RCC is an essential part of the global carbon reward policy. This policy also includes a sophisticated new market policy to manage the supply on the carbon currency. A market policy is necessary to enable orderly issuance of carbon currency and the provision and enforcement of service level agreements on a case-by-case basis. Service level agreements are necessary to define the rules for estimating the mass of carbon emissions that are avoided and the mass of carbon that is removed from the ambient atmosphere. Service level agreements are also necessary to define standards for monitoring, reporting, verification and surveillance, and to address any non-compliance by participating companies.[6]​.

The historic failure of the global community to share the costs of climate mitigation can be described as the prisoner's dilemma.[7]​[8]​ A potential advantage of the RCC is that it could be used to overcome the prisoner's dilemma by financing a global carbon reward without creating new debts for governments, companies or citizens. This ability to finance climate mitigation on a global scale, and without imposing any direct costs on stakeholders, could be critical to avoiding political disputes and maximizing cooperation at all levels of society. The RCC offers an entirely new channel for scalable climate finance that could be used to protect humanity's heritage.

The RCC and carbon currency could be implemented using a number of different digital technologies and settlement systems. One option is to ask central banks to purchase the carbon currency with conventional bank reserves. In this option, commercial banks, public banks and currency traders could act as intermediaries between the wholesale and retail markets of the proposed carbon currency. Alternatively, participating central banks could develop their own central bank digital currencies (CBDCs) that act as digital cash.[6]​[9]​ Under the second option, the carbon currency could be developed and marketed as a new type of CBDC on a common platform for interbank CBDC trading.

Quantitative easing

Quantitative easing (QE) by central banks generally involves the purchase of government bonds, corporate bonds and other financial assets to increase the overall money supply, either directly or indirectly. The RCC, on the other hand, will result in a direct increase in M1 with the additional currency injected into the economy as debt-free financing for climate mitigation services;[3]​[6]​ so the RCC is a specific form of the EC. The CCR is also heavily biased towards decarbonizing the economy, while conventional CCR patterns have been found to support carbon-intensive industries.[10]​.

Green quantitative easing

Green quantitative easing (green EC) involves the trading of green bonds or climate bonds by individual central banks. According to a study by the Foundation for European Progressive Studies, the application of ECverde could help mitigate climate change, but alone could not substantially influence global atmospheric temperature or prevent severe climate change.[11] RCC is significantly different from ECverde as the RCC aims to coordinate and aggregate the efforts of major central banks, thus generating an outcome that is more strongly correlated with global reductions in greenhouse gas emissions. Unlike the ECgreen, the CCR will not require central banks to carry out technical climate mitigation assessments, and this is because the carbon trading authority will take responsibility for the accountability, fungibility and transparency of the carbon currency.

Modern monetary theory

Modern Monetary Theory (MMT) is a heterodox macroeconomic theory concerned with increasing the supply of national currencies to finance public goods and promote full employment. The CCR is significantly different from the monetary policies proposed in the MMT, as this is because the CCR is designed to expand the money supply of the world economy by coordinating the monetary operations of the central bank to achieve an international goal. MMT, on the other hand, aims to expand the money supply of an individual nation for internal reasons. Furthermore, CCR and carbon currency do not depend on borrowing, debt creation or interest charges. This is because the time value of the carbon currency is embedded in service level agreements that require physical mitigation of long-term greenhouse gas emissions possibly over 100 years. These service level agreements define the standards for monitoring, reporting, verifying and policing carbon inventory.[6]​ RCC is unlikely to pose a direct inflation risk to any country because RCC attempts to spread the resulting monetary inflation across the world.

gold pattern

The RCC and associated carbon standard are analogous to the gold standard of the Bretton Woods system. This is because both standards are designed to link the value of national fiat currencies to the management of specific chemical elements as natural resources.

https://globalcarbonreward.org.

Contenido

La implementación ideal del RCC involucrará a todos los bancos centrales del mundo, sin embargo, el RCC puede ser implementado con tan sólo los 20 o 40 bancos centrales de las economías más grandes del mundo. Esto, sujeto a que aproximadamente este grupo de bancos centrales representa alrededor del 80-90 % de la economía del mundo por PIB nominal.

Antes de implementar el RCC, los bancos centrales participantes deben recibir un mandato que les permita administrar el tipo de cambio de una nueva moneda representativa; instrumento económico de la política pública “Recompensa Global del Carbono”. La moneda establecerá una señal de precio positiva[6]​ que ayudará a complementar los impuestos al carbono, el comercio de desechos de emissiones y políticas públicas no comerciales que ya se encuentren implementadas.

carbon currency

The representative currency must be denominated in carbon mitigation services, in which, for each unit of account, 1000 kg of COe will be mitigated for 100 years.[6]​ This currency can be called a carbon-backed currency or simply be called carbon currency, which will not have legal basis in any country and will only be marketed as a financial asset.

The carbon currency will play three key roles: financial incentive, as a store of value and as an accounting instrument to record carbon inventory based on the RGC policy. The total supply of the carbon currency will be proportional to the total mass of carbon that is mitigated and rewarded. All carbon supply will be withdrawn from carbon markets, so the carbon currency will not act as a carbon offset as there will be no carbon offset under the policy.

