The Solar Dollar is a currency for the people: to be issued as a reward for climate mitigation and financed by Green Quantitative Easing.
The Solar Dollar (SOL) is a world currency for a cohesive social-and-environmental movement that will change everything. The new currency will avoid political delay and will systemically change the global economy to address the true Social Cost of Carbon (SCC). SOL is 'money', but unlike traditional banking, SOL will be issued as debt-free rewards for the proven mitigation and sequestration of greenhouse gases. SOL will incentivise technological innovation and adoption. Our broad vision is to offer SOL rewards to enterprises of all sizes, in all sectors of the economy (energy, industry, domestic, agriculture, etc), and in all geographic locations (local to global).
SOL is a digital currency traded over the Internet and mobile phones using the Bitcoin Blockchain. SOL will be issued by licensed auditors who will receive data from participating enterprises, and will undertake assessments based on statistical rules. The mitigation data will be deposited in a global public database for transparency and improved market efficiency.
- SOL will aggregate with carbon taxes to reduce greenhouse pollution
- SOL will complement existing carbon markets (cap-and-trade)
- SOL are not carbon credits
- SOL will not pay twice for carbon offsets
THE ROADMAP has three stages. Stage 1 is launched by a private consortium. New legislation is not needed, and this avoids political delay. SOL issuance and trading will grow rapidly as a global movement at the nexus of economic and environmental issues. Stage 2 begins when enough people (50-100 million) buy SOL to create a political tipping-point for U.N. negotiations. Stage 3 will involve 100+ years of carbon debt de-leveraging and a new monetary paradigm.
STAGE 1 begins with six pilot projects in different regions. These pilots will be coordinated as an integrated action plan to test and commercialize the SOL administrative system (rules, software, contracts, security, etc). The business model will aim for exponential growth by offering multi-level SOL commissions to auditors and administrators. The SOL movement will operate through multiple channels: social media, commissions, trading, and public debate. This will unify disparate groups with a common strategy. Citizens everywhere will be encouraged to buy SOL to vote/petition for the new policy.
STAGE 2 begins with a U.N. meeting to register SOL as a World Currency in ISO4217 with one or more tickers (SOL, SUN, SAM, YAN, & SON). Central banks (BIS) and political leaders will negotiate to back the SOL with a World Monetary Union for Climate Change. Wall Street investors will speculate on the negotiations, driving the SOL price higher, and this momentum will encourage the U.N. Security Counccil (p. 74-76) to ratify the policy. A central bank protocol will fund the SOL system with Green Quantitative Easing (GQE). This will avoid taxes and foster real economic growth.
SOLAR DOLLAR SYSTEM:
- Unit of Account: 100 kg CO2-e verifiably mitigated. SOL supply is pegged to assessed mitigation.
- Medium of Exchange: digital currency over the Internet, mobile phones, and banking systems.
- Social Agreement: SOL will be issued to mitigating enterprises under the Beneficiary Pays Principle. Costs will be spread globally as inflation, and SOL prices will be managed under an international monetary protocol. A public ledger will provide security and digital contracts will enforce agreements (defaults and demurrage).
Store of Value: during Stage 1, demand for SOL is created by citizens who buy SOL as a petition. A nascent SOL bull market will emerge in anticipation of Stages 2 and 3. During Stage 3, demand will be created by central banks that buy SOL with fiat currency created by GQE. A planned SOL bull market will preserve wealth and stabilize the economy. Climate sensitive commodities will be traded in SOL.
Which plan do you select for China?Seed Proposal: Deep Decarbonization Pathways Project in China
Which plan do you select for India?Renew India: Public Transport with no Carbon Footprints.
Which plan do you select for the United States?2020 Cities By 2020: America's Mayors Taking Charge On Climate Change
Which plan do you select for Europe?Save Greece and the Climate simultaneously
Which plan do you select for other developing countries?Towards a Holistic Path to combating Climate Change Impacts in Kingdom of Jordan
Which plan do you select for other developed countries?Reforestation Olympics
What additional cross-regional proposals are included in your plan, if any?
