Emissions Reduction Currency Systems (ERCS) are schemes that provide a positive economic and or social reward for reductions in
greenhouse gas emissions
Greenhouse gas emissions from human activities strengthen the greenhouse effect, contributing to climate change. Most is carbon dioxide from burning fossil fuels: coal, oil, and natural gas. The largest emitters include coal in China and ...
, either through distribution or redistribution of national currency or through the publishing of
coupons,
reward points,
local currency, or
complementary currency.
Compared to other emissions reductions instruments
Emissions reduction currency is different from an
emissions credit
Emissions trading is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). Carbon emissio ...
. 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 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 behaviour 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
A think tank, or policy institute, is a research institute that performs research and advocacy concerning topics such as social policy, political strategy, economics, military, technology, and culture. Most think tanks are non-governmental ...
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.
History
The idea of a global wealth system based on alternative energy production was first suggested by
Buckminster Fuller
Richard Buckminster Fuller (; July 12, 1895 – July 1, 1983) was an American architect, systems theorist, writer, designer, inventor, philosopher, and futurist. He styled his name as R. Buckminster Fuller in his writings, publishing m ...
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
The United Nations Conference on Environment and Development (UNCED), also known as the Rio Conference or the Earth Summit (Portuguese: ECO92), was a major United Nations conference held in Rio de Janeiro from June 3 to June 14, 1992.
Earth ...
held in
Rio de Janeiro
Rio de Janeiro ( , , ; literally 'River of January'), or simply Rio, is the capital of the Rio de Janeiro (state), state of the same name, Brazil's List of Brazilian states by population, third-most populous state, and the List of largest citi ...
. Edgar Kempers and Rob Van Hilton launched the Kiwah (kilowatt hour) currency at the Copenhagen Climate Summit in 2009.
Categories of emissions reduction currency systems
Emission reduction currency systems can be designated as belonging to one or more of five categories:
Carbon title schemes
Introduction of
sustainable land management Sustainable land management (SLM) refers to practices and technologies that aim to integrate the management of land, water, and other environmental resources to meet human needs while ensuring long-term sustainability, ecosystem services, biodiv ...
practices in
tropical rainforest
Tropical rainforests are rainforests that occur in areas of tropical rainforest climate in which there is no dry season – all months have an average precipitation of at least 60 mm – and may also be referred to as ''lowland equatori ...
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
Emissions trading is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). Carbon emission t ...
under the
Kyoto Protocol
The Kyoto Protocol was an international treaty which extended the 1992 United Nations Framework Convention on Climate Change (UNFCCC) that commits state parties to reduce greenhouse gas emissions, based on the scientific consensus that (par ...
Clean Development Mechanism (CDM). Increases in
soil carbon for reasons other than
reforestation
Reforestation (occasionally, reafforestation) is the natural or intentional restocking of existing forests and woodlands ( forestation) that have been depleted, usually through deforestation, but also after clearcutting.
Management
A debat ...
either through changes to land management practices or through the burial of
biochar are currently not included in
emissions credit
Emissions trading is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). Carbon emissio ...
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
The Eindhoven University of Technology ( nl, Technische Universiteit Eindhoven), abbr. TU/e, is a public technical university in the Netherlands, located in the city of Eindhoven. In 2020–21, around 14,000 students were enrolled in its BSc ...
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 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 was GreenOps LLC, a community-based recycling rewards program founded by eco-entrepreneur Anthony Zolezzi, which he later sold to
Waste Management
Waste management or waste disposal includes the processes and actions required to manage waste from its inception to its final disposal.
This includes the collection, transport, treatment and disposal of waste, together with monitori ...
, becoming Greenopolis Recycling Rewards. Greenopolis gave rewards points to users from 2008 to 2012 through
social media
Social media are interactive media technologies that facilitate the creation and sharing of information, ideas, interests, and other forms of expression through virtual communities and networks. While challenges to the definition of ''social me ...
websites,
Facebook Games and bottle and can recycling via
PepsiCo
PepsiCo, Inc. is an American multinational food, snack, and beverage corporation headquartered in Harrison, New York, in the hamlet of Purchase. PepsiCo's business encompasses all aspects of the food and beverage market. It oversees the man ...
Dream Machines. The Dream Machines were placed on college campuses,
grocery store
A grocery store ( AE), grocery shop ( BE) or simply grocery is a store that primarily retails a general range of food products, which may be fresh or packaged. In everyday U.S. usage, however, "grocery store" is a synonym for supermarket, ...
s and
military base
A military base is a facility directly owned and operated by or for the military or one of its branches that shelters military equipment and personnel, and facilitates training and operations. A military base always provides accommodations for o ...
s across the US and collected more than 4 million
plastic bottles in their first year of use. Oceanopolis, a Facebook game created by Greenopolis to make the recycling habit fun and engaging, was recognized by
Al Gore at the 2011 Games for Change Festival at
New York University
New York University (NYU) is a private research university in New York City. Chartered in 1831 by the New York State Legislature, NYU was founded by a group of New Yorkers led by then- Secretary of the Treasury Albert Gallatin.
