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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.