Global 4C: Empowering Humanity for Carbon Transition with Smart Money by crcsolutions.org

Dear crcsolutions.org, Thank you for your entry in the global plan contest! Please note that — unlike other Climate CoLab contests -- two central elements of this global contest is for authors to (1) link together proposals from other contests into an integrated plan for the world as a whole, and (2) complete the climate model for their proposal’s impact on climate change and our economic systems. Please revise your proposal to incorporate these two elements, or else your proposal is not likely to be rated highly in this contest. If you wish to submit an idea to the Climate CoLab without including other proposals and how they fit together into a larger vision, we recommend moving your proposal to another contest. Kind regards, Daniel

Delton, it appears that you abandoned your original post in the Carbon Pricing group and have more fully developed the idea here. I intend to digest this in the next couple of days. Looks impressive.

P.S. Where is the penalty for burning forests? For that you need a government willing to enforce laws and apply penalties. A carbon tax in the U.S. has zero positive effect on illegal logging in Brazil, but Global 4C would make a difference. I like your questions because I can make references to Socrates! Who said that no man desires evil. Basically, Socrates is saying that illegal loggers compare options and then make a decision. In their eyes, they make a good decision and its not done out of evil. A culture of ignorance may be created by the illegal loggers, and that also needs to be overcome.

Dear Chris Sorry about lost threads. These websites can be confusing to newbies. HALVING PRICES: Yes I agree. I found the same thing, that rewards + taxes doubles the price signal, and so the curious thing is that by applying taxes/rewards 50/50 the net abatement cost can reduce significantly with the same/similar net price signal. POLITICS: Yes, our assumption is that rewards are politically less challenging. INFLATIONARY PRESSURE: Your comment on inflationary pressure & confidence isn't convincing, and perhaps you can expand on your point, but I can't really respond because its not a complete statement. I can say that our team (outside the MIT competition) includes 8 economists, one of whom is a professional monetary economist and does economic modelling. He has never made statements like yours. He has endorsed our policy proposal and we are writing the seminal paper publication and talking about a preliminary model/study. CONFIDENCE: Everybody would agree that confidence in a currency is important, similar to trust. In theory, if our proposal were executed as intended, we would have every G20 nation buying up 4C currency to force the price to rise to meet targets over 100 years. No other currency in human history has had that much backing, and confidence could therefore be very good. GLOBAL 4C: Externalities of the few - are you referring to the Polluter Pays Principle (PPP)? We have studied this issue, and we know that all sectors (except heavy industrial polluters of the non-energy supplying type) can be rewarded without conflict with the PPP. We have identified the issues for social equity, and we now know that the PPP is not universally applicable because the historical social cost of carbon can be EXCEEDED by the potential impacts of future climate change. On this topic, the IPC is also rewarding polluters, and so the IPC needs to be assessed for social cost. QUESTION 1 IPC: Is the IPC a closed market or open market? If the money is recycled, where is there open market competition? QUESTION 2 IPC: How does IPC force the enterprise to spend its money (tax rebate) on specific types of energy? Is this state control? Best regards Delton Chen

Hello Chris, apologies if my replies are inadequate or too terse. I have been working late on three of these MIT proposals. Originally I contacted you to Skype, to talk about our proposals, because writing here is an inefficient mode of communication because there are too many issues that inter-link and become confusing. Even with the team (about 8) economists, we have to talk because writing does not always convey meaning. I am following your thread and I think I understand your questions, but talking first would save us both so much time. Also, with some irony, our proposals are similar in some key aspects. Are you on London time? Can you talk? My Skype is delton-chen Cheers Delton

