Solar Dollars: The World Currency to Price and Finance Carbon Mitigation by global4c.org

Dear Michele,

it is great to receive your message.

I have downloaded your report and I will read it soon:
A new paradigm: establishing a global carbon market as an element for the foundation of a ‘Low Carbon Bretton Woods’ system

and I am also very interested to read your MIT project:
Establishment of a sound technical system to distribute emissions reductions
 

Please allow me a day or two to read the material, and then we should arrange to talk, especially about your proposal for an international monetary system and Low Carbon Bretton Woods. These terms are consistent with Global 4C, and I hope that we can have a (Skype) conversation soon. 

P.S. our website www.global4c.org is undergoing server change, and so it is not working at this time.

Warm regards,

Delton

Delton Chen Ph.D.
Research Fellow | Email: delton.chen@drawdown.org |www.drawdown.org | Cell: 001 52 1 55 16988192 Mexico (Please Text First)Project Coordinator | Email: deltonchen@crcsolutions.org | www.crcsolutions.org | Tel: +1 908 396 6179 Office USALead Author | Email: deltonchen@engineer.com | www.global4c.org | Post: 5 Devlin Court, Tewantin, Qld 4565, Australia About Me | uq.academia.edu/DeltonChen/Papers | Geo-Hydrologist & Climate Policy Research

P.S.

CORRECTIONS

2) The unit of account for GER has 1000 kg CO2-e, whereas the SOL is 100 kg CO2-e, and the difference is only for convenience.

We all look forward to your contributions and getting to know you!

Thank you Michele.

Please email me with any suggestions to improve the Proposal for  Global Climate Action Plan by  global4c.org.
You are welcome to work on the:

IMPACT and 
Explanation of the emissions scenario calculated in the Impact tab

Cheers

Delton

I agree with Michele. Fortunately, I know that Delton has made some own estimates on the impact, perhaps we should use them instead.

Jan

Dear Solar Dollar team, 

Thank you for this very intriguing and detailed concept of the Solar dollar global currency for carbon pricing, and your contributions thus far to the Global Climate Action Plan contest of MIT's Climate CoLab. I am one of the Fellows for this contest, serving as a liaison to the CoLab, here to answer any questions, and help provide substantive feedback toward strengthening proposals. Fellows will also have a role in the evaluative phase of this contest. 

Overall, your proposal is well-developed and detailed, and contains concrete and actionable steps toward implementation.  A few suggestions on how you could continue to strengthen this work: 

1) As you know, in this contest we are asking contestants to draw from the proposals and concepts within the various MIT CoLab regional and national plans, such to help inform in a global strategy. Good work thus far in selecting other proposals that mesh well with your concept. You may wish to continue to detail, however, more specifically and concretely how you view these various regional and national proposals intersecting and contributing to your concept. This is an area that could use expansion. 

2) You have a very detailed and well-designed Powerpoint presentation in the Dropbox link. Perhaps there is a way to include some more of the graphics and diagrams from that document within the body of your text to aid in explanation. 

3) Make effort to define acronyms during first use (e.g., you use the abbreviation for quantitative easing, QE, in the pitch without defining). 

4) Two comments for your consideration in naming structure. a) Why solar, versus any other renewable? It may be worthwhile to explain your rationale in this; b) There is another currency, the Peruvian Nuevo Sol, that is frequently colloquially referred to as the "sol.' This may lend some confusion in having two currencies by the same name.

5) Finally, but not least, I had difficulty accessing the two Solar Dollar websites referenced within the text. Are these sites currently active and publicly accessible? 

Look forward to seeing how you address these topics, and thank you again for your contributions to the CoLab! 

Best,

Jennifer 

P.S. Currency Naming Conventions

An overview of a five currency system is provided in this 2014 CoLab entry for a U.S. carbon price, and in the figure below.

A judge in 2014 simply said that he didn't want a new world currency. The theory for money indicates that a regular political pathway is not necessary for Solar Dollars, and avoiding the political system is the recommended approach.This is feasible simply by developing the currency system like Bitcoin did about 6 years ago, and then creating a new social movement to bring the currency system directly into U.N. negotiations.

Dear Friends and Contributors,

I have completed the Solar Dollar presentation on the MIT Climate CoLab. Please regard this as our first complete draft. Would you please check the presentation and offer your comments?

Also, please invited all your friends to vote for our proposal.

If you wish to make changes or edits, I would prefer that you emailed me your edits, rather than editing the site directly. This is because the CoLab system has its nuances, and I need to check your ideas and recommendations.

Jan's idea for a 'Reforestation Olympics' was brilliant. But I made some recommendations to expand on Jan's concept, and I recommended changing the name to The Solar Games because the word 'Olympics' is actually copyrighted by the Olympic Committe.

Best regards,

Delton Chen

Dear Delton,

excellent job! The updated version of the proposal is definitely intriguing and stimulating. We have already had to share thoughts and opinion on the idea all and its innovative value and potential is unquestionable.

There is just a point I wish to address: on my opinion the whole proposal may be even more effective if and when a demand of SolarDollars can be established.

In other words quantifying absolute reductions related to the 2-degree target as well as defining a fair and transparent distribution system for them is not only an imperative for the future of climate change mitigation.

This definition and quantification may serve at clearly establishing the (minimum) quantities of required SollarDollas, therefore avoiding risks such as excessive fluctuation in their prices and aggressive financial speculation.

We all know that the Intended Nationally Determined Contributions (INDCs) represent the most likely option to be adopted in Paris to attempt establishing a 2-degree target pathway. We also know that these highly political tools are unlikely to properly work and cover the entire need of emissions reductions for the 2-degree target achievement.

