Emissions Reduction Currency System
Encyclopedia
Emissions Reduction Currency Systems (ERCS) are schemes that provide a positive economic and or social reward for reductions in greenhouse gas
emissions, either through distribution or redistribution of national currency or through the publishing of coupons, reward points, social currency
, or complementary currency
.
Emissions reduction currency is also different from a voluntary carbon offset
where a payment is made, typically to fund alternative energy or reforestation, the emissions reduction or sequestration resulting from which is used to reduce or cancel the payers responsibility for emissions produced by themselves. The value of an offset is in its being held by the purchaser and applies only for the period and purpose against which the offset applies.
An emissions reduction currency, by contrast, is purely an incentive for behavior change by individuals or groups. As such the currency creates an additional economic benefit for emissions reductions separate from the cost imposed by national emissions caps or the voluntary cost assumed by the purchaser of a voluntary offset.
Emissions reduction currencies are not exchangeable within national cap and trade systems and as such do not confer any right to pollute.
While no emissions reduction currency system has achieved the scale of emissions crediting systems, there are a number of small scale schemes in operation or being set up. In addition there are a number of approaches that are currently hypothetical being promoted by a number of organisations, academic institutions and think tank
s.
Emissions reduction currency systems conceptually are inclusive of carbon currency
systems but also include schemes that reduce emissions in incidental ways such as through waste reduction and community education.
in his 1969 book Operating Manual for Spaceship Earth
. This idea was piloted by Garry Davis
who distributed these "kilowatt dollars" at the 1992 Earth Summit
held in Rio De Janeiro
.
and other high carbon environments can lead to abatement
of emissions from land clearing that might have otherwise occurred or from additional CO2 sequestration
.
Land purchased and managed for these purposes can be used to create an independently tradeable carbon right, which may or may not be recognised within an emissions credit scheme. For example, aboveground biomass resulting from land use changes can currently be converted to recognised emissions credits under the Kyoto Protocol
Clean Development Mechanism
(CDM). Increases in soil carbon
for reasons other than reforestation
either through changes to land management practices or through the burial of biochar
are currently not included in emissions credit systems such as the CDM.
These certificates of legal title can be traded as a form of currency independently of their use as an offset, yielding additional economic benefits.
This use is suggested by The Carbon Currency Foundation.
Another emissions reduction currency system proposed on this basis is the ECO, a project of The Next Nature
Lab which is an initiative of Eindhoven University of Technology
in the Netherlands.
RecycleBank
is one such scheme where participants weigh recycled materials in specially designed disposal bins that identify themselves to scales embedded in garbage collection vehicles. Recyclebank is also funded by municipal governments that purchase and operate the required equipment, allowing RecycleBank to operate as a private for profit company. Another similar scheme is Greenopolis that works through social media
websites such as Facebook
.
EarthAid uses specialised software that publishes utility bills from companies in an online format that participants can share with family and friends. Reduced energy consumption earns reward points that can be redeemed for prizes at businesses in the EarthAid rewards network.
The objective of an allocation scheme is to obtain social parity between participants with regards to emissions reductions.
Technically an emissions crediting scheme,an allocation scheme is classed as an emissions reduction currency system because the trading of the currency between individuals as parity is sought can create a secondary market of trading where the currency can act as a medium of exchange, and this trading creates an additional positive economic value associated with emissions reductions.
The Global Resource Bank is one organisation advocating such a global allocation scheme.
, an emissions reduction currency system based on rationing
presumes a standard ration of emissions allowable for an average citizen that incrementally decreases over time.
Participants using less than the rationed amount receive a currency that can be traded with those emitting more than the allowed amount.
All participants pledge to in total remain below the average with a net positive value in the scheme.
Carbon Rationing Action Groups (CRAG), started in the United Kingdom
, has a global network of groups. CRAG participants use a standard average for the country as a basis for the rationed amount. Participants emitting at above rationed levels must pay those below it in national currency.
Norfolk Island
, Australia
is in the process of implementing an island-wide voluntary personal carbon trading scheme designed by Southern Cross University
Professor Garry Egger,
issues are backed by the emissions reductions of the schemes members. The local currency, when accepted for trade by other members or local businesses, thereby rewards participants for their efforts at global warming prevention. These currencies may have various degrees of convertibility into carbon saved, renewable energy
, or national currency.
