The Carbon Currency

This article should more appropriately be titled ‘The Carbon Currencies’.

Because they rolling out not just one - but two.

Taking a break from the theme of General Systems Theory, because I see a number of these initiatives being rolled out at this very minute. But as we shall soon find, this connects to the whole story just as well. Either way - Toco, rolled out into its second destination only two weeks ago - Denmark¹.

And should you head over to their website², you will find two things of interest. First, ‘For every toco in circulation, 1 tonne of carbon is removed from the atmosphere’. That means the Toco as a carbon currency is centred around carbon sequestration.

The next thing of interest you find, is that ‘Tocos are minted and verified by The Carbon Reserve’. We also see that the initiative so far has only been rolled out in Switzerland and Denmark, but should you live outside, you can join the ‘Carbon is Money Movement’, a concept seemingly so idiotic that one could only assume frauds like Extinction Rebellion would readily sign up for it.

The Carbon Reserve has its own website³. It’s not terribly interesting, just confirms the above, before stating a physical address in… Geneva, Switzerland.

But Toco is not the only initiative. We also have the Global Carbon Reward Carbon Currency⁴ - incidentally, which also centres around carbon sequestration.

Oh, and will you look at that - here’s Delton Chen, the founder of the Global Carbon Reward debating his wonderful idea, certain to polatise wealth massively, discussing the concept with… Extinction Rebellion.

Around 24 minutes in, Delton explains Carbon Quantitative Easing (Carbon QE) as a mechanism for central banks to stabilize and support a new carbon currency, contrasting it with traditional QE which tends to exacerbate financial inequity. You’d expect a legit, left-wing organisation to balk at that moment at least, no?

Regardless, the reason why this should be of note is because the above mentioned CQE suggests (what will eventually become) a gradual replacement of existing currency (it’s always slowly, slowly), and it’s a concept reminiscent of Buckminster Fuller’s 1969 Operation Manual for Spaceship Earth⁵, because it would appear a ‘science fiction’ novel was released in a fairly similar style in 2020⁶, addressing… pretty much all of these concepts.

Now, I actually bought the book just to confirm what a piece of trash it is - and it really is. It’s nothing but outright propaganda, eventually going through the likes of Keynesianism and Modern Monetary Theory, but that’s not really what’s of importance. Because in spite of its quality - or distinct lack thereof - it supposedly is ‘a great read’, should you ask Bill Gates, and furthermore ‘chosen by Barack Obama as one of his favourite books of the year’, calling into question if the man actually reads books, or just watches Netflix shows, featuring massively⁷ overcompensated⁸ celebrities⁹, calling into question whether said ‘Netflix deals’ in fact serve a different function altogether. Regardless, this book really is terrible, the propaganda is simply smeared on way, way, way too thick.

But - as said - this is yet another carbon currency backed by carbon sequestration. There’s another type¹⁰.

EcoCore proposes a ‘Carbon Currency based on Carbon Allowances‘. We furthermore find that this should towards a 2050 Net Zero transition through -

‘allocation to all citizens of a carbon allowance‘

Which… sounds a tad like the Soviet Union, if you ask me.

`complete coverage for payment of the carbon price on every product and service in the economy’

… and nothing will escape this Marxist dream.

‘dual currency system of cash and carbon tokens‘

… at least until they retire cash.

‘control of the supply of fossil fuels at the point of extraction‘

So we can just burn wood instead, no? (lol, no)

‘a strong foundation for governance of the voluntary carbon markets by setting up a central carbon bank as the final arbiter and authority for carbon credits (paid in carbon tokens)‘

Of course, this initiative will also have a central bank. And we also know that this will operate in the voluntary carbon markets. Do make a note of that.

But, wait - we haven’t yet seen how the concept works. Thankfully, that follows, and we see that the ecosystem kicks off by the government setting an allowable carbon emission target. And this pool of emissions is then distributed to each and every citizen.

