Pitch
Permits, reflecting IPCC-calculated global carbon budget, allocated by auction (20%) and distributed free to all global citizens (80%).
Description
Summary
How it will work
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The United Nations Framework Convention on Climate Change administers the market
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Yearly carbon budget agreed by the Intergovernmental Panel on Climate Change
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Say 20 billion tons per annum (The total budget at our disposal is 750bn tons, for a 66% probability of staying below 2degrees). Permits (each representing one tonne of CO2) created and attached to a private blockchain.
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10 to 20% of yearly budget auctioned at beginning of the year, or at quarterly auctions. Revenues (estimated at €60-150bn) to be used for administering the market, supporting R&D and catastrophe relief for poorest countries.
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Remaining 80-90% distributed equally to all adult human beings on Earth, with a minimum age threshold. Everyone is issued a Wallet, and one’s allowance is transferred into it by the UNFCCC.
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One global market, carbon price traded in bitcoins or in agreed fiat currencies;
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Carbon emissions from all sources included.
Advantages
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Fair - permits given free not to polluters but equally shared among humanity
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Universal - Climate change is a global problem, and it requires a solution that goes above national rivalries and interests
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Neutral - By using blockchain technology, no nation is advantaged
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Inspirational - All people on earth joined in a market to solve an existential problem for humankind.
Category of the action
Building efficiency: Physical Action
What actions do you propose?
NEXT STEPS
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Design the Blockchain architecture of Global Market.
Key issues:
Scalability - Which Blockchain technology is best suited to:
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Create 20billion+ permits
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Create 5+billion accounts
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Drop the permits to 5billion+ agents in a yearly time horizon (=9500/minute)
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Maintain a global market with potential of 2million transaction in a day
Identity - Protocols for
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Reaching people who have limited access to the World Wide Web
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Preventing fraud
Currency - Choice of currency is political but also technical.
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Crypto (which) or Fiat?
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If Fiat, single or multiple?
Pilot - Can the architecture be tested in a regional market? The most obvious challenge is how to implement a carbon border tax for the selected region.
Who will take these actions?
The design of the market architecture is to be carried out by Blockchain technology experts in collaboration with the UNFCCC.
Once the architecture is designed, the UNFCCC needs to sell the concept to the National Governments. In this phase, I see an important role for NGOs and Large Corporations to lobby Governments.
Where will these actions be taken?
Globally
How much will emissions be reduced or sequestered vs. business as usual levels?
This will depend on the calculations by the IPCCC but it will be in line with reaching the 1.5 degrees target
What are other key benefits?
By distributing permits to all global citizens the issue of climate change will be appreciated as a global issue which we all have to solve.
Moreover, the price and allocation will be the same for everyone; in effect this will mean that, relative to their annual salary, people in emerging markets will receive a lot more than those in richer countries.
What are the proposal’s costs?
The running costs will be recouped through the auctions
Time line
Design phase: up to end 2018
Pilot phase: 2019
Global implementation: 2020
Related proposals
References
Why linking existing markets is unlikely to work:
http://www.nature.com/news/don-t-link-carbon-markets-1.21663
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