Abstract
English poet Samuel T. Coleridge wrote “O! lady, we receive but what we give? And nature alone lives in our lives.” The Earth is one, but nations are not. New technology, especially blockchain paves the way toward a global village. This chapter analyses the ultimate solution to the global warming issue through the introduction of green currency based on blockchain technology to inculcate the concept of environmental protection in the next generation. We never value the free gifts of nature as the economies are driven by markets globally. Unless and until a monetary value is associated with environmental protection it's difficult to motivate the next generation to protect it. The introduction of green currency helps in creating a market. Development with the acceptance, protection, and maintenance of nature as it is is possible only through the use of advanced technologies. This chapter introduces a new concept of global green currency based on blockchain technology. This tool may ultimately present a platform as a solution to the global warming issue.
TopIntroduction
Today, we are confronted with a truly global problem: global warming. It is truly global in the sense that it affects and also is accountable for not one or two countries, but the entire human race. According to the World Health Organization (WHO), climate change causes at least 150,000 fatalities every year, with that number anticipated to quadruple by 2030 (Paritosh Kasotia, n.d.). Global warming will have disastrous health implications. We've been working on it for a long time, but we haven't been able to come to an agreement since different countries have different objectives and instruments for dealing with the problem. Nobody is attempting to focus on a market-based solution to instill environmentally conscious habits in the next generation. We may redesign the economic system by introducing the concept of green currency, which naturally assigns value to the environment by re-establishing nature-human connectivity (Acheampong et al., 2018).
Comparison of Various Models Adopted to Solve Environment Issues
For the last fifty years, various steps are taken globally to limit global temperature to 1.5 to 2 degrees above the pre-industrial level. In the Kyoto agreement, carbon credit trading was made permissible between nations for sustainable development. This market failed due to various anomalies. After that, in the Paris agreement, all nations joined hands to fight this global issue(The Paris Agreement, n.d.)(Parry, 2019). Below we have tabularized the main features of various models adopted to solve Environment Issues and compared them with the proposed Green Currency Market approach. According to Berck and Helfand market based incentives (MBI) turns environment protection into just another market goods so this one is inferior to command and control (CAC) model. The superiority of one model over another depends upon the circumstances. (Berck & Helfand, 2005)
Table 1.
Comparison between the proposed Green Currency Market approach and Environment Issues
| GREEN TAX | GREEN SUBSIDY | Deposit/ Refund System | Pollution Permit Trading System | GREEN CURRENCY MARKET (New Proposed Approach) |
| Fee charged from the polluter | Financial assistance for pollution reduction | Imposes an upfront charge to pay for potential damage and refunds it for returning a product for recycling. | Establishes a market for rights to pollute by issuing tradeable pollution credits, allows emissions below a fixed level | Provides logic for pollution permits based on the potential of an area for development |
| Ex- Pigouvian tax, unit tax on the product equal to the MEC | 1. abatement equipment subsidies- make abatement tech. affordable
2. Pollution reduction subsidies per unit but without entry, barriers its not effective in the long run | It is designed to force polluters to account for both the MPC and MEC | There is a provision for trading these permits | Links development potential with GA value, and logically determines saturation point for development |
| Not practically possible to calculate MEC, hence the level of tax | | Targets potential polluters instead of the actual polluter | | Permits trade for GA in VGC. A proper account is maintained through Blockchain technology |
| This model only allows output reduction, unrealistic as does not guarantee emission control | | | | Transparent and fully technical system for trading VGC.
Ensure economic as well as ecological balance in long run. |
Key Terms in this Chapter
Green Currency Based on GAV: On the basis of green asset valuation a value could be assigned to green assets and green currency could be launched based on or operated globally through blockchain technology. This GC will be not centrally controlled like the current money market and also global currency in the true sense and will control or check the development process considering the potential of the environment and pressure on it. Apart from this Green Currency has intrinsic value.
Pollution Permits Trading System: The establishment of a market for rights to pollute, using either credits or allowances.
Green Currency Market: The market developed and is based on the global transaction of green currency through blockchain technology. This market will motivate all those who preserve the environment and also checks pressure on natural resources. GCM generates demand for and supply of green assets globally.
Green Subsidy: A payment or tax concession that provides financial assistance for pollution reductions or plans to abate in the future using environment-friendly techniques of production.
Green Assets: A green asset is an asset that generates more energy than it consumes. This creates a positive impact on the environment, as well as provides a net positive benefit to the economy. Green assets cover all-natural assets that facilitate our lives on this planet and protect us from the ills of global warming due to the rapid environmental degradation of the forest. These assets are particularly protected and possessed by primitives. An asset possessed by individuals, government, NGOs, industries, and institutions that has a positive environmental impact such as forests, open space, trees, water bodies, waste recycling plants, water treatment plants, grazing land, farms, etc. It includes Natural Assets, Environmental Assets as well as Soft Assets.
Green Tax/Pollution Charges: A fee charged to the polluter that varies with the number of pollutants released.
Externalities: A cost or benefit arising from any activity which does not accrual to the person or organization directly involved but extends to a third party outside the market. Externalities are positive or negative. Environment degradation creates negative externality as it generates costs to the third party. The environment is a public common good so those who are responsible for the damage need not pay for the damage as property rights are not well defined.
Potential for Development: Nature can meet our needs but not greed. Nature nurtures naturally all living beings, but it has its own limitations. Unless and until it revies which takes too much time resources are limited. The introduction of green asset valuation and the green currency market presents a guiding principle to control unsustain growth. As the growth of a country depends upon the use of natural resources globally the current economic models have no checks on the growth and development process as all models never take into account the capacity or the potential of growth.
Property Rights: The rights of an owner over the property. As property rights of the environment, green assets, and public goods or common goods are not well defined it hinders economic efficiency. So, to enhance economic efficiency green assets possessed by individuals, firms, governments, or organizations must be calculated and an asset value must be assigned to the owner. Due to negative externality, too much of the good will be produced as the market price does not reflect external costs.
Deposit and Refund System: A system that imposes an upfront charge to pay for potential pollution damages that are returned for positive action, such as returning a product for proper disposal or recycling.
Environmental/Ecological Parity: Green currency market generates demand for and supply of green assets globally. Nations and persons with rich green assets get rewarded and nations having low green assets have to check development or purchase GA. That’s how the global green assets parity is maintained.
Individual and Social Behavior: Individual behavior can be defined as a mix of responses to external and internal stimuli. It is the way a person reacts in different situations and the way someone expresses different emotions like anger, happiness, love, etc. Social behavior is behavior among two or more organisms within the same species and encompasses any behavior in which one member affects the other. This is due to interaction among those members. In the case of humans, social behavior can be determined by both the individual characteristics of the person, and the situation they are in.
Sustainable Development: Sustainable development is an organizing principle for meeting human development goals while also sustaining the ability of natural systems to provide the natural resources and ecosystem services on which the economy and society depend.
Blockchain Technology: Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding).
Green Assets Valuation: Green assets are becoming more popular and as a result, new valuation techniques have been developed to measure their value. These techniques take into account the environmental benefits of green assets, such as reduced air pollution and greenhouse gas emissions, and this can translate into higher returns. We can assign value to any green asset according to its CO 2 sequestration capacity or O 2 generation capacity.