New System Frame of Cap-and-Trade:A Post-Kyoto Economics

(Source:http://forums.treehugger.com/viewtopic.php?p=18794#18794)

A new system frame of global economic and political benefit negotiations for post-Kyoto was proposed recently by an independent Chinese economist group-Greency Group. It published in the start issue of Greency Magazine (Dec. 16, 2007). This unaided research of environmental economics, whose core is Nonbounded Ownership Theory, went on for 15 years.

This new economic direction, substitute the new thought of nonbounded ownership for the concept of common property rights. On the basis of the nonbounded ownership, They have set up the individual property institutions and the new money circulation mechanism about environment resource. The present condition that the public sector is leading in the development of environmental technologies and industries would be entirely transformed into that the private sector is the chief power to eliminate the pollutions and develop the breakthrough technologies under this absolute market incentive mechanism.



According to this new theory, The complete marketability about the global environment resources is the ultimate outlet for the global environment protection, but as a condition, It must be established the global system of nonbounded ownership and its money circulation mechanism. Only then under this new system frame of cap-and-trade, the Post-Kyoto era's global economic could build a inovation method based on the private sector to solve the Climate Change and other environmental problems, and this will be more efficient instrument and platform of benefit community which can make all negotiators being acceptable to each other truly.

The main points of this theory as follows:

1.According to Nonbounded Economics, Money is the core tool of the market mechanism. All of economic systems are established on the mechanism of measuring and exchanging through the currency. This institutional tool is designed to express and regulate the course of optimum conversion and transfer of resources. And it can puts the adjustment of human demands into the natural course of conversion and transfer of substance and energy. And by adjustment of their quality, quantity, velocity, rhythm and matching relationship, the wellth condition of human will be made more efficient and comprehensive.

2.Nonbounded Economics point out that there are positive and negative processes in the the course of optimum conversion and transfer of resources. They are economic process and the external process of economy. But they are in nature two totally different directions of value flow. In the practical economic circulation, money system can only express and regulate the positive process of economy, and can't do anything to the external process of economy.

3.By the theory of Nonbounded Economics, the causation of this problem is that the currency as a signal system, can not express and regulate at the same time the flowability of two adverse directions, otherwise, there would be a disorder of signals. So the economic system should make the evolution of the compound money system which has two kinds of signals to express and regulate simultaneously. That is the "Second monetary tool" lacked at present for the value flow of environment resource. It is so called "Green Currency" or the pet name "Greency". And the "First monetary tool" can be called "White Currency" or the pet name "Whitency".

4.Why is the "Second monetary tool" in absence? The Greency Theory declare that the development of the "Second monetary tool" has been suffocated by the traditionary theory of common property about environment resource. That brought the lack of the individual property institutions of environment resource and then the effective currency signal system can not be established. The new Theory make afresh definiens for property of environment resource. That is, every kinds of ownership are exclusive right to use in nature. So the rights to use about common resource are also exclusive for everyone. But it is in a sequence for every person to use early or late.

5.Nonbounded Economics study to confirm the new characteristic of environment resource with market exchange. Namely, if every ownership can be traded directly share for share with money at the same time, we will term this type of ownership as bounded ownership. However for environment resource, it is impossible for every ownership to be traded directly share for share with money between early user and late user simultaneously, that is named as Nonbounded ownership.

6.Based on the new characteristic of individual property for environment resource, Nonbounded Economics make a suggestion to unlock market. There is a new market principle to be complied for seting up the "Second monetary tool". In the market of environment resource, the exchanging mechanism is not one-to-one trade, but one-to-many, or one-to-total. every preceding user trade with total of subsequent users. Thus, the total ownership of subsequent users equals a reservoir in account-book. Both of them can exchange their nonbounded ownership and calculate increment and decrement of the reservoir. This mechanism can be called Greency Theorem.

7.According to Greency Theorem, Greency Group put forward a "new economic model of dual currency".It was delivered on the start issue of Greency Magazine by the title On Greency.In this model, Whitency and Greency are both of capital. Their power will maintain the optimization of positive and negative course of resource in ecosphere. This model design creatively a new global eco-economic system frame which can bring environment conservation into the course of market economy. The complete marketability about the global environment resources is the ultimate outlet for the global ecological protection. This model is completely different from the present economic and environmental protect mechanism.