Global 4C
Public Node Active 6 years, 6 months ago
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Global 4C Risk Mitigation (Global 4C)
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New International Climate Policy based on the Risk Cost of Carbon (RCC)
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Global 4C is a policy project that aims to incentivise climate mitigation at the global scale for managing ‘climate systemic risk’ and to significantly improve our chances of staying below 2°C of global warming this century.
The economic instrument of Global 4C is a proposed system of parallel currencies that are called Complementary Currencies for Climate Change (4C). These 4C currencies will be developed and and managed using Central Bank Digital Currency (CBDC) technologies.
The Global 4C project is not presented as a niche policy, but rather it is justified with a new and fundamentally important theory that describes the relationships between money, markets, and networked systems. The theory reveals that there is an alternative policy pathway that is naturally attuned to managing climate systemic risk.
The theory recognises that government institutions have centralised power that is suited to applying pollution caps and tax-based policies, however taxes are often ineffectual because of political delay over cost sharing. The new pathway of Global 4C will bypass political delay by offering a new central bank monetary policy for economic stimulus—and as a kind of macro-prudential regulation—by rewarding climate mitigation actions. The policy will rely on a decentralised administrative system to offer a ‘global carbon reward’ with long-lived service contracts.
Global 4C is a proposal for a global reward scheme for mitigation, and based on transparent (scientific) assessments and digital technologies for Measurement, Reporting and Verification (MRV), data sharing and anti-corruption. Global 4C will synergise with orthodox policies and will be fully-financed with internationally coordinated central bank monetary policy that can spread the mitigation costs as a uniform inflation levy. The Global 4C policy will mobilise most of the required finance through a managed ‘bull’ market in currency trading in foreign exchange currency markets (Forex).
The new pathway appears hopeful and feasible based on monetary theory, the evolving mandates of central banks, and a new application natural laws in the analysis of climate policy. We recommend that you read two new chapters (refer [2] and [3]) that will be published later in 2018. Please contact us for a copy of the chapter abstracts.
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Key References
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The new policy solution [1], [2], [3] can address the intractable problems of climate change and unsustainable GDP growth; and the ‘key’ to the new policy is a new market hypothesis, called the ‘Holistic Market Hypothesis’ (HMH). The HMH presented a theoretical argument for the Risk Cost of Carbon (RCC), which is additional to the standard Social Cost of Carbon (SCC). This hypothesis could change the way that the externalised costs of greenhouse pollution are assessed, and this can trigger a radical new international response to the climate crisis.
[1]
Chen, D.B., van der Beek, J. and Cloud, J., 2017. Climate mitigation policy as a system solution: addressing the risk cost of carbon. Journal of Sustainable Finance & Investment, 7 (3): 1-42.
http://www.tandfonline.com/doi/full/10.1080/20430795.2017.1314814
[2]
Chen, D. B. (in press). Central Banks and Blockchains: The Case for Managing Climate Risk with a Positive Carbon Price. In: Transforming climate finance and green investment with blockchains. Elsevier. Alastair Marke, Ed., Chapter 9.
[3]
Chen, D.B., van der Beek, J. and Cloud, J., (in review). Economics of the ‘Risk Cost of Carbon’. In: Understanding risks and uncertainties in energy and climate policy: Multidisciplinary methods and tools towards a low carbon society. Open Access Book by TRANSrisk, Spinger.
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Global 4C
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