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Apr
01

Disintegrating Antarctica and carbon-based international monetary system

Post By gaia1 in Climate crisis

 During the last couple of weeks new research by two American ice sheet specialists has shown that the IPCC projection of the disintegration of the Antarctic ice sheet was heavily underestimated. The editorial of the New York Times of April 1  lists the many other contributing  reasons for a warming planet.

The faster than projected disintegration of Antarctica and the ongoing melting of Greenland ice sheet and glaciers worldwide makes projected rises in sea level double within the next hundred years. The consequences of this grim reality and looming catastrophe are well-known. What we need to deal with this enormous threat is a comprehensive conceptual, institutional, ethical and strategic approach, demanding an extraordinary level of international cooperation for this extraordinary looming calamity.

One such approach is presented in Verhagen 2012 "The Tierra Solution: Resolving the climate crisis through monetary transformation" where the unjust, unsustainable and, therefore, unstable international monetary system is to be transformed by basing it on a carbon monetary standard of a specific tonnage of CO2e per person. Updates of this carbon-based international monetary system can be found at www.timun.net.

Except for some, mostly Republican opposition and negligence the USA is taking some leadership in climate cooperation. The US could also taking leadership in transforming the unjust, unsustainable and, therefore, unstable international monetary system by moving away from the US dollar as international transaction currency to an expanded SDR facility and finally to a single currency as part of a monetary architecture that is based upon a carbon monetary standard of a specific tonnage of CO2e per person. Tackling the international monetary system in this way could be a next phase in the political revolution of Senator Sanders.

 

Dec
02

A transformational path beyond Paris 2015

Post By gaia1 in Climate crisis

 A TRANSFORMATIONAL PATH BEYOND PARIS 2015: a realistic carbon budget and fair carbon pricing in a transformed world.

Op-Ed article submitted to the New York Times

December 2, 2015

The real question during and especially after Paris 2015 is the provocative question raised by Justin Gillis in his December 1 article: What would a truly ambitious plan to tackle climate change look like?  Gillis states a little bit later that “few people have spent much time studying potential steps to “deep decarbonization” — certainly not at the level of detail needed for a concrete plan.”Gillis seems to put much faith in the Deep Decarbonization Pathways Project which, indeed, has technically or energetically speaking much going for it. However, the project has a focus on individual countries without an explicit whole worldview or long-term vision. Its 16 research teams could add to their study of energy pathways the Tierra Fee and Dividend social pathway proposed here.

The social and inclusive climate pathway that I developed as a Dutch-born international sustainability sociologist with training and experience in divinity and international affairs consists of an integrated vision of a transformed world that does not enrich the few, impoverish the many and imperil people, species and planet. This vision of a transformed world where the challenge of the looming climate change catastrophe is the point of departure or its organizing principle consists of eight integrated components

First, transformational system change has to adopt a long timeframe, of at least 25 years or probably more appropriately of a 50 year span that would also include the value of intergenerational justice. Gillis in explaining the “most compelling finding of the Deep Decarbonization Pathways Project” argues “governments could easily flub the energy transition by failing to plan far enough ahead” in their 10- and 15-year targets that can be met with incremental changes. They should at least figure out where they want to be in 2050 and then “work backward to plot the necessary technological path, while remaining open to new inventions”. The transformed world  that is envisioned in the transformational socio-technico path of the Tierra Fee and Dividend system has at least a time frame of 50-75 years because the present monetary, financial, economic and commercial systems took centuries to develop and transforming them in a couple of decades is well-nigh impossible. Of course, if major climate catastrophes become dominant in those decades transformational system change can be shorter. Such catastrophes like global wars are major system changers in all their dimensions.

Second, the proposed transformation through the Tierra Fee and Dividend system is predicated on the transition away from the present neo-liberal (dis)order to a global governance system that does not enrich the few, impoverish the many and imperil people, species and planet. Such transformed international system with its appropriate global governance system is somewhat like the political revolution that Bernie Sanders is presently proposing in the USA and that has found acceptance particularly among the generation of US millennials.

Third, the Tierra Fee and Dividend system is based upon an accurate and particularly a fair global carbon budget. There is not to be a hanky-panky with negative emissions through biomass and carbon capture and storage as lucidly described by Geden in his December 1 Op-Ed piece. Negative emissions are the flip side of emissions. The idea is to develop technology that would remove carbon dioxide directly from the atmosphere. This would allow for significantly higher fossil fuel emissions over the next few decades which seems to be a dangerous thing to do. Notwithstanding the good will and optimism during these first few days of the UNFCCC conference it is not to be forgotten that the governments have pointedly declined to take up a recommendation from scientists of an equitable carbon budget which was well presented by Martin Kohr of the SouthCenter during the Cancun 2010 conference. It is also not to be forgotten that the voluntary pledges of countries are in most cases made as compromises between “the desire to be ambitious and the perceived cost and political difficulty of emissions cutbacks.”

Fourth, fairness in carbon pricing is crucial and as such cap-and-trade systems are generally not fair. They are also not fast and are not formidable given that they only deal with CO2 or rather than CO2e. Like in other areas of social, economic and ecological activities it is most important that policies are based on a set of integrated values as proposed in the Earth charter and further elaborated in the contextual sustainability framework of Earth and Peace Education International.

Fifth, the transformation of international monetary system and by implication of the Tierra Fee and Dividend system is based upon the transformation of the global banking and financial systems together with their economic and commercial systems. The transformation of the banking system can start with the pursuit 100% reserve banking and the expansion of public banking while the transformation in the present debt-based financial systems can evolve in a credit-based financial systems where governments are in charge  of the spending into circulation of trillions of dollars or Tierras that are needed by nations and the UN for climate adaptation and modification.

