This is a Proposed Plan B for financing the global climate crisis and the rapid transition to a clean energy economy. The existing funding mechanisms are woefully insufficient to meet the 1.5°C goal or 2°C limit. The goal of having $100 million/yr. by 2020 for the Green Climate Fund is wildly unrealistic, especially given US political developments and the unintended effects of Brexit. Moreover, the IPCC has underestimated the rate of climate change and relied on far more extensive development of Carbon Capture and Storage (CCS) than is currently possible or incentivized to meet the 2°C limit. The stark reality is we simply lack financing at the scale needed to decarbonize both developing and developed economies, in the time frames needed. In short, we need a "Big Bold Idea' that is much larger in size, that facilitates all stakeholders, including developing and developed nations, to decarbonize economies rapidly, and incentivize CCS to unleash rapid innovation. Finally, the Fund addresses the interests of companies that find themselves with enormous stranded assets - fossil fuels. The plan incentivizes them to lead the development of CCS implementation from existing technologies used by coal, oil & gas plants to the progression of net-negative CCS (including BECCS and newer breakthrough technologies). The Adam Smith Plan elegantly produces a Global Climate Fund of roughly $6.7 Trillion USD/year. The International Energy Association has projected $1.1 Trillion per year required for investments in the energy sector alone to meet the 2°C goal. Adam's Smith described an "invisible hand" that could serve all interests even as people pursue their own self-interest. That is quite different than the existing paradigm which requires financial "sacrifice" by nations to help solve the global crisis; effectively a zero-sum game. The Plan utilizes a global funding mechanism to benefit nations, not only to reduce emissions but to deliver an economic shot in the arm to whole new industries and new jobs, while actually reducing risks to global financial institutions and investors from large Institutional investors (Insurers and Pensions), to Portfolio and Fund managers, to ordinary investors. It's an offshoot of the Tobin Tax, a .05% tax on the estimated $5.30 Trillion/day of currency exchanges (FX), that yields a $6.7 Trillion Annual fund that can save the Climate, grow global growth and stabilize Markets. A single private bank in London now closes FX of 18 currencies at the same time across all time zones. The bank is owned by 69 Member Banks and as such, we can avoid the perpetual obstacle of political resistance. Imposing a minuscule tax on the trade of the wealthiest on the earth, currency traders, which amounts to rounding errors for them, can finance the entire global transition to clean energy economies, with minimal administration of collection efforts, essentially acting as Adam’s Smith’s “Invisible Hand".

1. THE ADAM SMITH PLAN
TO SAVE MARKETS AND THE CLIMATE
A Global Finance Solution
For
A Global Climate Crisis
By Nancy Skinner, @ClimateTalker
Inspired by the Founder of Capitalism
and author of “The Wealth of Nations”

4. The Problem
The Climate is rapidly destabilizing, beyond predictions by models used by the IPCC to arrive
At the 2 Degree Celsius (Limit) and 1.5 Degree Goal.
Source: Climate Interactive April 2017

5. THE POLITICS OF NATIONALISM IN A
GLOBAL INTERCONNECTED WORLD
CHANGES THE EQUATION & TIMING

6. We Can’t Get There From Here
Without Looking at the Solutions Differently
Since Paris 2015, the World has Changed
➢ Since Paris 2015, Brexit happened. It complicates participation in emissions trading with the EU. It also
has implications for the EU’s Financial Transaction Tax (FTT), (which French President
Hollande pledged should be dedicated to Climate Change) and created competition among EU
nations for attracting Banking Businesses from the UK.
➢ Donald Trump won the US Election: While his pledge to pull out of Paris is not yet known, he has
taken steps to undue the Clean Power Plan, a major portion of President Obama’s
commitment to Paris. His Executive Orders have allowed oil companies to stop methane
flaring from oil & gas operations, removed water protections that allow coal byproducts
to run-off in waterways, reducing production costs, and proposed major cuts to EPA,
NOAA, and NASA that pertain to Climate Change. The EPA has taken down it’s main
data collection webpage, used by Climate Scientists worldwide. He has approved
the construction of Keystone XL Pipelines and the Dakota Access Pipeline.
✓ France has just elected Emmanuel Macron to the French Presidency.
While that assures that France will remain in the EU, exactly what policy
changes from Hollande remain unclear, but bodes very well for Climate Change
as he is a strong supporter of the Paris Agreement.