And further - the money supply can then be continuously tightened as we inch closer to 2050’s lunatic ‘Net Zero’ target. And the clue is in the name - Net Zero. Net Zero Carbon Emissions. Zero emissions to be shared among the people.

Well, apart from what nature absorbs, I hear you say - yes, but that will gradually turn to zero down the line just as well. More on that in a minute.

So what we have here is a different type of carbon currency - one, backed by emission permits. We’ve seen one of those before, incidentally¹¹.

This was briefly touched upon when discussig the BIS Mitigation Outcome Interests, because the ultimate objective here really is crystal clear, no? The concept of ‘carbon allowances’ is intended for global rollout. Not local. Not regional. Global.

And as everything will be digitised and on distributed ledger technology (blockchain), all transactions will be stored forever. So, you know, 15 years down the line they can really drag your name through the mud for having bought some - in contemporary perspective - humiliating items on Amazon, no? Will be really convenient to get rid of political candidates who they will definitely not want running for office.

Mitigation Outcome Interests

Carbon Coded’s website is pretty much just a shell, but they do have a presentation¹². And I’m sure you’ll be pleased to know that their ‘Two-Tier CBDC Framework empowers public-private partnerships and enables digital cash to be designed by central banks but issued and distributed by financial institutions‘. Which - from their perspective - means that not much has changed compared to the existing system, though it does ‘empower public-private-partnerships’, aka accelerate the process of draining the middle class. But from your perspective? Quiet, prole - speak when spoken to.

A few pages on, we find that they ‘largely follow the Monetary Authority of Singapore’s Project Ubin framework, building upon and extending the work done across five inter-related components‘, and that’s actually of note, because that means that the initiative not only is connected to the central banking system in general, but also one of the major hubs of central bank FINtech development.

The Monetary Authority of Singapore connects to the BIS in a number of ways. Here’s a speech delivered by the managing director of the MAS back in late 2021¹³. Yes, hosted on the BIS website.

And from the same speech, we also learn that -

‘Not all cross-border payment improvements need CBDCs or the blockchain.  Singapore's real-time retail payment system – PayNow – is building direct linkages with other countries' payment systems. PayNow has already linked with Thailand's PromptPay, enabling individuals in the two countries to transfer funds directly to one another's bank accounts using just the payee's mobile phone number. PayNow plans to link up with Malaysia's DuitNow and India's Unified Payment Interface next year. But establishing bilateral payment linkages one jurisdiction at a time is hard work.  We need a multilateral solution.

MAS is therefore working with the BIS Innovation Hub on Project Nexus -  a common blueprint for how countries can fully integrate their real-time payment systems onto a single cross-border network. If it works, it will make PayNow globally interoperable much faster‘.

Ie, they cooperate with the BIS on Project Nexus, which relates to their real-time payments system, which is currently being integrated into neighbouring countries.

CoinCover has rather the glowing article in that regard, which lists Project Nexus and Project Ubin (plus) as two of their currently ongoing projects¹⁴.

Either way, let’s quickly recap here before moving on. Because we’ve learned that there are not just one, but two types of incoming carbon currencies. One is based on carbon sequestration, and the other on carbon emission permits. EcoCore’s solution proposes the latter, and they further seek ‘strong foundation for governance of the voluntary carbon markets by setting up a central carbon bank‘. And the idea of a cornerstone central bank already exists in the carbon sequestration currency field, through the Carbon Reserve, which just so happens to be based - of all places - in Geneva, Switzerland.

Got it all? Good. Because here’s where I’m going with this -

The Convention on Biological Diversity seeks to protect biodiversity, ie mangroves and forests, which in turn act as carbon sinks.

The UNFCCC seeks to control emissions, and hence, will lead to a global emission target for which permits will be granted to each individual nation. And these relate to carbon sources, because these are the ones require ‘netting’. The flip side of carbon sources is carbon credits, or you could alternatively call them - tradeable rights to pollute.

