Plougonvelin, Region Bretagne, France
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  • Energy and Environment

  • Global Programs

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  • Business

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Executive Summary

Our solution makes it profitable to solve the problem of climate change by rewarding individuals and companies who reduce emissions from heating and transport. These actors are rewarded in a new currency, CO2s, deposited on an online CO2 Account. An individual or company who reduces CO2 emissions by 1 tonne receives 1000 CO2s. With the CO2 Payment Card, CO2s are converted to $ and used to purchase products or services. Ultimately, an individual can pay part of his taxes using CO2s. The Account is operated through a mobile app. Our unique value proposition makes the CO2 Account competitive in the banking industry and a typical fintech new service. Our innovation offers a powerful economic tool, enabling a global community of voluntary actors to help meet global targets to avoid dangerous climate change. 100%Change funding will create traction on CO2s, and consequently on CO2 reductions with potential for worldwide systemic change.

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The Problem

We are all free riders. Free riding occurs when those who benefit from certain goods or services do not pay for them, leading to scarcity and shortage for all. When it comes to fighting climate change, and the need to transition from fossil fuels to renewables, we run up against this classical economic problem of free riding. We all benefit from stable atmospheric CO2 concentrations, but rarely pay for this stability when emitting CO2 (e.g. from heating, transport). As individuals we ask, why should I cycle to work when my neighbor drives an SUV? Companies, when asked to cut emissions, fear added costs and loss of competitiveness and threaten relocation and job cuts. Environment ministers may advocate high level action but industry ministers counter that they are not affordable. Free riding critically undermines the Paris Agreement, which relies heavily on voluntary action. Now entering in to force, the Agreement seeks to limit global warming to 1.5 C. Yet economic solutions to date - regulation, cap and trade, taxes - are far from sufficient to deliver this. Even if existing country commitments are all met, we remain on a course for a 3 C increase. This puts us all at real risk of dangerous and costly climate change. We are fast running out of time to find and stimulate the voluntary measures that will enable us to meet the Paris target. Can we incentivize voluntary actions to change free rider behavior?

Proposed Solution

Stop free riding and get paid ! CO2, a desirable digital currency and account. An economic agent (individual, company) opens a CO2 Account, reduces CO2 emissions and is credited 1.000 CO2s per tonne of CO2 abated. For example, if an individual replaces a combustion engine vehicle with an electrical vehicle, this reduces CO2 emissions by about 2 tonnes (following United Nation Framework Convention on Climate Change accounting rules). His CO2 Account is then credited with 2.000 CO2s annually, for 10 years. The CO2 Account is a credit account, holding units of CO2. Voluntary actors are empowered to 'mine' (generate) CO2s to credit their account. The CO2currency and CO2 Account give hundreds of millions of individuals and companies worldwide access to the 'goldmine' of CO2s that can be generated by reducing diffuse CO2 emissions from heating and transport. The CO2 Account is operated through a mobile app. CO2s may be sent through social networks within the community, or spent everywhere using the CO2 Payment Card which converts CO2s into $ automatically. Credit may also be added to the account by purchasing CO2s. This unique value proposition, together with 450 pricing policy to remove hidden banking fees, makes the CO2 Account competitive in the banking industry, and a typical fintech new service. The more agents use their CO2 Account in complement to their bank account, the more traction is created on CO2s. This allows a global community of voluntary actors to fight climate change simply, and daily, resulting in a systemic change.

