The need for an effective/just/integrated international taxation system

“The tax policies of Apple and other multinationals show how the international taxation system does not work for the common good. Apple, Inc and others even believe that their subsidiaries are beyond the reach of any taxing authority. Thus they are able, legally, to avoid their fair share of taxes.

The loopholes in the American corporate tax code cannot be closed without considering its international dimension, i.e. the international taxation system.

Though Apple asserts that it welcomes “an objective examination of the U.S. corporate tax system, which has not kept pace with the advent of the digital age and the rapidly changing global economy”, it does not advocate an international tax overhaul where it would be subject to national taxing authorities.

Any international taxation system cannot be separated from its nexus with the global financial and monetary systems. An integrated policy has to be developed based upon the integrated social and ecological forms of justice. A proposal for such policy is made by basing it on carbon-based international monetary system as described in The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation .”

April 2, 2013

David Jolly in the NYTimes of April 2, 2013 entitled “Unemployment in Euro Zone Reaches a Record High” cites a lot of statistics showing the dire economic situation in both Euro and other European countries. The sad thing is that the future does not seem to bring realistic improvement in the millions unemployed because of non-working austerity policies.

Though in the short term those European economies can improved by stimulation as opposed to austerity, in the medium and especially in the long term, serious deep rethinking is needed.

Such rethinking should start with some agreement about a basic values framework that would undergird such thinking. A new monetary, financial, economic and commercial edifice cannot be built on the loose sand of unclarified and vague values.

It is such value frame work of sustainable communities in the global North and South that is presented in 20012 The Tierra Solution proposal. Its value system is a, not necessarily the, value system that would respond to the needs of the global monetary, financial, economic and commercial systems.

A second element beside an explicit value framework for the deep rethinking that is needed is the need for the integration of these global systems, a challenge that was lifted up during the June Rio Earth Summit. The Tierra Solution provides such integration by transforming the world’s most basic system of monetary management. This transformation takes place by basing the international monetary system on a carbon standard, i.e. a very specific tonnage of CO2e per person.

March 3, 2013

The last three months have been hectic for my and my spouse Anita Wenden in the selling of our Queens cooperative apartment and our Hampton Bays bay front coop and in moving from the City to Chapel Hill in North Carolina. After about 3 weeks of moving into the beautiful continuing care retirement community of Carolina Meadows, I consider myself to be relocated but not retired. Much of the work done in the City will be done now on line in my spacious study that looks out on the Carolina pines and on landscaped bushes and trees frequented by lively birds. Note the new address and telephone numbers in the attached signature file.

I will resume my blogging for IIMT and responding to monetary/financial articles. My pen name for the latter activity is now fcvnycinc, indicating my locaton i(n), n(orth), c(arolina). So, in googling my internet contributions after 2013 the longer 9 letter term has to be used. I also plan to become a regular contributor to several magazines, basically focusing one the ten chapters of The Tierra Solution. I also plan to produce a dozen UTube videos that would present The Tierra Solution.

Any assistance in carrying out the enormous challenge of The Tierra Solution—which is well described in the two unsolicited reviews of the book on Amazon.com—would be most welcome.

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

Adjunct Associate Professor Sustainable Communities at Pace University, NY (2009-13)

Founding President, International Institute for Monetary Transformation (IIMT) www.timun.net (2008-present)

Sustainability Fellow at the Green Institute in Washington, D.C. www.greeninstitute.net

(20004-present)

UN ECOSOC representative for the International Peace Research

 Association (IPRA) (2000-2013)

Director, Sustainability Research and Education

Earth and Peace Education International (EPE), (1998-present),  http://www.globalepe.org,

327 Carolina Meadows Villa, Chapel Hill, NC 27517, USA
voice: 1+ (919-240-7164); fax 1+(919-240-7164); cell 1+(917-617-6217); Skype: fcvnyc, gaia1@rcn.com; fcvnyc@gmail.com; franscv@yahoo.com

“The intuitive mind is a sacred gift and the rational mind is a faithful servant.  We have created a society that honors the servant and has forgotten the gift”

Albert Einstein

THE UN TARGET YEAR OF 2015

November 29, 2012

Two main areas of discussion and negotiations among UN member states have taken the year of 2015 as their target in the achievement of their goals. These two most important areas of development and climate policies are discussed and negotiated as if they are unrelated. The 2015 target year is proposed here as a point in time where serious global discussions of an integrated global governance approach are to commence.