Answering the second question:- Chris wrote: "If 4C is issued, those holding 4C currency, on aggregate, will have more money, but still the same worth. (You cannot create worth by issuing money.) People selling goods and services will know that those who hold 4C currency have more money on aggregate, and so will put their prices up when accepting money in 4C currency. This is logical because if you know that people have, for example, twice as much money but still the same worth, you will understand that that particular money (currency) is now worth half of what it was. The situation is exacerbated because once that money has entered the economy, it doesn’t get used up on the first item it purchases, but gets ‘spent’ multiple times. The only thing which can be done to restore the value of the currency would be to withdraw some of the currency. " My general reply: We have placed the supply-demand curves in our proposal that answer this question (Figure 2). There will be a wealth transfer with issuing 4C as rewards. That's the intention, because ultimately we want to direct productivity into mitigation from all other sectors of the global economy. 4C could do this very effectively. With aggregate demand, the economists project that the global economy is going to grow over the next 40 years (in a big way) assuming that the primary energy supply is available to civilisation. So what we propose is to expand the money supply into 4C. The money supply will have to grow anyway. Moreover, the 4C can be managed in various ways to influence aggregate demand, but specifically in mitigation activities in the economy (when necessary). Keynesian stimulation with fiat would also trigger more aggregate demand, but the problem is more general consumption and thus more GHG emissions. As you said, the 4C money is spent many times and persists in the economy. Hence to sustain and increase the value (price) of 4C, it becomes logical and necessary to increase demand for 4C as a trading currency (to complement fiat and gold). Whilst the 4C supply grows, both the economy is growing, and 4C's popularity as an international trading currency should also grow too. From a monetary or political perspective, none of this would make any sense if Climate Change were not such a significant threat. Another time we might delve into the political theory: for example in Australia and Canada there is political opposition to carbon taxation. The origins of this proposal are also based on political and socio-economic story lines. The monetary aspects we have discussed are just one dimension. I hope this answers your question.

Hi Delton, Thanks for your explanations. You have made it very clear that governments will be asked to prop up the value of 4C. I guess a country the size of the USA might be expected to pay $60 bln/yr by 2070 (in real terms) for this. Compared to the cost of climate impacts at a four degree C warmer world, that sounds like a good deal, so I’ll give you my unreserved support. However, that $60 bln/yr would need to be collected as a tax and there would be no support from the conservatives in congress for this. You have argued that fiat currency expansion could be diverted to support 4C, but individual nations need their fiat currency expansion for themselves, to keep inflation ticking along healthily at about 1.8%. I’ll contact you on Skype later this evening. My Skype address is: itschrisnow. Kind regards, Chris

