Why is there an urgent need for a complementary resource currency, the ECO?

The simplified equation "money = emissions" describes the inseparable causality between consumption and climate-damaging emissions - as long as our goods and services are not yet generally climate-neutral. The current tools of climate policy rely heavily on price increases to bring about a curtailment of our fossil fuel consumption. But the wishful thinking of using price signals to bring about the necessary behavioral changes among consumers has failed miserably. This is because increasing prices does not simultaneously create realistic and sustainable consumption and mobility alternatives to a sufficient extent. Moreover, the rebound effect is once again driving consumption-related CO2 increases. Money saved by cutting back, doing without or using more efficient technologies is generally spent elsewhere. This is another reason why it is essential to decouple effective climate protection and the pricing of our consumption-related emissions from the monetary system - for example, through a complementary climate currency. Even in an international context, it does not make sense to apply local price signals. The fossil fuels we save are bought cheaply by other countries and burned there. The fossil fuels produced abroad are then imported into our economic area and counteract our efforts to protect the climate. Finally, the CO2 price surcharge included in the product price also prevents desirable transparency, because this is almost completely lost in the overall price. The separate emissions price tag in ECO makes the CO2 footprint readable, so that consumers can compare the climate impact of different products. 

But the German government has already adopted a climate package. Why do we need another one?

The German government's climate package is based on taxation. However, if only one tax is levied on something, only consumption will initially become more expensive. Because if you make something more expensive, this does not necessarily reduce consumption. It simply means that consumption costs more money. It would remain completely unclear whether the necessary reduction could be implemented in this way. 

Why is the concept of a resource currency better than the political solutions?

The alternative climate concept is conceptually superior to taxation. The approach is not to describe what everyone can personally contribute in their everyday life to save the climate. Rather, the concept is based on a systemic solution that is as broad as possible for society as a whole. It describes the limitation of emissions to a scientifically defined maximum, as well as the pricing and fair rationing of personal climate-damaging consumption. To this end, the draft pursues a well thought-out system of a complementary resource currency, which corresponds to the CO2 -equivalent, the fossil fuels used to create value. It can be easily integrated into our existing economic system and reliably limits the consumption-based consumption of fossil fuels through fair rationing. Market economy laws function in harmony with ecological sustainability and the polluter-pays principle applies to the smallest unit of the market, the consumer. The special feature of the Alternative Climate Concept also takes into account the case that the system of a complementary resource currency is not immediately accepted and implemented by all countries. It also describes the initially required interfaces to the "rest of the world".

Why is the already existing EU emissions trading system (EU-ETS) with certificates not sufficient?

Emissions trading has not been implemented in detail because not all instances of the value chain have been included according to the polluter-pays principle. In Germany, only operators of large combustion plants (with a rated thermal input of more than 20 megawatts) and energy-intensive industries such as steel mills, refineries, air traffic and cement plants currently participate in emissions trading. According to the German Federal Environment Agency, since 2008 there have been steadily more certificates on the market than are actually needed. The surplus of emission rights has therefore led to dumping prices, making investment in more environmentally friendly technologies simply uneconomical for companies. However, if the number of certificates becomes too scarce or their prices rise too high, this not only jeopardizes international competitiveness, but also leads to energy-intensive companies increasingly relocating their production abroad with less stringent regulations (carbon leakage). In order to prevent this to some extent, certificates are still being issued to some companies free of charge. Incidentally, the costs for auctioned pollution rights are added by industry to the end products and thus passed on to consumers. This increase in price disproportionately affects lower-income households in particular. Moreover, emissions trading on such a superordinate level does not take into account the smallest unit on the market, the consumer, with its enormous steering effect. This is different with the ECO, because the feedback from the change in demand re-educates the industry very quickly and efficiently. A disadvantage of the EU-ETS is also the high administrative effort by the legislator, because already now administration has to be done in many areas. The necessary measures to integrate sectors that have not yet been subject to emissions trading would require even greater effort.

The EU-ETS is therefore conceptually inferior to the ECO because

• the entirety of all sectors is not represented
• only industry is included, not consumers, who have no incentive to save additional CO2 as a result
• the penalty for exceeding the permitted maximum is far too low 
• the danger of carbon leakage exists (migration of CO2 intensive industry to third countries without ETS)
• by auctioning the allowances, the purchase price is passed on to the consumer and the prices are thus increased
• many of the allowances are given away for free so the industry has no incentive to invest in green technologies.

What about the CO2 tax?

CO2 taxes are conceptually inferior to the ECO because

•  they mainly increase costs and do not provide transparency regarding the CO2 footprint
• they do not reduce CO2 emissions quickly and reliably enough
• they are a bureaucratic monster, because they have to be administered in all different areas: agriculture, transport, energy, etc.
• the budgeting is missing, because money is infinitely available

Missing cap 

The current lack of a limit on the total amount of CO2 emissions or CO2 equivalents that can be emitted is by far the biggest disadvantage of the CO2 tax.

