Version 1.2 of Feb. 3. 2019 f1 Purpose The ultimate purpose of the - - PDF document

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The DRAGON is the most ancestral and universal of myths. It is commonly associated with the idea of strength, power and wisdom. A fierce and implacable guardian of treasures and riches of every kind. Easy to imagine and to remember. It evokes fire and hence combustion and heat (and by analogy, global warming) but also greatness, heroism and magic. It induces fear and respect. Whether this will be its final name or not, it must be clear that this project has more to do with human beings than with software, economy and politics. Suggestion, motivation, individual and mass psychology are fundamental and call for special attention. THE

DRAGON VALUES SYSTEM

Version 1.2 of

• Feb. 3. 2019

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Purpose

The ultimate purpose of the Dragon values system is to intensify and speed up as fast as possible the “healing” process needed to provide safety for the planet and current human

• civilization. Dragon Values must be seen as a financial and cultural incentive (with

considerable political and economic fallout) to implement policies focused on energy transition, safeguarding biodiversity, contrasting global warming, etc. This system cannot and must not allow for any kind of anonymity. Anonymity, in fact, would conflict with both the distinction between actors playing different roles (involved by the system) and with the possibility of monitoring the actual implementation of measures taken to make the planet safe. This schematic presentation of the system is only to illustrate the basic idea, so as to develop it properly before moving on to the actual development phase (the phase involving fine tuning and electronic, organisational and political/economic implementation). Because of the global impact of the project and its enormous economic implications, all financial, diplomatic and geopolitical aspects must be viewed at once with realism and

• audacity. To fully develop the project, a multi-disciplinary and holistic approach will be

required. A quest for synergies and cooperation with already existing systems, integration with complementary ideas, criticism, suggestions and proposals are welcome, indeed they are the very purpose of this initial phase.

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Premises

This project draws its origin from a few, well defined theoretical premises. Fact and theories held to be sufficiently proved and/or likely not to require justification or explanation. Opening

• r continuing debate on these points appears to dangerous, rather than merely useless.

The first premise of all, in fact, is that an urgency exists. Many signs indicate an ongoing collapse: peak oil, peak phosphorus, extinction rates many times greater than in the past, climate change, degradation of the oceans, etc. These signs seem in fact to confirm the thesis of the famous 1972 study, The Limits to Growth. A study which, forty years later, seems unfortunately to find confirmation in facts and in many similar studies. The text is now freely available to all:

• “The Limits to Growth” (scanned PDF version)

( http://www.donellameadows.org/wp-content/userfiles/Limits-to-Growth-digital-scan-version.pdf )

Apparently the fact that one is observing the beginning of a generalised and global collapse should not automatically imply urgency, since we do not exactly know the time this collapse will take. However, there are rational reasons to believe the timing of the collapse will be appreciably shorter than the time it took from the pre-industrial area to our present day

• situation. As Lucius Annaeus Seneca put it, “increases are of sluggish growth, but the way to

ruin is rapid”. This empirical observation seems to find logical justification in what is now, not coincidentally, known as the “Seneca cliff”. For a more detailed view of this effect, one can read, for example:

• “The Seneca effect: why decline is faster than growth”

( http://cassandralegacy.blogspot.it/2011/08/seneca-effect-origins-of-collapse.html ) To these theoretical premises, a third may be added: the central role of the energy question in both economic and ecological issues. Especially, the versatility and vastness of fossil sources must not make us ignore the issue of peak oil, as outlined already in the 1950s by the American geophysicist Marion King Hubbert . Despite the expansion of renewable energy sources, modern economy is still deeply tied to fossil energy. Economic and extractive problems of the fossil energy industry are everybody’s problem, and will be until we are able to cut down our dependence on such sources substantially. As if things were not already complicated enough, closely tied to the use of fossil energy is the question of climate change (which in its turn negatively affects the global economy). Climate and extraction issues have generated a violent media and propaganda war which has polarised holders of economic interests associated with fossil energy against their opponents, on irreconcilable positions.