But since the UNFCCC in effect is the net output of the core objective of the CBD (ie, planting forests leads to carbon credits), you can in effect consider the UNFCCC the derivative of the CBD, in a sense. Because as we - in theory - plant more trees, the more carbon we - in theory - can emit. Consequently, planting trees is a long-term strategy to create tradeable rights to pollute, aka carbon credits.

But what does the CBD in effect do, long term? It draws out carbon from the atmosphere, and stores this in trees, hence, those trees are carbon sequestered from the atmosphere.

So when we discuss two types of carbon currencies - one being that of carbon sequestering, and the other being that of emission rights - what we really discuss is one type of carbon currency, relating to the UNFCCC (emission permits), and one, relating to the CBD (sequestering).

Clever, isn’t it?

They’ve spent a long time on this, alright, as we shall soon see.

But that’s not quite all. Because the long-term objective is to stabilise emissions at an atmospheric level of co2 equal to that of 1990 - 350 ppm. So if we hypothetically started today, and magically reached that level by tomorrow, then we would have generated approximately 140 million carbon sequestering currency units (this I asked ChatGPT to calculate, but the quantity doesn’t really matter - the point is that the number will eventually stabilise). And assume we’d also magically reach Net Zero by then, there wouldn’t be any carbon emission permits at all, beyond what nature would absorb. And that’s where the next issue comes into play.

Nature always seeks to find an equilibrium. And that is to say - at some stage, nature will stabilise at some level, where natural emissions would equal natural sinkage. Ie, nature will eventually stabilise itself at ‘Net Zero’. Sure - long term, indeed - but that’s what will happen long term. And when that day comes, there will be absolutely no emission permits to spread around, an issue I outlined early on.

Consequently, that’s where tech needs to step in¹⁵.

Bill Gates was widely mocked for indirectly investing in a company working in ‘biomass burial’. Thing is, theoretically the idea’s not as dumb as it sounds, because the theoretical peak objective would be to recreate the oil deposits underground (obviously accepting their carbon consensus idea, which I do not - I am merely examining the premise), and this could hypothetically be a way to do it. Reality however differs from theory, and initiatives such as this one are so easy to shoot down, and alreaady have been by many. However, I have quite simply a brilliant solution to the problem.

The Ocean Conveyor. Or you can call it the Gulf Stream if you’re European, it amounts to the same thing in effect.

See, what I propose (and do treat this somewhat facetiously) is to simply cut down large trees in Northern Brazil, and dump them straight into the ocean. The stream - and waves - will then naturally do its thing, smashing said trees into tiny fragments by the time they eventually reach Europe, not forgetting all those eventually sinking along the way. New trees would be planted where the felled trees once stood, and they will absorb far more carbon than the now-felled mature forests. Overall quantity of material dumped into the ocean would be a teenie, tiny percentage of oceanic volume, so it should not matter in the slightest. Furthermore, as the oceans will unpredictably scatter the organic material all over the Northern Atlantic, there should be few - if any - places suffering as a result. But even if any did, we could probably send a few people to clean those locations once or twice per year.

Problem solved!

I took this brilliant, brilliant idea of mine to ChatGPT, which was about as receptive to the idea as central bankers being that the idea of not pushing CBDCs through.

‘I apologize, but I cannot agree with the suggestion of deliberately dumping trees into the ocean as a carbon sequestration strategy.‘

… which furthermore found a very strange reason to cull the idea, given that contemporary climate regulation is not the least bit democratic -

‘Implementing a program of deliberate ocean dumping of trees would require extensive international coordination’

But whereas in earlier days I’d have these complicated scripts to get around these issues, now I largely just ask it to think about the idea from a logical perspective -

‘You correctly mention that the increased surface area of fragmented trees in the ocean may lead to higher absorption. This is a valid point that warrants consideration.‘

… and…

‘In re-evaluating your proposition, it is evident that a thorough and comprehensive analysis of the potential benefits, risks, and environmental implications of ocean dumping for carbon sequestration is warranted.‘

BINGO! ChatGPT is now on board! Dumping Brazilions of rainforests is clearly an idea with legs.