The development strand called the post-2015 sustainable development framework wants to come up with a sustainable development framework that will succeed the framework of the Millennium Development Goals or MDGs that ends in 2015. This development strand also includes on an equal level of importance the discussions dealing with the Sustainable Development Goals or SDGs that were initiated as part of decisions taken at the Rio June 2012 Earth Summit. Both development strands and discourses only tangentially deal with the 21st century’s main challenge of the changing climate.

The second major area of discussion and negotiation, dealing with the climate crisis, takes place mainly within the confines of the UN Framework Convention on Climate Change (UNFCCC) of June 1992 and its Kyoto Protocol whose second implementation in 2013 is being discussed during its present two weeks conference in Doha. This UNFCCC conference and the ones of 2013 and 2014 are geared towards the establishment of a New Accord in 2015 which would replace the Kyoto Protocol with its many shortcomings. The official climate negotiations have even less connection with the development issue than the official development community’s connection with the climate issue.

Though those two UN strands of discussions and negotiations hardly make any connections with development and climate, civil society on the other hand generally make connections between development and climate. However, its connecting the dots between the two is still inchoate and needs far greater emphasis and far more resources to arrive at an integrated global governance system.

The connection or rather integration of development and climate is the major focus of a proposal by the International Institute for Monetary Transformation. The proposal called The Tierra Solution or the Tierra Fee & Dividend system or the Tierra System for short, presents the conceptual, institutional and strategic dimensions  of an integrated global governance system. It is based upon the transformation of the international monetary system which is the most basic of global system that as glue binds together the monetary, financial, economic and commercial systems. It can also be considered the lubricant of those global systems making them work smoothly and even as their linchpin. This global money system is to be transformed by the introduction of a carbon standard of a very specific amount of tonnage of CO2e per person. The introduction of this standard makes exchange rates stable by having currencies pegged to the standard or by the introduction of a single global currency.

This carbon-based international monetary system is predicated on at least two major new institutions. One of them is a balance of payments system that accounts not only for financial credits and debts, but also ecological (climate) debts and credits. Given that countries in the global North are financial creditors and ecological debtors and countries in the South ecological creditors and financial debtors, negotiations of converting financial debt into ecological credit become a real possibility. The second new institution is the Global Central Bank which would not only administer, regulate the new system, but would be the only institution that together with its regional central banks engages in money creation. Limits to money creation as described in the 1865 US Senate document are set by the imagination of responsible public officials. Transformational financing for the enormous needs in development and climate change areas becomes possible without the straitjacket of austerity.  Gone are the privately-owned banking systems with their fractional reserve systems, because they have become financial utilities without the privilege of money creation. People and their public officials direct their ample financial resources where they are needed as was done by the public banks in various countries during the 1930s.

There are two main strategies by which this carbon-based international monetary system with its fixed exchange rates, its transformed balance of payments system and Global Central Bank can become a reality. One is the top-down, UN strategy and the other is the bottom-up, grassroots strategy. They are fully described in the last chapter of The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation, the June 2012 Cosimo publication that also describes in detail the earlier mentioned conceptual and institutional dimensions. For additional information, see www.timun.net.

The Tierra Solution went public for the first time during UNITAR/YALE Global Governance conference in September 2010 and has been presented at various UN meetings in preparation for the Rio 2012 Earth Summit and at the two NGO Committees on Sustainable Development and Financing for Development at UN Headquarters. It is hoped that the year 2015 will be the year that serious discussions will take place in the UN development and climate communities about this integrated global governance proposal, propelled and pushed by the leadership of civil society.

 RECESSION OR REDIRECTION?

