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Could an economy that directly rewards carbon emissions reduction and sequestration be the solution to the climate crisis? In today's episode, we explore proposals for a global carbon currency: one unit of currency for one ton of CO2 reduced or removed. We'll hear from Suzi Kerr (Chief Economist, EDF), Bill English (Professor in the Practice of Finance at Yale University, Formerly on the Board of Governors of the Federal Reserve System), Vanessa Fajans-Turner (Executive Director, BankFWD; Candidate for Congress NY-22), Samuel Kortum (Professor of Economics, Yale University), Frank Van Gansbeke (Professor of the Practice, Middlebury College), and Diana Cárdenas (QOIN Foundation).
Notable quotes:
Carbon currency as described in Kim Stanley Robinson’s Ministry for the Future:
They [a big consortium of all the large central banks] would issue together a single new currency: one coin per ton of carbon-dioxide-equivalent sequestered from the atmosphere, either by not burning what would have been burned in the ordinary course of things, or by pulling it back out of the air. [The central banks] promised to establish a floor in the value of this carbon coin…and they foretold a rise in the value of the currency over the coming decades. By doing these things they made this investment a sure thing, assuming civilization itself survived.”
On the importance of incentivizing carbon sequestration:
Vanessa Fajans-Turner: Doing no harm is different than doing good. When we face a real global crisis, we don't simply have time to be neutral on the issue.
On changing the Federal Reserve’s mandate to back the carbon currency:
Bill English: So I think for the Fed to take a bigger step in this area, you'd have to go to Congress and say, we want a change in our mandate so that we can address these important issues. Congress could ask the Fed to take action in this area. It also could just do it itself right by providing taxes and transfers to implement a policy that would help a lot on climate change.
On the Green Paradox—the idea that, by the time the impacts of climate change are visible enough for world leaders take radical action, it will be too late.
Suzi Kerr: I'd like to challenge the idea of too late. It's never too late. As long as we're still around, we can still act. I always say 1.5 degrees, much better than 2, but 2 is really a lot better than 3 and 3 is really a lot better than 4 degrees Celsius. I think thinking about “too late” is dangerous because it risks us giving up when it all seems too hard—and it is hard.
Further reading on today’s episode:
The Global Carbon Reward, Delton Chen
Making the Fed’s Money Printer Go Brrrr for the Planet, Kim Stanley Robinson in Bloomberg
Could a ‘Carbon Coin’ Save the Planet?, Wall Street Journal
Could a 'carbon coin' solve the climate crisis?, Green Biz
Time For IMF Climate Coin, Forbes
We Need to Draw Down Carbon—Not Just Stop Emitting it, MIT Technology Review
Crypto Carbon: Can Blockchain Networks Fix Carbon Offsets?, CoinDesk
Utility of the Blockchain for Climate Mitigation, Delton Chen
This Pioneering Economist Says Our Obsession With Growth Must End, The New York Times Magazine
Photo by Arnaud Mesureur on Unsplash