The Edogawatt is a form of emissions reduction currency used in Edogawa, Tokyo
that is an initiative of the local Jōdo Shinshū
Jukou-in temple. In this scheme, the temple and devotees purchase solar panels and sell the excess power to the Tokyo Electric Power Company. The temple then takes the difference between the price paid by the Tokyo Electric Power Company and the price paid for natural energy in Germany and sells Green Power Certificates as a fund raiser for the temple. Purchasers of the Green Power Certificates are given 30 Edogawatt bills per certificate. "These are currently being used among people ... as a certificate of debt or obligation in exchange for baby-sitting, carrying loads, translating and other small jobs. They have provided an incentive for creation of a mutual aid society within the community and we would like to make them a tool for deepening interpersonal relationships and trust."
Kiwah is an emissions reduction currency scheme based on units of kilowatt hours delivered from renewable energy projects funded by the scheme participants. The currency is then used within local communities which adopt it functioning as a local currency. The scheme was launched on December 15, 2009 at the COP15 Copenhagen United Nations Climate Change Conference.
The Maia Maia Emissions Reduction Currency System, is a scheme currently being developed in Western Australia. The system currency is known as a boya
, named after the indigenous Nyungar people's word for rock trading tokens used by them. Each boya is based on 10 kilograms of carbon dioxide equivalent global warming prevention. The first issue of boya occurred on January 30, 2011 in Fremantle, Western Australia
at an event hosted by the International Permaculture
Service and the Gaia Foundation
of Western Australia.
The Liquidity Network, an initiative of the Foundation for the Economics of Sustainability
is proposing to introduce a community run emissions reduction currency in the County of Kilkenny in Ireland. The proposal is currently before council for consideration.
Carbon Manna is a proposed scheme that will use proceeds from pre-selling credits from bundled emissions reduction projects to reimburse users directly or to enroll them in the successful mobile phone currency M-PESA
being used in developing countries to reduce monetary transaction costs and hedge against currency fluctuations.
Greenhouse gas
A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...
emissions, either through distribution or redistribution of national currency or through the publishing of coupons, reward points, social currency
Social currency
- Definition :Social currency is a common term that can be understood as the entirety of actual and potential resources which arise from the presence in social networks and communities, may they be digital or offline...
, or complementary currency
Complementary currency
Complementary currency is a currency meant to be used as a complement to another currency, typically a national currency. Complementary currency is sometimes referred to as complementary community currency or as community currency...
.
Compared to other emissions reductions instruments
Emissions reduction currency is different from an emissions credit. The value of an emissions credit is determined by a national cap in emissions and the degree to which the credit confers a right to pollute. The ultimate value of an emissions credit is realised when it is surrendered to avoid punitive fines for emitting.Emissions reduction currency is also different from a voluntary carbon offset
Carbon offset
A carbon offset is a reduction in emissions of carbon dioxide or greenhouse gases made in order to compensate for or to offset an emission made elsewhere....
where a payment is made, typically to fund alternative energy or reforestation, the emissions reduction or sequestration resulting from which is used to reduce or cancel the payers responsibility for emissions produced by themselves. The value of an offset is in its being held by the purchaser and applies only for the period and purpose against which the offset applies.
An emissions reduction currency, by contrast, is purely an incentive for behavior change by individuals or groups. As such the currency creates an additional economic benefit for emissions reductions separate from the cost imposed by national emissions caps or the voluntary cost assumed by the purchaser of a voluntary offset.
Emissions reduction currencies are not exchangeable within national cap and trade systems and as such do not confer any right to pollute.
While no emissions reduction currency system has achieved the scale of emissions crediting systems, there are a number of small scale schemes in operation or being set up. In addition there are a number of approaches that are currently hypothetical being promoted by a number of organisations, academic institutions and think tank
Think tank
A think tank is an organization that conducts research and engages in advocacy in areas such as social policy, political strategy, economics, military, and technology issues. Most think tanks are non-profit organizations, which some countries such as the United States and Canada provide with tax...
s.
Emissions reduction currency systems conceptually are inclusive of carbon currency
Personal carbon trading
Personal carbon trading is a general term referring to a number of proposed emissions trading schemes under which emissions credits are allocated to adult individuals on a equal per capita basis, within national carbon budgets. Individuals then surrender these credits when buying fuel or electricity...
systems but also include schemes that reduce emissions in incidental ways such as through waste reduction and community education.