OPED article submitted to the New York Times by

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

Tuesday, October 23, 2012

We live in turbulent and carbon-constrained times where government, business and civil society are increasingly forced to make major decisions in the next ten years that will influence life on the planet for the rest of the century. At this cross roads the stark decision to be made is whether the world permits itself  to drift into another recession—bigger than the one In 2008— or is willing to generate the courage and insight to redirect the global monetary, financial, economic and commercial systems that enrich the few, impoverish the many and imperil species and the planet. It is argued here that the world will drift into recession within the decade unless we use the reset button and pursue approaches to integrated global governance that emphasize low-carbon and climate resilient sustainable communities development in the global North and South.

Though I am an optimist, I consider the likelihood for recession—larger than the 2008 0ne— to be strong within the next couple of years if present global monetary, financial, economic and commercial policies are not changed and nations continue pursuing national policies that may be rational in terms of national priorities, but irrational in terms of global priorities.

During the recent IMF/WB Annual meeting in Tokyo Yi Gang, vice governor of the China’s central bank, pointed out that the lowered forecasts by the IMF/WB for 2012 from 3.3 percent to 2.2 percent is too optimistic. He saw “an increasing possibility of growth below 2 percent” with the consequence that the developed countries would have plunged into further recession while emerging economies encountered further dramatic slowdown. He considers the global economy to be “on the brink of recession” and he pointed to the European debt crisis, mounting US deficits and stagnant growth in developing countries.

To this analysis we could add recent developments in the US society, where the Dodd-Frank regulations are fought tooth and nail by the banking and financial industry and where Too Big To Fail does not have sound conceptual and political support in the direction of capping the size and complexity of the megabanks. Fortunately, the Volcker rule that would separate investment/ trading/speculation from commercial banking, is now being supported by reports in Britain and the EU, respectively by economist John Vickers and central Finnish banker Erki LiiKanan.

Notwithstanding the emergence of this hopeful tool that would go back to the Glass-Steagall Act of the early thirties, the overall US monetary, financial, economic and commercial situation is still precarious, particularly also due to the political paralysis in Washington. The Federal Reserve System is pushed to carry the main or almost exclusive load to make the economy recover given the stark absence of fiscal legislation by a U.S. Congress which has received the lowest ratings in several decades. Thus, the FED is pushed into an open-ended quantitative easing policy that makes sense nationally, but not globally. IMF head Christine Lagarde rightly points to the need for global cooperation without the power to do much to make this happen. 

It is the lack of global governance institutions that makes the global monetary, financial, economic and commercial systems so fragile and prone to causing a recession. Strong emphasis has to be placed on the challenge of strengthening global governance, particularly integrated global governance where separate social, economic and environmental governance systems are to be integrated. Rightly the Rio 2012 Earth Summit adopted the formulation of such an integrated global governance system as its second theme, calling it Institutional Framework for  Sustainable Development. It did not, however, produce a formulation for such a global governance system, let alone an agenda for pursuing it. Now, notwithstanding its pursuit of Sustainable Development Goals by organizing Post-2015 Global Consultations and other means it still has not pushed the reset button in its formulation of integrated global governance, let alone in its pursuit.

What is needed is an all-out approach to find alternative global governance systems that would redirect the unjust, unsustainable, and, therefore, unstable monetary, financial, economic and commercial systems. One of those alternative global governance systems has been proposed in my recent publication entitled The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation. It presents the conceptual, institutional and strategic dimensions of an international monetary system that would be based upon a carbon standard with, consequently, fixed exchange rates, a Global Central Bank and a balance of payments system that would balance not only financial debts and credits but also ecological (carbon) debts and credits. In such a balance of payments system nations in the global North who are financial creditors and carbon debtors can start negotiating with nations in the global South who are financial debtors and carbon creditors. Equally important, the Global Central Bank in such a carbon-based international monetary system would behave like the central bank in the EU or in the USA in its administrative, regulatory and financial functions.

