Pitch

Global 4C advocates a new source of global finance that can reward the bio-sequestration of carbon and the protection of biodiversity.

Description

Summary

>Global U.S.

Peak institutions warn of the risks of climate change and an urgent need to better manage the land to preserve biodiversity and bio-sequester carbon. A barrier to improved land management could be a lack of finances, especially in Africa, SE Asia, South America, etc. where many people are opportunity poor. Land management is globally important because 17% of manmade GHG emissions are caused by deforestation and land degradation (more than emitted by cars). 

Global 4C proposes a new approach to climate policy and financing that we assume to be attractive to governments (Global and U.S.). We are writing a paper that defines the economic instrument for publication in 2014. Key features of this instrument are that it may avoid direct political opposition, its price would synergy with carbon taxes, and it could be used to strongly de-carbonize the global economy. An assumption is that governments want to strongly mitigate climate change and so will at least consider this proposal. 

This essay explains how 'Global 4C' rewards will be available to communities and projects in developing countries where there is spare capacity to undertake bio-sequestration. The '4C' digital currency would be convertible to local currencies, but its advantage is that it could be delivered by mobile phone and Internet and so would also be integrated into geo-social networks: a kind of 'Facebook' for geo-sequestration. For a local population, 4C would just be considered a foreign currency, but the reward is always proportional to a mass of GHGs bio-sequestered. The amount of 4C to be paid as a reward is therefore proportional to the GHG mass, but the exchange rate will vary and should rise over decades. The 4C prices could match the forecast carbon tax ($100-200 USD per tCO2-e by 2030 ) as a rough guide. Communities everywhere could then earn 4C as a supplementary income. Verification may use a combination of satellite data, GIS analysis, environmental sensors, and site visits.

What actions do you propose?

Global 4C is a proposal to fund bio-sequestration worldwide as well as cleaner energy and general mitigation of GHG emissions. This essay is not project specific and certain technological trends relevant to 4C are described. The principal action here is to lay out a methodological and technological pathway for implementation of Global 4C financial rewards for bio-sequestration of carbon. The central focus is tropical forests and woodlands however rewards would be offered for any bio-sequestration method that can be quantified and verified.

CLIMATE: To remain under 2°C of global warming net manmade GHG emissions will need to decline to zero by 2050-2100, or alternatively, they will need to go 'net negative'. How this can be achieved is uncertain. The IPCC AR5 WG3 and DDPP propose that total emissions from land-use sum to zero over this century. This will require cessation of emissions from land-use and then net bio-sequestration with reforestation, peat production, wetland restoration, and improved agricultural practices. In the United States, for example, land management is pulling down CO2 from the atmosphere.

REWARD SYSTEM: The carbon tax is known as the “price on carbon”, and 4C will be known as the "reward for carbon”. The 4C currency has the technical name Complementary Currencies for Climate Change (4C) and a unit of account of 100 kg CO2-e mitigated or sequestered for a minimum duration of 100 years (Fig S2). Global 4C is a proposed policy and an international monetary protocol with sufficient economic scope to finance mitigation and sequestration and address climate change. The 4C represents new foreign income for developing countries, and aggregate demand for local and imported goods and services may rise.

100 YEAR TIME HORIZON: The 4C unit of currency is tied to a moving 100-year climate sensitivity of the Earth. With this approach the sequestration of GHGs can be paid on a pro-rata basis as the carbon is stored. This approach will encourage people and enterprises to manage their sequestration projects for 100 years. The actual interventions on the ground will need to be explained in more simple terms, such as "protect this area", "plant trees here", or "don't build roads here" etc.

REFORESTATION & AVERTED DEFORESTATION: An 'open market' for reforestation and averted deforestation could provide cost-effective solutions (on average). The precise methodology for rewarding reforestation and forestry management would be developed by scientists and made transparent to the public on the Global 4C network. The basic rule is universal: one 4C unit of currency = 100 kg CO2-e sequestered for >100 years. The detailed administration of rewards would emerge from a combination of related science disciplines that can determine discrete rewards for projects, and statistical rewards for regionally distributed land management practices that may involve dispersed communities. 

