Sunday, November 30, 2008

The Carbo or Karbo -- the First Global Hard Currency?


The Carbon Micro Credit -- The Gold Standard of the Developing World



The CARBON TRUST BANK -- In Carbon We Trust

"This Carbon is Legal Tender for All Debts, Public & Private"

Carbon Micro Credits, transmutable into e-gold, e-money, local currency, or cell phone minutes, could become the Euro of Africa and other regions of the Developing World. Unlike paper fiat currencies that governments invariably inflate to blow away state debts, cell phone-based Carbon Micro Credits are not inflatable for several reasons: First, they can only be produced and earned daily in a fixed quantity. Second, the participating mobile carriers would never inflate minute allocations and thereby overload their networks. Third, the original buyer of the bundled Carbon Micro Credits has only paid for the issuance of a fixed amount of credits, which likewise fixes the minutes allocated.

Through these checks & balances, Carbon Micro Credits (CMCs) and their equivalent value in cell phone minutes (or other e-currencies) will serve as a fungible store of value and trade that transcends national boundaries. These non-governmental non-debaseable electronic doubloons will form a non-inflatable currency pool that renews itself daily.

Moreover, through cell phone-based money transfer systems such as Safaricom's M-PESA or, CMCs/cell minutes could be converted to a cash equivalent and withdrawn at any participating store or bank in Africa. There is no reason why not, seen as the bundled CMCs were originally pre-sold and a portion of the cash paid to the mobile carrier performing the back-office accounting and conversion -- refer to the 2nd post at the bottom of this Blog entitled "Carbon Micro Credit (CMC) Flow of Funds" (26 Oct 2008).

A few African countries such as Zimbabwe are now experiencing inflation or hyperinflation due to currency debasement -- or "printing their way to prosperity". Many other countries rely on circulating off-shore stores of U.S. dollars as a "hard" currency; however, the US$ is projected to experience its own collapse or severe depreciation in 2009 - 2010 due to excessive U.S. Government deficit spending. Therefore, Africa needs its own pan-continental currency as a long-term store of value, and to facilitate cross-border trade.

As well, the African people need their own People's Central Bank that issues and stores a currency that cannot be corrupted by government -- Carbon Micro Credits issued and stored at transnational mobile carriers such as MTN and Safaricom would be a synthetic equivalent -- a virtual African Carbon Savings & Loan, and the Carbon Micro Credit could be its Roman denarius or Greek decadrachma, to name two universal stores of value and trade that served Mankind well for centuries.

Gold has a universal value or readily identifiable market price anywhere on planet Earth. In view of global warming, likewise, a carbon-based currency should have universal value in any land. Eventually the disparate cap & trade, carbon tax regimes, and green house gas trading exchanges worldwide will coalesce, and the market price of a carbon offset or carbon permit (one metric ton of CO2 emissions) will, like gold, have a specific recognized market price anywhere.

In short, a global carbon offset-backed currency could appear -- let us call it the Carbo or Karbo, or Crbo or Krbo -- and a Standard International Carbon Micro Credit (SICMC = 2 kilograms of CO2/day/person) would just be 1/500th of this universal currency.

The Carbo / Karbo would transcend all national borders in its electronic forms -- the e-Carbo / e-Karbo, and be "Legal Tender for All Debts, Public & Private" worldwide.

Finally, because emission reductions efforts will take decades and because reduction of absolute concentrations of anthropogenic CO2 in the atmosphere will take centuries, and because the supply of CO2 credits/emissions will be constrained, just as the supply of gold is constrained, the Carbo / Karbo should be a store of value for 100s of years.

Caesar would be proud.

Globally & warmly yours,

David A. Palella
Caped Carbon Crusader

San Diego, CA
tel: 858-793-0741