Sixth, the transformation of the unjust, unsustainable and, therefore, unstable international monetary system into just, sustainable and, therefore, stable international monetary system is the main component of the Tierra Fee and Dividend system which is the heart of the Tierra Solution.  It consists of the monetary standard of specific tonnage of CO2e per person which leads to relatively fixed exchange rates and historical currencies pegged to the carbon standard or the new global currency of the Tierra. Main institutions that are needed are a world central bank and a modified balance of payments system that accounts for both financial and ecological (climate) credit and debts. Maurice Strong of Earth Summit fame considered in May 2010 basing the international monetary system on carbon “innovative” and Bill McKibben’s of 350.org fame wrote in May 2011: “The further into the global warming area we go, the more physics and politics narrows our possible paths of action. Here’s a very cogent and well-argued account of one of the remaining possibilities.”

Seventh, rather than focusing on the ambiguous term of sustainable development (SD) the international development community is to focus on sustainable communities development(SCD) where the real changes have to take place, including the introduction of supplemental local monetary systems. It is significant that political leaders on the sub-national level such as governors and mayors are pushing for more aggressive cuts than national leaders at COP 21. They feel that their leaders are not moving fast enough and they have to do more.

Eight, the direction to be taking now is the direction set out by the principles of the Earth charter the initiative for which was taking by Dutch prime minister Ruud Lubbers, Maurice Strong, Mikhail Gorbachov after the Rio Earth Summit in 1992. Our way forward to the transformed world of carbon-based international monetary system its Tierra Fee and Dividend system is to remind ourselves of the “The Way Forward of the earlier quoted Earth Charter which states: “As never before in history, common destiny beckons us to seek a new beginning. Such renewal is the promise of the Earth Charter principles. To fulfill this promise, we must commit ourselves to adopt and promote the values and objectives the Charter………. “Let ours be a time remembered for the awakening of new reverence for life, the firm resolve to achieve sustainability, the quickening of the struggle for justice and peace, and the joyful celebration of life.”

In conclusion, what is needed of all of us is boldness in reconceptualizing the monetary, financial, economic and commercial systems and in giving the Tierra Fee and Dividend system due consideration and study as one of the very few integrated conceptualizations of a just, sustainable and stable world with its appropriate global governance system.

“Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it.”

Johann Goethe.

____________________

Frans C. Verhagen, M.Div., M.I.A., Ph.D. is a Dutch-born international sustainability sociologist  who founded the International Institute of Monetary Transformation in 2009 and is the author of “The Tierra Solution: Resolving climate change through monetary transformation” Cosimo 2012. He co-founded Earth and Peace Education International in the early 1990s which developed a framework that integrated social and ecological peace. In 1980 after completing his international affairs and sociology studies at Columbia University Dr. Verhagen founded Sociological Energy Services International, a consulting service for North American states and African countries.

 

May
23

Leadership in precarious times

Post By gaia1 in Climate crisis

We live in not only unstable, but precarious times. One of the best articulations of that fact is the statement of veteran investor quoted by Thomas Friedman in his column on Sunday May 23, 2010. Mohamed El-Erian, who runs Pimco and has lived through many a financial crisis, recently described it like this: “The world is on a journey to an unstable destination, through unfamiliar territory, on an uneven road and, critically, having already used its spare tire.”

What is needed in such precarious times is leadership, not only of government and business, as Friedman believes, but also of civil society. Societies are to be guided by leaders who are able to articulate a clear vision of the future, based upon a coherent set of values and upon the political wisdom of building practical solutions. It is their intense desire to work together that such leadership can be effective.

A first requirement of such common leadership is the recognition of the need of agreement of the past and present social and ecological problems. Facts have to be established upon which to build a new edifice. These facts have to be established within as wide and diverse ways of participatory decision-making as possible.

A second requirement is boldness in choosing the proper policies and in carrying them out. International systems do not work and no national policies will work without functioning of international systems of which they are an integral part. Again these policies have to chosen within as wide and diverse ways of participatory decision-making as possible.

A third requirement for leadership in these precarious times is to deal with the most basic system in international relations, i.e. the monetary system. Its overhaul is to be wedded with the most pressing challenge of these precarious times, i.e. the climate crisis. Thus, a UN Commission on Monetary Transformation and the Climate Crisis seems to be a good start to restructure the international machinery, so that it serves humanity rather than humanity serving it. What humans make, human can unmake. The precarious times demand that a creative destruction of present systems take place.

 

 

 

Apr
16

Cochabamba and the UNITAR/Yale Conferences

Post By gaia1 in Climate crisis

This is one of the few post during the month of April. The main reason is that I was called to serve on a grand jury for 4 weeks daily from 9.30 to 4-5 pm. The following is my comment to a newsletter story of April 15 by the Cochabamba  Conference on http://pwccc.wordpress.com/2010/04/15/news-bulletin-the-world-comes-to-cochabamba/#comment-566. I added to my comment the abstract that I submitted to the UNITAR/Yale conference to show how each conference in its own way is able to contribute to the emergence of Tierra Fee and Dividend approach for low carbon and climate-resilient development.

 

"The Bonn recognition of the CMPCC is encouraging, in no small measure due to the intervention of Ambassador Solon as reported in the Guardian story a few days ago. More important is its willingness to consider the recommendations coming out of the CMPCC. Having made the case for the practical proposal of a UN Commission on Monetary Transformation and the Climate Crisis both in the CMPCC Working Groups and in a one hour meeting with Ambassador Solon on March 19, I hope the Conference recommends the establishment of such Commission, so that the UNFCCC can recommend that the GA passes a resolution to establish the Commission in a similar way it did with the UN Stiglitz Commission in September 2008 under the leadership of H.E. Miguel D'Escoto Brockmann, MM. One of the main agenda items of such Commission would be the consideration of the Tierra Fee & Dividend system which uses a transformed international monetary system for low carbon and climate-resilient development by adopting a de-carbonization monetary standard with the accounting unit of the Tierra. It would lead nations to deal with global ecological/carbon imbalances via their carbon accounts in the adjustment mechanism of a modified balance of payments.  I am appending here an abstract that I submitted for a presentation at the UNITAR/Yale Conference in medio September emphasizing the position that the international community has to go beyond simply reforming present institutions by transforming them in order to make real progress for the climate and development. It is a position that seems to be close to the purpose of the Cochabamba Conference.