Financial aspect

Since the price surcharge is essentially passed on to end consumers, a high CO2 price disproportionately burdens low-income households and has little effect on the affluent. They spend a much smaller percentage of their income on consumption. For them, higher prices primarily mean that they can save less. However, it will hardly have a significant impact on their consumption behavior.  Furthermore, there is little incentive for (domestic and) foreign industry to invest in the transformation to climate-friendly production, because consumers are reluctant to pay the higher price, but they do pay it - mainly due to a lack of consumption alternatives.

Price elasticity prevents reliable emission reductions 

The possibility of influencing purchasing behavior by increasing prices has reached its limits, for example in the case of fuels, since price increases have relatively little impact on demand. According to estimates by analysts at the European Central Bank, the short-term price elasticity of fuel demand for the euro zone is -0.15. This means that a 10% surcharge reduces demand by only 1.5%. Furthermore, imposing a CO2 tax does not guarantee compliance with a targeted emissions reduction goal, as it only directly affects the price of emissions. At best, the quantity of CO2 emissions can be controlled indirectly and only with a time lag. It therefore seems advisable to reduce CO2 emissions via a volume solution rather than via price regulation.

Lack of transparency of ecological costs

Since the surcharged CO2 costs combine with the economic product price to form a total price, transparent differentiation of the climate costs included is virtually impossible for the customer. The separate surcharge of the CO2 footprint is hardly visible. With the resource currency ECO, on the other hand, ALL costs of our ecological footprint become visible. This information flows into the purchase decision. People can now assign a price to the CO2 equivalent of their consumption in addition to the economic value. This is because the monetary price of something is determined by many costs: Materials, production, labor, development, marketing, taxes, etc. This also applies to each of the many components of a product. The final price is therefore the sum of several cost factors, and the additional CO2 price is only a fraction of them and therefore hardly transparent for the consumer. The ECO price, on the other hand, corresponds exactly to the CO2 resources consumed during the entire manufacturing process. There is no mixing of monetary price and resource price. Even the smallest CO2 emissions are reflected transparently. The intended emission target is achieved exactly. Market economy laws work in harmony with ecological sustainability. Due to the limited personal budget, the total emission volume can be precisely controlled. This gives the right investment and consumption signals to industry AND society. The last or first link in the chain is the end consumer, who brings about the necessary changes in the production processes through his free consumption decision and the limitations of his personal budget.

Why don't politicians first appeal to industry?

The primary interest of industry is to make profits and not to become more environmentally friendly in order to save the globe. This sounds sober, but unfortunately it is so. One should not overlook the fact that legal frameworks are being exhausted, but are generally being adhered to. The system should be designed in such a way as to put a sensible stop to the selfish pursuit of ever more growth and profit at the expense of the environment.

Why not simply push ahead with technical solutions to counteract global warming?

Work is currently underway to bring climate-neutral energy sources to market maturity. However, such processes are still complex, expensive or have a poor efficiency. The problem is simply that time is running out and we urgently need to start now to strictly limit greenhouse gas emissions. Through the alternative climate concept, environmentally friendly technologies will finally become competitive. Industry AND society are given the right investment and consumption signals. The last or first link in the chain is the end consumer, who brings about the necessary changes in the production processes through the free consumption decision and the limitation of the personal budget.

Doesn't change begin at a small scale and shouldn't everyone start with themselves first?

In principle of course yes! However, experience shows that appeal or even a few voluntary self-limitations do not bring about the necessary power of change by far. Many people recognize the pressure to act, but are not prepared to draw personal consequences from it. This is simply because, in contrast to the Corona Pandemic, no immediate threat or feedback is apparent. If we really were to focus exclusively on this, valuable time will pass in order to implement effective countermeasures. Also, many people think, "What can I do to make a big difference?" Resignation spreads and we hide behind the inaction of so many others. Selfishness is also an important factor: Even if many people have certainly recognized the dangers of global climate change, in addition to the systemic understanding of the pressure to act, selfish interests usually gain the upper hand "... but I won't miss out on the cheap offer for the cruise ...". It is important that the issue of climate change should not be about blame. Guilt, in the sense of "...your consumption is worse than my consumption...". No one should feel offended. Because we all live within this system design that enabled the current state of our environment. The focus should rather be on how we as a society come out of the crisis together. And this in the fairest possible way, without losing anyone along the way. The human being should therefore be able to behave in a way that does not affect the rights of third parties. 

Wouldn't it be better to produce less in order to reduce emissions?

With regard to the idea of a post-growth economy, we think that we do not necessarily have to consume less, but above all produce differently (in a climate-friendly way). If we succeed in this, there is no reason to limit consumption, at least from the perspective of climate change. If we do not succeed to a sufficient extent, the flexibly adjustable spending volume of the ECO will define the necessary guard rails, within everyone can move freely with their limited personal budget, according to their individual consumption needs.  

What is the level of acceptance of the ECO resource currency among the population?