Hello Gary I am very happy to answer these questions. Your questions go to the very heart of the issue from the perspective of governments, power and policy. The rationale of Global 4C is based on helping governments establish long term control of goods and services in the economy. The political storyline, which is not presented on CoLab, indicates that a complementary currency can be used to transition away from dangerous goods+services to safe goods+services with minimal political conflict and 'positive' market outcomes. The original theory was for one nation/government, and it was then extended to the global situation using a digital currency to improve efficiency & scalability. So this policy is not an "off the shelf" package deal, it was developed piece by piece from fundamentals about human nature and the economy. The crypto-currency is a bit distracting because of social-political undertones, but these are not intentional and crypto is simply just a good idea for administration. The climate problem is classic because it leaves governments with almost no options. Either we strongly mitigate to <2C or we enter into a losers pathway, with the ultimate price being the loss of most ecological, social and resource capital. My personal bias and assumption is that warming of around 2 to 3 C will eventually cascade into 4 C and the collapse of civilisation. Maybe I have a poor imagination (?) but I cannot imagine humanity adapting to 4C warmer world. Climate feedbacks could occur around 2-3C and so the idea of a managing 3-4C warmer world seems ingenuous and conceptually misleading (i.e. methane clathrates). The carbon stock has been building for tens of millions of years and basically we are sitting on a lot of carbon (plus the carbon in fossil fuels). Currently it is not politically correct to talk about the situation in these terms, and so you have to dig a bit to find the overview: http://www.ecosanity.org/blogsanity/compilation-4c-2060s-or-sooner-catastrophic The above information sets some boundaries to the problem. When governments look at fossil fuels, they may see a prized commodity, but they also see that it is a trap. Government needs civilisation to kick an addiction - oil, coal and gas. This is not a recreational addiction, it is more of a fundamental addiction for growth and social stability (see Garrett's highly informative papers). The value of money (e.g U.S. dollars) to governments (e.g. U.S. Government) is primarily as a tool to do what they want/need to do to maintain control. Keeping the U.S. dollar system in good long-term condition is less important than actually using it for whatever purposes are popular at the time. Now that climate change is clearly visible, the existing stock of fiat money has less utility, because it is not on its own very effective for mitigation. The barriers to mitigation are political (and physical) and not strictly financial. So from a Government perspective, a tool is a tool is a tool. Global 4C currency is just another monetary tool. Can government use it to mitigate GHG emissions on a global scale? Yes it can, to a certain degree. Can government use U.S. dollars to mitigate GHG emissions? Yes it can, to a certain degree. Next I will give a hypothetical example of how Global 4C could work. But the limitation of all fiat currencies is that they are not such great tools for mitigation, because the money itself is too attractive to actors in the global economy. Everybody wants some fiat, for self interest, and so getting the fiat to do the work (mitigation and sequestration) is problematic at every step in the chain. The economy is very competitive and short-term, and it generally does not have 'feelings' or 'ethics' as such. However, if mitigation is profitable, then we have a completely different situation. The challenge is to make mitigation profitable. Carbon taxes are the 'stick' for polluting. The reward is the carrot. The stick is only a stick if it is legislated. The carrot does not need the same kind of legislation, because the 4C currency is a currency, and it is not a tax. Taxes are about laws and limits. Currencies are social agreements. So if the governments of the world sat down and created 4C international currencies (to be minted as a mitigation reward) then the global politics changes quickly, because wealth can be continuously and directly transferable from one tool (fiat) into another tool (4C) without the discrete legislative demands of taxes (so I assume). Hypothetical: Lets assume we are the supreme rulers of an oil rich country. What do we do? We can sell lots of oil and build defences to protect ourselves from 4C warming (risky ?). We can take actions in international politics and set an example by reducing emissions, but would we stop exporting our oil (I don't think so because its too valuable and we very much enjoy our lifestyles and air conditioning). So we have no serious options and we depend the G20 to do some serious negotiations. The G20 have political problems in passing new laws for rapid decarbonisation, so things look risky. G20 are in love with democracy, and so state control looks unlikely for the time being, and state control would also risk market inefficiency in a very complex system. So now Global 4C comes on to the scene. Governments say "Would you support 4C currency?". What's the deal? By exchanging national currency we raise 4C prices, and people everywhere mitigate emissions and sequester carbon. OK, that's exactly what we want them to do. Our oil rich nation is surrounded by other nations with antagonistic ideas and religious resentments. So we know that we can't cooperate on individual projects. But if we allow the 4C to become an international currency (cross-border) then we know that our neighbours can earn this money, so we know that they most likely will do just that. Hence we don't have to talk to our neighbours, we just buy up 4C on the market, and start using 4C in our economy. We, the supreme leaders, are not too concerned about selling our currency to buy 4C, because the protocol is that 4C will rise for the next 40-100 years. The guarantee is that without 4C all nations start to lose control because of climate change. So it is attractive to support 4C from day one, and give it a good try. How does 4C impact our oil sales? Well, actually, we need to find a replacement commodity in the long run. Two options for us: (A) massive solar thermal and high tech hydrogen batteries, and (B) oil from algae. The prices of these are not competitive with oil. Under 4C rules, we can earn money from 4C by substituting oil for A and B. So we look at the price of 4C, and do some calculations. We find that in the year 2025, the 4C rewards should help make A and B price competitive with oil. We know that the future 4C prices are reliable for global mitigation for <2C because the science+economic models tell us this is the case to 75% confidence. So we plan for that timetable. We don't do anything else because the rest of the world is doing their mitigation and earning 4C at much lower marginal costs than what we can do here in the hot desert. Conclusion: The new 4C currency is accepted by nations and is valuable because it offers a pathway to (i) avoid dangerous >2C, and (ii) makes mitigation profitable earlier. The costs of sponsoring 4C are diffused globally. All major currencies lose some relative value to 4C, but we also end up with a new international currency and this has advantages for trade. The world economy is growing, and so there is a need for more currency. Also, the total abatement cost of mitigation is about ~3% of GWP, and so I guess that 4C should aim for about 3% of all trade. But I am out of my field of knowledge. As you can see, my work is strategic & conceptual, and lacks quantitative evidence. This is why we would like to find a sponsor to do some economic modelling. I acknowledge that the above is complex and speculative. If you see a problem, please email me. Delton g4cm@emai.com The fundamental thermodynamic and human-nature drivers of growth and GHG emissions are covered by Garrett (2012) however his work doesn't get a lot of attention, and maybe it needs more review. But the physics of Garrett defines the basic relationships for civilisation's strong bias for growth and emissions. Whilst Garret may be correct, i take a simple view that Global 4C improves our chances of staying below 2C. Global 4C creates a short-circuit in the growth-emissions paradigm. Power and resources are linked, and in our modern world oil, coal and gas are important, but most especially oil. I will give an example from the perspective of an oil-rich country, and how it might deal with climate change using Global 4C as the preferred international policy. It is scientifically reasonable to assume that we need to stop using coal, and effectively reduce oil and gas use to very low levels. The alternative is to let the climate warm-up past 2C and somewhere between 2 and 4C. My intuition and reading tell me that after we commit to 2-3C it could be difficult or impossible to prevent 4C and then its game over.