 

Abstract

 

The Tierra Fee & Dividend System:

 A Monetary Approach to Low Carbon and Climate-Resilient Development

For

2nd UNITAR/Yale Conference on Environmental Governance and Democracy: Strengthening Institutions to Address Climate Change and Advance a Green Economy Event Application

By

Frans C. Verhagen, M.Div., M.I.A., Ph.D., sustainability sociologist

President, International Institute of Monetary Transformation

New York City

April 15, 2010

 

This research builds on reformist efforts in the international monetary system or rather non-system to achieve a transformed international monetary system that is to be used for low carbon and climate-resilient development in both the global North and South. As such it does not strengthen present institutions dealing with climate change and the Green Economy, but transcends them by transforming them into a higher level of unification.

 

The Tierra Fee & Dividend (TFD) system consists of the carbon reduction methodology of the Fee & Dividend approach as suggested by climatologist James Hansen in opposition to the cap-and-trade approach and of Tierra Monetary Paradigm which is based upon the de-carbonization monetary standard with its accounting unit of the Tierra. In the first phase of the TFD the Tierra will be a carbon-based international reserve currency that is part of the carbon account of a nation’s balance of payments. Replacing the present hard currency reserves, the TFD would free up $100 billion annually for the developing world which can be used for domestic investment and consumption. Like global financial imbalances global ecological or carbon balances have to be balanced via the adjustment mechanism of this modified balance of payments.

 

One of the main effects of and the rationale for the TFD is the creation of joint financing of the MDGs and climate mitigation and adaptation measures. As such it has been presented at the ECOSOC and GA debates in March 2010 at the UN Headquarters. The full impact of this bold, transformational Tierra Fee & Dividend system is expressed in the attached draft Tierra Scenario of 2025 which resembles Edward Bellamy’s Looking Backward, 2000-1887.

 

Given the complexity of integrating monetary transformation, carbon fees or taxes within a political context where governments are regulators and drivers the forthcoming book length publication on the TFD discusses the need and feasibility of having the UNFCCC in COP 16 or 17 and other UN organizations recommend to the General Assembly passing a resolution to establish the UN Commission on Monetary Transformation and the Climate Crisis."

 

 

Mar
01

Climate Change, Trade and the Tierra FD System

Post By gaia1 in Climate crisis

The 5 G’s proposal by the managing director of the Brookings Institution as a way to building a binding and ambitious post-Kyoto climate governance structure is an important one. It was given public exposure in the 2009 Brookings publication Climate Change, Trade, and Competitiveness at the UN Headquarters on 23 February, 2010 in a discussion session organized by the UN University UN Office.

 

The 5G’s are derived from the “experience of how the global trading regime built confidence in a self-regulating system. The GATT/WTO system built on a small group of states who, through a general agreement, were able to gear up domestic action over a generation.” The fifth G is graduation and deals with the biggest challenge of global governance, like in the trade regime, i.e.  “how to graduate nations when they emerge from being developing nations into industrialized ones.”

 

It makes sense to consider this gradual approach to building an international climate governance treaty. First of all, groups that have formed at Copenhagen can continue working together and come up with a general agreement that is ambitious enough in terms of global targets to gear up their constituencies to greater climate action. Secondly, such regional general agreements (RGAs) do not pose a direct challenge to national sovereignty the wise reduction of which is one of the greatest international challenges. Thirdly, those RGAs build trust among the cooperating nations and between the groups of nations of the other RGAs because their General Agreements are being exchanged, compared and debated, hopefully leading to a race to the top.

 

The fourth G—generation—is a weak link in the 5 Gs approach because of the urgency of the climate crisis. We do not have some 50 years to get a climate governance treaty in place. It took trade politics a very short while, as shown by Walden Bello in his 2004 De-globalization, once the US found its national interest to lie in liberalizing international trade within a corporate globalization process. The UN Conference on Trade and Development established in 1994 was pushed aside and not given any compliance function besides a data gathering and debate tasks.

 

The Tierra Fee & Dividend system which addresses both the challenges of the economic and climate crises considers the RGAs approach to climate institution building important, but does not think that G4—generation-- and G5—graduation-- are needed in this approach. Instead, it proposes that the RGAs exchanges are conducted within the UN structure and that nations establish a UN Commission on Monetary Transformation and the Climate Crisis that would, among other agenda items, consider developing and adopting a de-carbonization monetary standard that would reduce volatility in exchange rates, and build a balance of payments mechanism that would deal with both global financial and ecological/climatic imbalances. In terms of the resolution of the latter imbalances the fact of ecological indebtedness of the industrialized countries has to be recognized, for, as Jagdish Bhagwati has suggested in the above Brookings publication, without “a substantial superfund for past carbon emissions” no real progress is possible.

 

Feb
15

THE TFD SYSTEM AND THE KLIMAFORUM09 PEOPLE'S DECLARATION

Post By gaia1 in Climate crisis

          The final version of the  Klimaforum09  People's Declaration emerged at the very end of the Copenhagen Summit on Climate Change in December 2009, also known as  COP 15 after the Conference of Parties that had signed the UN Framework Convention  on Climate Change at the Rio Earth Summit in June 1992. During the  Summit’s tumultuous second week when  many of the leaders of the 192 nations had arrived and the negotiations had almost completely failed except for the emergence of the weak Copenhagen Accord, the People’s Declaration was a remarkable achievement by several thousands of civil society organizations (CSOs).

 

          There are many areas of agreement of the Declaration with the Tierra Fee & Dividend system. Most notable are its views on the need and urgency of transitions to sustainable societies and of system change, its demand of recognizing the historical fact of ecological indebtedness and its associated obligation for compensation, its views on the refutation of the cap-and-trade system and its market orientation and technology centeredness, its views on TNCs and the need for their regulation and, last but not least, its views on the need to de-globalize by focusing  more on local communities using the principle of subsidiarity according to which economic and social decisions are to be made on the lowest possible levels of social organization.