In 1832, ...
, saying "I've been encouraged by recent developments like
Trash Tycoon and Oceanopolis, and both have spurred my thinking in this area." Eventually, Recyclebank and Greenopolis would merge following an investment in Recyclebank by Waste Management. In 2019, RecycleBank was purchased by Recycle Track Systems (RTS).
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 trading, 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 (CRAGs), 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
Norfolk Island (, ; Norfuk: ''Norf'k Ailen'') is an external territory of Australia located in the Pacific Ocean between New Zealand and New Caledonia, directly east of Australia's Evans Head and about from Lord Howe Island. Together w ...
, Australia is in the process of implementing an island-wide voluntary personal carbon trading scheme designed by
Southern Cross University
Southern Cross University (SCU) is an Australian public university, with campuses at Lismore and Coffs Harbour in northern New South Wales, and at Coolangatta, the most southern suburb of the Gold Coast in Queensland.
It is ranked in the t ...
Professor Garry Egger,
Community based currency schemes
A community based emissions reduction currency scheme is a C4 type local currency in which
local currency 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
is a special ward located in Tokyo Metropolis, Japan. It takes its name from the Edo River that runs from north to south along the eastern edge of the ward. In English, it uses the name Edogawa City.
The easternmost of the wards, it shares ...
that is an initiative of the local
Jōdo Shinshū
, also known as Shin Buddhism or True Pure Land Buddhism, is a school of Pure Land Buddhism. It was founded by the former Tendai Japanese monk Shinran.
Shin Buddhism is the most widely practiced branch of Buddhism in Japan.
History
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."
http://www.qoin.org/what-we-do/past-projects/kyoto4all/ Kyoto4All was a 2006 report written by Peter van Luttervelt, David Beatty, Edgar Kampers and Hugo Schönbeck for the Dutch Ministry of Environment (then named VROM). The study described a series of monetary models to connect citizens-consumers to the climate change targets of the post-Kyoto period.
The Maia Maia Emissions Reduction Currency System, is a scheme 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 which is equates to a $100 tonne e
social cost of carbon, which approximates a middle estimate from peer reviewed studies. The first issue of boya occurred on 30 January 2011 in
Fremantle, Western Australia
Fremantle () () is a port
A port is a maritime facility comprising one or more wharves or loading areas, where ships load and discharge cargo and passengers. Although usually situated on a sea coast or estuary, ports can als ...
at an event hosted by the International
Permaculture Service and the
Gaia Foundation
The Gaia Foundation is a registered charitable organization in the United Kingdom that promotes ecologically sustainable development. It is involved in a variety of research, educational, political and community activities; these address concern ...
of Western Australia. Other issuers of Boya include the
University of Vermont
The University of Vermont (UVM), officially the University of Vermont and State Agricultural College, is a public land-grant research university in Burlington, Vermont. It was founded in 1791 and is among the oldest universities in the United ...
and in Australia, primary schools, non-profit organisations, and a neighbourhood association.
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.
The German climate protection association
SaveClimate.Earth' is proposing to introduce initially on a European base a climate currency ECO (Earth Carbon Obligation) as
complementary currency to pay for the individual
greenhouse gas emissions
Greenhouse gas emissions from human activities strengthen the greenhouse effect, contributing to climate change. Most is carbon dioxide from burning fossil fuels: coal, oil, and natural gas. The largest emitters include coal in China and ...
consumption.
Monetizing schemes
A monetised emissions reduction currency is backed by the financial value of emissions credits or certified under a regulatory scheme or other financial products derived from them. These credits can be converted into
fiat currency
Fiat money (from la, fiat, "let it be done") is a type of currency that is not backed by any commodity such as gold or silver. It is typically designated by the issuing government to be legal tender. Throughout history, fiat money was sometim ...
through transferring ownership of the underlying assets such as selling the
emission credits
Emissions trading is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). Carbon emission t ...
into
cap and trade markets.
The
Ven is a
virtual currency issued by the
Hub Culture social media network. The value of Ven is determined on the financial markets from a basket of currencies and commodities. The Ven may be categorised as an emissions reduction currency because carbon futures are included as one of the commodities used to value 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 being used in developing countries to reduce monetary transaction costs and hedge against currency fluctuations.
Richard Seireeni ''Transforming the African Brand Through Sustainability'' – Huffington Post
/ref>
See also
* NORI token
Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (Abbreviation: ETH; sign: Ξ) is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capita ...
Notes
{{Sustainability
Local currencies
Emissions reduction
Carbon finance
Economics and climate change
Environmental issues in Ireland