This all leads me to propose to keep on working together in the attempt to identify a more efficient, equitable, accountable and transparent system to define the 'demand side' of reductions. The proposal made here under the name of "Establishment of a sound technical system to distribute emissions reductions" (https://www.climatecolab.org/web/guest/plans/-/plans/contestId/1302401/planId/1323303) goes towards this direction and may be a starting point.

Best,

Michele

Hello Everyone,

I have updated the figures and references. I also changed the graphic for The Solar Games.
I hope you like the new image - I think it is much more appropriate.

The editing time ends on Saturday midnight, so if you have any more recommendations for edits, please let me know.

Cheers

Delton
 

Dear Contributors,

thank you for emailing me your suggestions. I have edited the proposal and I am happy with the final product. If you see any errors or problems, please email me.

Faithfully,
Delton


 

Dear Contributors,

thank you for emailing me your suggestions. I have edited the proposal and I am happy with the final product. If you see any errors or problems, please email me.

Faithfully,
Delton


 

Hello,
Great, we made it into the finals! I have copied the following from the Evaluation section for your information.
Thanks again everybody,
Delton

RESPONSE TO JUDGES COMMENTS

On behalf of authors and supporters, thank you for your feedback and questions.
I have provided our ideas to address the judges additional comments:

Judges Comments-

"We found this to be a very innovative and creative idea, the feasibility of which will be premised on (1) who would issue such currency, (2) who will be the regulator, and (3) how will institutions such as the International Monetary Fund and Central Banks get involved in it. It is well thought through, and two additional minor points that need further elaboration are: 
- how to finance the auditors, 
- how to ensure that the CO2 basis for the SOL is not sold again on the market."

Proposal Response -

Answering the first question involves a business model and contracts that micro-manage the partnerships and prevent free-riding and corruption. The approach involves specific steps, and so there was not space to explain this on the website.

Answer 1 - How to finance the auditors and control the currency supply?

1) Enterprises that abate or sequester GHG emissions can voluntarily join the global reward scheme to earn Solar Dollars (SOL) as proportional rewards for the mass of CO2-e verifiably mitigated. They agree to provide their data to a public domain database (for instantaneous market knowledge). They are bound by digital contracts, most of which are actually imbedded in the SOL digital currency.
These digital contracts enforce the conditions and assessment rules, including things like duration of safe storage (i.e. for sequestration).

2) Auditors' commissions will be a fixed percentage of the Solar Dollar (SOL) rewards given to enterprises that mitigate. For example, auditor commission may be 4% of all SOL that they award to enterprises. 

3) A percentage, say 0.5%, of all SOL rewards will be given to the administrators (shareholders) who own and operate the digital administrative system. 

4) The enterprise that undertakes mitigation will first do a self-assessment, and this will be used to define the fixed commission for the auditor. They may be inclined to assess kg CO2-e slightly on the low side, because this will reduce their administration costs.

5) The enterprise has a contractual obligation to do their self-assessment within, say +/-20% accuracy, otherwise they will be penalized an administrative fee (a deposit).

6) The administrative system will chose the auditor for the assessment work, based on skills and capacity, and to reduce the likelihood of collusion and free-riding.

7) The auditor's commission is already fixed before starting the assessment, so the auditor has no incentive to bias their estimates high or low - they are paid a set commission.

8) The administrative system will do automated and random checks on the assessment to seek out errors or free riding (much like the tax department will do automated checks). With an advanced system, the data can be cross checked with other databases. Also, electronic field monitoring equipment can transfer data directly into the assessment process.

9) The public has access to the mitigation database for oversight and checking. Private whistle blower forms will be available for reporting corruption.

10) Everybody working in the system (people who trade with SOL) can vote on enterprises and auditors with 'trust' and 'quality of work' metrics. Much like people vote on each other in Ebay and Airbnb etc. 

11) If enterprises happen to default on their obligations, or are corrupt, the system has methods to either recover the SOL or declare it void through the digital contracts embedded in the SOL.

12) Enterprises and citizens who earn SOL are allowed to trade it into the global marketplace for fiat currency. Therefore there will be a percentage SOL in circulation that was issued for mitigation that is declared 'void'. This 'bad money' will be taken out of circulation with a uniform 'demurrage fee' applied to all holders of SOL. Hence the 'bad money' is removed from the entire SOL supply as a percentage of all money, and not from individuals who happen to buy SOL that should have been voided. This allows everybody to trade SOL without taking other peoples' risk.

13) The demurrage fee represents a social and physical inefficiency of the policy. This is not a fundamental problem, because the monetary protocol will adjust the SOL price higher in response to the inefficiency (i.e. to increase the global rate of mitigation). In other words, when people who own SOL see that their holdings of SOL are reduced (the demurrage fee) the rising price of the SOL will make up the difference.
This process will ensure that the unit of account for SOL is upheld.

14) The assessment rules require more discussion.


Answer 2 - How to stop CO2-e being sold again on the market?

1) The enterprise that has carbon mitigation to sell, can chose between SOL rewards or a carbon offsets in a carbon trading market. The enterprise will likely chose based on price.

2) The enterprise that mitigates for SOL rewards will enter into digital contract that they will not sell the same carbon to another market (this would be a breach of contract and may be enforced by international counterfeiting laws and criminal charges).

3) Carbon trading and SOL databases can be connected for cross-checking of double issuance. The system can perform all types of database cross-checking to seek out anomalies (i.e. like the tax department).

I hope that answers the question.

Best,

Delton