 

           However, there are main and minor differences between the Declaration and the TFD system. The main difference is that the TFD system adds an institutional innovation to the Declaration by its establishment of a carbon-based monetary architecture with its international reserve currency of the Tierra and its de-carbonization monetary standard that form the basis of debit and credit carbon accounts in the nations’ balance of payments. This addition would strengthen the financing for mitigation and adaptation measures. It would integrate the presently proposed funding under the COP and the funding for the MDGs and other UN programs for sustainable development. Thus, it would institutionally tackle the funding for restoring both the global financial and ecological imbalances that have to be considered together. 

 

          Though the Declaration applies the subsidiarity principle in its efforts to de-globalize the presently TNC dominated corporate globalization process, the TFD system places the development of sustainable communities within the concept of bioregionalism and frugal trade, thus enhancing the Declaration’s conception of sustainable local communities. This enhancement is also effected by the TFD system’s planning framework of contextual sustainability and its adoption of the Earth Charter which, to my great surprise, was not even mentioned in the 7 page Declaration.

 

          While the Declaration’s main strategy is to build a movement of the worldwide citizen movements to push for the Great Transition to sustainability, the TFD system presents the proposal of the UN Commission on Monetary Transformation and the Climate Crisis, as a practical step to bring the UN climate process forward.

 

Jan
09

TCS system and cap-and-trade

Post By gaia1 in Climate crisis

 

On January 13, 2010 the second carbon trading summit will be held in New York City where utilities, corporations, banks, hedge funds, carbon aggregators and brokers are considering how they can profit of the emissions market that is projected to reach $1 trillion by 2020. It is significant that the three expensive workshops that are offered mostly deal with carbon offsets, the weakest part of US and EU-ETS’s cap-and-trade legislation.

 

At the same time a citizens Climate Justice protest will be held, in preparation of which non-violent training, panel discussions and other sessions are being planned.

 

What is the position of the International Institute of Monetary Transformation and its TCS system in respect to this Summit and to carbon trading in general? The following 12 statements are part of its tripartite carbon reduction approach of the TCS system.

 

1.      The climate crisis being the challenge of the 21st century on account of its present and future disastrous consequences for people, species and planet presents an unparalleled opportunity to transform present international systems that enrich the few, impoverish the many and imperil the planet. A paradigm shift is to take place in thinking and institutional renewal to profit from this unparalleled opportunity.

2.      Climate change being an ecological change has to be reversed ecologically, i.e. this ecological reversal is to take place through the efficient use of renewable energy technologies, the de-carbonization of industry and REDD. New strategies are needed to re-inhabit the Earth to fully make that ecological reversal possible.

3.      Ecological indebtedness of industrialized countries in the North is to be recognized as a historical fact with great ethical import. It was both market and centralized economies in the past that externalized air pollution leading to climate crisis and thus both economic systems are to be blamed by engaged in this “atmospheric occupation”.

4.      Agreement on capping emissions is to be guided by science, not politics. As such the Copenhagen Accord is wholly insufficient, though the MRV (monitoring, reporting, verifying) agreement is valuable as a first step towards a FAB (fair, ambitious and binding) agreement.

5.      There is no efficient solution to the global climate crisis unless a global and "Whole World" view is taken: the pace of a “nation-by-nation” approach does not match the urgency of resolving the climate crisis.

6.      The cap-and-trade carbon reduction methodology is fatally flawed, because

a.       It does not take a "Whole World" view approach

b.      It believes that carbon trading plus off-sets can cope with the global climate crisis (offsets are dealt with in two of the three workshops of the above Summit, one focusing on the international, the other on the US scene.)

c.       Cap-and-trade does not address itself to all sources of GHG emissions, for it addresses itself to those that can measured and commodified. Apart from the dubious ethical issue of commodifying a global commons such as the atmosphere, and the opportunity for gaming in this unregulated carbon market,  it does not address itself to the emissions from land use, destruction of forests, etc. In other words, its scope is quite limited.

d.      The results of the cap-and-trade system in terms of actual reduction of emissions are poor, its greatest drawback.

7.      The carbon tax carbon reduction methodology is a little more acceptable, because, unlike the cap-and-trade which focuses on the price of carbon, carbon taxes are set by legislators who focus on the quantity of emissions themselves. Moreover, this methodology has greater international application than cap-and-trade, but still does not take a "Whole World" view approach

8.       The cap-and-dividend carbon reduction methodology has advantages over the methodologies in statement 8 and 9, because it does not permit offsets and returns the income of the auctions of the carbon emissions permits in a fair way to energy consuming families who have to pay higher energy prices. However, it, as in the Van Hollen legislation, lacks an international focus because it does not start out with a "Whole World" view approach.

9.      There are several "Whole World" view approaches to climate crisis of which global Cap & Share and Kyoto2 are examples. They and others are due to be evaluated by UNEP Technical Review panel in the near future.

10.  The Cap & Share approach is based upon an equal sharing of carbon emissions permits to all adults in a country or region or in the world. The latter, the global Cap & Share, would create ecological debtors in the North and ecological creditors in the South. Various ways are devised to trade those permits that are not needed by an individual with a low carbon footprint.

11.  The Tierra Cap & Share system adds an international monetary dimension to the global Cap & Share approach by having the carbon emissions permits become Tierras, constituting a country’s reserve currency, the amount of which is based upon the number of  residents 15 years and older. These monetized carbon emissions permits would become part of a nation’s carbon account in its balance of payments, thus constituting an institutionalized funding mechanism for mitigation and adaptation measures and development. The system would operate in a similar fashion as the International Clearing Union concept proposed by John Maynard Keynes for the Bretton Woods UN Monetary and Financial Conference of 1944. By introducing this carbon-based international reserve currency which operates like an updated Keynesian Bancor, the international monetary system becomes part of humanity’s battle to drastically and effectively reduce GHG emissions from fossil fuels and land-use by re-powering societies and re-inhabiting the Earth.