CROSS-REGIONAL COMPETITIONS: The Solar Dollar (SOL) administrative system needs to be developed and tested for evaluating bio-sequestration in different climatic and geographic regions. Methods of assessing bio-sequestration are described in Global 4C: Managing Land for Carbon Sequestration with Smart Money. Given that the SOL is a world currency and reward, it can be used for assessing and rewarding competitions.
THE SOLAR GAMES: One novel idea is a Reforestation Olympics, which is a world competition for bio-sequestering carbon with silviculture in a predefined space (arena) in a developed country. The word 'Olympics' is copyrighted by the International Olympic Committee, and so a new iconic name is needed - 'The Solar Games' is proposed. The Solar Games will invite the bio-sequestration of carbon anywhere in the world (developed and developing nations) with a number of events defined by plot type and area. For example: forestry (10 hectares), agriculture (1 hectare), permaculture (1000 m2), and gardens (100 m2). Competitors will be judged by the amount of SOL earned, based on carbon sequestered, biodiversity created, food produced, and sustainability. The Solar Games will promote the SOL system and the effectiveness of bio-sequestration technologies. Games judging will be undertaken by licensed auditors who will monitor plots at 2-6 month intervals, and winners will be announced at 1 to 4 year intervals. The Solar Games will be sponsored by agricultural companies and garden suppliers, and popular voting is feasible with the Bitcoin Blockchain.
The Solar Games can extend to other mitigation technologies and behavioral changes (A new race to the moon). For example, Solar Games can include windmills and solar panel designs, and the assessment of living buildings under the Living Building Challenge (LBC) of the International Living Futures Institute (ILFI). Another exciting competition would be based on transforming energy inefficient buildings to green buildings.
How do the regional and cross-sectoral plans above fit together?
PILOT PROJECT AIMS: Regional and sectorial mitigation projects will be piggy-backed as Solar Dollar (SOL) pilot projects, to develop the SOL administrative system and to create a steady supply of SOL currency during Stage 1. Pilots will occur in a variety of regions and economic sectors, but preferred are low-risk mitigation/sequestration projects. Pilots will survey the social and political responses to the economic policy. Pilot projects will also test a voting system (fraud-free) by giving Citizens the option to petition for the policy by buying SOL.
PILOT PROJECT SELECTION: Stage 1 Pilot Projects will be aligned with proven mitigation technologies, because a key aim is to issue SOL currency for global trade. Pilots will be located in China, India, USA, EU, and other developing and developed countries. Projects that develop machine-sensors and networked meters, will be given special attention to bring real-time data collection directly into the administrative system. Also important will be the political, economic, and cultural actions that can be used to increase socio-economic demand for SOL and to engender trust in the currency system. Marketing and education will explain the financial and environmental benefits to stakeholders. SOL must be worthy of an international agreement in preparation for Stage 2.
ADMINISTRATIVE SYSTEM: The SOL administrative system will be known as 'The World Tree' or 'Tree of Knowledge'. It will operate over the Internet to provide public ledgers and database management for auditor licensing, CO2-e mass assessments, SOL trading, social networking, data sharing, investment, collaboration, and verification. Citizens everywhere will be able to access The World Tree service by Internet and mobile phone. The World Tree will become the largest and most popular social and financial network on the Internet and in human history. It will eventually represent about 3-5% of Gross World Product (GWP) and will bring all nations together in a single market for decarbonization.
CROSS-SECTORAL: Each of the following sectors will be covered by at least one pilot project: (i) heavy industry, (ii) light industry and domestic, (iii) clean energy, and (iv) sequestration. Pilots for family planning will be addressed in Stage 3.
ASSUMPTIONS: The trading of digital currencies is legal and covered by tax laws in the countries listed. Special allowances will be sought from the governments of China and Russia, and a few other nations where Bitcoin is restricted.
