A Global Digital Climate Currency
The Problem
What science says
What economy says
“Preserving nature and maintaining its services are critical for economic growth,”
What people say
Or plain and straightforward:
“If you want us to stop emitting CO2, pay us for it.”
The Conclusion
Only if people can gain financial benefit from reducing GHG emissions, will they start to effectively reduce their ecological footprint.
The Solution
Pay people for the reduction and avoidance of GHG emissions.
Make the avoidance and reduction of GHG emissions an economic achievement that can be rewarded with money.
The political & economic: How?
The avoidance and reduction of greenhouse gas emissions is a merit of macroeconomic proportions in our capitalist, consumer-oriented society.
The direct consequence of greenhouse gas emissions into the atmosphere is increasing climate change.
The direct and indirect consequences of climate change can be assessed financially; a statement can be made about their macroeconomic extent.
Since the costs of climate change can be measured, all measures contributing to reducing the consequences of climate change can also be financially assessed.
From this, it can be deduced that the greenhouse gas avoidance performance and the greenhouse gas reduction performance are financially assessable merits with macroeconomic dimensions.
The technical: How?
KarboDime
It is a global digital climate currency that represents the financial equivalent of avoided greenhouse gas emissions.
How does KarboDime work?
KarboDime are earned by users through verifiable climate-positive actions.
What are climate-positive actions?
All actions that include a change of consumption patterns regarding the use of energy, goods, and services in comparison to a business as usual behaviour (like RCP8.5 scenario); In addition, all verifiable investments in sustainable climate projects, the course and results of which can be checked from an objective point of view and their influence on global CO2e emissions can be assessed.
What does verifiable mean?
An action can be proven by either a mobile tracing app or through information sent by a machine to the tangle.
How is it financed?
Apart from the fact that every investment in a future that is less affected by the consequences of climate change generally saves money – which in arithmetical terms would be sufficient to finance the global digital climate currency – the digital global climate currency is one of the two related instruments where the fight against climate change can be tackled effectively.
The financing of the global digital climate currency is ensured by the introduction of a globally uniform, digitally levied greenhouse gas emission tax.
Since KarboDime has set the value of an avoided or reduced ton of greenhouse gas emissions at 250 euros, the greenhouse gas tax must be at least this value per ton.
The income from avoided or reduced greenhouse gas emissions in the form of KarboDime must be kept tax-free. However, they can be used to pay off the greenhouse gas emissions tax.
The introduction of the global digital climate currency potentially enables a life in which no greenhouse gas tax has to be paid, as one’s own lifestyle or the production of goods not only reduces greenhouse gas emissions but also actively contributes to reducing global greenhouse gas emissions.
The Global Carbon Reduction & Avoidance Index
With a global digital climate currency, the efforts of each country to reduce and avoid GHG emissions can be measured and assessed in an index. This index is fed automatically from the KarboDime system.
The Global Carbon Reduction & Avoidance Index depicts comparably the reduction efforts of each country’s economies and inhabitants.
It will lead to currency competition through a revaluation of the predominantly used currencies as climate-positive investment currencies. The more people and companies earn KarboDime in a currency domain, the higher the value of this currency and, at the same time, the economy behind it.
Example:
People in the Eurozone, China, and the US earn KarboDime. Although the participation is similar in all three currency areas, the amount of emissions saved differs.
In all three zones, a total of 4 billion tons of CO2e emissions are saved or not emitted within one year. These correspond to a total of 4 billion KarboDime or 1 trillion euros.
The share of emissions saved varies, as the citizens and economic actors of the Eurozone are responsible for 45 per cent of the total emissions avoided, in comparison, 35 per cent in China and 20 per cent in the USA of the total amount and thus the amount of KarboDime were saved.
Since 45 per cent of KarboDime was earned in the Eurozone, they are traded in Euro, while 35 per cent is traded in Chinese Renminbi and 20 per cent in US Dollars.
Why KarboDime?
Only if the reduction in CO2e emissions offers a financial advantage will people reduce their emissions themselves.
The implementation of KarboDime will lead to new economic impulses to reduce CO2e emissions in all sectors of the world economy.
Their greenhouse gas emissions costs are redefining the prices of goods and services. This will ensure a voluntary redesign of the products and their life cycles by the production side.
To make even more money by reducing greenhouse gas emissions, the global economy will develop new and unknown inventions and ways of providing services while promoting job creation worldwide.
Both investment capital and risk capital flow more precisely and more directly into climate-positive, sustainable concepts.
Investing in developing climate-positive policies, goods, and services worldwide are paying off and can be offered as financial services by banks and other financial institutions.
