The chart is a simplified representation. However, it should give an approximate idea of the complexity of the tasks involved.

A Central Bank for the BRICS states

Every currency area has regions that are economically stronger or weaker, that are expanding or contracting. However, this area must be coherent so that the economic policy of the government institutions and the financial policy of the Central Bank can implement measures aimed at balancing.

But how can a Central Bank steer and stabilise when developments in a currency area depend on divergent economic processes, which are steered by mutually independent governments all over the globe using different instruments? Can a Central Bank set different impulses in a politically non-unified currency area, e.g. impose different interest rates? What would happen if it did?

In addition, aren't serious conflicts to be expected if strategic decisions of a supranational Central Bank are incompatible with the policies of a member state? Or would such a Central Bank not even be capable of making decisions owing to the representatives of participating nation states in the bodies of the institution vetoing or blocking each other?

The likelihood of such disruptions is not small when the lines of development and the challenges of included national economies do not correlate with each other and can even be have opposite goals. A single currency replacing national currencies is not a realistic prospect if the integrated economies are not coherent and the government systems are not obliged to exercise coordinated control. Figuratively speaking, the driver of a car cannot turn left and right at the same time if different passengers have different destinations.

A less far-reaching model

The introduction of a common currency would be easier if the scope of the monetary union were limited.

For example, a potential BRICS common currency does not need to be universal, i.e. it should not replace the national currencies of the member states. Rather, its use could be reserved for international payment transactions outside the sphere of influence of the US$ area. In this case, a Central Bank would also be necessary. However, this institution would not bear the burden of responsibility for five or more national economies. Instead, its focus would be on ensuring international financial transactions.

With their New Development Bank based in Shanghai, the BRICS countries have already created a nucleus from which a Central Bank and a global payment system – a SWIFT alternative - could be developed. Most likely the technical capability for this already exists.

A comprehensive system would have to be established whereby the conversion rates into national currencies for which there is not a consistent international exchange rate would need to be fixed continuously. Such a task would not be trivial, because measuring the exchange rate of the common currency requires an external benchmark. In the case of the European Currency Unit (ECU) created in 1979, this was the US$. The value of the African Financial Community franc, created in 1994 for international trade between member states of the West African Economic and Monetary Union (WAEMU), is pegged to the euro.

The determination of fair foreign exchange rates is difficult if one or more of the included currencies is not internationally tradable or is only internationally tradable to a limited extent. Tensions may arise between participating states if participants with freely traded currencies feel disadvantaged.

Furthermore it would be necessary to regulate who has access to the system and under what conditions. These can be legal entities or citizens of only of the BRICS member states or nations of which the BRICS system has approved. The exclusion of countries from which the BRICS region seeks distance will be challenging in the details.

An asset backed currency?

Another option may be an asset backed currency in which the benchmark of value is a precious metal rather than a national currency. Many Central Banks, and especially those of the BRICS countries, have made considerable gold purchases this year. From these holdings, the BRICS Central Bank could secure the full or partial backing of the new BRICS currency. This approach to bolstering the new currency is championed by one BRICS member state in particular.

These are currently the gold reserve tonnes of the BRICS states:

Brazil:                         129.65

Russian Federation:  2,329.63

India:                           797.44

PR China:                 2,113.46

South Africa:                125.41     

The gold holdings necessary to fully or partially cover the BRICS currency would need to be transferred to the BRICS Central Bank. To a large extent, the Central Bank’s ability to secure user confidence and manage the money supply would depend on its control over these holdings. The quotas for property transfers would be subject to a distribution formula agreed between the member states.

However, the debate on the pros and cons of a gold-backed currency is far from over. A key aspect of any planning process for a gold-backed currency will be clarifying how the exchange value of a gold ounce is determined. BRICS countries would likely prefer to avoid the US$-based London Bullion Market Association procedure. However, simply establishing a different procedure for valuing the BRICS Central Bank's gold holdings is not so easy as any discrepancy between the pricing according to the a new procedure and those from the LBMA will become targets of professional arbitrageurs. The use of the currency for speculative purposes could affect the stability of the BRICS currency.