Central banks participating in RCC will be instructed to create additional fractional reserves to purchase the carbon currency in open markets. Fractional reserve expansion and corresponding currency trading will need to be coordinated to give the carbon currency an exchange rate base that is calibrated to meet the goals of the Paris Agreement.[6]​ The purpose of the RCC is to underwrite the long-term minimum price of the carbon currency while the supply of the carbon currency increases over time. Such currency will increase when it is issued to companies as a financial reward for their climate mitigation services.

Carbon Trading Authority

The CCR and the carbon currency will be administered by a supranational authority, called the carbon trading authority. The carbon trading authority will ensure that the devaluation of national currencies through RCC is as uniform as possible across nations, with the aim of ensuring that the resulting monetary inflation is politically acceptable and economically benign. The currency devaluation process will not apply to fiat currencies that are not part of the RCC program.

The carbon trading authority will be responsible for mitigation assessments and also for the accountability, fungibility and transparency of the carbon currency. For this reason, central banks participating in the RCC are not required to carry out technical assessments on climate mitigation services, allowing them to focus on other responsibilities.

RCC is an essential part of the global carbon reward policy. This policy also includes a sophisticated new market policy to manage the supply on the carbon currency. A market policy is necessary to enable orderly issuance of carbon currency and the provision and enforcement of service level agreements on a case-by-case basis. Service level agreements are necessary to define the rules for estimating the mass of carbon emissions that are avoided and the mass of carbon that is removed from the ambient atmosphere. Service level agreements are also necessary to define standards for monitoring, reporting, verification and surveillance, and to address any non-compliance by participating companies.[6]​.

The historic failure of the global community to share the costs of climate mitigation can be described as the prisoner's dilemma.[7]​[8]​ A potential advantage of the RCC is that it could be used to overcome the prisoner's dilemma by financing a global carbon reward without creating new debts for governments, companies or citizens. This ability to finance climate mitigation on a global scale, and without imposing any direct costs on stakeholders, could be critical to avoiding political disputes and maximizing cooperation at all levels of society. The RCC offers an entirely new channel for scalable climate finance that could be used to protect humanity's heritage.

The RCC and carbon currency could be implemented using a number of different digital technologies and settlement systems. One option is to ask central banks to purchase the carbon currency with conventional bank reserves. In this option, commercial banks, public banks and currency traders could act as intermediaries between the wholesale and retail markets of the proposed carbon currency. Alternatively, participating central banks could develop their own central bank digital currencies (CBDCs) that act as digital cash.[6]​[9]​ Under the second option, the carbon currency could be developed and marketed as a new type of CBDC on a common platform for interbank CBDC trading.

Quantitative easing

Quantitative easing (QE) by central banks generally involves the purchase of government bonds, corporate bonds and other financial assets to increase the overall money supply, either directly or indirectly. The RCC, on the other hand, will result in a direct increase in M1 with the additional currency injected into the economy as debt-free financing for climate mitigation services;[3]​[6]​ so the RCC is a specific form of the EC. The CCR is also heavily biased towards decarbonizing the economy, while conventional CCR patterns have been found to support carbon-intensive industries.[10]​.

Green quantitative easing

Green quantitative easing (green EC) involves the trading of green bonds or climate bonds by individual central banks. According to a study by the Foundation for European Progressive Studies, the application of ECverde could help mitigate climate change, but alone could not substantially influence global atmospheric temperature or prevent severe climate change.[11] RCC is significantly different from ECverde as the RCC aims to coordinate and aggregate the efforts of major central banks, thus generating an outcome that is more strongly correlated with global reductions in greenhouse gas emissions. Unlike the ECgreen, the CCR will not require central banks to carry out technical climate mitigation assessments, and this is because the carbon trading authority will take responsibility for the accountability, fungibility and transparency of the carbon currency.

Modern monetary theory

Modern Monetary Theory (MMT) is a heterodox macroeconomic theory concerned with increasing the supply of national currencies to finance public goods and promote full employment. The CCR is significantly different from the monetary policies proposed in the MMT, as this is because the CCR is designed to expand the money supply of the world economy by coordinating the monetary operations of the central bank to achieve an international goal. MMT, on the other hand, aims to expand the money supply of an individual nation for internal reasons. Furthermore, CCR and carbon currency do not depend on borrowing, debt creation or interest charges. This is because the time value of the carbon currency is embedded in service level agreements that require physical mitigation of long-term greenhouse gas emissions possibly over 100 years. These service level agreements define the standards for monitoring, reporting, verifying and policing carbon inventory.[6]​ RCC is unlikely to pose a direct inflation risk to any country because RCC attempts to spread the resulting monetary inflation across the world.

gold pattern

The RCC and associated carbon standard are analogous to the gold standard of the Bretton Woods system. This is because both standards are designed to link the value of national fiat currencies to the management of specific chemical elements as natural resources.

https://globalcarbonreward.org.