Because the ECO resource currency system represents genuine per capita budgeting, it is predominantly perceived as fair. This is also confirmed by the results of the Citizens' Council on Climate (as of September 2021 Results & Expert Opinion | Citizens' Council on Climate: "The introduction of the climate budget per capita instrument should be pursued in any case. (...) On products, the amount of the CO2 price and the climate harmfulness of the product (...) must be presented in a simple and intuitive way." Another plus in terms of acceptance is the superiority of this system compared to non-transparent price increases through CO2 taxes or CO2 certificate costs passed on by the industry. 

How is it to be achieved that the entire EU agrees with this system and rejects its own?

This is certainly the greatest challenge - namely, to bring about a willingness to replace an entrenched but inadequate system with a better and fairer one. However, the advantages are also obvious. Policymakers are relieved of the need to enforce small-scale regulatory measures, because the control potential for climate protection is placed completely in the hands of all consumers. The ECO climate currency model sets the necessary ecological guard rails, within everyone can move freely with their consumption preferences. This model also decouples personal consumption habits from the issue of (climate) debt. This is because it is up to each citizen to decide how to spend his or her personal emissions budget. In addition, the market-based approach of such a budget solution means that the processes or technologies that are most efficient and cost-effective in providing the most green energy, are automatically used - without the need for legislation. So we are now faced with the decision whether we want to continue riding a "lame horse" just because we started with it once almost 20 years ago, or whether we don't want to finally rely on a better and, moreover, fairer system.  

But the other countries produce much more emissions than we do. Let them start to change things first!

Surely you could point the finger at others and say that climate protection measures would hardly be effective only at European level. Correct! Nevertheless, we should put our own house in order first, instead of hiding behind the inaction of other countries. Economically strong industrial nations such as Germany should send out a strong signal and take the lead internationally to show how an energy turnaround can take place. Climate change is a global problem and does not stop at national borders.

Shouldn't industrialized countries be granted higher emission quotas?
Historically high emissions by industrialized countries should not be used as a justification to derive the right to continue to act in this way in the future. In view of its history and its greater technological and financial capacities, Europe should therefore assume responsibility and take on a pioneering role instead of hiding behind historical customary law. Otherwise, previous low emitters could derive a catch-up right from this and want to expand their emissions to our level. In this way, the climate target would become unattainable.

This is all much too difficult to implement. How is this supposed to work?

It will certainly not be possible to do this in a cost-neutral way. However, there is also a great deal at stake for all of us to ensure that such an effort is worthwhile. Because there are two reasons for climate change: human activity and human inactivity. Back in the 1990s, the world already showed a remarkable unity - namely when it came to the dramatic expansion of the hole in the ozone layer and the urgent renunciation of CFCs. ALL countries of the world agreed to renounce the use of CFCs within 10 years and to replace them with (more expensive) substitutes. Why did this work back then? Because it was indispensable! Today the world is no less endangered and there is an equally urgent need for action. Nature will probably solve this much more brutally than the processes that humanity itself can set in motion. Should we fail in our efforts, it will be much more difficult to manage the consequences of global climate change than it is today to implement this alternative climate concept (or any other) at the most multinational level possible. It is our decision how - by design or by disaster. Because the world is facing a task of the century. But we do not have by far 100 years more time for it. 

Couldn't we start with a regional pilot project first?

Implementing the ECO as a pilot project would be a great idea in principle. However, it fails because the seamless and tamper-proof ECO pricing of all goods and services along the entire value chain will only work if the climate currency is also mandatory and fully introduced throughout the entire economic area. Only then can the ECO price automatically appear on every invoice from the extraction of fossil fuels right through to the finished product on the shelf. However, this would not be the case with a partial introduction of the ECO. In such a scenario CO2 balancing would have to be carried out by external service providers in a complex, expensive and yet inaccurate manner - as it is in the current system. Furthermore, it would be almost impossible to break down the ECO budget of participating citizens only for their consumption within the pilot region.

Wouldn't then quite a few energy-intensive companies become unprofitable because they would be at a competitive disadvantage?

No, because due to the limited ECO budget of the citizens, ALL companies have to convert their processes to green so that they can meet the changed demand for climate-friendly products. Figuratively speaking, this would be akin to adding another sack of potatoes to the back of each car in a Formula One race. The additional ballast is certainly a disadvantage. But since the same "weight" is imposed on all of them, there is no competitive disadvantage among them. Only the regulations have changed. In the Formula One example, maximum values for engine displacement, tire width, spoiler size for downforce, etc. are defined by means of regulations. And for good reason - it's about nothing less than equal opportunities for all. It should be similar with the combination of a country's economic interests and the necessary climate protection expenditures. The more lax the legal regulations, and thus the lower the financial expenditures for climate protection, the higher the (short-term) economic advantage of this country is compared to other countries. Investments in climate-neutral processes initially cost money - money that is well invested.

Isn't the cost of double-entry bookkeeping unreasonably high for companies?

Of course, climate protection will not be possible on a cost-neutral basis. For companies, the ECO means an additional accounting item - the additional expense is therefore manageable. However, compared to the upcoming obligation to balance and report the entire carbon footprint of their products (Scope 1-3), this effort is significantly lower. A time-consuming and expensive calculation by external service providers is unnecessary, as the corresponding ECO amount is shown on all invoices from the previous instances from the time of fossil fuel extraction.  

