emission trading through a complementary currency system
We have found that an individual climate gas quota is needed for each of us and that this can be traded. Now a currency is needed for this newly created market. In the medium term, of course at global level, but for the time being also at European level, we should start by introducing a complementary monetary system for greenhouse gas emission - the "ECO" Earth Carbon Obligation).
From a fixed date, each item will be paid for in two different but complementary currencies - the euro, dollar, yen ... and the purely cashless carbon resource currency ECO. This additional currency ECO stands for the obligation, through appropriate regulations (rationing), to extract and ultimately burn only so much carbon in the form of fossil primary energy sources (coal, oil and gas) that global warming is stopped. The sole aim of this complementary pricing of goods and services is to limit greenhouse gases through rationing. Every month the same amount of the new monetary unit ECO will be credited to a personal climate account.
How does this work in detail?
1. Introduction of the ECO as CO2-equivalent
First of all an Agreement is needed as multinational as possible, to introduce this complementary resource currency, called the parallel currency "ECO", which represents the CO2-equivalent of our consumption. This is needed because our normal money is not able to reflect our actual carbon footprint. Because everything has two prices, one economic and one ecological. These two values do not necessarily have to correlate. An item can be produced economically for a very low price, but it can be very damaging to the environment.
2. Establishment of private climate accounts
Since all world citizens have an equal right to use the resource "atmosphere" by emitting greenhouse gases through their personal consumption, every citizen of full age receives a personal climate account at the climate bank to record and account for his consumption. This account is topped up monthly in the form of an agreed ECO amount equal to each person. Just as with our conventional account, we also have to ensure that it does not run out through unreasonable consumption.
3. Establishment of ECO clearing accounts for industry
The commercial enterprises receive an ECO clearing account to be able to pay for fossil energies with the corresponding amount of the parallel currency in addition to their price in normal money:
4. Establishment of a climate bank
Personal climate accounts or commercial Clearing accounts are managed by the climate bank. This bank transfers exclusively to natural persons a monthly equal amount of the parallel currency ECO. This climate-compatible budget can:
5. Establishment of a climate exchange
Since citizens are entitled to trade their ECO, a climate exchange will be established for this purpose. Even ECO that are not used can be sold for money or additionally required ECO can be purchased. Companies are not allowed to trade on the climate exchange in order to prevent distortions through incorrect pricing for the purpose of enrichment. The resource currency ECO should not degenerate into an investment or speculative object, but should reflect the real ecological value of our consumption. This removes the incentive for industry to charge higher ECO amounts than those actually spent. On the contrary: this ban gives companies an incentive to buy raw materials and products from preliminary stages for as little ECO as possible and to optimize the energy efficiency of their own processes in order to pass on as little ECO as possible and thus be able to place their own products on the market more attractively. The operator of the climate bank and climate exchange could be the United Nations (UN), for example.
6. certification of fossil primary energy sources
The fossil fuels coal, oil and gas do not contribute to the greenhouse effect to the same extent. In order to be able to compare them nevertheless, the term CO2-equivalent (CO2e) was defined. It describes a unit of measurement for standardizing the climate impact of the various greenhouse gases in relation to CO2. The different CO2-equivalents also result in different ECO costs. From now on, the ECO amount of the subsidized amount of fossil energy sources must be transferred to the supranational climate bank. The amount of fossil fuels extracted is subject to a market economy limitation due to the closed loop system of the resource currency, in which no more may be spent (extracted) than can be paid with the limited currency. Within this cycle, the costs for the extraction of fossil fuels must ultimately be covered by the payment of the consumers. The resource currency circulates in a closed system, between the climate bank, the climate accounts of the consumers, across all instances of value creation, up to the extraction of the fossil primary energy sources. A limitation of emissions, from now on, results automatically, through the reduction of climate-damaging consumption, due to the rationed parallel currency ECO.
What are the advantages?
