Carbon Storage in Fort Knox: A New Security Strategy
Here’s a breakdown of the key ideas and concerns presented in the text, focusing on the proposed “carbon banks” and their potential implementation:
The Core Idea: carbon as Currency
The article discusses a proposal to create “carbon banks” – financial institutions that would accept carbon sequestration as deposits, essentially treating captured carbon as a form of currency.
Individuals and landowners could earn credits by actively removing carbon from the atmosphere (e.g., through planting fast-growing crops like hemp, or leaving oil/gas in the ground). Biochar (a charcoal-like substance created from biomass) is initially proposed as a “gold standard” for carbon deposits due to its stability and verifiability. However, the long-term goal is to incorporate other sequestration methods.
Addressing Potential Problems & Concerns
Fraud & Illegality: The system needs to prevent people from fraudulently claiming carbon sequestration (e.g., by cutting down forests and claiming the carbon stored in the wood, or stealing plants).”Assayers” would verify the legitimacy of carbon deposits, checking for “fresh wood.”
Abundance/Over-Supply: The authors anticipate a potential issue of too much carbon being deposited. they draw parallels to the gold standard, where hoarding led to scarcity.
Solutions to Abundance: They suggest that central banks have existing tools (“sterilization”) to manage overabundance, similar to how the Federal Reserve dealt with excess gold in the 1930s by increasing bank reserves and issuing bonds.
Difficulty of Biochar Production: They also point out that creating good biochar isn’t easy, which naturally limits the supply.The vision & Comparison to Existing Systems
Not a “Mad Rush”: The authors don’t expect a chaotic scramble for carbon credits, but believe people will be motivated to participate in a meaningful way to combat climate change.
Volunteer & Remunerated labor: They compare the system to temples, which rely on both paid workers and volunteers. Some will actively work to sequester carbon for profit, while others will do so as a contribution to the climate effort.
Could the Fed Do It?: The idea is so sound that a macroeconomist suggested the existing Federal Reserve could simply implement the system.
in essence, the article explores a novel financial mechanism to incentivize carbon sequestration, acknowledging the challenges and proposing solutions based on historical economic practices.