How are general/public costs handled, such as the purchase or operation of a patrol car?

All economic costs related to general tasks of the state, such as the maintenance of government buildings or official flights of politicians, are of course distributed to the citizens by means of taxes. Similarly, ecological costs will be collected from citizens' climate accounts according to a distribution key.

A large part of our "products" is now digital only - see ChatGPT. How is the ECO price calculated for this? 

Digital services are climate-relevant insofar as the energy consumed for them is of fossil origin. In such a case, the ECO is therefore included in the ECO bill for the energy costs. And this is ultimately due to the subsidization of fossil primary energy sources. Because here, directly at the bottleneck of the entire value chain, CO2 pricing begins by means of a complementary currency. 

In the case of goods and products from the B2B (business-to-business) sector, end consumers have no influence at all. Doesn't the ECO fail here? 

Particularly in the B2B sector, there is a great interest in buying upstream products at the lowest possible ECO prices in order to be able to price their own products with low ECO costs and thus secure a competitive advantage over competitors. The ECO works within the complete value chain - whether in the production of physical goods or the offer of services.

Private sale: What happens if a used article, e.g. a car, is resold privately after a whileof use?

Since the complete ECO price was paid by the first owner when buying a new item, the latter will naturally want to get part of the amount back from the later buyer- similar to the purchase price in conventional money. This happens individually between the private seller and the new owner according to the laws of supply and demand. Even in private trade, the transfer of an agreed ECO amount can take place from the buyer's account to the seller's account at the world climate bank. The currency ECO can be freely traded, just like physical goods or a service. The transfer of the negotiated amount is handled by the climate bank. This is as uncomplicated as an ordinary bank transfer or a transfer to a PayPal account.

Import/export: For example, what would Russia, as a supplier of natural gas, care if the EU introduced the ECO as a Resource Currency Union (RCU)?

Imports and exports determine our global economic system - both goods and energy. When fossil fuels are imported into the RCU, this additional quota of greenhouse gas emissions must be consistently adapted to the system of the carbon resource currency ECO. If fossil energy sources from the RCU itself were used, all companies involved in the value chain must pay their consumption with the corresponding amount of the parallel currency ECO to the extraction companies, which in turn must pay their share to the climate bank according to the amount extracted. Regardless of where the fossil carbon was originally extracted from the ground. Citizens of the RCU pay the ECO price for the products manufactured with it. Scenario: The EU imports gas from Russia, which is not part of the Resource Currency Union (RCU) The gas source operator therefore does not pay ECO to the climate bank. The first processing company in the EU must pay the specific ECO amount associated with the gas to the climate bank. If the end product obtained from this is sold within the RCU, the cycle remains strictly closed. Further scenarios on the subject of import/export.

How does the import of climate-damaging goods work?

The EU has also recognized that the import of supposedly cheap but GHG-polluting goods counteracts its own efforts to protect the climate. Therefore, a Carbon Border Adjustment Mechanism (CBAM) is planned for 2025 to ensure that imports are subject to the same emission prices as products produced within the European Union. The ECO concept also describes with its border adjustments how to deal with imports and exports from/to (not yet) participating countries. Imported goods are adapted to the climate currency system according to their GHG content. This has an even stronger effect than the price signal intended by the EU via CBAM. This is because no matter where in the world a consumer good was produced, it still cannot exceed the total consumer budget within the RWU. In our opinion, this is a clear advantage compared to the mechanism of a CO2 tariff. 

What about tourists from countries not participating in ECO?

Foreign tourists from countries not participating in Personal Carbon Trading or people who, for example, have forgotten their CO2 card when refueling, simply pay the (fuel) price in the store or at the gas station and also the current exchange rate value for the required CO2 units. The ECO price for the corresponding amount of CO2 is then added to the energy price. The required amount of ECO is automatically purchased by the point of sale on the climate exchange and paid directly to the climate bank.

Couldn't rich people buy up large sums of ECO to speculate on rising prices?

To prevent the ECO price from being driven to dizzying heights by speculation on the climate exchange, purchased ECO are marked as such. This digital marking prevents resale. Accordingly, additionally purchased ECO can only be consumed by the buyer itself. Only the ECO transferred monthly by the climate bank can be freely offered for sale by anyone on the climate exchange. This prevents price gouging through speculation.

Is there also an ecological basic income for children?

Minors also receive monthly ECO transfers from the Climate Bank, very similar to the child benefit in local currency. However, in order not to send the wrong signals, possibly offspring as a business model, these ECO are marked. This is necessary to achieve that these specially tagged ECO can only be used for payment. Unlike the basic ecological income of adults, this digital tagging prevents the basic ecological income of minors from being capitalized. It can therefore not be sold on the climate exchange.

What happens to my saved ECO when I have passed away?

Since the transferred personal ECO budget is closely linked to the permitted issue volume, this "credit" of the resource currency can be inherited in the same way as conventional money.