12.   In order for the tripartite TCS system to work the public sector has to reclaim the privilege of fractional reserve banking from the privately-owned banking systems, so that the regulation of international financial transactions via the Tierra International Clearing Union becomes possible and transparent. Banks become utilities which would also not engage in securities dealing.

 

 

Dec
21

The Copenhagen Accord and the TCS framework

Post By gaia1 in Climate crisis

 

Now that the Copenhagen conference has ended with its ups and downs and all its energy before and during its two weeks I want to assess it in respect to THE TIERRA CAP&SHARE framework that has been suggesting in this blog and the TIMUN website.

 

First of all, I believe in setting high policy goals as is evident in the monetary transformation framework that I have been developing for over a year. This policy ambition is wedded to the belief that you only loose when you give up. So, the enormity of the TCS framework is not to lead to paralysis, but a steadfast engagement, preferably with deadlines and guideposts.

 

Second of all, given the enormity of reaching a legally binding climate agreement among 193 nations, the Copenhagen Accord can be seen as an important step towards working together towards such agreement.

 

Thirdly, the following assessment can be made about the essential elements of the Accord and the TCS framework:

 

  • Capping: the Accord sets target below 2 degrees C—the TCS cap is to be set at 1.5 C or 350ppm, using Jim Hansen’s interpretation of the climate data. The intent of Measuring, Reporting and Verification of a nation’s target under that cap is essential.
  • Cap & Share approach: Accord did not go exclusively for the cap-and-trade approach, so TCS approach and other "Whole World" view approaches can still become realities, particularly if the UNEP Technical Review panel is going to subject them to a peer-reviewed scrutiny. Support for these approaches rather than the "nation by nation" or even “group by group” that was used during the Conference can be found in the reports the two working groups of the UNFCCC which advocate looking into different ways of negotiating.
  • Funding: promises of $100 billion annually by 2020, but only some $30 billion for period of 2010-12 were made. These are promises, not binding obligations. Adopting TCS framework means annual transfer of Tierras which would create as extra liquidity, so that nations with their present financial and economic problems need not use those scarce resources. These Tierra allocations would work somewhat like the SDR allocation proposal of George Soros.
  • Level of cooperation: notwithstanding major ups and downs during the two week conference the 190+ countries’ heads of state, ministers and especially the 25,000 CSO participants have recognized the problem and are willing to take action. Now one of the real challenges is to transform the international monetary system by basing its international reserve currency on a carbon reduction monetary standard and monetizing the carbon emissions permits that are allocated on an equal basis to all adults on the planet.

 

Fourthly, I consider positioning the TCS challenge in this ongoing climate change process in the following way.

 

  • Emphasize the TCS framework as a transformational monetary mechanism of funding for mitigation and adaptation measures and sustainable development. It requires a restructuring of the international monetary system that would update the Bretton Woods UN Monetary and Financial Conference of 1944 and respond to policy recommendations by the UN Stiglitz Commission of June 2009.    
  • Demonstrate that this TCS framework can be a workable version of Lord Keynes’ proposal of an International Clearing Union at the 1944 UN Monetary and Financial Conference at Bretton Woods.
    • Show the differences with Davidson’s Multilateral International Clearing Union, who, being one of the world’s preeminent interpreters of Keynes, also proposes an update.
    • Show how the Tierra international reserve currency of TCS framework is an option of a non-national international reserve currency replacing national ones such as the US dollar.
    • Show how the 7 functions of central banks as proposed by Frederic Mishkin can be exercised within the TCS framework
  • Suggest a workable deadline for the Tierra as a or the supranational international reserve currency in which nations begin to transfer their present reserve currencies in SDRs by 2012 and engage in the enormous political challenge of having those SDRs transferred into Tierras as part of a transformed international monetary system  that could start functioning under UN governance by 2020.
  • Emphasize the urgency to structurally deal with both the economic and climate crises by restructuring the international monetary system, which is the glue of the international financial, economic and commercial systems. Thus besides advocating dealing with the climate crisis economically by introducing a new green deal,  financially by funding the green technologies in both Northern and Southern countries and commercially by shortening and optimizing transportation distances the TCS framework would emphasize building into the international monetary system structures and processes that, institutionally, promote the reduction of GHG emissions and other climate forcings such as surface reflexivity associated with land-use.

 

 

Dec
14

Climate finance: A Transformational Way

Post By gaia1 in Climate crisis

 

CLIMATE FINANCE: A Transformational Way

An OPED

Submitted to the New York Times

14 December 2009

By

Frans C. Verhagen

 

During this second and last week of the Copenhagen conference on climate change the funding of mitigation and adaptation measures in developing nations is a central concern. While the EU has been leading industrialized nations with its promise of some $10 billion over the next three years, the need for some $200 billion by 2020 is still from being satisfied during these hard economic times in the industrialized world. The market approach of raising large amounts of funds via the cap-and-trade system will be illusory given that large amounts of carbon emissions permits are grandfathered rather than auctioned.

 

A transformational way of financing climate measures with the needed billions or even trillions by 2050 is the monopoly-like infusion of monetized carbon emissions permits. After setting the cap based upon the best science—the IPCC is still the best organization notwithstanding those 1000plus leaked email messages of the East Anglia Climate Research Unit—the permits would be allocated on an equal basis to all adults in the world. (Strictly speaking, nations in the South should be indemnified for the ‘atmospheric occupation’ of nations in the North for the last couple of centuries. However, Southern nations would agree to this fair allocation.) This sharing is like the distribution of equal amount of money at the start of the monopoly game.