Delton, those were some pretty detailed responses there...They illustrate the complexities of introducing a reward system and overcoming entrenched political/monetary system. My choice of the agriculture example was not because I misunderstood g4c (at least I hope not), but because I thought it might be a good example of a clearly damaging international industrial practice that would be effected by g4c. If I am understanding this, the gradual widespread adoption of g4c will begin to have a financial effect on carbon intensive practices; namely, that people/commercial interests will wish to maintain the value of their g4c investments and be looking for future returns in order to buy more in order to, as you say, "continuously and directly [transfer wealth] from one tool (fiat) into another tool (4C) without the discrete legislative demands of taxes. Stipulating that neither of us in an economist, it appears to me that the increasing adoption of g4c has a deflationary effect on fiat, i.e. falling demand. So industries such as multinational carbon-intensive agriculture will have increasing difficulty accessing fiat capital to continue their operations. If this is correct, it's only one example of a powerful industry that buys access to government to influence the conditions in which they operate. You say that the G20 is in love with democracy, but in case you have not noticed, it's more like they are in love with the appearance of democracy. Financial interests dominate, financial paradigms rule, corporate interests to a large degree determine the legal framework of life. Separating the G20 from those interest to a degree sufficient to launch a new global currency will be no easy task. As I digest all of your comments, the understanding that emerges is that the out-of-the-box paradigm that you are proposing is a currency with a negative interest rate which is precisely what the civilization requires to restore the value of natural capital and to restore our thinking about our relationship to the biosphere. The engine of fiat currency --and global degradation--is the positive interest rate. G4C turns that inside out, turning currency into an engine of improved quality of life in which the rewards are not measured in monetary returns, but rather in deposits that are fundamentally different. You may be interested in a couple of books, or possibly know of them already. Sacred Economics, Charles Eisenstein: http://www.amazon.com/Sacred-Economics-Money-Society-Transition/dp/1583943978 in which he devotes a good deal of discussion to alternative currencies, negative interest rates as a vehicle of recovery from the damage that the current system has wrought on everything. In fact, I can contact him about your work here. He should see it. and Debt: The First 5000 Years, David Graeber: http://www.amazon.com/Debt-The-First-000-Years/dp/1612191290 I wish you great success, Delton. Press on. Gary.

