Aglietta & Hourcade debatem como realizar a transição para o baixo carbono utilizando o financiamento como veículo principal. Saem da leitura convencional de instrumentos climáticos específicos para orientar bancos centrais a sinalizarem o preço de carbono junto das suas políticas macroeconômicas. Para isso, sugerem uma arquitetura financeira nova/modificada e também uma composição de forças entre a arquitetura convencional de ODA e a arquitetura macroeconômica global, partindo do enfoque europeu.

1. 1
ESTE TEXTO NÃO REFLETE UMA POSIÇÃO DA SECRETARIA DE ASSUNTOS ESTRATÉGICOS
Low-carbon investment and sustainable
growth
A C4 mechanism: Carbon-asset Convertible Carbon Certificates
Climate negotiations faced with a closing window of opportunity
COP 20 at Lima and COP 21 at Paris will have to answer the call of the Cancun
conference (COP-16) for “building a low-carbon society that … ensures continued high
growth and … an ‘equitable access to sustainable development1
. This call shifts clearly
the paradigm of climate negotiations away from adversarial game about sharing the
remainder of a global emissions budget to a cooperative exercise linking climate and
development policies in a diversity of domestic agendas.
To achieve a ‘global peaking of GHG emissions” this exercise has to facilitate deep
restructuration of existing capital stock in developed countries and massive redirection
of infrastructure investments in developing countries to avoid their lock-in to carbon-
intensive development pathways? The overall economic context is not conducive to
ambitious public spending but action cannot wait for better public budgets and strong
economic recovery in Annex 1 countries because the window of opportunity for
stabilizing global warming under 2°C is rapidly closing.
Short of a worldwide accepted sense of this urgency, this note presents a mechanism
bringing a way-forward to continuing world development through massive low-carbon
investments. Its rationale is that searching a least common denominator within the
conventional negotiation tracks is a false realism which will fail to get maximum
participation and will ultimately lead to inaction.
Turning the constraints of an adverse context into a fulcrum for action
1 UNFCCC Decision 1/CP.16, para. 1.6,
http://unfccc.int/resource/docs/2010/cop16/eng/07a01.pdf#page=2

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ESTE TEXTO NÃO REFLETE UMA POSIÇÃO DA SECRETARIA DE ASSUNTOS ESTRATÉGICOS
An ambitious climate action is politically possible only if it contributes to better
respond short term concerns about growth, employment, public and private
indebtedness and employment. It has the potential to do so for two main reasons:
- Its short term macroeconomic impact: it involves low aggregate incremental
investment costs but its ripple effect is potentially high because of a far higher amount
of redirected investments in sectors which represent 40% of the gross capital formation
- Its long term impact on development; affected sectors are key for the
inclusiveness of growth (transport, construction) and for the exploration of new
technological frontiers (material transformation, logistics, production processes in
industry and agriculture).
These investments are currently not blocked by a lack of available financial resources
but by the over-cautiousness of financial intermediation over the two last decades vis-
à-vis long-term investments and its preference for liquid assets. This behavior raises
specific barriers against low-carbon projects (LCP), often close to breakeven points but
looking more risky than Business-as-Usual investments due to higher upfront costs, lack
of a carbon-prices and missing records on their financial performances.
Carbon price signals are needed to overcome this obstacle. But they have to be high
enough to compensate for the fact that they are swamped by many other signals
(including the price of fossil fuels) and for the regulatory uncertainty in the concerned
sectors. Such prices are unlikely in most countries over the short term, if only because
of the political mobilization of both households trapped in carbon-intensive behaviors
and carbon intensive industry of which installed capital is directly hurt.
Well-tailored financial instruments are thus needed to unleash low-carbon investment
opportunities that are today frozen. The basic wrinkle is to reduce the investment risks
of LCPs by sending a signal to investors and their funding partners about the ‘social value
of avoided carbon emissions’ without hitting existing capital. Doing so climate finance
could provide a fulcrum to a sustainable economic recovery if it results in efficient
intermediation bridging long-term assets and short-term cash balances.
The “carbon-certificates-convertible carbon assets (C4)” mechanism presented here aims
at such scaling up of climate finance without an additional burden on taxpayers. It is not
a ‘free lunch’ and does not resort to an headlong endebtedness. Its rationale is rather to
trigger a better use of current savings within a less vulnerable banking system.