From a historical perspective, it should be noted that the pegging of value to gold, while providing warm feelings at times, did little for economic stability. In older times, rulers exploited such systems by obtaining capital through secretly changing the alloys of precious metal coins. The pegging of the money supply to be created by central banks would also lead to contractions in commercial bank lending capacity when there was not enough gold available to back it up. Furthermore, in times of collective distress, central banks sold gold, triggering turmoil in their areas of responsibility. Is it really advisable to reopen a laboratory where there have been many failures and explosions in the past?

Conclusion

The repeatedly asked question of whether it is possible to narrow the scope of the US$ as the current reserve currency for international capital movements among the BRICS countries may attract attention. In fact, however, there are a number of tough conceptual nuts to crack before such an undertaking will be a justifiable proposition.

Authorship disclosure:

Fully human generated

To set the stage

“There is nothing in the world more soft and weak than water, and yet for attacking things that are firm and strong there is nothing that can take precedence of it.”

Lao Tzu’s words sum up a dramatic contemporary scenario: While in some parts of the world people are increasingly affected by water scarcity, others face the growing threat of too much water due to extremely heavy rainfall and rising sea levels.

While the poem captures the ambivalence of water perfectly, the words "soft and weak" also seem to describe the way modern civilisations have responded to it. Their foggy perception and sluggish action is just as dangerous as the threats themselves.

Why Water?

The focus of this essay is to use the prominent example of water to help identify concrete approaches for dealing rationally with the issue of climate change. Climate change affects us in many ways, including the expansion of deserts, forest fires, the salinisation of soils, landslides, extreme weather events, agricultural crop losses, loss of biodiversity, spread of disease and human and wildlife migration.

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Scientists and engineers have laid the foundations for our prosperity. And only these elites can show us the way to overcome the harmful externalities of these very engines of our wealth. This article supports the thesis that we are technologically and organisationally in a position to successfully meet these challenges, step by step.

One obstacle to the mobilisation of existing resources lies in the fact that the general public has only a vague understanding of the issue. They do not realise that, unless we make controlled sacrifices, nature will impose uncontrollable sacrifices on us.

We urgently need to overcome the human tendency to trivialise and understand with our minds and hearts what will happen if we do not listen to the guidance of our scientists and engineers. However, while these experts hold the keys to the right strategies, they are only trained to communicate with other scientists. This leads to a situation of misunderstanding and therefore a lack of adequate action.

Blurred perception of facts

Every day, we are all exposed to an overdose of reports about minor and major disasters in all forms of media. We more or less defend ourselves against this by ignoring some news, i.e. reducing the strain on our nerves by filtering information. It is human nature to rely on the mostly correct assumption that unpleasant developments will eventually end and change for the better. In the case of climate change, however, looking away and hoping things resolve themselves doesn’t appear to be a winning strategy.

A wealth of scientific analyses on climate change is available to everyone, but these are mostly comprehensible only for other scientists.

We should openly acknowledge that most people in the northern hemisphere have a sense of empathy for people "in the south" who are plagued by overpowering rains, flooded lowlands, islands disappearing into the water, eroding coastlines or droughts. However, the geographical distance and lack of awareness of the frequency of such disasters dilute solidarity. Collective psychological repression can set in quickly.

Most people in the northern hemisphere do not consider an increase in average temperatures of a few degrees to be alarming. Many even express relief that the winter is often milder than in the past. Loud protests by campaigners are experienced and understood by most citizens as a disturbance or perhaps exaggerated fearmongering.

At the level of policy, scientifically informed decision-makers attend international conferences on climate change, where they negotiate with other decision-makers on action plans that have no teeth but are presented as hard-won progress. And they are increasingly supporting “green” sectors of the economy. However, they are often reluctant to share the full extent of their knowledge about the problem because they do not want to jeopardise their recognition by “rocking the boat”.

The factual impact level is decisive for citizens

There is controversy about the interplay of causes of climate warming (industrial emissions, volcanic activity, ocean currents, etc.). We don't want to debate that here. What is more relevant are the changes in global average temperatures and their trends, as determined by scientific methods.

