THE TIERRA CURRENCY: what, why and how.
The Tierra currency would be the single currency that nations and their peoples would be using for their financial interactions. It would not be a reserve currency such as the U.S. dollar or British pound because the strength of a nation’s currency is determined by its deficit or surplus position of Tierras. Moreover, historical currencies would not exist to be held by other nations. A global currency such as the Tierra is part of an international monetary system the architecture of which is based upon the monetary standard of specific tonnage of CO2e per person. The monetary architecture also include a global central bank and a balance of payments system that keeps track of both financial and ecological (climate) credits and debts.
Reasons for pursuing the study and introduction of the Tierra currency are many. It would reduce the heavy fluctuations in currencies; it would eliminate currency manipulation and speculation; it would remove the currency of one nation and its fluctuations as a de facto global currency; it would contribute to humanity’s efforts in avoiding a looming climate catastrophe; it would transform the financial, economic and commercial systems given that the international monetary system acts like glue in binding those systems together; it would transform the unjust, unsustainable and, therefore, unstable international monetary system to one that is more just, sustainable and, therefore more stable.
The world’s unstable currency situation is well described in an article that was prompted by China’s inability to deal effectively with its transitioning economy and its fluctuating Yuan currency (thttp://www.nytimes.com/2016/01/09/business/dealbook/asia-china-renminbi-currency-devaluation.html). These currencies fluctuations—either through the invisible hand of export markets and/or poor domestic planning—are a demonstration of how our global monetary, financial, economic and commercial systems are not working, a major reason of which is they continue to enrich the few, impoverish the many and imperil people, species and planet.
One intermediate way of introducing the Tierra global currency and dealing with this unjust inequality in global systems is to replace the U.S. dollar by an expanded use of SDRs, already suggested by the Stiglitz 2009 UN conference and the Brueghel think tank. Verhagen 2012 "The Tierra Solution: Resolving the climate crisis through monetary transformation" has proposed a top-down (UN) and a bottom-up (grassroots) approach to pursue the Tierra carbon-based international monetary system with the Tierra global currency as one option and national currencies pegged to the carbon standard as another option. Its conceptual, institutional, ethical and strategic dimensions are updated at www.timun.net.