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Delton Chen designs the carbon economy
Episode 2: Delton and I discuss his ideas for 4C ("Complementary Currencies for Climate Change") as a means of promoting a sustainable carbon economy.
You can learn more about Delton and his ideas here:
Interview: https://youtu.be/Hd4PET0Z2f8
The Silver Gun Hypothesis: New Model for a Sustainable Carbon Economy: https://mahb.stanford.edu/blog/silver-gun-hypothesis/
Hypothesis for a Risk Cost of Carbon: Revising the Externalities and Ethics of Climate Change:
https://link.springer.com/chapter/10.1007/978-3-030-03152-7_8
After our talk, Delton sent some additional thoughts:
"Transaction Costs: In our interview, you mentioned a few times that transaction costs for 4C would be high. This could be confusing or misleading, because the costs of trading 4C are very low (i.e. the transactions costs are similar to trading currencies).
[DZ: Economists group all costs of finding, trading and receiving "goods" under transaction costs. Delton separates these... as seen below.]
Administration Costs: The costs you refer to are the costs of administering the assessments of the climate mitigation actions (measurement, reporting and verification of data and policing). These costs are lumped with the actual cost of doing the mitigation work. Both costs are accounted for in the Risk Cost of Carbon (RCC). Separating administrative costs from mitigation costs is only a matter of interpretation — and ultimately we need to combine these costs as one single cost.
Financial Intermediaries: If we compare the Global Carbon Reward (and the 4C payments) to other sources of finance, there is much less opportunity for financial intermediaries to skim profits from 4C (e.g. lawyers and fund managers etc.) because there is no 4C held in reserve accounts. In other words, the 4C is created at the time that it is issued to the actors who do the mitigation work. Technically speaking, there are no financial intermediaries in this system.
Economic Growth Problem: Dirty Growth? Good Inefficiencies? The costs of mitigation and administration will be significant (USD $1-3 trillion per year) but this cost is not a bad cost. In other words, it is not fair to describe it as "bad inefficiency", because these costs are required for climate safety.
Moreover, the more efficient is the economy, the more growth there will be, and economic growth is currently very highly correlated to primary energy demand and carbon emissions. Therefore, if more resources (and money) is spent on climate mitigation (and administration) this will slow other types of economic activity that are producing carbon emissions — and this is the desired outcome. For this reason the inefficiencies of the policy are called "good inefficiencies". This distinction is very important, because it changes the narrative on climate change economics. Please read the book chapter [third link above] for more information."
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Episode 2: Delton and I discuss his ideas for 4C ("Complementary Currencies for Climate Change") as a means of promoting a sustainable carbon economy.
You can learn more about Delton and his ideas here:
Interview: https://youtu.be/Hd4PET0Z2f8
The Silver Gun Hypothesis: New Model for a Sustainable Carbon Economy: https://mahb.stanford.edu/blog/silver-gun-hypothesis/
Hypothesis for a Risk Cost of Carbon: Revising the Externalities and Ethics of Climate Change:
https://link.springer.com/chapter/10.1007/978-3-030-03152-7_8
After our talk, Delton sent some additional thoughts:
"Transaction Costs: In our interview, you mentioned a few times that transaction costs for 4C would be high. This could be confusing or misleading, because the costs of trading 4C are very low (i.e. the transactions costs are similar to trading currencies).
[DZ: Economists group all costs of finding, trading and receiving "goods" under transaction costs. Delton separates these... as seen below.]
Administration Costs: The costs you refer to are the costs of administering the assessments of the climate mitigation actions (measurement, reporting and verification of data and policing). These costs are lumped with the actual cost of doing the mitigation work. Both costs are accounted for in the Risk Cost of Carbon (RCC). Separating administrative costs from mitigation costs is only a matter of interpretation — and ultimately we need to combine these costs as one single cost.
Financial Intermediaries: If we compare the Global Carbon Reward (and the 4C payments) to other sources of finance, there is much less opportunity for financial intermediaries to skim profits from 4C (e.g. lawyers and fund managers etc.) because there is no 4C held in reserve accounts. In other words, the 4C is created at the time that it is issued to the actors who do the mitigation work. Technically speaking, there are no financial intermediaries in this system.
Economic Growth Problem: Dirty Growth? Good Inefficiencies? The costs of mitigation and administration will be significant (USD $1-3 trillion per year) but this cost is not a bad cost. In other words, it is not fair to describe it as "bad inefficiency", because these costs are required for climate safety.
Moreover, the more efficient is the economy, the more growth there will be, and economic growth is currently very highly correlated to primary energy demand and carbon emissions. Therefore, if more resources (and money) is spent on climate mitigation (and administration) this will slow other types of economic activity that are producing carbon emissions — and this is the desired outcome. For this reason the inefficiencies of the policy are called "good inefficiencies". This distinction is very important, because it changes the narrative on climate change economics. Please read the book chapter [third link above] for more information."