The Carbon PACE Bond works like a typical PACE bond but offers a greater incentive to invest in clean energy and energy efficiency. This is because the interest for PACE bonds is funded by a modest $8/tonne carbon tax (at least to start). As a side note, this is the exact mechanism used for any government infrastructure bond. Taxes are collected and those who choose to invest and support the infrastructure project benefit from a stable and guaranteed interest rate. In this case the carbon tax funds a stable and respectable 6% return on the citizen-invested PACE Bond opportunity (Who wouldn’t invest in that?!). With the interest paid by the carbon tax, zero interest loans would be issued to borrowers, such as homeowners and property developers, public service organizations, businesses and renewable energy developers. Borrowers would be greatly facilitated to implement cost-effective energy efficiency and green energy projects that hold a payback of 10-years or less. Completing the cycle for borrowers is a pay-as-you-save mechanism that removes any differential long-term cost burden.