12 Nor do we intend to spend more time here to demonstrate the scientific truth of anthropogenic global warming. In-depth analyses made by IPCC and studies across the last decades are more than enough to establish that the phenomenon is real and mainly caused by emissions associated with human activity. Taking not of this, however, in no way justifies demonising fossil fuels, for two simple reason: first, economy demands and has demanded them for a long time from their producers, benefiting and hence sharing responsibility with them; second, and more pragmatically, modern economy, in order to do anything, including an inevitable and massive energy transition towards renewable sources, needs to use the fossil fuels it still depends on. This last consideration, however, poses a technical question which is often neglected or even ignored in public debate: what to do with energy which emits climate altering gasses? Seen from this point of view, it becomes fundamental to look at fossil fuels, not as an absolute evil, but as a resource to employ wisely. It therefore becomes useful and crucial to understand the strategy of the sower: a farmer may eat all the wheat he raises in his fields in order to maximise short term returns, or he may use a certain quantity to ensure abundant harvests in the future too. It is easy to understand which of these two strategies is wiser, when we speak

• f wheat. When we speak of energy, things are less intuitive, however the “Sower’s way”

remains a wise choice (and also asks for some expertise). For further information, one may refer to this study: “The Sower's way. Quantifying the Narrowing Net-Energy Pathways to a Global Energy Transition” ( https://arxiv.org/abs/1602.01203 ) Every opinion deserves respect, but if we notice a serious risk and want to act to avoid the worst, each one of us in the end is responsible for the choice we make. These theoretical premises are not and do not intend to be dogmas; rather they want to and do indicate taking responsibility as the starting point for this project. A starting point. A point of view on reality. A shared reference to allow all those who may decide to give their contribution, in a harmonious, consistent and constructive manner.

From petrodollars to ecodollars (or carbon dollars)

The Dragon values system is something far more complex and ambitious than a simple incentive system based on something resembling one of the many cryptocurrencies in

• circulation. One of its main ambitions, in fact, is nothing less than to modify the world financial

axis which, in an apparently insoluble fashion, ties the currency of reference - the US dollar - to the quotations of the oil market. The reason is that the geopolitical and financial system revolving around so-called petrodollars is an almost impenetrable obstacle between us and energy transition, contrasting global warming and a large part of the policies aimed at guaranteeing stability of planetary

• ecosystems. Since a considerable part of the value of the dollar originates in oil, in fact, even

13 an apparently trivial act such as politically acknowledging that peak oil and global warming exist and are serious current issues, comes up against a wall. So, to avoid the collapse of our civilisation, we need an escape route out of this twentieth century geo-financial structure. We need a way out which can safeguard and reassure current balances of power, without destroying the planet at the same time. Putting aside political rhetoric and the hypocrisy of media and diplomats, the petrodollar system is a decaying system which clashes with the growing and irreversible difficulties caused by peak oil and Global Warming. This decay is already beginning to turn into geopolitical instability and clear military jumpiness among the leading actors on the international stage (first of all, Usa, Russia and China). Pretending the problem does not exist will only drive companies tied to fossil fuels towards credit and financial collapse, with catastrophic results, while at the same time pushing the whole planet towards a large scale conflict with even more disastrous outcomes. In any case, wasting the last economically usable fossil fuel resources to reinforce extractive and military apparatuses which are already greatly hypertrophic, will only speed up the race towards global collapse. It should be remembered that renewable energy sources are not yet able to replace fossil

• nes, so a large scale financial shock or conflict (even if carried out only using conventional

weapons) would overwhelm the already fragile world economy. Currently, therefore, fossil fuels are indispensable for any attempt to save the planet, energy transition included. To avoid these terrifying scenarios, we suggest making Dragon Values the bridge (via the Dragons market) linking US dollars to any action (great or small) which may help prevent the economic and ecological collapse we are increasingly approaching. At the same time, Dragon Values must be seen as a powerful support to conversion of companies tied to fossil fuels and, finally, as an incentive, not only economic but also cultural, for the rest of the global economy.