History
The idea of a global wealth system based on alternative energy production was first suggested by Buckminster FullerBuckminster Fuller
Richard Buckminster “Bucky” Fuller was an American systems theorist, author, designer, inventor, futurist and second president of Mensa International, the high IQ society....
in his 1969 book Operating Manual for Spaceship Earth
Operating manual for Spaceship Earth
Operating Manual For Spaceship Earth is a short book by R. Buckminster Fuller, first published in 1968, following an address with a similar title given to the 50th annual convention of the American Planners Association in the Shoreham Hotel, Washington D.C., on 16 October 1967...
. This idea was piloted by Garry Davis
Garry Davis
Garry Davis is a peace activist who created the first World Passport.-Early life:Davis was the son of Meyer and Hilda Davis. He was graduated from the Episcopal Academy in 1940 and attended the Carnegie Institute of Technology...
who distributed these "kilowatt dollars" at the 1992 Earth Summit
Earth Summit
The United Nations Conference on Environment and Development , also known as the Rio Summit, Rio Conference, Earth Summit was a major United Nations conference held in Rio de Janeiro from 3 June to 14 June 1992.-Overview:...
held in Rio De Janeiro
Rio de Janeiro
Rio de Janeiro , commonly referred to simply as Rio, is the capital city of the State of Rio de Janeiro, the second largest city of Brazil, and the third largest metropolitan area and agglomeration in South America, boasting approximately 6.3 million people within the city proper, making it the 6th...
.
Categories of Emissions Reduction Currency Systems
Currently envisioned emission reduction currency systems can be categorised into five categories:Carbon title schemes
Introduction of sustainable land management practices in tropical rainforestTropical rainforest
A tropical rainforest is an ecosystem type that occurs roughly within the latitudes 28 degrees north or south of the equator . This ecosystem experiences high average temperatures and a significant amount of rainfall...
and other high carbon environments can lead to abatement
Abatement
Abatement may refer to:*Abatement of debts and legacies, a common law doctrine of wills*Abatement in pleading, a legal defense to civil and criminal actions based purely on procedural and technical issues involving the death of parties...
of emissions from land clearing that might have otherwise occurred or from additional CO2 sequestration
CO2 sequestration
Carbon sequestration is the capture of carbon dioxide and may refer specifically to:* "The process of removing carbon from the atmosphere and depositing it in a reservoir." When carried out deliberately, this may also be referred to as carbon dioxide removal, which is a form of geoengineering.*...
.
Land purchased and managed for these purposes can be used to create an independently tradeable carbon right, which may or may not be recognised within an emissions credit scheme. For example, aboveground biomass resulting from land use changes can currently be converted to recognised emissions credits under the Kyoto Protocol
Kyoto Protocol
The Kyoto Protocol is a protocol to the United Nations Framework Convention on Climate Change , aimed at fighting global warming...
Clean Development Mechanism
Clean Development Mechanism
The Clean Development Mechanism is one of the "flexibility" mechanisms defined in the Kyoto Protocol . It is defined in Article 12 of the Protocol, and is intended to meet two objectives: to assist parties not included in Annex I in achieving sustainable development and in contributing to the...
(CDM). Increases in soil carbon
Soil carbon
Soil carbon is the generic name for carbon held within the soil, primarily in association with its organic content. Soil carbon is the largest terrestrial pool of carbon. Humans have, and will likely continue to have, significant impacts on the size of this pool...
for reasons other than reforestation
Reforestation
Reforestation is the natural or intentional restocking of existing forests and woodlands that have been depleted, usually through deforestation....
either through changes to land management practices or through the burial of biochar
Biochar
Biochar or terra preta is charcoal created by pyrolysis of biomass. Biochar is under investigation as an approach to carbon sequestration via bio-energy with carbon capture and storage. Biochar thus has the potential to help mitigate climate change, via carbon sequestration...
are currently not included in emissions credit systems such as the CDM.
These certificates of legal title can be traded as a form of currency independently of their use as an offset, yielding additional economic benefits.
This use is suggested by The Carbon Currency Foundation.