• Uniqueness: The most important fact is that a warming of 1.5%, 2% or even more is highly unusual in geological terms. If we are looking for a comparable global warming of this magnitude, we have to go back to the Pliocene: "Paleocene-Eocene Thermal Maximum". This period was 5.3 to 1.8 million years before our era. The causes back then were different and the temperature rise did not occur at the same speed as today. A comparison with the more imaginable “Medieval Warm Period” in the years from 750 to 1350 CE may appear plausible at first sight. However, this consideration cannot reassure us, because the temperatures were lower than today, and it was not a global phenomenon.
  
  
• Causality: Increasing global warming is causing glaciers and polar ice sheets to melt. At the same time, the increased temperatures in the oceans are causing the mass of water to expand. The combination of both factors has an impact on islands and the coastlines of the continents. These include the rising of sea levels and temporary or long lasting floods inland. The number of extreme rainfall events inland with destructive power has increased significantly in recent decades, with regional differences. East Asia is most affected. An additional knock-on effect results from the release of the greenhouse gas methane, much of which has been previously locked up in frozen land and is now being released as it thaws.
  
  
• Dimension: The Intergovernmental Panel on Climate Change (“IPCC”) has concluded  that there has been a 1% increase of average temperatures since preindustrial times until 2017. The IPCC projects another 0.5% increase over the next 20 years. This assumes what is not certain, namely that greenhouse gas emissions will be reduced immediately, quickly and on a large scale. However, the latest "sclerosponge thermometry" research results suggest that the rise in average temperature is 0.5°C higher than the IPCC consensus. This means that by the end of this decade, almost 20 years earlier than expected, global warming could already be 2°C above pre-industrial levels. . In the following, however, we continue to refer to the lower IPCC estimates. According to IPCC calculations, it is to be expected that water levels will rise between 0.65 and 1.1 metres by the year 2100. Other models project between 1 and 3 metres by the year 2100. Not all coastal areas will be exposed in the same way. Ocean currents, tidal range and the topography of the coastal areas will make major differences. Through simulations, readers are given a vivid idea of how water will change our living conditions. It is important to note that the northern hemisphere does not enjoy a privilege, meaning that torrential rain, flooding and storm surges are increasing and will continue to do so there too. It should be noted that sea level rises of up to 30 metres are not unusual in geological history.
  
  
• Other causes:
  There have been dramatic rises in sea levels in history that were linked to the melting of ice at the end of an ice age, i.e. not to the CO2 content of the atmosphere. At the end of the last ice age, around 10,000 years ago, there was a rise of up to 120 metres, albeit through a slower process than the change caused by climate gases today. The result was a significant retreat of coastlines.

Instantaneous interruption or reversal of a climatic process?

Changes to the climate are not new in human history, and certain events have triggered reductions in temperature. A striking example of a break in climatic developments is the eruption of an Icelandic volcano in the year 536 CE, whose dust made the atmosphere in the northern hemisphere so opaque to sunlight over a period of more than 20 years that temperatures fell drastically ("Little Ice Age"). 

Recently, it has been hypothesised that ice ages were triggered by asteroids.

It may be tempting to pin our hopes on the possibility of such events helping us to mitigate climate change, but while we cannot rule them out, events of this kind are rare and unpredictable, we must not include them in projections. It would be absurd to hope for random external causes that could interrupt or stop the progress of global warming. While hope is a human propensity, it is not suitable for contingency planning.

Our real bottleneck

What is preventing us from taking appropriate action to minimise and reverse the rise in average temperatures?

Citizen perception of the nature and dimension of the threat is inevitably blurred, because the daily reports from the media are mostly unstructured and not comprehensible to non-scientists. The reports do not allow us to recognise the essentials.

Citizens need an overview that is communicated in an honest, understandable and clearly structured way. Only when citizens have realised the nature and scale of the problem will decision-makers have the courage to take action with determination. In essence, it is about legitimising protection strategies that are considered unpopular today.