INTERNATIONAL AGREEMENTS: Stages 2-3 will commence around the year 2020, when SOL will be sponsored by nation states (e.g. Kiribati, Tuvalu, Bangladesh) to be brought into U.N. negotiations for registration into ISO4217. Alternatively, the scope of ISO4217 will be expanded to include SOL as a stateless world currency.
NATIONAL AND REGIONAL PROJECTS:
(1) China: Preferred pilot projects will promote deep decarbonization and conform with the recent Eco-Civilization policy initiative of the Central Committee of the Communist Party of China. Examples will inlcude issuing SOL to private/public enterprises for cheap clean energy and reduced GHG emissions from agriculture, and to maximize public ownership of SOL and petitions for the SOL policy in China.
(2) India: Issuing SOL for the electrification of Rickshaws businesses (transport) is a pilot project that will attract worldwide media attention and provide cheap advertising in major population centers, such as Mumbai, Delhi, Chennai, Kolkata, Vizag and Ahmedabad. Renewable energy supply will be rewarded SOL as the primary pilot project in India, and this will create a steady supply of new SOL. The project for smart metering for gas utilities at the cities of Hubli Dharwad and Ilkal can be used to integrate real-time data collection into SOL trading, and to create 'smart' cities and villages. Young Energy Ambassadors will educate the public about SOL trading and voting.
(3) United States: The US leads the world in trends and innovation. The world is now waiting for an 'evolutionary' new philosophy that will guide humanity through the 21st century. The key is to define the dream: a Solar Dollar world currency for economic freedom, sustainability, and a level playing-field. Leading US corporations and US cities (and Mayors) are requested to sponsor the development of the Solar Dollar digital platform for the social good. SOL represents freedom because it will be administered by private enterprise, and marginal costs will approach zero with new technologies.
(4) EU: A special EU pilot project can be established to mitigate both GHG emissions and the financial crisis in Greece. A limited Green Quantitative Easing (GQE) program will be coordinated with the ECB and IMF to provide Greece with unconventional finance for renewable energy projects (wind and solar). A trial GQE program will be used to purchase a local Solar Dollar (called SON) that is ring-fenced to the Greek economy. This SON pilot project will create new jobs and attract investment to Greece. The SON pilot will reward proven GHG mitigation within Greece's energy market, and so the SON pilot will demonstrate the effectiveness of the Sollar Dollar mechanism, and will demnstrate how/why it will complement all existing carbon markets. This will assist the EU ETS which suffers an over-supply of emissions credits and 75% of carbon offsets lacking integrity. Regular SOL pilot projects will piggy-back on other clean energy projects in the EU to increase the supply of SOL currency.
Stage 3 will launch SOL in developing nations, and the first such nation could be Jordan because it has a developed knowledge economy, large solar energy potential, and liberal banking sector. Stage 3 projects will review:
(A) effectiveness of SOL finance on holistic national decarbonisation;
(B) socio-economic co-benefits for refugees of wars and climate change; and
(C) benefits for managing the water-energy nexus in a very dry region.
Explanation of the emissions scenario calculated in the Impact tab
Emissions Scenario: EnRoads was used to roughly analyze the Solar Dollar (SOL) policy. The SOL policy is currently overlooked by policy experts, and so Stage 3 is unlikely to come into effect until after 2020.
Climate Policy: SOL policy aims to create a global reward scheme (market-based) for all types of greenhouse gas mitigation and sequestration, and the SOL price will rise responsively (in Forex currency markets). It is therefore not necessary to pre-define technological variables.Unlike orthodox polices (i.e. carbon taxes, cap-and-trade, regulations) this policy can establish a 'hard objective', such as limiting global warming to 2 deg-C by 2100. This requires allowing the SOL price to rise adaptively to achieve the objective. This is a rational approach, because orthodox polices cannot address the true Social Cost of Carbon (SCC) when there is political delay, climate feedbacks, and long-term uncertainties. The carbon tax is assumed to reach $100/ton by 2022, but this is not a policy pre-requisite.