7. Elections and Consequences: The Fate of the Clean Power Plan is in Jeopardy

8. Trump’s Executive Order Reversing Fuel Efficiency Standards

9. THE WORLD NEEDS A PLAN B
THE WORLD MET AFTER THE US ELECTION AND EXPRESSED ITS RESOLVE.

10. The Global Financial & Banking Industry’s Big Risk: Climate Change

12. “The point is that the more we invest with foresight; the less we
will regret in hindsight. Financial stability risks will be minimised if
the transition begins early and follows a predictable path,
thereby helping the market anticipate the transition to a two-
degree world. “
“Your invitation to discuss climate change is a sign of the
broadening of the responsibilities of central banks to include
financial as well as monetary stability. It also demonstrates the
changing nature of international financial diplomacy.”
Governor of the Bank of England Chair
of the Financial Stability Board –
Mark Carney

13. The Insurance Industry Risk

14. Insurance Industry Effects
✓ Standard & Poor’s (S&P) recently suggested that current catastrophe losses may be undervalued
by as much as 50% at the 1 in 10 and 1 in 250 return periods if the past decade were to be
representative of future environmental trends.
--Standard & Poor’s (2014), “Climate Change Could String Reinsurers that Underestimate its Impact”
✓ Given the widespread governmental acceptance of climate change and the global shift to
reduce greenhouse gas emissions, there will likely be several changes and additions to existing
climate change-related policies and regulations in the near- to mid-term. The severity of future
climate change-related events depends on how Aggressive these policies are, both in terms of
the size and timing of carbon emission reduction. --Global Risk Institute
✓ Several insurers/reinsurers have since participated in climate-related efforts including research
collaborations with the scientific community, raising the awareness of clients and the general
public, and conducting internal reviews to assess the risks and opportunities associated with
climate change. Despite this involvement, the number of worldwide weather-related loss
events has tripled since the 1980s, and inflation-adjusted insurance losses from these events
have increased from an annual average of around $10 billion to around $50 billion over the
past decade. --Global Risk Institute

15. Bank Industry Effects

16. “Clearly, the faith in the OPEC and non-OPEC deal has just been obliterated. There are whispers and
rumors out there that the deal won’t even get extended,” John Kilduff, a partner at Again Capital
LLC, a New York-based hedge fund, said by telephone. “The proof just hasn’t been in the pudding
in terms of this accord.”

17. The Oil Sector is in Upheaval and Volatile.
US Natural Gas has caused a glut of oil supply.
Natural Gas has all but decimated the Coal Sector.
Worldwide supply by non-OPEC actors like Libya and
others threaten the production cut extensions to be
decided May 25, 2017 as Russia and OPEC meet to
negotiate. With massive oversupply and competition,
many analysts believe that market share concerns
will over-ride artificial supply limitations, and a price war
may ensue.
The Paris Agreement has already fundamentally changed
the trajectory of energy for the future.
Nations like China and India are racing to clean air and
investing in renewable energy while shuttering coal plants.
Major corporations have long since been on board,
where sustainability is a measure of progress.

18. FINANCING THE TRANSITION
The International Energy Agency estimates that:
“an additional USD 1.1 trillion in low-carbon
investments is needed every year on average
between 2011 and 2050, in the energy sector alone,
to keep global temperature rise below two degrees
Celsius. In cumulative terms, the world is falling
further and further behind its low-carbon and
climate-resilient investment goals.”