How will I be able to afford larger, long-term purchases such as a house or a car with the ECO?

With the ECO it is very similar to the salary account. Most people will not be able to pay directly for a car and certainly not for real estate with their average monthly salary. There are credit institutions for this. They will grant a loan with mostly monthly repayments and interest, provided that the creditworthiness and feasibility are checked. Similarly, citizens can also apply for an ECO loan from the climate bank for larger purchases. However, there is one decisive advantage: a loan from the climate bank is never charged with interest. The special feature of the ECO resource currency system is, that in contrast to the variable money supply of a country, that there must be no increase in the total quota issued by the climate bank for a period. The ratio of ECO to the emission quota always remains tightly coupled. An interest effect would destroy this basic principle.

What about data protection? Does the ECO not make me transparent as a citizen?

Of course, it is also immensely important that the ECO does not store the nature of my purchases and thus make them traceable. Data protection and data economy must be guaranteed. Only ECO amounts are recorded - but not what was bought or from whom. In addition to the climate account, an "ECO Wallet", similar to an EC money card function, which can be topped up with an ECO amount, would also be conceivable. Similar to Paypal Friends, one could then directly exchange ECO amounts with others via this electronic ECO wallet. Thus, there is no longer a direct and traceable link between my ECO climate account and my purchase.

Doesn't using a personal climate account open up the possibility for a social credit system? 

We can very well understand the objection or such concerns. Of course, we want to prevent conditions like those in China, for example, where buying the "wrong" newspaper at the newsstand leads to a "point deduction" within such a social credit system. In order for citizens to be as untrackable as possible with regard to their personal consumption, it is sufficient to electronically process only the bare quantitative amounts of a purchase, but not the details of what was paid for. Storage of other data, such as the subject of the purchase (smartphone) or the object (Amazon), is completely irrelevant to the functioning of the ECO system and therefore does not need to be recorded. Misuse of personal data is thus ruled out.

Is it possible to cheat on the ECO pricing? Who checks how much CO2 is produced?

The alternative climate concept works completely without expensive and bureaucratic test institutes and is therefore very simple and unrivalled effective. The only regulation is at the bottleneck of the entire consumption chain, namely the amount of ECO paid out to the private climate accounts of citizens. This amount corresponds to the current remaining emissions budget and must therefore be reviewed on a cyclical basis. It is important for understanding the concept that any "mining" of fossil primary energy sources must be paid to the climate bank quantitatively with its ECO equivalent. The only state monitoring takes place with regard to the quantities of coal, oil and gas produced. Their quantity is thus dependent on only one factor, namely the amount of ECO paid by industry to the extraction companies, which in turn has previously been collected from consumers. From now on, the individual players within the value-added chain will calculate the ECO associated with their process as a CO2-equivalent, completely autonomously. 

There is no possibility of cheating on the pricing of the ECO due to the system and thus no possibility of gaining a price advantage over the competition. The system of the resource currency ECO is explicitly designed in such a way that misuse is virtually impossible. It is by no means possible for companies to make a profit with it. In order to rule out distortions of competition, companies are not allowed to keep a climate account (as private individuals do). Companies only have an ECO clearing account with the climate bank. Each link in the value-added chain must pay the invoiced ECO to the previous instance and, in connection with the calculated expenses for its own processes, pass these costs on to the downstream instance(s) in order to avoid making a loss. It works very similar to the calculation of the sales price in Euro. Only the generation of an ECO profit is excluded, because each instance would like to pass on the lowest possible attractive ECO costs to remain competitive on the market. This, by the way, spurs the rapid conversion of production processes towards "green" and thus reduces the use of fossil fuels. Therefore, it makes no sense for a company to fraudulently set ECO artificially too high for its own processes because this plus cannot be capitalized, just as private individuals can do by selling their surplus ECO on the climate exchange. In addition, this would make their products less attractive on the market than competing ECO products with lower prices.  

Furthermore, it is also completely uninteresting, even impossible for companies to fraudulently underprice ECO for their own processes. This is because every company must (be able to) pay the upstream instances (receipt of raw materials, transport, ...) by means of the ECO it has collected itself. The ECO is therefore not at all suitable for pocketing money. The charming thing about it is that the ECO prices are calculated completely automatically within this cycle between consumers, trade, transport, production, material extraction and mining through system-inherent self-interest free calculation. The industry visualizes the realistic ECO prices as CO2-equivalent of our consumption. A distortion of the prices upwards is counterproductive and therefore senseless. On the other hand, a downward distortion is not possible at all, because although one wants to position oneself favorably on the market, all expenditure must be covered 1:1 by income at the same time. The most important objective, namely to reduce CO2-emissions below a permitted level, is therefore absolutely fulfilled. And this very lean, fair and effective.

Is the concept of a resource currency protected against fraud or manipulation by a parallel economy?