Given that citizens do not have access to graspable knowledge, we have a transformation problem. And this can be overcome if science presents the overall scenario from a certain distance. Figuratively speaking: It is not about describing every pixel point of an image, but about showing the image as a whole. The holistic representation deviates from the usual approach of scientists, because each of them is professionally held to focus on "pixel points" in their respective area of specialisation. This is the only way science makes progress, but that's not what is needed here.

The contours of the hologram can be communicated in an understandable way using e.g. the key points mentioned above:

1. uniqueness: there has never been a rise in atmospheric temperatures as fast as now
2. causality: the most important trigger is industrial emissions
3. dimension: a rise in atmospheric temperatures of 1.5 or 2° Celsius or more above pre-industrialisation levels will massively weaken our civilisations
4. other causes: additional factors can further exacerbate the process

If the effect of a detail is not legible, the presentation of the measurement can be improved. In particular, the exponential impact of very small changes in average temperatures in the atmosphere goes very much against human intuition. We can compensate for this disadvantage in perspective: Instead of referring to changes in temperature in degrees Celsius, we should consistently communicate changes in basis points, i.e. in hundredths of a degree Celsius. For example, labelling a temperature rise as "32 basis points" would be correct and would make the difference easier to comprehend than "0.32 °C". This method is a common practice in the financial industry. There, too, this method of representation is helpful in raising awareness that a small change can have massive implications.

Comparing our planet with human bodies helps us to comprehend the effect of changes in temperature: If your body temperature rises by 1° Celsius, you have a fever and are not feeling well. If the temperature rises by 1.5 or even 2° Celsius, you are very ill and hardly able to work. It is similar with our planet: If it experiences increases in average temperatures of this magnitude, it shows the symptoms of a "serious illness". However, this "fever" does not go away after a few days.Truthful and comprehensible holographic description will work like a call to action as sensible citizens will refuse to accept the idea that their lives, that of their children or that of their grandchildren, will be exposed to significant and unparalleled danger.

Here is a simple example of a call to action: It is true that the onset of toothache does not necessarily trigger a reaction in us straight away. We are perhaps still hoping that it will go away on its own. But at some point we turn to the dentist for help. We may later find the dentist's bill stressful, but the relief of finding a solution to the problem outweighs this. It is necessary that we anticipate, that we sense the expected greater pain, in order to take the initiative.

Governments will only act vigorously when informed citizens demand it vigorously. There has been pressure from sections of the population for a long time, but its direction has always been vague and therefore not sufficiently effective.

And like a dentist, a government cannot act for free, but will send bills to taxpayers. The later the comprehensive strategy is implemented, the higher the bill.

Defensive and offensive measures

The necessary government action plans are not the subject of this article. It should only be mentioned that defensive measures are necessary first, e.g., improved meteorological warning systems, raising and strengthening of dams and dykes on the sea coast and rivers, preparation for the abandonment of non-defensible areas. In addition, measures are needed to halt the dangerous trend and then slowly reverse it. These essentially consist of avoiding emissions and removing greenhouse gases from the atmosphere.

Desperate measures?

The keyword for desperate actions is "geoengineering". This could imply approaches such as making either the atmosphere or our oceans absorb less sunlight or bind more CO2. While these approaches sound exciting, they are not fully developed and run the risk of causing irreversible damage. As such it is unlikely they will be used.

Sabotage of the communication of scientific work

There are two groups working against open and fair communication between science and the citizens.

Refuseniks who are not interested in facts work against this. They are used to believing their own feelings and those of their friends from social networks. There should be no discussion with them, because deviations from their assumptions act as fuel for them. Science will not lead them out of their dream worlds.

Then there are the sceptics, who may have expert knowledge but only select those parts of it for their thinking and communication that seem to support their rejection of action. This is a dangerous species, because “expert” sceptics can claim some credibility and can disrupt societal communication successfully. The only way to weaken these people is to persistently ask them for better and well-founded alternatives. Then they have to provide verifiable answers or quietly hoist the white flag.

Acknowledgements:
My heartfelt thanks go to Professor Reinhard Gast. As a practising geologist and experienced researcher, he has helped me to grasp the exponential impact of seemingly minimal changes in the temperature of our atmosphere, similar to our own bodies, and the uniqueness of the current situation.

Authorship disclosure:
Fully human generated