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ESTE TEXTO NÃO REFLETE UMA POSIÇÃO DA SECRETARIA DE ASSUNTOS ESTRATÉGICOS
Rationale for a carbon-asset convertible carbon assets (C4) device
Public credit is with taxation one of the few possible macroeconomic ‘lubricants’ to
economic transitions at the level. Several monetary proposals have been suggested,
including the use of Special Drawing Rights (SDR) issued by the IMF, and the
implementation by central banks of ‘green quantitative easing policies’. Those proposals
have the common goal to leverage private climate finance without direct public money
disbursement. But in the absence of a carbon price, they don’t address the specific
obstacles to the attractiveness of LCPs .
The mechanism presented here (C4) is designed along the same lines but with a carbon-
value mechanism improving the LCPs return on investment and reducing their risk by
including a “social value of avoided carbon emissions (SVACE)”.
Its basic principle consists in central banks injecting liquidities into the economy, in the
same fashion as the “unconventional monetary policies” implemented after 2008, but
under condition that the money is used to fund LCPs. A prerequisite is that
governments provide a guarantee on a given amount of carbon assets. This will allow
the central banks for opening credit lines, the reimbursement of the credits being made
by carbon-certificates certifying the reduction of GHGs emissions, valued at the pre-
determined SVACE and ultimately swapped into carbon assets.
This targeted credit facility makes it possible for banks to expand credit to LCPs as it
improves their profitability and offsets their extra risks relatively to conventional
projects. Specialized investment funds, including the Green Climate fund, could also use
this facility to back highly rated “AAA” climate bonds, in order to attract long-term
saving. Institutional investors could be interested in safe ‘‘climate colored’’ bonds for
both ethical and regulatory purposes.
For the central banks, this device is equivalent to buying a carbon asset at a price which
translates society’s willingness to pay for emissions reduction. For the macroeconomic
policies it generates liquidity backed on ``actual wealth'' in the form of productive
equipments and of averted carbon emissions, both certified by an independent body. It
entails low inflationary risks given that both the volume and price of carbon
certificates that the central bank is allowed to back will be bounded (ultimately to a few
percent of the central bank balance sheet).
From principles to climate negotiations

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ESTE TEXTO NÃO REFLETE UMA POSIÇÃO DA SECRETARIA DE ASSUNTOS ESTRATÉGICOS
This type of mechanism could be included in the climate regime to be defined in Paris
if: a) it relies on voluntary initiatives by a ‘club’ of countries, b) it is not seen as a full-
fledged global architecture but as a support to a diversity of bottom-up initiatives and
as a way of hedging against the economic and political costs of their fragmentation c) it
incorporates no other penalty for a defaulter country than to be de facto excluded
from the access to investments facilities provided by the system.
To meet these conditions the C4 device necessitates an agreement of volunteer
countries around a common set of principles agreed within the UNFCCC and
periodically adapted:
1. A mutually agreed SVACE for the sake of overall consistency of decentralized
initiatives: such agreement, for example within the corridor of values of carbon given
by the IPCC to stick to the IPCC recommended trajectory can be easier to mutually
agree than on a world carbon price, since a SVACE will not create immediate extra costs
on firms and consumers.
2. Rules to determine the quantity of carbon assets issued by central banks (and
guaranteed by their states) and the access rights of the recipient countries to the
opened credit lines, so as to set a pullback force motivating countries to comply with
their pledges and to gradually close the gap between these pledges and an emission
trajectory converging to zero emission;
3. A credible MRV process under an Independent International Supervisory Body,
in charge of determining the conformity of the projects to the NAMAS presented by the
Parties, attributing carbon certificates to projects and certifying their completion.
4. A share of the carbon assets considered as a contribution to the Green Climate
Fund (GCF).
In addition to LCPs, this system could support any recognized “club” of actors in
developing initiatives recognized by the UNFCCC. This could be the case for sectorial
agreements in energy intensive industries and for initiatives taken by cities and local
authorities to improve the synergies between climate policies and local development.
Beyond, because this carbon-based monetary instrument embarks economic partners
in a forward contract, this device would create a reference for carbon pricing
mechanisms, progressively facilitating their social acceptance.

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ESTE TEXTO NÃO REFLETE UMA POSIÇÃO DA SECRETARIA DE ASSUNTOS ESTRATÉGICOS
Conclusion:
The voyage towards COP20 and COP21 will be successful only if poses the first terms of
a new ‘social contract’ worldwide which incorporates the care for our global commons.
Upgraded climate finance has to be part of this contract, and will be provided it
contributes to equitable access to development and to long term investment adapted
to a low-carbon economy. This contract will be concluded only if the ‘non-climate’
concerned decision-makers are convinced that it can contribute to address the
economic and political challenges they face in a still unstable world economy.
By proposing a monetary based financial device, developed countries would assume
their historical responsibility in the climate affair and in the financial breakdown. They
could realistically do so thanks to the positive impact of expanded infrastructure
markets domestically and abroad. Emerging countries would get a support to redirect
their infrastructure for higher energy security and more inclusive regional and urban
development. As to the fossil fuels actors, they would be helped in investing a bigger
share of their rents for the preparation of the post-fossil fuels era.
Ultimately, all countries are interested in finding pathways between extreme monetary
rigor which freezes economic growth and extreme laxity which fuels speculative
bubbles and debt risks. They could also perceive the interest of an evolution of
monetary systems where carbon assets recognized a reserve currency and one element
of the DTS, would lead to less exposure to turmoils of currencies and domestic asset
prices. It would thus be misplaced to suspect the C4 device to be a diplomatic ‘non-
starter’ because the UNFCCC process has no legitimacy to address monetary issues and
because the risk is high to trap it in a labyrinth of sophisticated controversies.
Climate negotiations will not solve everything but are legitimate to provide a grip for
advances in the global governance, with the co-benefit that this governance be
consistent with the UNFCCC objectives. The C4 mechanism is such a grip and provides
opportunity, not to be missed, for a large alliance around climate policies.