19. Where in the World can we get the Scale of Funds
required to Decarbonize the World’s Economy?
ON JUSTICE…
If justice is removed, the great, the immense fabric of human society, that
fabric which to raise and support seems in this world, if I may say so, has the
peculiar and darling care of Nature, must in a moment crumble into atoms.
THE INVISIBLE HAND…
The rich are led by an invisible hand to make nearly the same
distribution of the necessaries of life, which would have been made,
had the earth been divided into equal portions among all its inhabitants,
and thus without intending it, without knowing it, advance the interest of the
society, and afford the means to the multiplication of the species.
Ask Adam Smith

20. The Solution
Now, that the Climate is too big to fail!
Rather than rely on national contributions to The Green Climate Fund, from nations that
are finding that politically difficult or impossible, and which only goes to smaller nations primarily
for adaptation…
Why not impose a single global tax using the symbol that most represents a nation or a Union,
it’s Currency, or Foreign Exchanges (FX), valued at $5.3 Trillion/day, using the most eloquent
administrative means of collecting that tax, at the point of daily closure for such transactions,
the CLS in London, a private specialized bank, a unit of the International Back of Settlements,
the Bank for the world’s Central Banks and the world’s largest private banks and financial
institutions.
One Tax, FX, not as many transactions as the EU-proposed Financial Transaction Tax. A tax that
the late Yale Professor, James Tobin, proposed as a means of stabilizing “hot money” and
therefore the financial security of global markets and natural currencies.
The other benefit is that the tax is paid essentially by the wealthiest on our planet, where
increasing income inequality undermines national governance. The taxpayers bailed
out Big Banks and Financial Institutions in 2008. Traders, who wouldn’t notice a rounding error
can contribute to a $6.7 Trillion Annual Fund for decarbonizing all our economies and dealing
with the seemingly intractable problem of stranded assets; the fossil fuels that can’t be burned.

21. The Foreign Currency Trades Dwarf all other Trading Markets *
* Bank of International Settlements

22. The Math
Take $5.3 trillion X .005*= $26.5 billion $USD/day
NASDAQ estimates 252 Trading Days a Year so
$26.5 billion times 252 = $6.7 trillion a year.
* .5% A half of 1 % on trades

23. ✓ Stabilizes global financial market and currency risks.
✓ Provides the scale of funds necessary to decarbonize globally and rapidly.
✓ Creates global wealth with new clean energy industries, including Carbon Capture &
Storage (CCS).
✓ Reduces ‘devastating’ risks to high-carbon portfolios, insurers and pension funds.
✓ Can be achieved simply by private global banking institutions
✓ Avoids political opposition to Climate Change (Deniers, Big Oil-funded PR)
✓ Requires no Congressional or Parliment approval or taxpayer funding.
The Benefits of the Adam Smith Plan

24. The Financial Markets are systemically at risk as property damage, sea level rise, rapidly changing
public opinion and smart money moves money out of heavy-weighted fossil fuel assets due to any
number of shocks: A major extreme weather event, Institutional Disinvestment, or very real gluts and
oversupply possibly causing oil futures to crash by 50%. *
* OPEC and non-OPEC parties are meeting May 25th, 2017 to discuss continuing current production limits. A continuance seems unlikely.

26. The World is moving already to monitor Global Financial
Institutions and the Impact for Secure Investments

27. The Good News
Renewable Energy
prices have dropped by
80% as installations
increase the economies
of scale.
China has invested USD $321
billion in Renewables and
half-built coal plants are
being shut down.
India plans nearly 60% of
electricity capacity from
non-fossil fuels by 2027
Expansion of solar and wind
power will help exceed Paris
targets by almost half and
negate need for new
coal-fired power stations.
According to a report by
investment firm Arabella
Advisors, the more than $5
trillion in investment funds
leaving fossil fuel stocks is
double the market valuation
it had reached just 15 months
ago.
Disinvestment is Accelerating
Major global corporations
are moving forward on
efficiency and many
with goals of 100%
renewable
energy.
Including Wal-mart, GM
Bank of America, Google,
Apple and Facebook.

29. Source: World Resource Institute
The Bad News
It’s insufficient to meet a 2 C° Limit, let alone 1.5 C °. The funding of the transition to decarbonization,
is woefully insufficient, chaotically decentralized, depends on doubtful Pledges, INDC’s remain
underfunded, and time is running out even as climate damage is costing lives, economies & global financial
stability.

