= 2 proposals, as yet not existing projects
The Solar Dollar (SOL) is related to the Global 4C Risk Mitigation (Global 4C) policy proposal. The Solar Dollar is the trading name of a digital currency that could be implemented under the Global 4C policy. The Global 4C policy allows for multiple currencies that are called Complementary Currencies for Climate Change (4C). The Solar Dollar is recommended as a culturally appropriate trading name based on the biophysical importance of the Sun's radiant energy to the functioning of the biosphere, civilisation, and the economy. Other currencies and currency trading names are also admissible under the same policy.
The Global 4C policy was introduced in 2017 in a journal paper titled "Climate Mitigation Policy as a System Solution: Addressing the Risk Cost of Carbon", which presents a new market hypothesis for the Risk Cost of Carbon (RCC), which is described by the authors as a missing cost of greenhouse gas emissions and a complement to the Social Cost of Carbon (SCC). The authors write:
The RCC is theorised, with an epistemological method, to be the (missing) complement to the SCC, and a hypothesis for the RCC is posited as the Holistic Market Hypothesis (HMH). The RCC should be internalised into the economy with a reward per tonne of additional CO2-e mitigation service and the reward price should be periodically estimated by risk-cost-effectiveness analysis. Risk-cost-effectiveness is defined here as a combination of two existing economic concepts, namely (a) risk-cost, and (b) cost-effectiveness. (Chen, van der Beek and Cloud, 2017, p.2)
The Solar Dollar was first proposed in 2015 by Chen, Cloud and van der Beek (2015) at an Earth System Governance conference in Canberra, Australia: a social science research conference that is focused on governance and global environmental change. The conference paper is available here.
In summary, the Solar Dollar:
- will be offered as a debt-free global reward—for the abatement and sequestration of carbon emissions—and subject to long-lived service contracts;
- will be an international currency—managed as a Central Bank Digital Currency (CBDC);
- will be priced to mirror the RCC, and will therefore price climate risk into the global financial system;
- will not be used to trade carbon, and so will not be a new type of carbon credit or carbon offset;
- will create a price signal that aggregates with the price signals created in other carbon markets; and
- will be type of demurrage currency because a demurrage fee will be periodically charged to all holders of the currency to reconcile unrecoverable defaults by private mitigators.
A more complete understanding of the Solar Dollar requires an in-depth review of the Global 4C policy and its financial mechanism and social agreements. The Global 4C policy requires that all 4C currencies meet the policy's requirements for accountability and transparency. Under the Global 4C policy, the Solar Dollar (SOL) will be issued directly to enterprises, firms and citizen collectives as a reward for greenhouse mitigation, assuming that the applicants can pass a reliable auditing and assessment process, called Measurement Reporting and Verification (MRV). Direct payments with the Solar Dollar will avoid the inefficiencies of financial intermediaries. The Global 4C policy recommends that a worldwide public database be created to share scientific and commercial knowledge/data about all types of abatement and sequestration that are rewarded with 4C. This will lead to greater market efficiency, innovation, collaboration and social inter-connectedness.
The Global 4C policy, if implemented, will influence the world economy and will have major social and ecological implications. The policy aims to establish a global guarantee (or global insurance policy) based on central banks' ability to underwrite the Solar Dollar (SOL) and other 4C currencies. The policy is to coordinate central banks so that they can create and manage a multi-decade bull market in the Solar Dollar and other 4C currencies. This implies that the Solar Dollar will be the economic instrument of an international policy and a key tool of new central bank remits for addressing climate change risk. With this approach the Solar Dollar (SOL) price will be scheduled to rise over the next 30 to 50 years approximately, to ensure that greenhouse emissions are mitigated, and to limit the climate systemic risk. The policy should improve our chances of staying below 2°C of global warming as defined under Article 2 of the 2015 Paris Agreement. The Solar Dollar bull market will allow firms and citizens to protect wealth during a period of economic transition. Important also, is that the Global 4C policy will weight higher or lower the Solar Dollar rewards for each project, depending on a project's social and ecological outcomes. This weighting scheme will not distort the net carbon budget.
Critique by James Quilligan
- see the discussion page at https://wiki.p2pfoundation.net/Talk:Solar_Dollar
Thomas Greco’s Solar Dollar proposal is for a new credit instrument for local electric utility companies.
- please see Beyond Money and this discussion paper: https://beyondmoney.files.wordpress.com/2016/08/solar-dollars-proposal-rev1.pdf