World GDP: Finance for the SOL policy will be created with Green Quantitative Easing (GQE) and this will create inflation and limit economic growth as needed.
Population: Family planning will be rewarded by SOL in Stage 3 to limit population growth.
Energy Efficiency: Accelerated efficiencies are anticipated for buildings, industry, and transportation because of SOL rewards.
Subsides for Low Carbon Energy: SOL will be paid as a subsidy for cleaner energy and the assumed values are high to reflect this.
Breakthroughs in Low Carbon Energy: All types of clean energy are subsidized by SOL based on their mitigation potential. For this reason 50% price reductions are anticipated around 2030-2040 when many clean-energy utilities will be scaling-up rapidly.
Land use: Emissions are assumed to reduce by 40% between 2022-2050, because bio-sequestration will be rewarded with SOL.
What are the plan’s key benefits?
A global 'open-market' can unlock the skills of entrepreneurs and resources of investors to achieve <485 ppm CO2-e.
Meeting Economic Goals: SOL's price will complement carbon taxes and credits. Rising SOL value will be managed (in Forex markets) with the transfer of purchasing power from national currencies (fiat) under a worldwide monetary protocol for central bank SOL trading. Central banks will purchase SOL with fiat created under Green Q.E. The world currency will reduce debts, spur innovation, reduce inequity, create jobs, and reduce U.N. reliance on donations.
Multi Sector: SOL digital currency will be issued to enterprises in all economic sectors and geographic locations. It introduces a 'level playing field' with scientific rules for assessing the decarbonisation of (1) heavy industry, (2) light industry and domestic, and (3) energy supply. SOL will reward (4) sequestration of all kinds, and (5) family planning.
International Equity: Existing subsidies for fossil energy will be counter-balanced by SOL rewards/subsidies. The cost for financing SOL will be spread globally as inflation and without disadvantaging individuals or firms. SOL avoids bureaucracies, middle-men, free-riding and corruption.
Geopolitics: SOL will not erode the reserve currency status of nations because a monetary protocol will share costs amongst nations. Major economic blocks can determine trade rules and currency convertibility rules for SOL.
Socially Progressive: Promoted are non-violence, scientific rigor, lawful action, collaboration, egalitarianism and decentralization of authority.
Knowledge Sharing: Administration over the Internet will share worldwide mitigation data instantaneously, and will establish causality for economic planners.
Empowering Indigenous and Communities: Micro-finance can be issued to mobile phones, even in the most remote regions, for bio-sequestration and protection of biodiversity. This avoids the centralized authority of REDD and carbon offset trading.
What are the plan’s costs?
Institution: About $0.5 to 1 million USD seed money to establish the Solar Dollar Institution and attract corporate sponsors. The seed money will be recorded as shares in a trust fund, and will be used for marketing, presentations, legal work, board of directors, manifesto, advocacy, and project management. In-kind support from partners will include office space and administrative services.
Research: About $3-5 million USD (trust shares) will be raised for economic models, protocol development, and research publications to define the terms of reference for legal, commercial, and technical issues.
The World Tree: About $25-50 million USD from investors to develop the administrative system (The World Tree). This capital finance will be recorded as shares owned in a consortium trust fund. Pilot projects will piggy-back on external collaborative projects and will be used to develop the administrative system. This will support field-testing, validation, and marketing.
Campaign: About $1 million USD for advocacy to bring the Solar Dollar into negotiations with UN, World Bank, IMF and BRICS (Stage 2).
Business Model: During Stage 3 about $1 trillion USD worth per year of SOL will be issued as rewards to firms and multi-level commissions to licensed assessors and administrators. Shareholders, firms and citizen holders of SOL will enjoy a rising asset when SOL prices are traded higher by central banks. SOL commissions will pay for system maintenance and development.
Global Abatement: According to the IEA (2014) the cost of de-carbonization to remain below 2 °C will require about $53 trillion in cumulative investment by 2035, including $40 trillion for energy supply and $14 trillion for energy efficiency. Approximately $20 trillion of fossil assets will also be written down. A significant portion of these costs will be deleveraged by the SOL policy, as central banks buy SOL with fiat currency created by GQE. This process will transfer purchasing power from national fiat into SOL.