 

The next step is to monetize this permits and make them part of the carbon account of a nation’s balance of payments, resulting in ecological debit accounts for the industrialized North and ecological credit accounts for the agricultural and industrializing South. This can be done by the introduction of a carbon-based international reserve currency that would replace the present reserve currencies of the US dollar and others. It is the existence of the major reserve currency country’s monetary policies and its Triffin dilemma that is one of the main reasons for the present economic imbalances anyway. It was also for this reason that the UN Stiglitz commission of June 2009 recommended shift to a non-national or even regional currency like the euro. By monetizing the allocated carbon emissions permits as a nation’s reserve currency in a transformed international monetary system, liquidity is introduced into climate finance. The volume of liquidity can be determined by the value that nations want to give to that carbon-based reserve currency which I have called the Tierra, Spanish for Earth.

 

By introducing this monopoly-like infusion of liquidity into the international monetary system funds for climate finance would become available as soon as the nations can agree on the monetary architecture of these Cap & Share Tierras that would administer the new monetary system. They could decide to establish an UN Commission on Monetary Transformation, leading to a Bretton Woods II Final Act in which Keynes’ International Clearing Union with its non-national reserve currency of Bancor would be updated for the needs of the monetary, financial, economic and commercial systems of the 21st century.

 

A major advantage of this infusion of liquidity by the Tierra Cap & Share (TCS) method—one of the 7 "Whole World" view approaches that are being considered to be peer-reviewed by a proposed UNEP Technical Panel—consists of avoiding the racket of a world-wide carbon market for which the large consolidated financial companies are lining up with their shadow economy of derivatives. By changing from a cap-and-trade to a carbon tax system the main beneficiaries are not banks, but the public. Another advantage of the TCS system is the reassertion of public control of the monetary system away from privately-owned banking systems which are competing in the public domain function of money creation that is not theirs to compete in. Even ignoring the financial collapse of 08-09 it is not advisable to have large private companies set the direction of the economy, both in a nation or in the international arena. Reformist bodies such as the Financial Stability Forum are more part of the problem than of the solution, because they maintain an unfair, unsustainable, and, therefore, unstable monetary system.

 

Infusion of these monetized carbon emissions permits need not cause inflation, given that these extra funds would be used for economically worthwhile programs without becoming part of a shadow economy that has caused such disruption.

 

 I agree with the Klima-Forum09 in Copenhagen who in statement 4 expresses “strong opposition to purely market-oriented and technology-centred false and dangerous solutions put forward by many corporations, governments, and international financial institutions. These include nuclear energy, agro-fuels, carbon capture and storage, Clean Development Mechanisms, biochar, genetically “climate-readied” crops, geoengineering, and reducing emissions from deforestation and forest degradation (REDD) as currently defined by the UNFCCC. These only produce new environmental threats, without really solving the climate crisis. Carbon trading and offsetting are also false and unjust instruments, because they treat a common planetary resource – the atmosphere – as a

commodity that can be owned and traded. So far, the system has not proven its merits, and by allowing rich countries to offset their reduction obligations, it has maintained this unjust and unsustainable system.”

 

Thousands of civil society organizations (CSOs) have signed its declaration entitled “System change – not climate change”. This proposed TCS approach proposes a system change in the international monetary system which, being the glue of the other international systems, would transform the present international system that still enriches the few, impoverishes the many and imperils the planet.

 

Frans C. Verhagen, M.Div., M.I.A., Ph.D. is a sustainability sociologist and founding president of International Institute of Monetary Transformation www.timun.net. His forthcoming book is entitled THE TIERRA CAP AND SHARE: A Transformative Monetary Approach to Deal with the Climate Crisis.

 

Dec
11

The Monopoly-like infusion of liquidity to finance climate measures

Post By gaia1 in Climate crisis

On December 9 I submitted to the Copenhagen conference my message to its leaders:

Let nations and parties to the COP15 agree to allocate carbon emissions permits on an equal basis and turn them into liquidity by creating a carbon account in their balance of payments. 

 

One of the most important elements of climate finance at the Copenhagen conference is the availability of funds for financing mitigation and adaptation measures. All parties are in need of more funds, even the richer parties in the global North. They are demanded to transfer funds from their weakened economies to assist the even weaker economies in the global South. Does the world carbon market going to provide those $200 billions by 2020 continue providing them on an annual basis there after?

 

If the private carbon market is supposed to be the main source of revenue as source of these funds as part of the cap-and-trade arrangements in the global North, the question arises whether this market route would deliver a fair, effective and reliable climate financing system in the short, medium and long term. Who would be the main beneficiaries of this carbon market system? How are nations in the South who are ecological creditors on account of past and present “atmospheric occupation” going to benefit?

 

Increasing amount of evidence shows that cap-and-trade fails to deliver significant GHG reductions. James Hansen’s OPED article in the New York Times of December 7 presents some strong reasons against cap-and-trade and in favor of “fee and dividend”. In a more popular fashion a recent 10 minute video of the cap and trade watch project of the Transnational Institute makes the same point. Its various publications provide documented background for the credibility of the video. So, cap-and-trade is not an effective carbon reduction methodology and, thus, those billions of dollars to finance cannot be reliably attached to the resolution of the climate crisis. A secondary reason is also the process and structure of this carbon market that is dominated by large financial corporations which are weakly regulated in existing financial products and services, let alone in an emerging market like the carbon one.

 

Enter the Tierra Cap & Share approach and its monetary architecture that is based upon a carbon-based international reserve currency. This approach starts out with a monopoly-like infusion of liquidity by allocating to every adult an equal amount of carbon emissions permits which become carbon reserve currency in a nation’s balance of payments. Note what happened if the COP 15, 16 or 17 parties were to adopt this monopoly-like infusion of liquidity as a public capital infusion to combat climate change.

 

Monetarily: it would introduce a new reserve currency, so that nations would not need to hold expensive dollars in their reserve systems, so they could use those dollars, euros for more productive purposes. Given the failure of the present floating exchange system, even acknowledged by the Economist (January 6, 1990) and the Financial Times (February 17, 1987), this dramatic infusion of liquidity cannot make this failed system more failed.

