A complementary climate currency as an emergent economic system

to reliably achieve a coordinated emissions reduction trajectory

Emergent systems are characterized by the emergence of new properties in a complex system as a result of the interaction of its elements. Emergence arises on the basis of spontaneous self-organization, as can be observed in schools of fish or flocks of birds, for example.

 

With the climate currency ECO (Earth Carbon Obligation), the non-profit organization for sustainable economics SaveClimate.Earth has developed an emergent economic model (Cap, Personalize and Trade) that could replace European certificate trading and national CO2 taxes as a quota, pricing and billing system for greenhouse gases. 

 

This complementary resource currency is also a complex, self-regulating emergent economic system that reacts extremely flexibly and in real time to changing framework conditions - without the need for political tax impulses on market participants. The only control variable required is the volume of ECO spending. This is made available to all citizens as a personal tradable emissions budget to pay for individual fossil fuel consumption.

 

The behavior of this market economy system develops autonomously, based on simple rules, due to the abundance of interactions between the various players, such as buyers and sellers, industry, investors, as well as the underlying rules of supply and demand. The dynamics of the market arise from the individual purchasing decisions of the multitude of consumers and the interest-driven actions of all players. The model of limited personal emissions budgets places the control potential for climate protection entirely in the hands of all citizens, as the smallest unit of the market. This leads to an emergent behavior of the entire economic system, which results from the large number of these autonomous interactions.

 

The market-based approach of the ECO climate currency ensures absolute technological openness, as the most suitable methods and most efficient technologies that achieve the greatest reduction in emissions at the lowest cost are automatically applied.

 

 

"The ECO solves the urgent problem of linking national interests with global necessities - without the need to implement often unpopular political measures and monitor compliance with them."

 

 

The "Cap Personalize and Trade" concept adds a personalized component to the already familiar "cap-and-trade model", enabling individuals to make autonomous purchasing decisions for more or less climate-friendly consumption via equal personal emissions budgets. In this way, every citizen decides - self-effectively - how to integrate climate protection into their lives, not whether! The system works without additional regulatory increases in the cost of our consumption, such as those arising from the passing on of certificate costs and/or the surcharge through the CO2 tax. The possibility of trading our own unused emission rights also reduces economic inequality. This is because there is a direct financial equalization between high consumers and low emitters, which particularly benefits lower-income households or citizens of poorer countries. However, the agreed total emissions budget is not exceeded. In this way, the ECO sets the necessary ecological guard rails, while still allowing a maximum of personal freedom of consumer choice.

 

 

The system is based on the interactions and decisions of various market players. The dynamics arise from the individual actions of the participants, who intrinsically strive to reduce their own emissions - a much better system than the current one, which in a sense is structured like a "small-scale planned economy". For example, we prescribe the type of heating, subsidize the purchase of cars with certain types of drive, and "punish" certain consumer behavior by making things more expensive. The result: repeated protests from citizens and, as a result, decisions that are withdrawn or watered down to the point of meaninglessness.

Cap, Personalize and Trade meets people's basic need for justice and could initiate a socio-ecological transformation of our economy and society.

 

More on a potential game changer in climate policy: www.saveclimate.earth

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