A very legitimate question! The parallel currency ECO is extremely safe from manipulation. In contrast to offences such as tax evasion or illegal employment, the great advantage of this resource currency is that it circulates within a closed loop system. If someone wanted to purchase a product or service without paying the associated ECO, the cycle would be broken. The consequence would be that the retailer or any other upstream entity would not collect any ECO, but would need it to pay for its own CO2 costs. In this respect, all links in the value chain, except the end consumer, have an interest in the CO2 currency circulation. Because, unlike us consumers, they only have a clearing account and are not allowed to trade ECO. Which means that they can neither buy nor sell them. Without the ECO they take, they would have a deficit in their clearing account. Every link in the chain has to pay the CO2 costs of the previous instances from its own clearing account. These costs can only be covered by the payment of the (end) customers, who in turn receive the parallel currency monthly from the Climate Bank. (see figure Consumption Resource Chain).

Goodbye greenwashing - why is the ECO preventing the problem of consumer deception? 

Greenwashing is not only dishonest, but also harmful to the environment and our society by concealing the real problems and deceiving consumers. So when companies advertise with embellished sustainability, this is not only a nuisance, it also makes it more difficult for us consumers to make an informed decision in favor of the more climate-friendly product. The ECO enables absolutely transparent and tamper-proof pricing of every product and every service with its actual CO2 equivalent and thus creates a clear link between our consumption and its emissions. This is because the harmfulness to the climate of even the smallest screw in the product is reflected in the additional ecological price tag, without the need for external service providers to carry out time-consuming, expensive and usually incorrect accounting. This system tackles the bottleneck in the value chain - the extraction of coal, oil or gas. From this point onwards, the GHG emissions are included as a separate item on every invoice - right through to the finished product on the shelf. The ECO prevents greenwashing and gives consumers a direct decision-making criterion regarding the carbon footprint of their consumption.

What's it all gonna cost?!

That's a fair question. Critics fear that meeting the climate targets will hamper economic development. Analyses put the economic costs of climate protection at 0.5 to 2% of the total global gross national product. Surprisingly, hardly anyone asks what the effects of the global climate crisis will cost if we do nothing. The massive restructuring of our fossil-fuelled infrastructure will provide a powerful economic stimulus. And perhaps, by the way, bring about a climate policy economic miracle. This could certainly be a pleasant side effect. After all, ambitious climate protection triggers investments and creates numerous jobs.

If this alternative climate concept were actually implemented globally, then the rich could simply carry on as before?

Of course, the environmental crisis cannot be considered in isolation from social aspects. For this question describes two very complex issues that undoubtedly play into each other: The justice problem and the climate problem. Of course, at first it sounds like injustice if some wealthy people can use their money to buy more emission volume than they are personally entitled to according to the distribution algorithm. Nevertheless, the ECO helps to reduce the wealth gap between rich and poor, because the rich now pay for their extra emissions, which they do not have to do today. More consumers thus pay low consumers directly in financial compensation. The poor have a new source of income through the sale of their unneeded quota, which they do not have today. At the same time, personal emission quotas reliably ensure that no one can consume beyond his means, at the expense of everyone else. This is because the ECO's limited spending amount corresponds exactly to the remaining total emissions budget. Thus, in addition to the very positive effect of reducing emissions, the ECO also has a desirable positive side effect, namely greater social justice. It should also be taken into account that the poorer people do not have the financial means at all to engage in emissions-intensive consumption.
Our economic system enables the phenomenon of excess wealth. The associated overconsumption (in the sense of consumption outside planetary boundaries) is associated with a significantly disproportionate carbon footprint. A well-functioning GHG quota system must also be able to reflect the reality of these people's lives, otherwise it is hardly feasible. This may seem unfair at first, but it is far less unfair than the current system.

Comparison of the current system vs. the climate currency ECO in the context of fossil overconsumption:

How can I still afford to commute to work?

What will happen when ECO becomes mandatory in the near future? Could I then still afford the daily commute to work, for example? Yes, because politics and industry will make green fuels available by then. The possibilities for this have been around for a long time. However, up to now they have not been financially competitive with fossil fuels, as only economic aspects have been taken into account. The ecological view of the accompanying environmental destruction was wrongly ignored. In order to soften the introduction phase of the resource currency, we could discuss an expansion (overshooting) of the ECO budget for a certain transitional period. However, this additional emission would have to be consistently reduced again at a later date (overshooting to the target level). For one thing is clear, nature or physics does not negotiate. The remaining volume of emissions is absolute. Therefore, the strict implementation of the limited resource currency ECO on an agreed date is preferable. It would also be conceivable to use the instrument of state subsidies to industry in a targeted manner in order to alleviate the initial financial burden of investing in green technologies. Furthermore, a reform of the commuter allowance would make sense. The state already contributes to the cost of commuting to work by making daily commuting tax deductible. With the introduction of the parallel currency, this commuter allowance could be extended for a certain transitional phase, gradually melting away, to cushion the initial additional personal burden. However, an initial additional burden is unavoidable. This is the only way to create the necessary pressure for change.

Once on a cruise ship, do you sit cold all winter long?