Blockchain

The system of Dragon values should be based on one or more blockchains (that is distributed ledgers). What makes this blockchain (or communicating blockchains) special is that it can attribute different rewards and rules to different parties (Small, Big, Inspector, Nations, Bank, Cooperative/Foundation). Another feature is that writing will be accessible only to parties which have previously been identified and authorised to operate, while consultation will be open to all. The blockchain (or blockchains) make the shared data unchangeable, reliable and verifiable. They create trust and cooperation among the parties. They help cut down risks of degeneration and corruption associated with centralised structures, as well as the power struggles to monopolise such centralised structures. The blockchain therefore is an important part of the Dragons system, but is not the system itself. The system in fact requires:

• Identification of individuals, companies and authorities;
• certification and inspection of plants and actions involving the real world;
• development of regulatory and safeguarding steps for the system itself;
• integration with “traditional” banking and financial systems.

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Dragon values

These are tokens which reward a series of pre-set actions in the system blockchain/s. They must not be designed as a currency for exchange, but as a quality asset, a high-value reserve. They are more like a virtual gold ingot than like a banknote. They are quoted only a special

• fficial market and can be held only in special bank accounts. As emphasised before, their

purpose is not only that of funding actions useful for contrasting the current potential collapse (Good Actions), but also of increasing cooperation among currently conflicting parties (for example, the major companies tied to fossil energy and those tied to renewables). Actually, Dragon values must first of all reward the effort of the fossil fuel industries which decide to convert to renewables, offering them a powerful economic incentive. The goal of the system is to help them avoid the foreseeable financial brink towards which they are travelling, driven by peak oil and depletion in general, but while doing so, Dragon values at the same time try to guarantee a proper supply of fossil energy to the whole world. Fossil energy is in fact necessary to support efforts towards energy transition and, more in general, all good actions needed to prevent the sixth mass extinction. The name “Dragons” of course is only a provisional proposal, but the idea is to immediately stress the marketing, propaganda, psychological, cultural and narrative aspects that an enterprise of this kind has to put at the fore. Dragon values have an economic/financial value which is however nourished by the ideological, cultural and political value which they will be able to propagate in the minds of the 7.6 billion people currently alive. From an ideological, practical and propaganda point of view, Dragon values must be seen as the value all of us assign to medium term survival of the planet and of civilisation as we know it today. Can there be anything more precious than survival? Or greater merit than in contributing to save the world? Or a more engrossing cause or epic? The economic value one is willing to attribute to an asset or a service is based on intrinsically subjective assessments. Any market which may arise around a product will only mediate among the various assessments. The value of things is subjective. Hence the strategic importance of advertising the beauty and intrinsic value of the Dragons. It is however undeniable that many would like to have “real” benchmarks for the value of an

• asset. However illusory and misleading this tendency may be, it does exist and is widespread.

An asset able to respond to this need makes a higher quotation and/or quicker dissemination more likely. From this point of view, the Dragons offer a further advantage. In fact, the Dragons system includes a party, the “Cooperative/Foundation”, appointed to support and advertise the whole system. Through this non profit organisation, one can “inject” values, not only through cultural action and advertising, but also financially. It would thus be possible to nourish a fund in US dollars, other currencies, securities, etc., which could act as a foundation for the “objective” worth of the Dragons. This fund could be kept up, for example, through

15 collection of green certificates, percentages on commissions for negotiating the Dragons, issue of private securities which can be purchased by organisations, companies and individuals interested in cutting down their environmental footprint and/or through accumulation of financial income tied to the sale of electricity coming from renewable energy plants belonging to the “Cooperative/Foundation” itself, but also - why not? - through collection

• f inheritances and donations. The Dragons system is flexible enough to include several

solutions which can reassure potential investors (speculative or not). The flexibility of the Dragons system also makes it possible to plan dynamics to make them inflation-proof. Last but not least, tying the Dragons to the US dollar could facilitate attributing worth to the former, making them politically acceptable to various countries and financial power centres interested in preserving a high value for the international benchmark currency (the US dollar). Good Actions These are actions rewarded with Dragon values by blockchain. We are not speaking only of new photovoltaic plants and/or renewable energy installations, but of a vast and varied range