THE TIERRA SOLUTION AND BRAZIL’S CALL FOR TRANSFORMATION AT THE UN

Wednesday, September 26, 2012

Yesterday Brazilian President Dilma Roussef made a strong statement about the need for a global effort to deal with the economic crisis. Appended is the UN summary of the speech.

She emphasized that monetary policies in the developed world cause currency problems in the emerging nations and that monetary policies have to be wedded with fiscal policies. She understands that only a global cooperative effort can result in effective economic policies for all.

The Tierra Solution proposes integration of monetary and financial policies where a global carbon-based international monetary system is wedded with a financial system that is based not on debt and privately-owned banking system, but on money or credit. One of the economic departments in the USA that has done most work on such monetary and financial system is the one of the University of Missouri-Kansas City with its modern monetary theory or MMT. They are have been taken their MMT views outside their university such as in the well-organized course at Columbia University entitled Modern Money and Public Purpose. http://www.modernmoneyandpublicpurpose.com/index.html

When will the time come when leaders in government, business and civil society are going to pursue an integrated approach to progress and prosperity by simultaneously focusing on resolving the economic and climate crises?

BRAZILIAN PRESIDENT CALLS FOR JOINT EFFORTS TO CONTAIN CONSEQUENCES OF GLOBAL ECONOMIC CRISIS
New York, Sep 25 2012  1:05PM
One of the first world leaders to address the United Nations General Assembly’s high-level debate today, Brazilian President Dilma Rousseff called on countries to boost international efforts to tackle the global economic crisis, stressing that a balance must be found to stimulate growth while at the same time controlling public spending without resorting to extreme austerity measures.

“The grave economic crisis that began in 2008 has taken on new and worrisome contours,” she said. “The choice of orthodox fiscal policies has been worsening the recession in the developed economies, with repercussions for the emerging countries.”

Scores of the world’s heads of state and government and other high-level officials are attending the Assembly’s General Debate, at UN Headquarters in New York, and are expected to present their views and comment on issues of individual national and international relevance over the coming days.

In her remarks to the gathering, President Rousseff stressed that countries must find a path that combines appropriate fiscal adjustments with measures to stimulate investment and demand to halt the ongoing recession and ensure future economic growth.

In particular, the Brazilian President noted that monetary policy cannot be the only response to growing unemployment and poverty as this is causing imbalance in exchange rates, which, in turn, is creating an artificial appreciation of emerging countries’ currencies.

“There will be no effective response to the economic crisis without strengthened coordination efforts between United Nations members and multilateral bodies such as the G20 [Group of 20], the IMF [International Monetary Fund] and the World Bank,” she said.

She added, “This coordination must attempt to reconfigure the relationship between fiscal and monetary policy, in order to prevent the deepening of the recession, control the currency war and once again stimulate global demand.”

Countries must build a comprehensive pact for the coordinated resumption of global economic growth, President Rousseff said, noting that this is crucial to prevent social unrest and despair prompted by high unemployment rates, and social inequality.

The Brazilian leader emphasized that Brazil has addressed the crisis domestically by exerting strict control over public spending, while simultaneously increasing investments in infrastructure, education and social inclusion.

“We have overcome the incorrect view according to which measures to stimulate growth are incompatible with austerity plans. This is a false dilemma,” she said. “Fiscal responsibility is as necessary as growth measures are indispensable, for fiscal consolidation can only be sustainable in a context of economic recovery.”

President Rousseff also spoke of the need for multilateral action to achieve all the commitments made at the UN Conference on Sustainable Development (Rio+20) which Brazil hosted in June. The Conference, she emphasized, helped to set a starting point for a sustainable development agenda for the 21st century, and give countries guidance as to how to address challenges such as climate change, poverty and exploitation of natural resources.

“Rio+20 shone a powerful light on the future we want. We have an obligation to heed the many warnings being sounded by science and society,” Ms. Rousseff said. “In a context of environmental challenges, economic crises and threats to peace in different parts of the world, Brazil continues committed to working with its neighbours to build an environment of democracy, peace, prosperity, and social justice.”

