The Ministry for the Future

commons, they now were trying to direct our attention to what they called the tragedy of the time horizon. Meaning we can’t imagine the suffering of the people of the future, so nothing much gets done on their behalf. What we do now creates damage that hits decades later, so we don’t charge ourselves for it, and the standard approach has been that future generations will be richer and stronger than us, and they’ll find solutions to their problems. But by the time they get here, these problems will have become too big to solve. That’s the tragedy of the time horizon, that we don’t look more than a few years ahead, or even in many cases, as with high-speed trading, a few micro-seconds ahead. And the tragedy of the time horizon is a true tragedy, because many of the worst climate impacts will be irreversible. Extinctions and ocean warming can’t be fixed no matter how much money future people have, so economics as practiced misses a fundamental aspect of reality.

Mary glanced at Dick, and he nodded. He said to her, It’s another way to describe the damage of a high discount rate. The high discount rate is an index of this larger dismissal of the future that J-A is describing.

Agreed to that.

And this Chen line of thought solves that? Mary asked. It extends the time horizon farther out?

Replied, Yes, it tries to do that.

Explained how the proposal for a carbon coin was time-dependent, like a budget, with fixed amounts of time included in its contracts, as in bonds. New carbon coins backed by hundred-year bonds with guaranteed rates of return, underwritten by all the central banks working together. These investments would be safer than any other, and provide a way to go long on the biosphere, so to speak.

Mary shook her head. Why would people care about a pay-off a hundred years away?

Tried to explain money’s multiple purposes. Exchange of goods, sure, but also storage of value. If central banks issue bonds, they’re a sure thing, and if return set high enough, competitive with other investment. Can be sold before they mature, and so on. Bond market. Then also, since this is a case of central banks issuing new money, as in quantitative easing, investors will believe in it because it’s backed by long-term bonds. And this money could be created and given to people only for doing good things.

Like what? Mary asked. Issued for what?

For not burning carbon.

Started writing on the whiteboard, feeling she was oriented enough to be ready for some figures. Not equations, which might just as well be Sanskrit to her, only some numbers.

For every ton of carbon not burned, or sequestered in a way that would be certified to be real for an agreed-upon time, one century being typical in these discussions so far, you are given one carbon coin. You can trade that coin immediately for any other currency on the currency exchanges, so one carbon coin would be worth a certain amount of other fiat currencies. The central banks would guarantee it at a certain minimum price, they would support a floor so it couldn’t crash. But also, it could rise above that floor as people get a sense of its value, in the usual way of currencies in the currency exchange markets.

Mary said, So really this is just a form of quantitative easing.

Yes. But directed, targeted. Meaning the creation, the first spending of the new money, would have been specifically aimed at carbon reduction. That reduction is what makes the new money in the first place. The Chen papers sometimes call it CQE, carbon quantitative easing.

Mary said, So anyone could get issued one of these coins after sequestering a ton of carbon?

Yes. Or also a fraction of a coin. There would have to be a whole monitoring and certification industry, which could be public-private in nature, like the bond rating agencies are now. Probably see some cheating and gaming the system, but that could be controlled by the usual kinds of policing. And the carbon coins would all be registered, so everyone could see how many of them there were, and the banks would only issue as many coins as carbon was mitigated, year by year, so there would be less worry about devaluing money by flooding the supply. If a lot of carbon coins were being created, that would mean lots of carbon was getting sequestered, and that would be a sign of biosphere health that would increase confidence in the system. Quantitative easing thus directed to good work first, then free to join economy however.

Mary said, So if you combined this thing with carbon taxes, you would get taxed if you burn carbon, but paid if you sequester carbon.

Agreed, and added that any carbon tax should be set progressively, meaning larger use more pay, to keep it from being a regressive tax. Then it becomes a good thing, and feebates can be added that pass some of this tax income back to citizens, to make it even better. A carbon tax thus added to the carbon coin was said by Chen and others to be a crucial feature of the plan. When both taxes and carbon coins were applied together, the modeling and social experiments got much better results than when either strategy was applied by itself. Not just twice as good, but ten times as good.

Mary said, Why is that?

Confessed did not know. Synergy of carrot and stick, human psychology— waved hands. Why people did what they did— that was her bailiwick.

Dick pointed out that for economists, carrots and sticks are both just incentives, and thus the same, although they tend to assume sticks are more efficient than carrots.

Mary shook her head vigorously. No fucking way, she said. We’re animals, not economists. For animals, negative and positive are generally regarded as quite distinct from each other. A kick versus a kiss. Jesus Christ. She looked back and forth at us, said, It’s a question which of the two