30. Although public finance and investment will continue to play a critical role, particularly in low-income
countries, large amounts of private capital are needed as well – and this will only flow if the right
market signals are present within the financial system.
Private financing of infrastructure that is high-carbon, not climate-resilient, or generally unsustainable
still significantly outweighs private flows to sustainable infrastructure. Actions by regulators and policy-
makers in the financial system can reorient incentives and reframe how investors view risks and
potential returns.
Reforms in the financial regulatory system and in the practices of central banks, combined with other
policy reforms (e.g. to price carbon and support innovation and to use sustainability criteria when
screening projects), can level the playing field between sustainable and unsustainable options and
thus give a powerful boost to private investment in sustainable infrastructure.
Private Finance and Central Bank Practices Can Push Infrastructure from
Unsustainable Toward the only real path forward: Sustainable Infrastructure.
Source: New Clean Economy Report 2016

31. What is the CLS?

32. CLS
BIS
US
FED Member
Banks
Green
Climate
Fund
Develop
-ment
Banks
Stranded
Asset
Transition
Fund
CCS
Plants
A $6.7 Trillion Annual Global Climate Fund
From .005% tax on $5.3 Trillion/day in FX
Audit 1
Audit 2
Audit 3
Private Final Auditors
Proposed Flow of Funds and Transparency Checks

35. According to Glen Peters, of the International Center for Climate and Environmental Research,
The scale is the biggest issue.
In an interview on Climate Talk Radio, Peters told me that we would need to have some 20,000
CCS plants at scales factored in by the IPCC, given technologies that are in infancy or don’t yet
exist, which require the building of 4-5 plants a week. His fear is lack of financial incentive to do so.
Coming full circle, given the IEA estimates that USD $1.1 Trillion are needed annually just in
Renewable, Efficiency and decarbonizing energy alone is required to meet Paris Goals,
And acknowledgement that industries with stranded assets (coal, oil in particular, with natural
Gas to a lesser extent, will suffer financially and have secondary effects on portfolios, whether
Individual, or institutional investors like Insurers and Re-Insurers and Pension Funds worldwide.
Putting aside an allocation for those companies that risk stranded assets while have
the most experience with CCS technologies, can be incentivized to build CCS with
Net-negative emissions, as they also use CCS to reduce the footprint of built facilities
and sunk costs.

36. “This situation is compounded by a lack of understanding and experience
with CCS in the finance sector, and a focus on the additional costs of CCS
rather than the overall competitiveness of low-carbon energy production in
the long term. Governments, industry and the finance community need to
work together to identify and develop the key features of a model
incentive framework (as part of a broader emissions reduction
Framework where one exists) that would encourage adequate
CCS investment.”
International Energy Association 2013
A Model for Incentivizing CCS
Researchers and IEA have warned that INDP’s will not meet the
2 C Goal and that major investments in Carbon Capture and
Storage (CCS) are required.

37. So can a $6.2 USD Annual Trillion Climate Fund spur economic growth in clean
Infrastructure and call it a day?
Not without global cooperation and major investments in Carbon Capture and Storage (CCS)
Of the 120 scenarios explored by the IPCC in Paris, all of the relied on some amount of CSS, yet
Only 5-10 INDC’s actually included CCS projects in their Pledges.
CCS is the “Get out of Jail Free Card” that doesn’t exist anywhere near the scale assumed by
and required as part of a 2 C goal.
The financial incentives don’t exit for net-negative emissions CCS like BECCS that removes
CO2 and permanently stores it in deep underground wells.
The most experienced with CCS are the coal, oil & gas industries who have employed them
To capture CO2 but for the purpose of increasing oil production of declining wells.
These industries are most at risk of decarbonization and declining futures, yet
can exchange stranded asset losses with building CCS plants at a massive scale world wide.