Earlier today, the Brazilian President met with Secretary-General Ban Ki-moon, who thanked her for making the Rio+20 Conference a success and expressed his appreciation for Brazil’s contribution to UN peacekeeping operations in Haiti.
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August 22, 2012

On August 21 the UN News Service  under the heading “WITH DROUGHT INTENSIFYING WORLDWIDE, UN CALLS FOR INTEGRATED CLIMATE POLICIES declared that more “consolidated efforts to combat the threat of climate change and counter its ripple effects on global food security are needed”. In http://www.wmo.int/pages/mediacentre/press_releases/documents/954joint.doc the World Meteorological pointed to the “intensifying global drought and increasing temperatures worldwide”. Together with the Convention to Combat Desertification and other UN agencies it presented various ways for nations to coordinate their climate policies.

Though this need for coordinated action on the national level is very important, time has come to change the mindset of national climate policies into one that emphasizes a whole world mindset. National coordinated climate policies are to be integrated into global monetary, financial, economic and commercial systems to make them more effective.  Thus, integrating national climate policies into a carbon-based international monetary system, i.e. a monetary system with a specific tonnage of CO2e per person as a monetary standard, would these climate policies more effective.

Though droughts have plagued humankind all through its history, droughts and increasing temperatures due to the warming of the climate is something new and bodes ill for the future of people, species and planet. It is this novel combination of drought and heat requires new thinking. Having nations assisted by UN agencies to cope with this novel phenomenon of  heat droughts is insufficient and demands at least search for new global approaches such as presented in the proposed carbon-based international monetary system of the Tierra Solution.

THE MANANA BANKERS AND THE TIERRA SOLUTION

Friday, August 03, 2012

Today’s top editorial in the New York Times calls Mr. Draghi and Mr. Bernanke manana bankers because they fail to action in Europe and the USA letting the entire global economy “slow” in its already precarious condition.

Why are they not taking action?  Are they waiting for slower growth, higher unemployment and lower output before they are using their statutory powers to intervene? Those are possible minor reasons for their taking no action. One of the main reasons is the lack of political resolve on the part of the political establishment in both jurisdictions that would result in proper fiscal policies and necessary structural reform.

There is also another reason why both European and American manana bankers and their politicians are not taking the necessary monetary, fiscal and economic actions. They do not have an integrated view of the future expressed in a conceptual, institutional and strategic plan of an integrated global governance system. Such plan or approach would inspire them to look beyond their own regions’ problems and challenges and focus on global solutions because their problems and challenges are an integral part of the globalized world of today. Even if the manana bankers were to come up with some additional stimulus measures and improve their regions’ economies somewhat, such regional progress would often not redound into global wellbeing of all nations. It is only through the creation of global governance institutions that integrate the social, economic and ecological (particularly the climatological) dimensions of development and climate challenges that real progress and wellbeing can be accomplished for all. It is to accomplishment of that challenge that The Tierra Solution is offered as one of the presently very few integrated global governance proposals.

Connecting monetary justice with global South climate efforts.

On August 1 Pablo Solon, former UN Mission representative  of Bolivia and presently executive director at Focus on the Global South, summarized a longer statement into a Facebook post at http://www.facebook.com/groups/rioplustwenty/permalink/308996169197514 , calling for an open meeting on August 31 during the UNFCCC meeting in Bangkok

. The post states: Asia Social Movements call for an open meeting in Bangkok to strengthen the struggles, addressing Climate Change.

Humans and nature are under attack. The endless growth model has pushed the planet to its limits. Governments are making people pay for the excesses of banks and transnational corporations through more and more severe austerity measures. There are now 1 billion people living in hunger. There are now climate migrants and refugees. Already, we are witnessing a war over who controls the remaining resources on the planet – land, water, forests, and, biodiversity. As the earth becomes hotter and the system continues to implode, things will only get worse. We need to act and act swiftly if we are to avoid this impending disaster. We need regain our momentum and defeat the system by targeting the source. We need to unify our different struggles if we want to succeed in our fight for our future.