Gary I have written a short essay here about BEING IN LOVE WITH CAPITALISM. I would like to use Figure 1 on the webpage as the metaphor. The picture of the couple in the car. https://www.climatecolab.org/web/guest/plans/-/plans/contestId/1300701/phaseId/1301101/planId/1307204 When we fall in love with a beautiful person, its often a bit superficial until we get to know them. When we learn more about their ethics, then we really get to know them. If their ethics are contrary to ours, then we can have a serious problem because the difference in ethics can end the relationship in a split second. The reason is that we (people) have our ethical foundations tied up in our first three chakras (how we relate to the world) and these are instinctive, and often non-negotiable. If our partner breaks our ethical rules then the energy stops flowing up through to the higher chakras and the mind, and instead flows downward into the lower chakras and the energy exchange between partners is disconnected. The relationship is on ice, and we have to go into emergency relationship management. With democracy its similar. The man driving is the government, and the woman is democracy. The driver can't control the speeding car and democracy is scared. The government tries to slow down with the foot break, but the engine and car's inertia is too strong. So government goes for the hand break (carbon tax) but the invisible hand of the market stops him using the hand break. Invisible hand? Who has an invisible hand? Its the kids in the back seat. They're putting their feet on the hand break and screaming go faster! faster! (we wan't growth and jobs). The kids spent their pocket money and want more. So they want to go faster (analogy speed=profit). The kids have borrowed money from the older kids at school and they need to pay back their debts and they are addicted to sugar. Meanwhile, the communication and cooperation between the husband (government) and wife (democracy) has a few problems. On one hand, they cooperate extremely well, and this is because they have a mortgage to pay, and if they don't keep working and cooperating they have to sell the house and lose money and security. Their relationship and communication is therefore coordinated quite well with the debt on loans, and the need to pay back interest. So they keep working on the relationship, but it is stressful. This runaway car problem could well end the relationship (i.e. with premature death). So government does the hard thinking. He's behind the wheel. He can't break effectively, his relationship is strained, the kids in the back seat are just little *&$$#$. So what now? Well the husband calls up his mechanic on the mobile. What can I do, the breaks are't strong enough and the engine won't slow down??? The breaking system is only as good as the designer intended, so it has limitations. It helps, so they try applying all the breaks. What next? How about this? We disconnect the exhaust pressure hose from the turbo charger, and reconnect it to a new breaking system independent of everything else. The more the engine pushes out pressure, the more it applies the new break. So the car slows down.(i.e. new break = g4c economic instrument). In the analogy between husband, wife and kids, what does this imply? The communication has changed because now they are cooperating for different goals. Before it was to pay off debts, now it is to mitigate and sequester carbon (the new g4c currency and new break). The kids can earn their pocket money by mitigating and sequestering, so they're happy. The car slows so she's happy and she trusts her husband more and their relationship improves. The whole family is better off, and this is because money is a social agreement within the family unit, and a new agreement was needed that defined the rules of behaviour.