Each process stage within the value chain calculates the ECO price of its product by dividing the sum of all upstream stages by the number of units produced.
There cannot be any CO2 components hidden in a product that are not included in the final ECO price, other than those charged via the numerous upstream stages of the value chain. Even the CO2 content, of the smallest screw, is integrated in the ECO final price and therefore visible to the consumer. Due to the very high smallness of the calculation, ALL sub-stages of the value chain are included. This ensures a high-quality information about the contained CO2 values. Much better and more precise than any CO2 calculator app could do.
Any extraction of fossil primary energy sources must be quantitatively transferred to the Climate Bank with its ECO equivalent (according to the following table). The ECO price is based on the assumption of a scientifically determined maximum of currently approx. 2 tons of CO2-emissions/person/year to stop global warming. The only necessary governmental monitoring takes place for the produced amounts of coal, oil and gas.
Scientific values (exemplary):
lignite: |
3,25 kg CO2/kg |
32,5 ECO/kg |
4,17 kWh/kg |
0,779kg CO2/kWh |
7,79 ECO/kWh |
hard coal: |
2,68 kg CO2/kg |
26,8 ECO/kg |
8,06 kWh/kg |
0,333kg CO2/kWh |
3,33 ECO/kWh |
petroleum: |
2,30 kg CO2/kg |
23,0 ECO/kg |
11,40 kWh/kg |
0,202kg CO2/kWh |
2,02 ECO/kWh |
natural gas: |
1,50 kg CO2/kg |
15,0 ECO/kg |
10,29 kWh/kg |
0,146kg CO2/kWh |
1,46 ECO/kWh |
Basic assumptions:
All sub-instances involved in the extraction of raw materials, production, transport and other activities within the entire value chain calculate the ECO expended (analogous to money) on a pro rata basis for their sub-process and invoice these to the subsequent instance(s) in each case. This is because the final ECO price of each product or service includes all CO2-emissions that have occurred along the entire value chain.
Example production of 10,000 ballpoint pens (highly simplified)
The following section describes in detail the costs incurred during the entire value creation process, from the production of ballpoint pens to their final sale via the retail trade. The ECO pricing from the extraction of the fossil fuels, the material extraction to the finished product and finally the distribution through the retail trade is presented. The use of the various CO2-emission sources (coal, oil and gas) for electricity generation, production of fuels, heating oil and materials is broken down and clarified separately.
ELECTRICITY GENERATION
Coal mine extracts 100kg of lignite:
PRODUCTION OF FUEL AND PLASTICS
Oil production company produces 100kg of crude oil:
- 30 l to Pentastic for 690 ECO, which uses it to operate its vehicle fleet.
- 20 l to the retailer Schmitt for 460 ECO, which is used to operate its vehicle fleet.
PRODUCTION OF HEATING GAS
Gas production company produces 100 kg of gas:
- 70 kg to Pentastic for 1.050 ECO, which uses it to heat its production facility and administrative buildings.
- 30 kg to the retailer Schmitt for 450 ECO, which is used to heat its sales and administration premises.
SUMMARY:
1. pentastic ballpoint pen company (ECO costs of various preliminary instances):
Total: 5.306 ECO
5.306 ECO goes into the production of the 10.000 pens and is passed on to retailers.
2. retail company Schmitt (ECO costs of various previous instances):
Total: 7.050 ECO
Thus, the complete value chain of manufacturing, transporting and selling the 10,000 pens, accounts for a total of 7.050 ECO. Each individual ballpoint pen accounts for 0.71 ECO, in addition to the sales price in euros.
The example is presented in a highly simplified form for better understanding. The figures are merely intended to provide a quantitative explanation of the various ECO prices for individual process stages in a simplified manufacturing process and make no claim to qualitative accuracy. Also, for simplification purposes, no own infrastructural expenses were applied for the various extraction companies, the refinery, BASF, RWE and EON.
This page was translated with the help of DeepL
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