What are the key challenges to enacting this plan?
- Communicate to the world why/how the Solar Dollar (SOL) is needed to price and finance climate mitigation and to avoid catastrophic global warming.
- Present at conferences, firms, institutions, and through the mainstream media.
- Earn sponsorship for the Solar Dollar project (www.global4c.org) from corporations and institutions.
- Build a multi-disciplinary and multi-group collaboration.
- Build a new global social-environmental movement.
- Promoting monetary-and-market theory as the basis of an effective social transformation.
- Promoting a monetary ecosystem for climate protection and long run sustainability, peace, and security.
- Promoting Common but Decentralized Social Responsibility (CBDSR).
CBDSR differs significantly from Common but Differentiated Responsibility (CBDR) of nations as defined at the 1992 Rio Earth Summit and by international law. The existing CBDR principle assigns responsibility to governments to implement caps, regulations, and penalties that limit greenhouse pollution. CBDSR complements CBDR with a currency system based on global rewards (Beneficiary Pays Principle), global pricing, and decentralized authority.
CBDSR assigns responsibility for developing the SOL administrative system to businesses, scientists, and ethicists. CBDSR assigns responsibility for introducing a World Monetary Union for Climate Change and Monetary Protocol to central bankers and political leaders.
Our broad challenge is to introduce a systemic change to the global economy that will trigger a socio-economic transformation and a consciousness shift that creates a sustainable economy. This new paradigm aims to create a balance of penalties ('masculine') and rewards ('feminine') for progressive and dynamic change.
(A) From Jan 2016: Find financial & political sponsors for advocacy; find policy custodians, build strategic alliances, release the Solar Dollar Manifesto to the world in a new global social and environmental movement that Changes Everything.
(B) January 2016-Dec 2016: Find sponsors and partners for the Solar Dollar (www.solardollar.org) and policy development (www.g4cm.org). Publish journal papers defining the Solar Dollar Mechanism and economic theories.
(C) Jan 2016-Dec 2017: Solar Dollar study commences; set-up collaborative business structure and board of directors, undertake SOL macro-economic modeling, undertake SOL policy analysis; undertake SOL legal and constitutional review; undertake SOL ethics review; begin direct outreach for political and policy allies.
(D) July 2016-Dec 2018: Solar Dollar administration system is developed with first pilot projects; develop multi-media presentations; publish a Solar Dollar Policy White Paper; present key findings at conferences; direct outreach for political and policy allies.
(E) July 2019 - Dec 2020: Target 100+ million traders in SOL.
(F) Jan 2021: deliver SOL to the United Nations for registration as a world currency for environmental services.
(G) Approximately 2021 to 2100, and then beyond 2200 for the long run drawdown of CO2 and climate stabilization. Refer this pdf for the strategy.
Project References & Endorsements
[i] Chen D. B., J. van der Beek, J. Cloud, H. Jin, and A. Borrego (2015). World Currencies for Sustainability, World Economics Association (WEA) Conferences, No. 1 2015, Ideas towards a new international financial architecture?, 15th May – 20th July, 2015
[vi] Chen D.B., J. Cloud, and J. van der Beek (2015). 2015 Canberra Conference on Earth System Governance, Australian National University, Australia (14-16 December). Global 4C: A Proposal for a World Monetary Union for the Strong Mitigation of Climate Change.
 Payton, L (June 9, 2014). Tony Abbott, Stephen Harper take hard line against carbon tax: 'Job-killing carbon tax' criticized by Australian, Canadian prime ministers meeting in Ottawa. CBCNEWS Politics.
 Stern (2013). The Structure of Economic Modeling of the Potential Impacts of Climate Change: Grafting Gross Underestimation of Risk onto Already Narrow Science Models. N. Stern, Journal of Economic Literature 2013, 51(3), 838–859.