I responded on August 3: Unifying different struggles into a movement is essential in these carbon-constrained times that also labor under wide spread hunger and unemployment. What is a necessary, not sufficient condition is agreement on an organizing principle for integrated global governance. The recently published The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation in its chapter six argues for monetary justice as such guiding principle. Its concept not only includes social, ecological, procedural and intergenerational justice, but the monetary justice of a carbon-based international monetary system. That Tierra system presents an integrated conceptual, institutional and strategic proposal based upon the transformation of the world’s most basic system that as glue binds together monetary, financial, economic and commercial systems and that as lubricant makes them operate smoothly.

CONNECTING THE DOTS

July 25, 2012

One of the recurring expressions at the DPI/NGO Conference in Bonn on September 2011 was the expression “Connecting the dots”. One of my half dozen public statements made the point that not dots are created equal. Some dots or realities are more important than others. Thus, I showed how the issue under discussion could be connected to a larger dot, emphasizing the need for an integrated perspective on the three dimensions of sustainable development.

It is this strategy of connecting the dots that I use in learning about new economic, social or environmental realities. Thus, the question in respect to the issue of Greece’s debt and the future of the Eurozone would become one of connecting it to the conceptual, institutional and strategic dimensions of  the TSN. In answering that question I would refer to the basic notions of the TSN, its institutional framework and its strategy as preliminarily presented in The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation.

RIO AND THE TSN

Wednesday, July 25, 2012

A month has passed since the concluding of the Rio 2012 Earth Summit on June 22. It is an appropriate time to evaluate the impact of The Tierra Solution (TSN) by considering its impact before, during and beyond the conference.

There were about a dozen interventions during the preparatory process of the Summit, both physical at UN meetings and conferences and electronic by the participation in various dialogues and listservs. Most notable physical interventions were 1. At the Stakeholder Forum’s (SF)May 2010 that  preceded the first PrepCom in New York and which, later on, resulted in having SF accept the TSN as one of its ten thinkpieces in its series of Sustainable Development Goals (its executive director Felix Dodds wrote the preface of the TSN Book ); 2. At the UNITAR/Yale conference on global governance of September 2011 where both my panel presentation and an accompanying flyer were made part of the proceedings; 3. At the DPI/NGO Conference of September 2011 in Bonn which resulted in line 265 of its Declaration where governments are asked to “rethink the international monetary system and a carbon standard”; 4. At two CoNGO committees in New York, i.e. the Sustainable Development Committee in May with its PowerPoint presentation on Monetary Justice in May resulting in recommendation 10 to considering monetary justice as the guiding principle for global governance and the Financing for Development Committee in June with its PowerPoint on Transformational Finance (TF) which resulted in an edited one hour video and several members interested in forming a TF Working Group. During the PrepComs, Intersessionals and Informals I generally produced a golden rod circular for each occasion specifically relating the topic at hand with the TSN. Thus, a circular was produced arguing for a 10th Sustainable Development Goal (SDG) when civil society argued for 9 SDGs during the discussion of the green economy during the spring of 2012.

My main electronic engagement before the Summit was 1. The inclusion of the TSN as a global governance proposal into the Compilation Document of October 2011 which contained some 700 submissions of government, business and mostly civil society—it was the basis for the formulation of the famous Zero Document; 2. My participation in the Sustainability Treaty process by submitting the People’s Treaty on Monetary Transformation; 3. My participation with the Rio Dialogues, a worldwide process of determining solutions, organized by the Brazilian government and the UNDP. I participated in 3 of the 10 issue areas, several times making the point that a most important area was not included, i.e. integration of the issue areas or guiding principles. My main recommendation was that civil society support the G3 nations, some 4 dozen of them, in their proposal for a 2013 global governance conference that would also include the consideration of integrated sustainability approaches such as the TSN. It was also the main recommendation I made to the People’s Earth Summit, the more radical civil society group. The main outcome during the Summit’s Dialogues voting was focused on removing the subsidies for fossil fuels, an important element in the TSN’s decarbonization component of the Fee & Dividend approach; 4. The inclusion of the Rio challenge in the two online courses on climate and sustainable communities presented by the National Peace Academy together with Earth and Peace Education International.  