Evidence of Effectiveness

Economic theory and tangible results in Europe show that putting a price on carbon works in reducing CO2 emissions. With the CO2 Payment Card, the $55 per 1.000 CO2s exchange rate is a significant social price on carbon. In his book Collapse, Jared Diamond argues that societies can choose to succeed and evidence shows that this requires complementary top down and bottom up solutions. Our bottom up solution empowering economic agents (individuals, companies) to reduce emissions is complemented by the top down Paris Agreement. Monetary innovation is known to be a powerful and adapted tool for behavioural change, allowing numerous agents to coordinate action through the exchange of goods and services. Complementary currencies, such as air miles, have demonstrated that they can change behaviour at large scale over a sustained period, cheaply. From the viewpoint of behavioural economics, CO2s are 'nudges' which inform and empower agents to participate in the development of the low carbon economy at all levels. We have deployed the solution at small scale in France and validated all technical steps required for implementation. Companies and households who have opened a CO2 Account do change their behaviour to reduce emissions (to date, 120k tonnes per year) and share their effort and pride within their community, attracting more actors. Initial sales (45k in 2015, 300k in 2016) demonstrate that companies will purchase CO2 offset certificates and incentivise their employees to open CO2 Accounts. A large city in France is deploying CO2s is association with multinational development companies in 2017.

Previous Performance

We have designed and tested detailed systems, products, services and tools for the generation and circulation of CO2s through CO2 Accounts. Notably, we have: created concepts, rules, methodologies for CO2 Accounts and CO2s; obtained approval of rules and methodology for CO2s from UNFCCC, French government; created and tested web platform for customers to open and operate CO2 Accounts, generate, spend and receive CO2s; opened 1100 household CO2 Accounts; opened 30 CO2 Accounts for businesses (wide range of sectors) wishing to generate CO2s; secured partnerships with 35 businesses willing to accept CO2s in part payment of goods and services; developed specific products for sale of CO2s to businesses; sold 4000t CO2 for 300,000 in 2016; obtained decision from large city and major energy supplier to deploy the CO2 Account in their communities from 2017. 450 is unique worldwide in having UN and state agreement to operate a currency that reconciles economic growth with CO2 emissions reduction. 450 has received numerous awards, e.g. CO2 Account selected by Efficycle (supported by French Ministry of Ecology) as Positive and Inspiring Innovation of the Year 2015, 450 nominated FrenchTech Ambassador at UNFCCC COP21 by French Ministers, 450 chosen by French Ministries of Environment and Digital Economy as most promising start up in eco innovation. 450's founders are entrepreneurs with expertise in climate change mitigation, carbon markets, business development, energy, web algorithms, big data and social networks (reflecting the highly trans disciplinary nature of our innovations) sharing an optimistic and constructive vision of a low carbon future.

The Team

Team Purpose

Our proposed solution aligns fully with the primary purpose of our company. 450 is a digital start up, registered in France in June 2010. 450 arose as a result of a research programme that led to creation of the rules for CO2 Accounts and CO2s. 450 is the sole operator of CO2 Accounts and CO2s. 450 is wholly focussed on the development and commercialisation of these innovations, which are designed to incentivise economic agents (individuals, companies) to reduce their CO2 emissions by rewarding these reductions. 450 has no other program and is thus a single focus company, aimed at implementing the proposed solution described in this proposal. The name 450, which works in all languages, recalls the recommendation of the Intergovernmental Panel on Climate Change to avoid exceeding an atmospheric concentration of 450 ppm CO2 in order to limit global warming to 2 C.

Team Structure

This is a single entity proposal with a simple management structure. Strategic decision making authority and overall responsibility for innovation and risk management rests with the 450 Board. The Board is made up of the principal shareholders, namely: Jean Luc Baradat (CEO, 450), Eric Lasage (Director Innovation, Research and Development, Group AGRIAL - a leading agri food cooperative, turnover of 4.2 billion in 2014), Jean Francois Jacob (President, SICA, Saint Pol de Leon - a leading horticultural group, turnover of 214 M in 2014) and Ronan Caradec (President Societe Madec - a specialist compnay in electrical engineering, networks and photovoltaic plants). Jean Luc Baradat plays the lead representational role for 450. He also leads on day to day operational decisions on implementation, innovation and risk management, in consultation with senior management Oliver Messager (Co Founder, Business Development) and Tony Cois (CPO/CTO). Other staff include highly experienced Business Development Leads for Germany (Andrea Kramer Le Vot) and the UK (Guy Duke), Web Developers (Glenn Guegan) and a Back Office Engineer (Gauthier Ballan).