Hi Gary, WIth respect to your first paragraph, I didn't fully understand everything but I didn't see a serious issue either. I will just clarify the fundamental macro-economic approach that I am suggesting. This is what I think the governments (of the world) could and should do: they will continue to support g4c (provide demand by buying it up when necessary) so that the g4c price rises, and this will stimulate more mitigation and sequestration in the market place. They will then do frequent analysis and modelling on the data they have collected, to update the 40 to 100 year price schedule for g4c so that the world can avoid dangerous climate change. They can update the price schedule weekly or monthly etc. Their analysis will include all relevant factors, such as climate science and feedbacks, existing taxes, economic conditions, political events etc. So the g4c price schedule is not really designed to meet a 4% annual rise, because the rise is simply whatever is needed to avoid dangerous climate change. It might rise 6% or 1% per annum. My impression is that it is more likely going to be at the high end, because some scientists claim that we need to decarbonise at 10-20%, which is incredible. Also, the IPCC possibly does not include the latest on positive feedbacks in their analysis (risks are high). And so I am assuming quite a high yearly increases and very much likely exceeding the rate of inflation by a big margin. The high yearly increase (lets say it is 6%) will be attractive to investors, and so this whole approach creates a positive reinforcing social response. It creates positive feedbacks in society, because i) we need to survive climate change, ii) it is ethical, and iii) it is profitable. These are 3 of the most powerful forces in society and the economy. I did some preliminary modelling of the g4c currency with a spreadsheet model. The impression I have is that the supply of g4c increases most quickly during the most active part of the industrial transition (the de-carbonization of the economy). This transition period has the characteristics of a rising g4c price and falling marginal cost of mitigation & sequestration (i.e. the new mitigation supply is racing to keep up with rising demand, and demand is rising exponentially to keep supply rising - it is a race). But the key thing is that nobody knows really the future marginal costs, because climate change itself will be a factor. When the planet warms, our efforts at mitigation become less effective in all sorts of ways (e.g. the IPCC models do not include political dynamics and clathrate leakage). So the g4c price is dynamic and always adjusts to the current knowledge and conditions. But in the long run, if we are successful at mitigation, then eventually we may not need to sustain a high price for g4c because the rate of mitigation (lets say in year 2100) may fall considerably. If this happens, then we have succeeded because that was the objective. The price and value of g4c after the year 2100 is almost irrelevant, because we have prevented irreversible climate damages and avoided collapse. The costs of the transition (de-carbonization) have to be carried by society anyway. Thats unavoidable. The g4c is just the tool that allows the transition - it is the mediator and the 'social agreement' that gets people working and cooperating via a transfer of wealth. It will also complement and synergy with taxes (that are also needed). WIth your second paragraph: I think i answered that above. Also, we should talk in terms of prices (or exchange rates) for g4c, and not interest rates. It is just a currency that is issued. There is no loan and no interest rate. THere is a rate of rising value, that we can express as an annual percentage. There is an inflation rate too, but we could also just talk about inflation adjusted terms to avoid that confusion. The world is now quite concerned about not achieving <2 degC target. Some respected scientists are saying that is is likely impossible to meet now (i.e. 10-20% de-carbnisation rate is needed). And so the world's problem and concerns are not a falling sequestration rate (in the future). If we reached that point we would all be celebrating! Our problem is that the sequestration rate is possibly unattainable. Human beings have never previously managed net sequestration. We have always produced GHGs. The fundamental problems are also not just physical, they are fundamentally about 'growth' and human motivations. According to Garrett's (2012) global analysis, growth is needed to maintain social stability. His work is thermodynamically based and is not optimistic in its conclusions. In other words, things are looking bad (quantitatively and qualitatively). Last paragraph: I have avoided those deeper issues you mention because they exceed the scope of g4c. My feeling is that humanity has the potential to make a breakthrough and reach a much higher quality of existence. But we are beholden to the existing currency system, and I believe it is this which is preventing us form taking the next major step of our social evolution. I have written on this topics about 6 months ago, but I stopped because its not helping me with this project. Thank you for the opportunity to answer your questions. I appreciate your questions a lot. Let me know if I missed something. Sincerely Delton

It’s a new framing, will penalize emitters, and it’s aligned with the recent trend of major actors from the financial sector (e.g. Tom Steyer, Hank Paulson) pushing back against members of the business sector who are climate change deniers. Engaging the investment sector has potential. Proposal could use more analysis of the barriers that must be overcome and more details on how it could be implemented. Adding additional money to the world economy could create inflation, and the proposal could do more to consider the potential monetary impact of the proposed actions. - The proposal is well articulated and convincing. The link with sub-proposals is clear and well argued. It could be improved by a more thorough analysis of potential barriers and how they will be addressed. The implementation framework at the global political level could be further expanded. Use of pricing system is a good idea, but a better comparison and articulation of taxes vs rewards is needed. Also the link macro/micoreconomics is needed (system implemented by States but taxes get paid by individual economic agents). How to make sure signals are right and governments do the right thing. Also deepen analysis of link between fiscal policy (tax/reward) at micro level and monetary policy. - Once the new currency is introduced it will be tradeable for normal money so this scheme does not avoid the costs of climate policy and to the extent the green investments have a lower rate of return, this could also slow down economic growth. However, if carefully designed such a system could help change the frame for the climate debate while used to also address some equity concerns. To the extent that key players in the financial community has now become pro climate policy (e.g., the Steyer, Bloomberg, Paulson 'Risky Business' project), something along the lines of this proposal may actually be doable especially if it is carefully linked to actors in the traditional financial and insurance systems.

This is a very well explained and argued proposal and I believe has real possibilities for implementation. On the other hand, it involves quite complicated and complex maneuvers and requires a lot of coordination and universal agreement. I wonder how could pilot projects be launched to demonstrate the affectivity of the proposed action plans, before embarking on ideas on a global scale.