Another emissions reduction currency system proposed on this basis is the ECO, a project of The Next Nature
Next Nature
Next Nature is a philosophical concept that states that human cultural activity creates a new kind of nature distinct from "old" nature. The term Next Nature was coined by the Dutch artist and scientist Koert Van Mensvoort. The subject was further explored in the book Next Nature. Next Nature is a...
Lab which is an initiative of Eindhoven University of Technology
Eindhoven University of Technology
The ' is a university of technology located in Eindhoven, Netherlands. The motto of the university is: Mens agitat molem . The university was the second of its kind in the Netherlands, only Delft University of Technology existed previously. Until mid-1980 it was known as the...
in the Netherlands.
Promotional discount schemes
An emissions reduction currency system based on promotional discount is one where participants are rewarded for reducing their emissions by gaining points which can be redeemed for discounts from businesses advertising in the system.RecycleBank
RecycleBank
Recyclebank is a company headquartered in New York City with offices in Philadelphia and London that rewards people for taking everyday green actions with discounts and deals from thousands of local and national businesses. It does this by measuring the amount of material each home recycles then...
is one such scheme where participants weigh recycled materials in specially designed disposal bins that identify themselves to scales embedded in garbage collection vehicles. Recyclebank is also funded by municipal governments that purchase and operate the required equipment, allowing RecycleBank to operate as a private for profit company. Another similar scheme is Greenopolis that works through social media
Social media
The term Social Media refers to the use of web-based and mobile technologies to turn communication into an interactive dialogue. Andreas Kaplan and Michael Haenlein define social media as "a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0,...
websites such as Facebook
Facebook
Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook, Inc. , Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as...
.
EarthAid uses specialised software that publishes utility bills from companies in an online format that participants can share with family and friends. Reduced energy consumption earns reward points that can be redeemed for prizes at businesses in the EarthAid rewards network.
Allocation schemes
An emissions currency reduction system based on allocation is one where all individual participants are awarded an equal allotment of emissions currency. Participants then trade goods and services with one another to obtain enough of the currency to cover their actual emissions.The objective of an allocation scheme is to obtain social parity between participants with regards to emissions reductions.
Technically an emissions crediting scheme,an allocation scheme is classed as an emissions reduction currency system because the trading of the currency between individuals as parity is sought can create a secondary market of trading where the currency can act as a medium of exchange, and this trading creates an additional positive economic value associated with emissions reductions.
The Global Resource Bank is one organisation advocating such a global allocation scheme.
Emissions rationing schemes
Otherwise known as personal carbon tradingPersonal carbon trading
Personal carbon trading is a general term referring to a number of proposed emissions trading schemes under which emissions credits are allocated to adult individuals on a equal per capita basis, within national carbon budgets. Individuals then surrender these credits when buying fuel or electricity...
, an emissions reduction currency system based on rationing
Rationing
Rationing is the controlled distribution of scarce resources, goods, or services. Rationing controls the size of the ration, one's allotted portion of the resources being distributed on a particular day or at a particular time.- In economics :...
presumes a standard ration of emissions allowable for an average citizen that incrementally decreases over time.
Participants using less than the rationed amount receive a currency that can be traded with those emitting more than the allowed amount.
All participants pledge to in total remain below the average with a net positive value in the scheme.
Carbon Rationing Action Groups (CRAG), started in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, has a global network of groups. CRAG participants use a standard average for the country as a basis for the rationed amount. Participants emitting at above rationed levels must pay those below it in national currency.
Norfolk Island
Norfolk Island
Norfolk Island is a small island in the Pacific Ocean located between Australia, New Zealand and New Caledonia. The island is part of the Commonwealth of Australia, but it enjoys a large degree of self-governance...
, Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
is in the process of implementing an island-wide voluntary personal carbon trading scheme designed by Southern Cross University
Southern Cross University
Southern Cross University is a university based on the North and Mid North Coast of New South Wales, Australia. It is a regional University with more than 14,000 students. The University's primary campus is in Lismore, with other campuses located at Coffs Harbour and Tweed Heads.The University is...
Professor Garry Egger,
Community based currency schemes
A community based emissions reduction currency scheme is a C4 type local currency in which local currencyLocal currency
In economics, a local currency, in its common usage, is a currency not backed by a national government , and intended to trade only in a small area. As a tool of fiscal localism, local moneys can raise awareness of the state of the local economy, especially among those who may be unfamiliar or...
issues are backed by the emissions reductions of the schemes members. The local currency, when accepted for trade by other members or local businesses, thereby rewards participants for their efforts at global warming prevention. These currencies may have various degrees of convertibility into carbon saved, renewable energy
Renewable energy
Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from...