"Opportunities for climate change mitigation by forestry are currently being lost in the existing institutional structure, with more effort required to develop mechanisms that take account of the climate change mitigation benefits of forests - including payment for ecosystem services schemes." -- Social and Economic Research Group, Forest Research, UK 

There are  two relatively new concepts introduced here: (a) providing micro-rewards to people in communities on a statistical basis (i.e. geo-social rewards); and (b) rewards for averted deforestation as an equivalent to reforestation but relying on predictive statistical methods. Both interventions could be controversial, and will require evidence by examples and safeguards to prevent corruption. If the rewarding authorities are politically neutral and strong verification on payments is in place then the system could be highly effective. 4C rewards for averted deforestation could be offered to a community forest protection service. This may be more peaceful than reflexive state intervention in forestry and policing with its own set of risks. 

GRASSLANDS: 4C rewards would be available for all kinds of bio-sequestration, such as grassland management, which is identified as potentially important. There is also uncertainty about methodology, such as with the 'holistic' management concept. The 4C are only rewarded for proven performance and so the question of methodology is left to the market and there is no 'picking winners'.

WEIGHTED BIODIVERSITY: A primary reason to mitigate climate change is to preserve the diversity and resilience of ecological and agricultural systems. These systems support human life and give cultural and spiritual context and hence are acknowledged as invaluable and should be rewarded with additional weighting factors to account for protected biodiversity. Incentives will be multiplied by a weighting factor, ω{x,y,t}, based on trends that can be recognized or inferred from satellite images, field and socio-economic data (Virgilio & Marshall, 2009). Correlations can be estimated using fractal dimensions, biometrics and ecological knowledge (Brown, West &Inquest, 2005). The recommended community actions should be clearly communicated in the geo-social network (e.g. Facebook) as reward opportunities for the public.

4C rewards that are weighted for biodiversity protection may induce private landowners to join parcels of land and connect fragmented habitat. The bottom line is this: if land is worth more clear-cut than not, then bio-diversity loss will continue.

GREEN FUNDS & PROGRAMS: The U.N. Green Fund is looking to raise $100 billion worth of pledges from nations. The long term reliability of pledges is not guaranteed. To help bridge the gap, Global 4C would provide continuous funding to help fight climate change in developing countries, and so the the U.N. and other programs could focus on actions rather than fund raising. 

INCOME LOCALIZATION: The general concept is to provide 4C rewards directly into the hands of local communities and local projects using digital currency systems such as by mobile phone and internet. This would provide these communities with greater financial independence and 'localized' income.This is needed to counter the internationalization of markets. So, athough Global 4C is a globalized monetary system, it actually promotes financial 'localization'. In Africa, for example, there is a trend for foreign entities to purchase land and resources for future profit (possibly even with REDD funds). The 4C currency, having an intrinsic value of carbon mitigated, is not initially tied to any specific project and the 4C money is only minted (comes into existence) where and when mitigation is occuring.

Below we describe the key technologies that could be used to reward bio-sequestration and biodiversity protection, especially in remote and rural areas.

(1) GEO-SOCIAL NETWORKS:  These are geo-referenced social and information networks delivered through mobile phones and Internet. Devices are becoming smarter and cheaper in developing countries. There are three key reasons why geo-social networks are important:

i) Civilization's consumption of natural resources is almost exponential in time, and so interventions must also grow exponentially to counteract this. Recent history shows that uptake of social networking and mobile phones can be exponential, and so they could be well suited to land management objectives.

ii) Geo-referenced information and mobile communication can provide the intelligent instructions for bio-sequestration etc.

iii) Digital money payments are possible with interface to banking.

“Digital money has low transaction costs which is great for the poor because they need to do financial transactions with small amounts of money. Over the next 5 years I think digital money will catch on in India and parts of Africa and help the poorest a lot.” -  Bill Gates, (a) FOX (b) REDDIT

The concept is that villagers and communities can be informed about land use trends that favor bio-sequestration. Some interventions might be simple, such as leaving a forest in tact or not building any more roads in a certain direction. The people living in the relevant areas would then be offered 4C rewards to meet certain goals. The people in the geo-social network can assess the costs-and-benefits of available options and then decide for themselves the best course of action. The 4C incentive system will solicit many simple actions, or it may result in a high level of cooperation to capitalize on new projects. Rewards would be given as micro-payments over many years in proportion to changes in vegetation. This could also cause social conflict over resources, however such problems may be unavoidable. Disputes over land ownership and bargaining for rewards might also occur, however this may be unavoidable. 