Hi Delton, I quote, 'It is very challenging to respond within the tight word limit of the MIT competition. So I have written a long reply here and a shorter reply in the competition'. I have a suggestion for your proposal revision answers. Will you consider using imgur.com. This website have an option of creating your account and upload the answers on which you can share the link in your proposal. I tried to use it in my proposal due to limited space and i found it fascinating. Hope you find it helpful. Also, am aware that the judges will not be required to review in the comments than rather are directed to discussions only. That's why i feel it will be nice for you to copy and paste the answers in word, change them into pdf, and finally upload them to imgur.com, of which i found to be convenience.

Thank you for your submission and revisions. This proposal was not chosen as a Finalist. The Judges are developing their comments and will be posting them shortly.

To all those people who have supported our proposal so far, thank you. I have to make a clear statement about the judging of Global 4C, because this proposal may have merit for our collective future. The Global 4C Mitigation proposal is not a "tradable credit system" as claimed by the judges. The Global 4C proposal is fundamentally different to tradable credit systems and it is fundamentally different to "cap and trade" and all similar systems that put a price on pollution for the polluter. Global 4C also does not put any limits on pollution. This is Global 4C's strategic political advantage. Global 4C is actually a subsidy and reward system for mitigation, and as such it does not enable trading of pollution. Mitigating/sequestering emissions is the opposite of polluting. The master plan is to instigate a social transformation that can spearhead the carbon transition by gradually winning over the carbon intensive industries: by allowing the people with vested interests to divest in alternative business models and to culturally adapt. Global 4C will synergy with carbon taxes that should also be introduced as quickly as the politics allows. Global 4C should be applied globally, and the standard carbon taxes, fee-and-dividend and cap-trade etc. applied nationally. Confusion may arise because the Global 4C subsidies and rewards are issued as a new currency. After this new money is issued, it is basically just money for use in general trade, like any other money. Important, is that currencies have low transaction costs and can be quickly set-up in Forex markets. A globalised price signal is absolutely essential if we are to strongly mitigate climate change. The administration of this system is pragmatic, requiring a scientific approach. Engineers and scientists can manage the details. This is what people are good at: administration, innovation, working and improving the environment (i.e. when paid to do so). The financing of Global 4C could be described as a "negative tax", however the monetary approach that we have identified opens up various new financing options that are unorthodox. I expect that bankers and traders could design very effective monetary policies to appreciate the 4C currency as required for mitigation over the next 50-100 years. With some irony, it would be the bankers and currency traders who would save us from climate disaster. I am personally convinced that Global 4C is the missing link in the climate change conundrum. Others may disagree, however it is evident that this proposal and the innovations that it recommends have not been professionally assessed nor have they been tested in pilot studies. We had hoped that by entering Global 4C into the MIT CoLab, we would earn some publicity. Global 4C shows a glimmer of potential because it directly connects the economy, politics, and society with the physical world. The standard economic perspective is that subsidies are inefficient. But Global 4C is not a standard policy. It is very innovative and multi-disciplinary. Moreover, it uses the most powerful economic tool of all the tools, and that is 'money'. Money is the social agreement that everybody understands. Global 4C proposes new debt-free money. Global 4C also recommends the Internet and social networks as the knowledge and communication system. My view is that we need to look at the 'whole system', and not just the economic system. Global 4C is integral with the whole system, and it may allow us to discover hidden opportunities to create positive feedbacks that can couple human 'self interest' with the much needed mitigation of GHG emissions. We desperately need to identify these positive feedbacks and make maximal use of them. Moreover, we also need to develop policies that leaders in government and banking can promote and employ without exposing themselves to harsh political opposition and related risks. It is this strategic thinking that makes Global 4C special in my view. We should have all noticed that modern society has lost its balance. Society is currently operating in an overly masculine framework (i.e. penalties and base logic) and we need to balance this with the feminine (i.e. rewards and intuitive problem solving). Carbon Taxes = Yin, and Rewards for Carbon = Yang. Only such a balance can correct the disfunction. All the best, Delton Chen

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