With KarboDime, the responsibility for climate-positive behaviour is given back to each one of us, and the opportunity is opened up to earn money through our climate-related behaviour.
Every single person’s efforts to reduce emissions to save or make money will have beneficial effects on the global economy as the demand for goods and services with lower emissions will increase.
In contrast to the current emissions trading systems, individuals can also sell KarboDime to companies that emit more than they can reduce to lower their tax burden.
A reduction in emission-intensive energy sources worldwide follows almost automatically.
Property tax can be based on facts such as pollution factors and the life cycle of a building.
The production of agricultural goods will experience a revolution as agrarian land is reorganized to collect greenhouse gases, while urban, indoor, and vertical agriculture will gain momentum as transportation costs make up a large part of the climate negative costs.
Reducing greenhouse gas emissions through forests and land protection measures, products, and services becomes measurable and financially significant.
The financial and political costs of inaction will always be higher than the costs of implementing KarboDime.
References
- IPCC, 2021: Summary for Policymakers.
https://www.ipcc.ch/report/ar6/wg1/ - World Bank Group President David Malpass. 06.07.2021
https://www.weforum.org/agenda/2021/07/climate-change-economic-cost-world-bank-environment/ - The real economy is not a side event in the global decarbonization effort 30.07.2021 https://www.weforum.org/agenda/2021/07/the-real-economy-is-not-a-sideshow-in-the-global-decarbonisation-effort
- World Bank: Economy faces huge losses if we fail to protect nature 06.07.2021 https://www.weforum.org/agenda/2021/07/climate-change-economic-cost-world-bank-environment/
- What economists think about the effects of climate change
https://www.weforum.org/agenda/2021/04/economists-global-action-climate-change-natural-disasters/ - Larry Fink’s 2021 letter to CEOs
https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter - Matthew Yglesias “What Are You Willing to Sacrifice to Stop Climate Change?” 15.08.2021 https://www.bloomberg.com/opinion/articles/2021-08-15/climate-change-action-is-hard-because-no-one-wants-to-sacrifice
A Global GHG Emission Tax
Climate-damaging behaviour has macroeconomic effects. It’s financially measurable.
The political decision must be that society, including the economy, move towards climate neutrality. The globally binding goal pursued worldwide is net-zero emissions in all areas of economy and life.
Climate-damaging behaviour must be sanctioned through the introduction of a tax on greenhouse gases, which drive climate change.
An effective greenhouse gas emission tax must be so high that the emitter considers the first ton of greenhouse gases to be expensive. Only in this way can avoidable greenhouse gas emissions be kept low from the outset or measures can be taken to avoid them completely.
The introduction of a global greenhouse gas emissions tax also means that other taxes must be lowered or eliminated. Greenhouse gas emissions affect every area of life. Therefore, the introduction of a greenhouse gas emission tax also affects every area of life and thus of course also the economy. For this reason, it is imperative that taxes such as value-added tax, fuel taxes or other product-related taxes are significantly reduced or, if necessary, abolished when a global greenhouse gas emission tax is introduced.
In addition to sanctioning climate-damaging behaviour, the introduction of a global greenhouse gas emissions tax serves two other purposes:
1. As the first global tax to be paid by every natural person over the age of majority and by every non-natural person without exception, it is the first application for a globally standardized, digitized measure to combat climate change worldwide.
2. The introduction of the global greenhouse gas emission tax is one of two instruments with which the fight against climate change can actually begin.
It forms the counterpart and the financial basis for the global digital climate currency KarboDime. It is therefore imperative to implement both tools at the same time. Because without the global digital climate currency, which rewards climate-positive behaviour in monetary value, the greenhouse gas emission tax will not work. The people in our global capitalist-liberal system do not understand that they always have to “pay for everything”.
With the introduction of the global digital climate currency KarboDime, the capitalist system recognizes that the avoidance and reduction of greenhouse gases and generally climate-damaging behaviour is merit with a macroeconomic dimension.
The global digital climate currency rewards climate-positive behaviour, which enables every natural and also every non-natural person to be exempt from greenhouse gas emissions tax through climate-positive behaviour. The value for a saved or a reduced ton of greenhouse gas emissions was set by KarboDime at 250 Euro.
Since the greenhouse gas emission tax is to be used to finance the climate currency, the tax on one ton of greenhouse gases must have at least the same value, i.e. at least 250 Euro.
Until the world has reached net-zero in all areas of life, it is unlikely that more emissions will be saved than emitted. The greenhouse gas emission tax should therefore not be higher, as enough money should still be collected to compensate for the elimination of other taxes in the respective countries. Since the tax, like the digital climate currency, should only be raised digitally, distributing it to the right places is technically unproblematic.