, or national currency.
The Edogawatt is a form of emissions reduction currency used in Edogawa, Tokyo
Edogawa, Tokyo
is one of the 23 special wards of Tokyo, Japan. It takes its name from the river that runs from north to south along the eastern edge of the ward. In English, it uses the name Edogawa City....
that is an initiative of the local Jōdo Shinshū
Jodo Shinshu
, also known as Shin Buddhism, is a school of Pure Land Buddhism. It was founded by the former Tendai Japanese monk Shinran. Today, Shin Buddhism is considered the most widely practiced branch of Buddhism in Japan.-Shinran :...
Jukou-in temple. In this scheme, the temple and devotees purchase solar panels and sell the excess power to the Tokyo Electric Power Company. The temple then takes the difference between the price paid by the Tokyo Electric Power Company and the price paid for natural energy in Germany and sells Green Power Certificates as a fund raiser for the temple. Purchasers of the Green Power Certificates are given 30 Edogawatt bills per certificate. "These are currently being used among people ... as a certificate of debt or obligation in exchange for baby-sitting, carrying loads, translating and other small jobs. They have provided an incentive for creation of a mutual aid society within the community and we would like to make them a tool for deepening interpersonal relationships and trust."
Kiwah is an emissions reduction currency scheme based on units of kilowatt hours delivered from renewable energy projects funded by the scheme participants. The currency is then used within local communities which adopt it functioning as a local currency. The scheme was launched on December 15, 2009 at the COP15 Copenhagen United Nations Climate Change Conference.
The Maia Maia Emissions Reduction Currency System, is a scheme currently being developed in Western Australia. The system currency is known as a boya
Boya
Boya may refer to:*Boya, Western Australia, locality on the Darling Scarp, in the Shire of Mundaring, Western Australia*Boya, Nepal*Boya people, an ethnic group in Sudan*Boyar caste, Boyar caste of India*Casati Boya, paint manufacturer in Turkey...
, named after the indigenous Nyungar people's word for rock trading tokens used by them. Each boya is based on 10 kilograms of carbon dioxide equivalent global warming prevention. The first issue of boya occurred on January 30, 2011 in Fremantle, Western Australia
Fremantle, Western Australia
Fremantle is a city in Western Australia, located at the mouth of the Swan River. Fremantle Harbour serves as the port of Perth, the state capital. Fremantle was the first area settled by the Swan River colonists in 1829...
at an event hosted by the International Permaculture
Permaculture
Permaculture is an approach to designing human settlements and agricultural systems that is modeled on the relationships found in nature. It is based on the ecology of how things interrelate rather than on the strictly biological concerns that form the foundation of modern agriculture...
Service and the Gaia Foundation
Gaia Foundation
The Gaia Foundation of Western Australia is part of the international Gaia Movement of individuals and groups which share concerns with living more sustainably on the Earth, which was inspired by the Gaia hypothesis of James Lovelock and Lynn Margulis, and is attempting to bring about the Great...
of Western Australia.
The Liquidity Network, an initiative of the Foundation for the Economics of Sustainability
Foundation for the Economics of Sustainability
Feasta, the Foundation for the Economics of Sustainability is an organisation based in Ireland which aims "to identify the characteristics of a truly sustainable society, articulate how the necessary transition can be effected and promote the implementation of the measures required for this purpose"...
is proposing to introduce a community run emissions reduction currency in the County of Kilkenny in Ireland. The proposal is currently before council for consideration.
Monetizing Schemes
A monetized emissions reduction currency is backed by the financial value of emissions credits certified under a regulatory scheme. These credits can be converted into fiat currency when sold into cap and trade markets and the money raised used to allow exchange of the currency.Carbon Manna is a proposed scheme that will use proceeds from pre-selling credits from bundled emissions reduction projects to reimburse users directly or to enroll them in the successful mobile phone currency M-PESA
M-Pesa
M-PESA is the product name of a mobile-phone based money transfer service for Safaricom, which is a Vodafone affiliate. It was initially developed by Sagentia before transitioning to IBM...
being used in developing countries to reduce monetary transaction costs and hedge against currency fluctuations.