Decarbonization theory
Introduction
Quantitative Carbon Reduction (CCR) is an unconventional monetary policy presented in an international climate change policy proposal called the Global Carbon Reward.[1][2][3] The main objective of the CCR is to finance the RGC proposal by managing the exchange rate of the currency represented by the RGC. The representative currency will be an international unit of account and store of value, as it will represent the mass of carbon that is mitigated and in turn will reward the new policy.
RCC is designed to manage the exchange rate of the representative currency by decreeing an internationally agreed base price for that currency, and its base price will need to increase predictably over many decades to meet the main objectives of the 2015 Paris Agreement.
RCC is the name given to the currency trading operations of central banks that have agreed to cooperate and coordinate their efforts to manage the exchange rate of the representative currency. In addition to currency exchange, central banks must communicate their intentions by announcing the future exchange rate of the representative currency to market participants, thereby increasing private demand for the representative currency in the foreign exchange market.
With the RCC, it is proposed that market participants accept the new representative currency as an investment asset given that it will have relatively low financial risk, relatively high appreciation and relatively high liquidity.
History
The RCC was first proposed in 2017 by Delton Chen, Joël van der Beek and Jonathan Cloud,[1] with the aim of creating a new socioeconomic route to achieve the main objectives of the 2015 Paris Agreement. The RCC was reviewed in 2018 by Guglielmo Zappalá as part of an economics thesis,[3] and was first mentioned in the media in 2020 with two articles appeared on Bloomberg business platforms.[4][5].
Even though RCC has not yet been included in mainstream narratives on the economics of climate change. The RCC has the scope to address a broad spectrum of critically important systemic climate risks, such as weak carbon pricing, lack of climate finance, and lack of social cooperation.[2].