 

Economically: freed-up hard currency reserves can now be used for combating mitigation and adaptation measures without depending on the funds generated by the cap-and-trade systems, where, unfortunately, too great an amount of carbon permits were grandfathered rather than auctioned.

 

Financially: this infusion of limited liquidity—limited because of this carbon currency being a reserve currency—would escape the grip of the large international financial corporations which would be among the main beneficiaries of the private climate financing.

 

Ecologically: in one swoop which could be repeated annually under an ever tightening cap, climate change could be effectively combated.

 

Politically: agreeing to this infusion of these monetized carbon credits would show boldness and statesmanship towards monetary cooperation, that eventually may lead to a transformed international monetary system based upon an updated Bretton Woods Conference as proposed by Paul Davison in 2008 and Bill Lucarelli in 2009 or as proposed by the International Institute of Monetary Transformation which proposes a carbon account in a nation’s payments schedule with its Bancor2 carbon reduction methodology.

 

Socially: such major monetary step will build confidence in the future and comity among nations.

 

Ethically: the equal allocation of these monetized carbon permits would be a fair deal, though countries in the global South could demand additional permits given the atmospheric occupation of the industrialized countries during the last couple of centuries.

 

An article dealing with the What, Why and How of this Monopoly-like infusion of liquidity for climate finance will go into greater depth. Stay tuned.

 

 

 

THE MONOPOLY INFUSION OF LIQUIDITY

 

On December 9 I submitted to the Copenhagen conference my message to its leaders:

Let nations and parties to the COP15 agree to allocate carbon emissions permits on an equal basis and turn them into liquidity by creating a carbon account in their balance of payments. 

 

One of the most important elements of climate finance at the Copenhagen conference is the availability of funds for financing mitigation and adaptation measures. All parties are in need of more funds, even the richer parties in the global North. They are demanded to transfer funds from their weakened economies to assist the even weaker economies in the global South. Does the world carbon market going to provide those $200 billions by 2020 continue providing them on an annual basis there after?

 

If the private carbon market is supposed to be the main source of revenue as source of these funds as part of the cap-and-trade arrangements in the global North, the question arises whether this market route would deliver a fair, effective and reliable climate financing system in the short, medium and long term. Who would be the main beneficiaries of this carbon market system? How are nations in the South who are ecological creditors on account of past and present “atmospheric occupation” going to benefit?

 

Increasing amount of evidence shows that cap-and-trade fails to deliver significant GHG reductions. James Hansen’s OPED article in the New York Times of December 7 presents some strong reasons against cap-and-trade and in favor of “fee and dividend”. In a more popular fashion a recent 10 minute video of the cap and trade watch project of the Transnational Institute makes the same point. Its various publications provide documented background for the credibility of the video. So, cap-and-trade is not an effective carbon reduction methodology and, thus, those billions of dollars to finance cannot be reliably attached to the resolution of the climate crisis. A secondary reason is also the process and structure of this carbon market that is dominated by large financial corporations which are weakly regulated in existing financial products and services, let alone in an emerging market like the carbon one.

 

Enter the Tierra Cap & Share approach and its monetary architecture that is based upon a carbon-based international reserve currency. This approach starts out with a monopoly-like infusion of liquidity by allocating to every adult an equal amount of carbon emissions permits which become carbon reserve currency in a nation’s balance of payments. Note what happened if the COP 15, 16 or 17 parties were to adopt this monopoly-like infusion of liquidity as a public capital infusion to combat climate change.

 

Monetarily: it would introduce a new reserve currency, so that nations would not need to hold expensive dollars in their reserve systems, so they could use those dollars, euros for more productive purposes. Given the failure of the present floating exchange system, even acknowledged by the Economist (January 6, 1990) and the Financial Times (February 17, 1987), this dramatic infusion of liquidity cannot make this failed system more failed.

 

Economically: freed-up hard currency reserves can now be used for combating mitigation and adaptation measures without depending on the funds generated by the cap-and-trade systems, where, unfortunately, too great an amount of carbon permits were grandfathered rather than auctioned.

 

Financially: this infusion of limited liquidity—limited because of this carbon currency being a reserve currency—would escape the grip of the large international financial corporations which would be among the main beneficiaries of the private climate financing.

 

Ecologically: in one swoop which could be repeated annually under an ever tightening cap, climate change could be effectively combated.

 

Politically: agreeing to this infusion of these monetized carbon credits would show boldness and statesmanship towards monetary cooperation, that eventually may lead to a transformed international monetary system based upon an updated Bretton Woods Conference as proposed by Paul Davison in 2008 and Bill Lucarelli in 2009 or as proposed by the International Institute of Monetary Transformation which proposes a carbon account in a nation’s payments schedule with its Bancor2 carbon reduction methodology.

 

Socially: such major monetary step will build confidence in the future and comity among nations.

 

Ethically: the equal allocation of these monetized carbon permits would be a fair deal, though countries in the global South could demand additional permits given the atmospheric occupation of the industrialized countries during the last couple of centuries.

 

An article dealing with the What, Why and How of this Monopoly-like infusion of liquidity for climate finance will go into greater depth. Stay tuned.

 

 

 

THE MONOPOLY INFUSION OF LIQUIDITY

 

On December 9 I submitted to the Copenhagen conference my message to its leaders:

Let nations and parties to the COP15 agree to allocate carbon emissions permits on an equal basis and turn them into liquidity by creating a carbon account in their balance of payments. 

 

One of the most important elements of climate finance at the Copenhagen conference is the availability of funds for financing mitigation and adaptation measures. All parties are in need of more funds, even the richer parties in the global North. They are demanded to transfer funds from their weakened economies to assist the even weaker economies in the global South. Does the world carbon market going to provide those $200 billions by 2020 continue providing them on an annual basis there after?

 

If the private carbon market is supposed to be the main source of revenue as source of these funds as part of the cap-and-trade arrangements in the global North, the question arises whether this market route would deliver a fair, effective and reliable climate financing system in the short, medium and long term. Who would be the main beneficiaries of this carbon market system? How are nations in the South who are ecological creditors on account of past and present “atmospheric occupation” going to benefit?

