Chapter 15

Central Banks and Blockchains

The Case for Managing Climate Risk with a Positive Carbon Price

Delton B. Chen,    Center for Regenerative Community Solutions1 501(c)(3), Basking Ridge, NJ, United States

Abstract

A central problem of the climate crisis is a need to mobilize sufficient climate finance to generate a low-carbon transition, and to do so quickly enough to prevent dangerous anthropogenic interference with the climate system. In response to this challenge, a case is presented for a coordinated central bank policy that involves a Central Bank Digital Currency (CBDC) for rewarding climate mitigation actions. Justification for the CBDC is framed on a new model for costing externalities and pricing systemic risk. A hypothetical ...

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