The concept of the limiting resource currency is not about permanently restricting people or putting them into existential hardship, but rather about a change in the way we deal with the limited resource atmosphere, which will otherwise get us into hot water very quickly if we fail to make the switch to green energies. A cruise ship leaves with the cheapest heavy fuel oil that can be bought, because we book the trip with the provider who offers us the week Canary Islands for 800 euros or cheaper. The alternatives to coal, oil and gas have existed for a long time. But until now, they were not financially competitive compared to fossil fuels, as only economical aspects were considered. The ecological aspect of the accompanying environmental destruction has been wrongly ignored. That is why we now need this CO2 currency, so that economic production processes become more climate-friendly as a result of consumer pressure, because ECO-friendly consumer goods and services are now in demand.

C02-neutral products are usually more expensive than products with a larger carbon footprint. How can low-income earners afford climate-friendly consumption?

The ECO in particular does NOT rely on additional regulatory increases in the cost of our consumption in order to achieve less climate-damaging consumption through restriction and renunciation. It is true that the necessary initial investments in the conversion of production will inevitably lead to an increase in costs, even with the ECO. However, the ECO manages without ADDITIONAL COSTS, which arise from the passing on of certificate costs and/or the surcharge through the CO2 tax. After the conversion phase, low CO2 consumption is more cost-effective with the ECO, while the current measures rely on a permanent or even increasing cost. 

A limited emissions budget simply means for me a new restriction in my personal freedom!

Yes and no!

Saving our climate will not be possible for free, and certainly not according to the motto "Keep it up! Things finally need their rightful price. However, personalized emissions trading is enormously efficient and unrivalled in its fairness in relation to other concepts under discussion for saving our climate. It allows a maximum of personal freedom of choice, but within clearly defined limits for everyone. For example, people who does not want to give up the idea of continuing to make three long-distance journeys a year can of course do so, but have to limit themselves elsewhere. Just like with conventional money.

I don't need a surveillance state that tracks my consumption!

We don't want that either, and the concern is unfounded. This is because no qualitative details of the purchase are recorded, only quantitative ECO totals of the purchase transaction, so that no conclusions can be drawn about the type of consumption. In addition, a cash card function could be implemented on the ECO payment card, similar to a pocket money account. During the payment process, it would then be possible to have ECO debited directly from this separate credit balance without a transfer to the climate account. 

Why should mankind save emissions today when it is not yet clear whether climate change has natural causes?

It is not about the natural causes of climate change. These have always existed and will continue to exist. But they take place on other time scales. Nor is it about "the planet." The Earth has already experienced several ice ages and hot periods. Nature adapts to them over the course of millions of years: Species die out, new species emerge. The current discussion about climate change is about the survival of us humans and our civilization. The fact that anthropogenic (i.e. man-made) causes are by far the greatest driver of this is scientifically unambiguous and clearly proven. Uncertainties exist at most on detailed levels and are used by ideologues and conspiracy theorists for various reasons to sow doubts.

As a Central European, what do I care about global climate change?

After all, we’ll be probably in the comfortable situation of having a moderate climate here for a long time to come! Yes, it is possible that regions near the equator will become uninhabitable and agriculturally unproductive much faster due to rising temperatures. What will happen when the livelihoods of the people living there are dwindling? There will be streams of refugees, against the scale of which the current "refugee crisis", for reasons of war and persecution, will seem insignificant. Fortress Europe will not be able to protect itself against the millions of climate refugees that will come, even with even higher walls and Frontex. Moreover: only one of the many sensitive tipping points is the Gulf Stream. If the polar caps continue to melt and "dilute" the salty seawater, there is a danger that this gigantic heat pump will dry up, which would endanger the comfortable Central European climate.

How does the introduction of a resource currency affect our handling of packaging waste and returns ?
One-way packaging, e.g. made of plastic, or packaging waste in general, is significantly reduced by the parallel currency ECO. The throw-away mentality, with all its associated disadvantages, such as the littering of the oceans with plastic waste, is due to the fact that disposable packaging is produced very cheaply and therefore has little economic value. The consequential costs, such as those of disposal or the damage to marine life, are overlooked. The ECO finally gives this resource its real value, making material-saving handling and recycling systems much more attractive. The current practice of destroying new goods and returns is economically cheaper than putting them back into the sales process.  This resource madness would come to an end with the ECO, because things would finally have an ecological value. 

Methane: What about the steady increase in meat mass production. Isn't that where the particularly climate-damaging methane is produced?

Correct! Large quantities of methane are released during meat production in particular. Very similar to the billing of the consumption of fossil energy sources, the release of methane could be integrated consistently into the system of the parallel currency ECO in a next step in the near future.Deforestation/afforestation of forest areas: It would also be conceivable to adapt resource consumption by the timber industry to the ECO. This is because non-sustainable deforestation means that these forest areas are no longer available for CO2 absorption and the atmosphere is thus additionally polluted. Consequently, measures that are accompanied by additional compensation requirements for the atmosphere should also be taken into account. Just as with the consumption of fossil resources, the ECO price would be passed on through the wood industry along the entire value chain to the end consumer. Conversely, the reforestation of additional forest areas, for example, would relieve the atmosphere. Thus, ECO can be "earned" by such measures that remove CO2 from the atmosphere and lead to a quantitative expansion of the resource currency. Conversely, ECO could be "earned" and lead to a quantitative expansion of the resource currency. This is because additionally afforested forest areas withdraw CO2 from the atmosphere and thus reduce the burden on the atmosphere.