 

Increasing amount of evidence shows that cap-and-trade fails to deliver significant GHG reductions. James Hansen’s OPED article in the New York Times of December 7 presents some strong reasons against cap-and-trade and in favor of “fee and dividend”. In a more popular fashion a recent 10 minute video of the cap and trade watch project of the Transnational Institute makes the same point. Its various publications provide documented background for the credibility of the video. So, cap-and-trade is not an effective carbon reduction methodology and, thus, those billions of dollars to finance cannot be reliably attached to the resolution of the climate crisis. A secondary reason is also the process and structure of this carbon market that is dominated by large financial corporations which are weakly regulated in existing financial products and services, let alone in an emerging market like the carbon one.

 

Enter the Tierra Cap & Share approach and its monetary architecture that is based upon a carbon-based international reserve currency. This approach starts out with a monopoly-like infusion of liquidity by allocating to every adult an equal amount of carbon emissions permits which become carbon reserve currency in a nation’s balance of payments. Note what happened if the COP 15, 16 or 17 parties were to adopt this monopoly-like infusion of liquidity as a public capital infusion to combat climate change.

 

Monetarily: it would introduce a new reserve currency, so that nations would not need to hold expensive dollars in their reserve systems, so they could use those dollars, euros for more productive purposes. Given the failure of the present floating exchange system, even acknowledged by the Economist (January 6, 1990) and the Financial Times (February 17, 1987), this dramatic infusion of liquidity cannot make this failed system more failed.

 

Economically: freed-up hard currency reserves can now be used for combating mitigation and adaptation measures without depending on the funds generated by the cap-and-trade systems, where, unfortunately, too great an amount of carbon permits were grandfathered rather than auctioned.

 

Financially: this infusion of limited liquidity—limited because of this carbon currency being a reserve currency—would escape the grip of the large international financial corporations which would be among the main beneficiaries of the private climate financing.

 

Ecologically: in one swoop which could be repeated annually under an ever tightening cap, climate change could be effectively combated.

 

Politically: agreeing to this infusion of these monetized carbon credits would show boldness and statesmanship towards monetary cooperation, that eventually may lead to a transformed international monetary system based upon an updated Bretton Woods Conference as proposed by Paul Davison in 2008 and Bill Lucarelli in 2009 or as proposed by the International Institute of Monetary Transformation which proposes a carbon account in a nation’s payments schedule with its Bancor2 carbon reduction methodology.

 

Socially: such major monetary step will build confidence in the future and comity among nations.

 

Ethically: the equal allocation of these monetized carbon permits would be a fair deal, though countries in the global South could demand additional permits given the atmospheric occupation of the industrialized countries during the last couple of centuries.

 

An article dealing with the What, Why and How of this Monopoly-like infusion of liquidity for climate finance will go into greater depth. Stay tuned.

 

 

 

 

Dec
05

Climate justice, human rights, the Tierra and IFIs

Post By gaia1 in Climate crisis

Former UN Human Rights Commissioner Mary Robinson and her co-author Alice Miller write in   http://www.brettonwoodsproject.org/art-565686    the following.

“Using the lens of climate justice, and incorporating principles and tools of human rights to guide policy and practical responses to climate change, is an essential aspect of climate change policy work at the global and national level. Climate justice, moreover, is useful in evaluating the financial architecture necessary to support just and sustainable climate interventions. Ultimately, a justice and human rights framework can provide us with a compass to chart the course of climate change responses, and a set of tools that operate at all levels between and within nations.”

 

Agreeing with their value-based planning framework of climate justice and human rights I think the framework can be further extended by including a monetary dimension of a carbon-based international reserve currency, such as the Tierra or Bancor2. (Bancor1 was the non-national international reserve currency proposed by John Maynard Keynes at the UN Bretton Woods Conference of 1944.)  This extension would transform the funding for mitigation and adaptation measures and development by the creation of carbon accounts in nations’ balance of payments. Consequently, ecological debtor nations in the global North have to settle their carbon debts with the ecological creditor nations in the global South. The ecological debt or credit is determined by the equal allocation of carbon emissions permits under a Cap & Share approach.

 

If nations are unable to agree on a funding mechanism within the UNFCCC, the Worldbank will become the funding mechanism by default in the same way the IMF have became the default mechanism by not accepting the UN Global Economic Coordination Council proposed by the UN Stiglitz Commission in June 2009. In both instances, the privatizing trends of corporate globalization supported by the IMF/WB/WTO/BIS will continue to exert adverse pressures towards equitable, sustainable, and, therefore stable monetary, financial, economic and commercial systems. If these present international systems are not counteracted, they will continue to enrich the few, impoverish the many and imperil the planet.

 

Mar
27

The March 19 UNGA President's Commission report and the climate crisis

Post By gaia1 in Climate crisis

Though this important report by the UNGA President's Commission of Experts on Monetary and Financial Crises states in paragraph  5 that long-term objectives have  to SIMULTANEOUSLY pursued and list the "reduction of greenhouse gases" as one of many, it does not cover in its 18 pages the climate crisis, except when dealing with financing, as quoted below. If the Commission had adopted a carbon-based international reserve currency rather than the non-emission based one that is not spelled out, it would have had an institutional mechanism of funding for climate mitigation and adaptation measures, because the nations would have to balance their carbon accounts in their balance of payments. That would mean transfers of Tierras from ecological debtor countries in the North to ecological creditor  countries in the South.

"78. The international community needs to explore a variety of mechanisms of innovative

finance, including regular emissions of a new global reserves (SDRs), revenues

generated from the auction of global natural resources (such as ocean fishing rights

and pollution emission permits), and international taxes (such as a carbon tax, which

would simultaneously help address problems of global warming, or a financial

18

services tax, which would simultaneously help stabilize international financial

markets.)"