Advantages are low cost of transactions and communication. Risks to privacy and personal security need to be assessed and counter measures put in place. Risks of dangerous climate change may outweigh privacy concerns. National interests and security are other issues to be addressed. Mobile phones can be used in innovative ways, as demonstrated by Rainforest Connection.

(2) INTEGRATED CLIMATE & ECONOMIC MODELS: Such models could be used to estimate the target 4C price in much the same way the carbon tax is estimated. The 4C price will change continuously and the collection of worldwide mitigation data will provide evidence of cause-and-effect between 4C prices and bio-sequestration. Climate Climate science is emerging, and new findings may require a revision of mitigation priorities. Carbon taxes in various countries will be tied to previous legislation, whereas 4C target prices can be revised as frequently as required.

"The AAAS warned of “massively disruptive consequences to societies and ecosystems,” adding that scientists do not know exactly what degree of warming would lead to such changes. Even a relatively small change in one element of the climate can lead to abrupt changes in the system as a whole, according to the report". -- Renee Lewis, Aljazeera (March 18, 2014)

(3) INTERNET OF THINGS: The rapidly falling marginal cost of data capture and communications means that carbon stored in forests, grasslands and soil can be monitored (in real time) and this will solve a critical problem for policy makers who are concerned with carbon leaking from bio-sequestration projects. 
 
(4) GEOGRAPHIC INFORMATION SYSTEMS (GIS): This is a specialized technology that can analyze diverse data types, such as satellite images ( Google Earth), land use, ecological data, cultural mapping, etc., all of which can be utilized to calculate 4C rewards for bio-sequestration and bio-diversity protection. Advanced GIS systems for monitoring forests and land management are already available, such as from  Google Earth. The U.N. Secretary General’s Climate Change Support Team are hosting the  Big Data Climate Challenge to investigate the economic impacts of climate change (September 2014).
 

"The important technical advances made recently have been in satellite remote sensing, which has delivered moderately high resolution data on forest cover change …Previously, the technical challenge of doing this and the inadequacy of inventory-based reporting were often cited as an obstacle to the progress of REDD+. Future developments in remote sensing, outlined above, promise additional capability to detect change at scales that are appropriate to assessment of change in the global carbon cycle and even to monitor quite small, community-based, carbon projects.... It remains important to make such data easily available and free to governments and land managers." -- [26] Grace, Mitchard & Gloor (2014).

 
 


Who will take these actions?

OUR TEAM: Our team of volunteers includes people at the crcsolutions.org, 8 PhD economists, 1 PhD civil engineer and 3 student interns. The first paper will explain the macro-economic theory and social equity issues as they relate to the use of complementary currencies for correcting market failures in public goods and services. A 100+ page technical report defining the Global 4C Mitigation rules is available to sponsors and partners.

People who can respond to sponsors and partners are listed here: www.g4cm.org, and includes:

Jonathan Cloud (Executive Director) jcloud@crcsolution.org

Center for Regenerative Community Solutions (CRCS) and New Jersey PACE 501c3 non-profit Organization, NJ, United States

Theresa Carbonneau (Strategic Business Consultant) tcarbonneau@mac.com

Delton Chen (Lead Author & Coordinator) g4cm@email.com

Joel van der Beek (Community Sponsor) info@econovision.nl

EconoVision, Economic Research & Advice, The Netherlands

Where will these actions be taken?

POLICY STUDY: The study will be international and collaborative because the objective is a new international currency system for mitigation. The current policy host is www.crcsolutions.org, located in NJ, United States, but our team is international, with representation from United States, Holland, Australia, Canada, India, Serbia, Finland and other countries. Sponsorship will be sought internationally. The economic study and a policy white paper for Global 4C Mitigation will be developed collaboratively, but the working language is English. 

ADVOCACY: After completing the policy study, we will seek support from climate scientists, economists and policy makers from many nations. Advocacy will then focus on the international institutions and high level officials in the United States, China, European Union, and other G20 nations.

IMPLEMENTATION: For governments to begin Global 4C negotiations, a framework of five 4C host countries and one host institution is suggested. These could be the United States, China, European Union, India, Switzerland, and the United Nations. A starting point for negotiations could be the five-currency system presented in our sub-proposal. This system can be managed and delivered by the host countries (prices of different 4C will tend to equilibrate in a common market).