Does not the formula apply: fewer people = fewer climate problems?

That's only partly true. The fact is that it is precisely the relatively few people in the industrialized nations who cause by far the largest proportion of the world's climate gases. However, the effects, in the form of droughts, floods and extreme weather, are currently being borne primarily by the emerging and developing countries, which have contributed least to climate change.

Can we draw useful parallels from the Corona pandemic for climate policy?

The global climate crisis and the Corona pandemic have more in common than we might think. Both are global crises that require a quick and decisive response. With the Corona pandemic, we have seen that people are willing to take drastic action when they feel directly threatened. With the climate crisis, this direct feedback is often lacking, which can lead to repression. However, the Corona crisis has shown that we as a society are capable of making epochal decisions. We could also use this capacity to address the global climate crisis. The pandemic has taught us that there is enough money when it comes to responding quickly and consistently to serious crises. Noticeable restrictions in social life are also suddenly feasible. A great opportunity of the Corona crisis lies in the willingness to accept scientific findings as a framework for action. If we can maintain this respect for scientific knowledge, we will no longer have to argue about the "if" in the eco-crisis, but only about the "how". But it is important to note, that support for the coal, oil, and gas industries with portions of economic aid encourages "business as usual" and keeps us from achieving the Paris climate goals. 

Consideration of biomass (e.g. renaturation of peatlands, reforestation projects, etc.):

After intensive consideration, we decided against integrating biomass into the ECO model for good reason. Not because we are against such projects, but because the accounting of CO2 sequestration from the atmosphere by biomass cannot be quantified seriously and transparently and integrated into a GHG accounting system. There are too many uncertainties in assessing the potential of these measures and the correct and stringent accounting within the ECO climate currency. It takes many years before new seedlings absorb a relevant amount of CO2 from the atmosphere, which is subject to strong fluctuations (age, tree species, in which region the trees are located, ...). In addition, such concepts can hardly be controlled in the long term (with reasonable effort). The door would be open to greenwashing.

We would like to justify our concerns:

Trees and peatlands do bind carbon in their biomass, but even in the EU ETS, afforestation and forest projects are excluded for good reason. In such projects, there is no certainty as to how long these trees will stand. If they are felled and processed into firewood, the entire amount of bound CO2 is released again during combustion.  

Could the ECO also be used to solve other important problems, such as water consumption or the preservation of biodiversity? 

There are certainly other very urgent problems to tackle, as many other resources are also finite and there is often an overuse of various ecological systems. However, with the ECO climate currency, we have initially focused on what is probably the most time-critical problem of all - namely limiting global warming caused by anthropogenic greenhouse gas emissions. In the climate currency model, the ECO spending volume influences the use or promotion of fossil primary energy sources, and thus indirectly the global temperature increase.

The ECO complementary resource currency model is a self-contained control loop which, however, can "only" reliably process one control variable.

Why it is not possible to map several control variables within a resource currency at the same time:

Theoretically, one of these control variables could assume the status "green", while the most important one (consumption of fossil fuels) is set to "red".

Let's take a limit value approach:

Let's assume that the ECO not only reflects the CO2 equivalent of GHG, but also includes other scarce resources such as land use, water, biodiversity, etc. It could then happen that I use my ECO budget disproportionately for fossil consumption. In this case, I would also be spending ECO shares of other resources. This would be good for the other areas and the personal budget would not be exceeded, but the control option for the most critical area, emission reduction, would no longer be sufficient.

Or to put it very simply: it would be like trying to regulate not only the room temperature in the bathroom with a room thermostat, but also the water temperature at the tap or the brightness of the lighting at the same time. That can't work.

Conclusion:

Unfortunately, it is therefore not possible to control two (or more) different control variables (consumption of fossil fuels + e.g. land use) within a self-contained control loop (accounting system) with a common control variable (output volume of the contingent resource currency ECO). At least not if one of these control variables is extremely time-critical, as is the case with the limitation of GHG emissions.

Here are two charts for comparison:

It is assumed that the monthly ecological basic income of 1,660 ECO for individual fossil fuel consumption is expanded to include other resources such as land use, water and biodiversity. As an example, every citizen could have 5,000 ECO per month at their disposal as a personal budget. 

Figure 1: 

Illustration of the exemplary distribution of other limited ecological systems

within an extended resource currency ECO.

Figure 2: 

Illustration of the disproportionate use of fossil fuels

through reduced use of other resource shares.

"But the ECO thing, that's not possible at all!"

Everyone said that it is not possible at all. … someone came along who didn't know that and just did it." Amazing that hardly anyone asks what the consequences of not acting would be!

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