• f actions necessary (or desirable) to try to avoid the sixth mass extinction (or any such

catastrophe or risk). Just as an example, such actions could range from protection of biodiversity (such as creation of oases and protected areas), to energy saving works (both industrial and civil), to fresh water protection, to regulations aimed at containing the population explosion, to any initiative based and developed according to principles of Circular Economy, to actions aimed at making for safer farming and nutrition, to developing substitutes for synthetic oil-based products, etc. Rewarded actions involve different parties and follow different rules, with incentives in Dragon values balanced to give the most powerful overall impact. The vastness and variety of interventions makes it possible to work on several different levels and at the same time favour collaboration among parties with different needs, means and aims. For example, richer nations

• r private companies can make major renewable plants, poorer nations and companies can

work on safeguarding biodiversity or on regulations or actions aimed at containing

• verpopulation. A vast variety of actions which can be funded through Dragon values is also

functional to the enormous monetary mass needed to feed the value of the US dollar independently from oil quotations. This is why, though energy transition is of course a fundamental item, it cannot be the only

• ne where Dragon values operate. There is also another reason: an energy transition which

keeps production processes strictly linear (like the current ones) instead of circular (as would be desirable) would not provide a solution, indeed it would risk aggravating the current situation. The list of Good Actions, its management and keeping it up to date also require a process

16 which needs to be entirely invented, but which must have at its core a party as neutral and scientific as possible - the Cooperative/Foundation. The high degree of complexity and the vastness of the list and topics involved suggest a multi-disciplinary approach. How to involve such competences is another matter to be dealt with. Despite large margins for development and integration, already at this point in our analysis, we can imagine a shared rationale for deciding the various awards in Dragon values. The common rule to all kinds of good actions could be the following: associating Dragon values to a certain quantity of carbon dioxide equivalent. Good Actions will prevent dispersal into the atmosphere (or into the oceans) of carbon dioxide, or will sequestrate it from the atmosphere, storing it in a reasonably safe manner, or preserving it as biomass (as varied and resilient as possible). Awards actually delivered could therefore be calculated as the counter-value in Dragon values of the quantity of CO2-equivalent avoided by the specific good action, and multiplied by a coefficient aimed at rewarding, in a differentiated manner, the various economic actors involved. This coefficient should also be studied so as to ensure maximum impact of the system. Whether this method or another is used, the system for calculating the rewards will probably require a logical and mathematical approach aimed at optimising the system.

Big

These are major companies which have been historically involved in the field of fossil energies (both extraction and distribution). They are chosen beforehand by the manager of the Dragons Blockchain network (that is the Cooperative/Foundation). This system guarantees preferential treatment to the Big, because they are economic entities which have to run the greatest risks and make the most effort in going through energy transition and other kinds of ecological mitigation. They provide the Small (and also the Nations) with products and services which earn them Dragons. They are not of course the only companies which can do so, but they receive a greater amount of Dragon values for the same quantity of action. Each certified and awarded action will, in fact, generate dragon values on the accounts of their customers and on their own accounts (that is the bank accounts in Dragon values in the name

• f the Big who provided the asset/service to be awarded).

The Big, for the same action, will receive a larger prize than anyone else belonging to the Dragon value system. As we said, this is to help avoid their economic collapse and to prevent them from blocking any serious attempt to heal the planet. However, the favourable treatment granted to them also has to do with a sense of equity: the Big are rewarded more than others, because the rewarded actions demand greater effort and risk from them than from other actors, since this action erodes their core business. Also, since a large part of the current energy and industrial system is still based on fossil fuels, these are functional and indispensable not only for the economy in general, but also for efforts focused on ferrying the economy across to more sustainable and renewable shores. Everyone should remember that, if we wish to avoid the worst scenarios, fossil fuels should be seen not only as the source of

17 the problem, but also as part of the solution. The Dragon values system must explicitly focus

• n putting an end to the dangerous propaganda clash between fossil and renewable energy

sources.