So far as I know now, monetary transformation at the Summit itself was only once brought up in public by the comments by Leida Rijnhout the executive director of ANPED (the Northern Alliance of NGOs) who was also instrumental in having the Bonn Declaration include the need for monetary transformation.

It was on June 20 that the publisher of The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation officially launched the book at http://cosimoblog.blogspot.com/2012_06_01_archive.html and it was a week later that I hired a publicist to reach her 5000 media outlets. In two weeks, about half a dozen responses were received, but none of the larger media (yet).

There are about half a dozen projects to connect Rio with the TSN. 1. A panel on connecting Rio (development) with Doha (climate) is being organized for the end of September with the former president of CoNGO together with the book launchings of the TSN and his book on values; 2. An online course on Monetary Justice has been scheduled for October 2012; 3. A PP presentation on monetary peace will be presented at the PJSA (Peace and Justice Studies Association) conference in October; 4. Several activities in preparation and participation at the UNFCCC Conference at  Doha in November/December, showing how the TSN is one of the few alternatives for an integrated global governance system that would bridge the development and climate realities; 5.  Working with The Widening Circle Campaign , phase 2, a major civil society effort to build a global citizen movement that originated in Rio; 6. Using the social media via the www.timun.net , particularly YouTube and LinkedIn networking group at  http://www.linkedin.com/groups/Tierra-Solution-International-Networking-Group-4496959?gid=4496959&report.success=7GcSc9MenMD5-zxa-kN_TToM-x5janvu_HMEw0LwSaLTiMXToFk2hhLiKanEipLCLCi2aHOMY2Q0YQnTDIu0oJnh-x5wKBYTHQ 7. Finishing an article on “The Rio 2012 Earth Summit: Its problem and Challenge” emphasizing the need for a conceptual, institutional and strategic vision of  integrated global governance. 7. A publishing  strategy to highlight the TSN using topics such as  a) integrated global governance; b) transformational financing for development and climate; c) transformational decarbonization; d) monetary justice; e) the 10th Sustainable Development Goal, which would integrate the 9 SDGs of the Green Economy Coalition.

Los Cabos and Rio

Tuesday, June 19, 2012

Barack Obama, Angela Merkel and David Cameron are attending the G20 meeting in Los Cabos, Mexico and have decided for different reasons not to attend the Rio 2012 Earth Summit which directly follows their G20 meeting. It is a mistake for the politicians (leaders?) of these three important countries not to attend the Rio summit where very basic issues are being raised about the global economy and global governance in this world where the global economy has put millions of people out of a meaningful job and where national governments are rationally pursuing their limited goals without sufficient political will to improve, let alone overhaul, the global systems which enrich the few, impoverish the many and imperil the planet.

Their forthcoming statement will highlight their wisdom of sustainable growth over austerity without realizing that growthism, even accompanied with the adjective sustainable, is an unrealistic economic pursuit. It does not include the recognition of the natural limits that humanity is up against in these carbon-constrained times of peak oil, peak water, peak food, etc. The unsustainability of growthism is very clearly described in Richard Heinberg’s recently updated book The End of Growth

As suggested by Herman Daly for many years or even decades the term growth is to be abandoned for development. Thus it would be most appropriate to speak of and write about sustainability prosperity which is the purpose of economic activity anyway. Not doing this means one is engaged in goal displacement.

What is needed and being pursued in Rio but not in Los Cabos is a new vision that is able to integrate the social, economic and environmental dimensions of this sustainable prosperity for people and planet. One of the very few proposals for integrated global governance that is not yet widely recognized is the International Institute for Monetary Transformation’s proposal called The Tierra Solution where the climate crisis is conceptually, institutionally and strategically resolved by working towards a carbon-based international monetary system. Details are available on this website with a book length treatment in the recently published The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation.