REWARDS: Class 1, 2, 3 and 4 rewards would be offered to all sponsor nations. Class 4 rewards will be offered for storage of GHG for a period of >100 years and using any lawful technology: BECCS, bio-char, CCS, electrolysis, mineral carbonation, ocean storage, etc. Class 4 rewards will be offered for bio-sequestration in non-sponsor nations, such as in Africa, SE Asia and South America, where significant amounts of GHGs are produced by land degradation, deforestation, logging, fire, mono-agriculture, over grazing, urbanization, desertification, etc.

How much will emissions be reduced or sequestered vs. business as usual levels?

The objective is deep de-carbonization and a CO2-e peak of 450 ppm and then to sequester to <400 ppm by 2100. We propose that Global 4C will facilitate this by coordinating international monetary flow into the 4C market. The 4C price will rise adaptively, whereas carbon taxes will be pre-determined in various legislations

How much global emissions are actually reduced depends on governments' ability to bypass political opposition, implement effective policy, and then the ability of enterprise and people to innovate and be productive. 

UN REPORT SAYS AVOIDING CLIMATE DISASTER IS HARD, BUT POSSIBLE

"The projected cuts are ambitious and the authors acknowledge that many of the hurdles that have stymied efforts to combat global warming until now could also derail these proposals — namely, political opposition as well as the feasibility of deploying technological solutions that are currently too costly or not yet proven on a commercial scale." -- Michael Casey, Fortune (July 8, 2014).

What are other key benefits?

GOVERNMENTS: i) ability to leverage mitigation without taxes, ii) more currency liquidity in global trade, iii) improved social equity, iv) globalized data capture, v) direct causality between prices and mitigation, vi) policy longevity, and vii) good governance.

INDUSTRY: Offered rewards to reduce emissions based on average carbon intensity of operational costs. 4C prices allow long-term planning.

PUBLIC: Social cohesion and investment options. Communities will benefit from bio-sequestration and improved land management. Global 4C creates an education portal & complements other programs.

INVESTORS: A government sponsored bull market in 4C will yields a return. IPCC advice on 4C targets feeds back on prices. Micro-finance will reach places where banking is expensive.

POWER SUPPLIERS: Suppliers are rewarded by the pollution they offset. 4C complements the carbon tax, invites innovation, and does not reward heavy polluters. Rewards sunset at 100% of market share.

What are the proposal’s costs?

STUDY: Economic study is $0.75 -1.0 million USD with private and public partnering.

ADVOCACY: In kind with partners and sponsors.

OPERATION: The marginal cost for data collection & verification will fall rapidly with the emergence of the ‘internet of things’.

ABATEMENT: The global abatement cost for de-carbonization to 450 ppm CO2 (<400 ppm by 2100) is roughly 3.1% of GWP (Tyndall Centre, 2006). The cost to markets will include a $20 trillion fossil asset write down. Investment of about $48 trillion will be needed for new energy by 2035.

CONCLUSION: Carbon can be globally deleveraged with rising government purchases of 4C over 100 years. This will diversify reserve currencies (fiat and gold) with 4C and will help finance mitigation and sequestration (M&S). 4C rewards for M&S can bypass banks, improve currency liquidity for global trade, and be used to balance or increase aggregate demand. The 4C supply will be pegged to the CO2 mass mitigated, to physically couple it with the climate. 

Time line

Presented is a time line for policy development. A fast track might involve parallel projects to develop 4C pilots in various situations. 

TIME LINE FOR GLOBAL 4C MITIGATION:

(A) July 2014-Dec 2014: Find sponsors and partners for Global 4C, Launch Website (g4cm.org), Publish Journal Papers defining the 4C Economic Instrument

(B) Jan 2015-Dec 2015: Global 4C Study Commences, Set-up Collaborative Website (g4cm-policy.org), Undertake 4C Macro-Economic Modeling, Undertake 4C Policy Analysis, Undertake 4C Legal and Constitutional Review, Undertake 4C Ethics Review, Direct outreach for political and policy allies.

(C) Jan 2016-Dec 2016: Global 4C Study Continues, Develop Multi-Media Presentations, Publish a 4C Policy White Paper, Present Key Findings (Conferences), Direct outreach for political and policy allies. 