Small

These are all the end users of the carbon free services/products provided in a privileged manner by the Big (but also offered by any “green economy” business). The Small include individuals or families which install a home photovoltaic device, businesses of various sizes, local communities (small or large). They cannot operate directly, since they do not have access to writing in blockchain. They are excluded from the blockchain for practical reasons (there would be too many of them). This exclusion also helps to guarantee the Big, Banks and Nations a certain degree of control on the system, which is both reassuring and facilitating. Trying to radically transform the contents of the current economic system without consent by its leading actors would be both useless and counter-productive. The Dragon values system is an attempt to balance the interest of all parties in a system where everybody wins by working together. There is an explicit quest for economic equity, but without falling into the trap of an egalitarianism which would alienate the most influential economic actors making everybody lose (and not only in terms of money).

Inspectors

These certify the interventions the Dragons are supposed to award. On the Blockchain, they check and document the technical features, localisation and compliance with the requirements imposed by the blockchain to obtain dragons. Their documentation must be accessible to all, allowing anyone to verify the authenticity of the actions declared (and hence rewarded) by Small, Bank, Big and Nations. For their work, they are paid in Dragon values, whether or not they approve the intervention being assessed. Inspectors’ management must be based as far as possible on criteria and rules which have been decided on previously in the blockchain, to avoid or limit as far as possible acts of corruption, distortion or putting too much power into few hands. Banks, Big and Nations must not be able to control or pressure the Inspectors, but they must be able to read the documentation collected by them in order to monitor and if necessary point out anomalies, irregularity or actual fraud. The nations belonging to the Dragon values system must undertake to safeguard and regulate the system, through regulations and laws, both in financial terms and in the validation carried out by the inspectors.

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Nations

These are countries which decide to accept the rules of the Dragon values. Presumably, they will have a Blockchain of their own. They can earn Dragons by achieving pre-set goals of their

• wn specific Blockchain (large scale reforestation, protected oases, mega-plants and

subventions for renewables, regulations with specifications falling within those provided for by the Blockchain, etc.). They can also buy Dragons from the special regulated market (the “Dragons Market”) managed by the banks belonging to the circuit (the "Banks”). Every year, each member Nation must reach a certain threshold of Dragons established by comparing in percentage terms the GDP of that nation compared to the world GDP. Once the Nation has achieved its annual quota of Dragons, these tokens will be deleted (that is completely cancelled) from the blockchain associated with the Dragons. This helps to keep the value of the dragon values high, and simplifies monitoring and, if necessary, applying penalties in case of failure to achieve a quota or doing so by malpractice (for example, pretending to have undertaken operations which were never really carried out, or were not carried out in the way described in the blockchain). The basic idea is that member nations want to safeguard the planet. Profit aspects, for such public actors, though possible, should not be the reason they join. Dragon values allows such countries to facilitate the task of coordinating, monitoring and balancing the efforts various countries put into trying to save the planet.

Banks

These are regular banks which join the blockchain network of dragon values. Their task is to identify Small, Big, Inspectors and Nations which hold wallets in dragons with them. The wallets in Dragons may be held only on bank accounts of member banks, and only after having been legally identified. Banks may not ask for any commission or fees for this service. It is the blockchain they belong to which acknowledges them remuneration in Dragons proportional to their clients’ deposits on wallets managed by the specific bank. Banks will also be the only parties allowed to manage the “Dragons Market” where the dragons can be bought and sold. This monopoly is guaranteed to member banks so as to add a suitable banking standard (no anonymity, hence an obstacle to illicit trafficking and money laundering) to the electronic security offered by the blockchain. This monopoly also creates the premises for effective legal safeguarding of dragon users, and creates opportunities for profit for the banking system, thus reducing its hostility. Small, Big, Inspectors and Nations must hold a wallet in a member bank if they want to take part. This creates an attraction for the banking system which otherwise would feel threatened by cryptocurrencies.