39. Existing Mapping of CCS Plants – An Open Market for Expansion
Source MIT, Center for Carbon Capture & Storage

41. ✓ Provide the world sufficient funding to decarbonize and meet the Paris 1.5 C Goal.
✓ Use a single tax on one Financial Transaction, Currency, which both includes all wealthy
and non-wealthy countries alike, at least the wealthiest among them, and eliminates
the problems of the proposed FFT in a post-Bexit EU.
✓ The global wealth tax, as it may be called, is essentially the partial repyment of global
Bank Bailouts by taxpayers as a result of the 2008 Global Recession and Banking
Collapse and will help politically in this environment.
✓ But the Global Climate Fund will also be distributed to all countries, to create new
industries and jobs in a Marshall Plan-style rapid mobilization of expansion of existing
renewables, battery, storage, smart grids and distributed. Global GDP would
actually grow.
✓ Member Central Banks and private banks will be given earmarked capital to finance
and therefore profit from the decarbonization building and infrastructure.
✓ Some amount should be given to companies with stranded assets, coal, oil & gas, to
persuade their transition to being clean energy providers, as their technical abilities are significant.
The Bottom Line: From Zero Sum to Thriving & Survival

42. NEXT STEPS : BIG BOLD ACTIONS
The Adam Smith Plan is conceptual, but is based on the ever-changing reality and gap
between achieving our 1.5 C ° goal and 2 C ° limit, and the limitations of existing INDC’s
and the funding shortfalls of these by nations.
The beauty of the plan is that the institution that could administer the plan, CLS, is a
Private Bank, regulated by the US Federal Reserve (Chaired by Janet Yellen), and its private
Memberships, which include Federal Banks and major private bank and financial institutions.
This unique private nature, may allow action to proceed much more rapidly than national
Governments, Congress, Parliaments, etc. as most major nations are already Party to
CLS, and use the Bank to close FX Trading, across multiple time zones, including
18 currencies presently. The CLS has vastly minimized foreign currency exchange risk.
It may just be a tiny tax on the wealth of nations, it’s currency, may minimize risk to our
Climate, our Financial Institutions and our survival.
Anyone else got any big ideas? There are more than welcome!

43. A Note From the Author:
The Adam Smith Plan, as I’ve named it here is indeed a “big bold idea”. It comes from a lifetime
of working to both solve the Climate Crisis and move to a Clean Energy Economy, where whole
new industries are grown and new ones are born and along with them, the jobs and income that the
peoples of all nations need so desperately now. It is the result of changing political and economic
winds that after 20 years of UNFCCC and COP talks and the pinnacle of Paris 2015, saw our hopes
Dashed as a fever of nationalism threatens the work of millions of scientists and diplomats; where
Denial is somehow exalted and masses of people fear so much, they don’t see that its their fear that
endangers them.
Change is hard they say. Not changing is harder I believe. We have never faced such a complex
global problem that required cooperation because we are all dependent on the outcome
for own survival; our human interest make us realize our inter-dependence.
Strange that our last best chance comes at a time when nationalistic, tribal-like influence
are sweeping the globe like a pandemic. But being human means being fearful of
change, especially when the reality is that wealth is being concentrated increasingly
in smaller number of hands, while billions struggle to get by in industrialized nations
and to survive with enough food, water and shelter as many in undeveloped countries.

44. But all fevers break; especially ones that I call testosterone fevers. At the very crucial moment that
Mother Earth needs us to nurture and rejuvenate her, a strong headwind of powerful forces
are projecting or provoking violence that has the power to annihilate life on earth.
Brexit, followed by the election of Trump and rise of Russia flexing its power as an oil-financed
regime are all cause for concern. On the bright side, China has shown a reversal on climate change
Change and now leads the world in investments. Saudi Arabia and other oil-rich countries
have also looked beyond the next quarter or election, and are preparing for the transition to a
Clean energy economy.
I applaud those efforts, where humans seek solutions for humanity. The sun and wind are not
companies to whom monthly bills are due – just upfront investments in our future.
The Adam Smith Plan does indeed rely on the “invisible hand” of capitalism to direct
resources where they need to be. It’s an elegant global solution that distributes wealth,
health, and a sustainable future for the pale blue dot we all call home.
It’s just a start, as all transformative ideas are. I rely on my fellow travelers to refine
and fine tune what appears to be our next best Plan B.
Nancy Skinner