How did nature cool the planet?
How did nature manage to take all of the incoming heat energy from solar radiation that constantly enters the atmosphere, and stabilise the climate by sending the same amount of energy back into space?
How did nature craft this planet from a set of hot dead rocky land masses and oceans full of complex life, as it was 420 million years ago, to a planet with rich deep soils, with green plant growth covering all the ice free land, and with that green growth driving the evolution of abundant and increasingly sophisticated animal life in complex self-sustaining ecosystems?
What was the process that nature used to bring down concentrations of carbon dioxide in the atmosphere all the way from about 8,000 parts per million to as low as 100ppm? And where did all that carbon go?
We are all now painfully familiar with how humans have come to put this whole system in jeopardy. We know that the abundance of life and the richness of ecosystems on this planet are now under great pressure, and these systems are being depleted at rates that threaten catastrophic collapse. We know that it is the burning of fossil fuels that is driving the planetary scale destruction. We know that we have a heating planet and an industrial system that has now overwhelmed the climate balance that nature managed to sustain for hundreds of millions of years.
We want to solve climate change. We want to avoid tipping the climate further into chaos. We want to have enough food and water to ensure social stability and avoid chaos. We also want the global industrial system that supports human civilisation to continue to operate without interruption.
We humans are a clever lot, but despite everything we have learned, the climate debate we have been having for the last 60 years has been fairly dumb.
Some of us have become misled by the presumption that the needs of the industrial system and those of the planet are necessarily at odds, and that one must be sacrificed for the sake of the other. Those misled by that presumption take up ideological positions for or against the industrial system, and divert discussions into political areas such as how best to distribute the costs of reduced burning of fossil fuels, or even more ignorantly, into whether or not we need serious global action in the first place. Such debate is not really constructive, and serves to divert our attention from what is needed in the real world.
Even when ideology, politics, and economics are put aside, the debate is still dominated by a narrow focus that simply presumes our power to act on climate change is mostly based on what we can do about carbon dioxide concentrations. This singular focus has been far too simplistic, because water is a much more powerful driver of global heat exchanges than carbon dioxide. The singular focus is also largely ignorant to the power nature has to draw carbon down from the atmosphere, and to reduce atmospheric concentrations far more easily and safely than anything that humans have dreamt of to date.
Learning from Nature
Humans have only one realistic option to significantly influence the climate system at the global scale, and at the rate of change required to minimise the risk of tipping the system further into chaos. We must understand nature’s powerful processes that drive global cooling and carbon draw down, and then leverage that knowledge with action that both reduces the way we interfere with nature’s processes and helps to repair the damage we have already done.
We humans are a clever lot. We figured out long ago how to bring automatic control to machines and systems of all kinds, and we used this control to change the world.
The rapid growth of industrial civilisation was driven in a very large part by steam engine technology, and central to this new technology was a simple device that brought automatic control. The pressure regulator for steam boilers prevented the pressure from rising to the point where the engine would inevitably explode, without a human engineer working the valves. It was simple, and it was genius, and it helped to drive the transformation of the world’s economy.
We need another transformation of the world’s economy. We need to make a transition from a system that depends on infinite energy, infinite growth and infinite resources, to one that can operate effectively in a world without abundant cheap energy and with a set of unavoidable limits on economic expansion.
To make this transition we will need to take control of certain economic outcomes, but we humans have never truly figured out how to control outcomes delivered by the global economy, the most powerful machine ever constructed. That is, until now.
We have a solution, and just like the pressure regulator, it is a fairly simple but ingenious control mechanism. The pressure regulator was a control system that allowed us to better harness the energy in the very abundant coal resources at the time, and we exploited it to power the Industrial Revolution.
A control system for the global economy will allow us to better preserve what remains of our natural resource base for as long as we choose. It will harness the inherently innovative and competitive engine of profit-seeking markets, and exploit them to grant us the power to make the transition we need.
A control system for the economy would also grant us the freedom to decide what economic outcomes we want, above and beyond the simple goal of the sustainability of human civilisation, and give us the power to make markets rush to deliver those goals.
We humans are a clever lot. We are curious about the world, and we are natural problem solvers within it. When we are free from ideologies and other delusions, we have a strong affinity for the natural world, and a genuine wish to live within its means and to protect it from harm.
But we humans are now chained to an economic system that is currently a planet destroying machine. So if we want to break free, and gain the power to save the planet and the human societies it nurtures, we need to understand the nature of the problems that make the economic system so destructive, and then decide on the best solutions to correct those underlying causes of dysfunction, and set some transition plans and put them into action.
As we start to look at what makes the economic system so destructive, we immediately come to realise that finance is at the heart of the problem. The system that creates the money on which the economy operates is driving the perpetual expansion of the volume of economic activities that deplete the planet’s finite resources and natural systems.
Already, armed just with the concept that finance is the problem, we gain enormous power. The way that finance works is subject to our political institutions, which are in turn subject to our collective political will. So finance is not some independent force of nature, it is something that we can control, should we be willing and able to gather the necessary political will to do so.
In this article we will come to see that fixing finance actually comes with enormous social and ecological benefits, along with dramatic improvements to the efficiency and stability of the economic system.
This article presents an overview of a powerful and elegantly simple solution to address climate change. If adopted at the global level, it would allow climate change to be controlled at its very cause, which of course is the dangerous concentrations of greenhouse gases in the atmosphere.
A self funding control system
This proposal is one particular application of the self funding fee-rebate model, which uses pricing signals to control market outcomes. Briefly, the model has a specific goal for each market outcome, which is something that can be measured in the real world, and a desired trajectory for that goal to follow over time. There is a cost price applied to economic activities that drive the market outcome away from the desired trajectory, and a reward price that is paid out to economic activities that drive the market outcome towards the goal trajectory. The revenues collected from destructive activities are fully distributed to constructive activities.
The pricing signals are dynamic, and will rise and fall according to the measured performance of the market outcome compared to the desired trajectory. If the market has outperformed the target, the pricing signal will be reduced, and if the market has under-performed the target, the pricing signal will rise to increase the power of the incentives and disincentives.
Control market outcomes, not businesses
The pricing signals will control aggregate market behaviour with respect to the particular goal, without dictating to market participants how to go about their business. They will of course try to maximise their profitability, by changing their business activities to better exploit the new incentives and better avoid the disincentives created by the pricing signals, but the way they find those efficiencies and innovations is completely up to them.
Grow the good, and shrink the bad
The overall effect of the pricing signals is to cultivate and maximise the volume of economic activities that serve the goals, and to minimise or even eliminate economic activities that harm the goals. The ratio between the volumes of constructive and destructive activities is controlled by the dynamic pricing in an increasingly precise method of forcing the overall goal outcome to follow the specific trajectory laid out for it.
The ultimate model of climate action
This model of control, armed with just the singular goal of controlling greenhouse gas concentrations, would be an absolute game changer. The actual costs of emissions and the actual value of carbon sinking would be embodied in the prices of all inputs to economic activities, so every economic decision would automatically take into account the impacts on greenhouse gas concentrations.Continue reading “Global Carbon Sinking Fund”