19 Dragons Market This is the regulated market where dragons are quoted. The only one where they may be quoted and exchanged. Quotations will be allowed only and exclusively in US dollars. The purpose of dragon values, in fact, is to favour an energy and ecology transition, not to arbitrarily subvert the financial and/or geopolitical establishment. The dragons system intends to facilitate, economically, culturally and also politically, the energy transition and everything needed to prevent the sixth mass extinction. The current political stand of the USA on greenhouse gases poses an enormous problem for the whole world, and stability of the dollar is important for stability of political, economic, financial and military relations throughout the

• planet. The dollar partly feeds on the quotation of fossil fuels, and as these lose importance,

a problem will arise not only for the USA, but for the whole world. Hence the need for a positive alternative, that is the quotation of dragons in USD. There also follows the need for this shift to guarantee the same levels of reliability offered by any “traditional” financial market, as well as even higher security standards, so as to drive away any possible fear on the part

• f investors, large or small.

Cooperative/Foundation

This advertises and administrates the Dragons system, receiving a predetermined (and transparent) return in Dragons. It associates the Big members of the system and allows the banks and Nations which decide to join to operate. It collects green certificates, if any, from the Big members, to generate additional dragons. Here too, the fossil fuel Big have a fast- track which however drives them towards transition. The Cooperative/Foundation is a non profit economic organisation. It does not distribute profits, but provides its members with facilitated services. Collected economic resources are used to fund large scale photovoltaic (or in any case renewable-based) plants with which to create long term financial income for shareholders according to the capital they have invested in the plants. It is also entrusted with managing the blockchain, making any changes or corrections to the list of good actions rewarded by the system and the relevant rules. Ideally, this cooperative/foundation should work on a worldwide level and be impartial, neutral compared to any national interest or interest of the individual parties making up the system. It therefore requires a strong technical component and a very high degree of scientific credibility. It must be completely transparent, economically certified and ethically uncompromising. It must have low management costs and elevated systems of prevention against collusion and corruption, both from the outside and from the inside. Its various tasks include that of trying to guarantee a minimum income for each newborn child (but also for charities, schools, hospitals, etc.) on the base of renewable energy plants of its own or belonging to others, so as to ferry capitalism beyond the shoals of the devastating technological unemployment which will soon add to the economic crisis associated with climate change and resource depletion. When pursuing this goal, the

20 cooperative/foundation must inject an ideologically egalitarian thrust into the system, while at the same time becoming an agency of the United Nations or some other kind of largely or universally recognised supranational institution.

Conclusion

One should always remember that the purpose of this system is not to subvert the establishment, but to forestall imminent disaster. The ultimate purpose is to gain time and spread and enhance a culture which can make “structural change” possible, plausible and desirable... starting out from the premise that, unfortunately, this is not currently the case. Even though it has an ideological thrust and vision of its own, the dragon values system must not be seen as a utopia or as a cynical financial game aimed at enriching the same privileged elite. This system aims at bringing together consensus from profoundly different parties, and in doing so creates a narrative, an economic return and a potentially speculative financial system. It need not be a perfect system. It only has to function. Should it for any reason fail to function, the alternative would be the current immobilism, with everything this means in terms of likely global collapse, on the economic level, but also on the ecological and military levels. The underlying logic however is to move over towards a more sustainable but also more collaboration oriented kind of economy, overcoming the vetoes, distrust and conflicting interests which paralyse or seriously hinder the necessary change. We need to avoid the worst in terms

• f climate change, reduction of biodiversity (which, in the present conditions, is an irreversible

kind of damage where we risk sudden ecological collapse), contrasting peak oil, overpopulation, food security, etc. The approach must inevitably be holistic, and for this reason, during the development phase, a high degree of skill will be needed to mediate among a large variety of different disciplinary, technical, ideological, economic and political approaches. Energy transition is clearly a central and unavoidable element in this system, but it is not the only pillar holding it up. Energy transition must blend in and amalgamate with all the rest in the most harmonious and balanced way possible. The very way it will be designed (renewable energy sources, energy saving, sustainable mobility, grey energy, etc.) will affect all the rest. One can also say by now with mathematical certainty that all the issues the planet is facing, from climate change to peaking of main resources, are tied to the unbridled growth of world population, a reality which is evident especially in poor and underdeveloped nations, which while rich in natural resources indispensable for the world economy, suffer from ongoing military conflicts and terrorism. So no doubt exists that the only true solution to the problem of overpopulation cannot of course be starvation and war, but should be education, culture, peace and - within sustainable limits - prosperity, always in a system of circular economy.