But back to the topic of credit in the system. The two carbon currencies - how exactly would they become one? Because it appears reasonably obvious that those based on carbon emission permits would be retired within a given period of time - 12 months, possibly - because approved quantities of carbon emissions and hence credit will change on an annual basis. Consequently, this leads me to believe that the currency based on carbon permits would be the trading currency, ie, the medium of exchange, which is also where the keyword ‘voluntary’ comes into play, because consumer use of ‘carbon allowances’ currently are considered ‘voluntary’¹⁶.

And that would make the carbon sequestering currency that of the store of value.

And that’s where the next issue arise, because how do you convert between the two? I searched long and hard for the answer to this on the web, but I didn’t find. ChatGPT referred to the Taskforce on Scaling Voluntary Carbon Markets (TSVCM), supposedly currently busy cracking that particular nut. Which would make sense, because if the voluntary side is the medium of exchange, then the store of value needs to be converted back to that.

But there’s a further issue - the emission permit based carbon currency will be in ever shorter supply, as the allowances are shrunk gradually. Consequently, this should naturally lead to a gradual increase in worth, which adds another complexity, because how will that correlate with stored sequestration currency?

ChatGPT outlines efforts such as the Certified Emissions Reductions framework, and McKinkey wanting a slice of this particular pie. Regardless, should we have a quick peek at the output of said taskforce¹⁷?

‘The Taskforce on Scaling Voluntary Carbon Markets is a private sector-led initiative…‘

Ugh, no I don’t like where this is going already -

‘The Taskforce was initiated by Mark Carney‘

Ah great, and initiated by the central banker of central bankers.

I’m not diving into its contents at this stage, because I want to finish off by taking this in a different direction. But first, let me just link this, because Mark Carney could not possibly be more aligned with the broader narrative -

Connecting the Central Banks

Now, when developing a new market - in this case carbon trading and currency systems - you need sourcers of carbon credits, and markets in which to trade said for offsetting purposes. But you also need a legal framework.

There are many examples of the former, like this, recently acquired one - EcoSphere+¹⁸ who procure carbon credits. Look at how happy she is. Don’t worry. They have a grievance mechanism¹⁹ for when they evict her and her fellow indigenous peoples from her ancestral homelands. Yeah, look, it just happened that her tribe patriarch got a bit tipsy on the night of signing that Debt-for-Nature Swap, which was probably a bad move on his part. Well, and hers, and it transpires.

‘Ecosphere+ is a proud B Corp and accredited to ICROA, a quality assurance framework in carbon offsetting‘.

And you can find them²⁰… in IETA’s building, it would appear.

… and the IETA²¹, well from their history we learn that -

‘In June 1999, a visionary group of international companies and business associations established IETA‘

Usually, these people love to gloat, and ensure they receive their due credits. So that’s a tad odd.

So let’s head over to Wiki… where we very strangely find that… there is no page on IETA²².

OK, ChatGPT - same question.

‘IETA was established in 1998 with the support of UNCTAD and the Earth Council‘

Oh really? Well, that really is terribly, terribly interesting, because we’ve been here before²³. And do try to contain your shock, shock, as we discover that -

‘The inaugural meeting of the IETA will be convened in Buenos Aires on 12 November 1998, in conjunction with the fourth Conference of the Parties (COP4) to the United Nations Framework Convention on Climate Change. The purpose of the inaugural meeting, to be be chaired by Mr. Maurice Strong, Chairman of the Earth Council, is to complete arrangements for its establishment, including examining its draft statutes‘

Oh golly, and it connect right to none other but Maurice Strong himself. What an extraordinary coincidence.

… and the Earth Charter? Founded in 1992 by… Maurice Strong at the Rio Summit, also hosted by… yes, Maurice Strong.