INTEGRATED GLOBAL GOVERNANCE NEEDED

Op-ed article submitted to the New York Times

June 1, 2012

The world’s monetary, financial, economic and commercial systems are singly and jointly in a mess. They do not work, singly or jointly. They are unsustainable now and they will be unsustainable in the medium and long-term. Greece’s and Spain’s present monetary, financial, economic and commercial systems will not create jobs, increase quality of life for people and planet. The other euro-zone countries’ monetary, financial, economic and commercial systems, even of Germany, The Netherlands and other more or less well-off countries are also not sustainable without structural changes as ECB’s president Draghi has made clear in his recent speech to the European parliament. What is needed is bold leadership to stop the forces of divergence and push for convergence of common values and vision, of fiscal unity, of Europe-wide governance to start with.

What is needed for Europe, China, the USA and the rest of the world is bold leadership for global governance that would integrate not only the nation’s monetary, financial, economic and commercial governance but also its social and environmental global governance. It is this task that essentially faces the world’s heads of state (can they called leaders?) at the forthcoming Rio Earth Summit this month.

How can they accomplish such momentous task while the nations are less focused on moral, cultural and political convergence and more on divergence, bickering among themselves while hundreds of millions of people are unemployed, ill-housed and of deteriorating health and when the prevailing global monetary, financial, economic and commercial systems enrich the few, impoverish the many and imperil species and planet?

Though the Summit’s pursuit of a green economy and an integrated institutional framework for development may produce some desirable outcomes, they will not be sufficient to match the task for integrated global governance. The focus should be on two priority areas: the acceptance of a common value base and the transformation of the international monetary system.

The international monetary system acts as glue binding together the monetary, financial, economic and commercial systems. That monetary system if working properly would also lubricate those systems, so that they would work smoothly. The international monetary system can be considered to be the linchpin of those global systems. Transforming that most basic of the world’s global systems would drastically change those other connected systems.

That transformation would take place when the international monetary system was to be based upon a carbon monetary standard with its guiding principle of monetary justice. It would lead to the proposition that the more a nation decarbonizes its society, the stronger its economy and currency become. Most importantly, it would combat the looming climate catastrophe and advance low carbon and climate-resilient development in communities in the global North and South. Unfortunately, organizers of the forthcoming Rio Summit deemed it politically not feasible to include the climate issue as part of their development pursuits in the Summit as if the two realities can be separated. Thus, real integrated global governance based upon a common value system and encapsulated in the overarching value of monetary justice  will have to wait till the world’s monetary, financial, economic and commercial systems will become even less functional and people’s demonstrations become more wide-spread. It was only due to people pressure that FDR was forced to pass enlightened legislation in the 1930s. It was also at that time of the Great Depression that outstanding economists such as Irving Thomas and other members of the Chicago School promoted the idea of having a banking system based upon 100% reserves and a financial system based upon money rather than credit. These transformational ideas are resurfacing during these times of the Great Recession. They have to be combined with the transformational idea of a carbon-based international monetary system to redirect the world’s monetary, financial, economic and commercial systems.

Announcement of a new book that is most relevant to the upcoming Rio Earth Summit next month. It presents one of the very few proposals for an integrated global governance system where the three pillars of sustainable development are woven together by basing the international monetary system on a carbon standard, thus combating the climate crisis and advancing low carbon and climate-resilient development. The book proposes to have monetary justice in its regular and transformational sense become the guiding principle of such integrated institutional framework for sustainable communities development. For more information, see www.timun.net and for action before the Earth Summit see http://www.change.org/petitions/g20-and-rio-summitteers-make-monetary-justice-the-basis-of-your-negotiations    

drummond.marina@yahoo.com, coordinator of The economics of sustainable development dialogue space in the www.riodialogues.org  responded to my post in then Forum topic Monetary justice as guiding principle for integrated global governance   “I wholly agree: the transformational potential of money is huge. It is specifically these initiatives which ally the financial with the environmental that I believe have the greatest possibility of changing the global paradigm.

What are your thoughts on changing GDP to another KPI? Would this be linked to carbon p/person; other indicators inclusive of natural capital?"