(D) Jan 2017: Find Financial & Political Sponsors for Advocacy, Find Policy Custodians, Build Strategic Alliances, Strategy for a bill to Congress.

Related proposals

Worldwide: Global 4C Mitigation: An International Currency Protocol to Protect the Earth's Climate and Biosphere.

United States:  A proposal for a monetary policy to address climate change and strengthen international cooperation.

 

EXAMPLE APPLICATIONS:

Synergies of Afforestation and Community Empowerment in Kenya

Fighting Climate Change and Wildlife Extinction With One Of The Largest Carbon Capture Projects In The World.

Nicaragua: Carbon Sink, Economic Driver & Medicinal Plant Preservation.

Reforestation, avoided deforestation and protected biodiversity qualify for Class 4 rewards of Global 4C. 4C micro-rewards would be given to registered locals via their mobile phones (under a pilot project). Geo-social networks will be created. Geo-statistical analysis of satellite images and field data are needed to verify sequestration amounts and assess biodiversity weighting for rewards. Rewards are for net mass with a conditional contract for 100 year safe storage whilst the project is current.

References

[1] World Bank (2012). Turn Down the Heat: Why a 4°C Warmer World Must be Avoided.

[2] Chen, D.B. (unpublished). Global ‘4C’ Mitigation Policy: Complementary Currencies for Climate Change. Working Paper 1 – Theory and Concepts.

[3] IPCC, 2013: Summary for Policymakers. September, 2013.

[4] PwC (2012). Too late for two degrees? Low carbon economy index 2012. Pricewaterhouse Coopers.

[5] Andreoni, J. et al. (2003). The Carrot or the Stick: Rewards, Punishments, and Cooperation. The American Economic Review, Vol. 93 No. 3.

[6] Garrett, T.J. (2014), Long-run evolution of the global economy: 1. Physical basis, Earth’s Future, 2, 127–151, T. J. Garrett.

[7] Garrett, T. J. (2012), No way out? The double-bind in seeking global prosperity alongside mitigated climate change, Earth's Future, Volume 2, Issue 3, pages 127–151, March 2014

[10]  Anderson, K. (2012). Climate change going beyond dangerous – Brutal numbers and tenuous hope. Development Dialogue September 2012. What Next Volume III. Climate, Development and Equity.

[11] Socrates (470-399 BC). Socratic paradoxes: “No one desires evil”

[14] Randers (2012). 2052: A Global Forecast for the Next Forty Years. Report to the Club of Rome. Jorgen Randers, Professor of Climate Strategy, BI Norwegian Business School, Oslo.Chelsea Green Publishing, Vermont, USA, June 2012 (392 pp).

[18] IPCC, 2014a: Impacts, Adaptation and Vulnerability. Contribution of WG II to the Fifth Assessment Report (AR5). March, 2014.

[19] IPCC, 2014b: Mitigation of Climate Change. Contribution of WG III to the Fifth Assessment Report (AR5). April, 2014.

[22] West, Brown & Enquist (2001). A general model for ontogenetic growth. Letters to Nature.Geoffrey B. West, James H. Brown & Brian J. Enquist. Nature, Vol 413, 11 October 2001.

[23] Brown, West & Enquist (2005). Yes, West, Brown and Enquist’s model of allometric scaling is both mathematically correct and biologically relevant. Functional Ecology 2005,19, 735 –738. Brown, J.H., Geoffrey B. West and B. J. Enquist.

[24] Virgilio & Marshall (2009). Forest Carbon Strategies in Climate Change Mitigation:Confronting Challenges Through On the-Ground Experience, The Nature Conservancy.Arlington, Virginia. Virgilio, N. and S. Marshall. 2009.

[25] UNEP (1999). Cultural and Spiritual Values of Biodiversity United Nations Environment Programme. Compiled and Edited: Darrell Addison Posey, United Nations Environment Programme.

[26] Grace, Mitchard & Gloor (2014). Perturbations in the carbon budget of the tropics. Global Change Biology (2014).

[27] www.ed.ac.uk/news/2014/060614-tropics

 

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Global 4C: Managing Land for Carbon Sequestration with Smart Money
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By:  crcsolutions.org
Contest: Land Use: Agriculture, Livestock & Forestry 2014
How can we scale-up sustainable landscape management to reduce GHG emissions while ensuring food, water, and energy security?