Maurice Strong also was connected to the 1987 Brundtland Report, 1982 World Charter for Nature, and of course hosted the 1972 UNCED Stockholm meeting²⁴, where UNEP was born. He also commissioned the report on global surveillance in 1971 leading to SCOPE’s first report, and the update in 1973.

SCOPE

The other link is the UNCTAD - and they penned the elusive ‘UNCTAD/RDP/DFP/1‘ document for which I’ve searched for months, fruitlessly. Because that UNCTAD document from 1992²⁵, in short, outlines the future carbon credit trading system²⁶.

And though I’ve found documents referring to it beyond merely in the references, the document itself remains at large - however, this official UN document from 1995 is fairly descriptive²⁷.

Incidentally, this prior post tracks the origin of that initiative even further back in time, eventually leading through IPCC’s Working Group 3 in 1990, and all the way back to the Clean Air Act Amendment of 1977.

Tradeable Emission Permits

Regardless, the central document remains elusive. However, a further comment on the UNCTED press release from 1998 above -

‘The establishment of the IETA will strengthen the institutional capacity of the private sector to assist governments to design and implement a comprehensive, stable and efficient greenhouse gas emissions trading system. It will draw upon and complement the growing number of emissions trading schemes (such as BP’s internal emissions trading scheme) in helping to prepare for a smooth launch of the international emissions trading market in 2008.‘

So the plan - in 1998 - was to launch the international emissions trading market in 2008. And you know what launched in that year?

That’s right - the ICROA²⁸.

What an extraordinary coincidence, no?

1. https://nordicfintechmagazine.com/toco-launches-in-copenhagen-pioneering-positive-climate-action-through-digital-currency/

2. https://www.tocos.org/

3. https://www.thecarbonreserve.org/

4. https://globalcarbonreward.org/carbon-currency/

5. https://en.wikipedia.org/wiki/Operating_Manual_for_Spaceship_Earth

6. https://www.theguardian.com/books/2020/nov/20/the-ministry-for-the-future-by-kim-stanley-robinson-review-how-to-solve-the-climate-crisis

7. https://www.inc.com/jason-aten/2-words-explain-why-mr-beasts-100-million-deal-with-amazon-is-a-big-problem-for-netflix.html

8. https://www.forbes.com/sites/carlieporterfield/2023/01/19/how-rich-are-prince-harry-and-meghan-markle-heres-what-we-know-about-the-power-couples-135-million-deals/?sh=2d4fef0a3d86

9. https://variety.com/2018/digital/news/barack-michelle-obama-netflix-deal-1202817723/

10. https://ecocore.org/proposal/

11. https://www.carboncoded.com/

12. https://www.carboncoded.com/Carbon_Coded_Presentation.pdf

13. https://www.bis.org/review/r220210d.htm

14. https://www.coincover.com/blog/singapores-crypto-success-a-beacon-of-innovation-and-regulation

15. https://www.technologyreview.com/2022/12/15/1065016/a-stealth-effort-to-bury-wood-for-carbon-removal-has-just-raised-millions/

16. https://www.eex.com/en/markets/environmental-markets/voluntary-carbon-markets

17. https://www.iif.com/tsvcm

18. https://ecosphere.plus/about-us/

19. https://documents1.worldbank.org/curated/en/598641478092542645/pdf/108864-WP-CAO-ENGLISH-Implementing-Grievance-mechanisms-PUBLIC.pdf

20. https://icroa.org/

21. https://www.ieta.org/about/#history

22. https://en.wikipedia.org/wiki/IETA

23. https://unctad.org/press-material/international-emissions-trading-association-established-unctads-help

24. https://www.un.org/en/conferences/environment/stockholm1972

25. https://digitallibrary.un.org/record/225948

26. https://www.un.org/esa/documents/ecosoc/cn17/1995/ecn171995-8.htm

27. https://digitallibrary.un.org/record/181064?ln=en&v=pdf

28. https://en.wikipedia.org/wiki/International_Carbon_Reduction_and_Offset_Alliance