Detailed table of contents
THE TIERRA SOLUTION:
Integrating monetary transformation, climate change, and
sustainable development.
By
Frans C. Verhagen, M.Div., M.I.A., Ph.D., sustainability sociologist
To be published by Cosimo Books by April 2012
New York City
January 2, 2012.
INTRODUCTION
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PART I ...........................................................................................Error! Bookmark not defined.
BACKGROUND: ..........................................................................Error! Bookmark not defined.
The Climate Crisis, ..........................................................................Error! Bookmark not defined.
Methods of Carbon Reduction, ........................................................Error! Bookmark not defined.
The International Monetary System: ...............................................Error! Bookmark not defined.
recent history and present structure and process, .............................Error! Bookmark not defined.
Value-based planning and monetary justice ....................................Error! Bookmark not defined.
CHAPTER 1 ..................................................................................Error! Bookmark not defined.
UNDERSTANDING THE CLIMATE CRISIS ............................Error! Bookmark not defined.
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Need to Recognize the Financial and Ecological Indebtedness of All Countries.................. Error!
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The global North is typically financial creditors and ecological debtorsError! Bookmark not defined.
The global South is typically ecological creditors and financial debtorsError! Bookmark not defined.
Resolving ecological and financial indebtedness between nations..Error! Bookmark not defined.
Understanding the four dimensions of the climate crisis ...............Error! Bookmark not defined.
1.The physical dimensions of the climate crisis ..............................Error! Bookmark not defined.
2.The economic dimensions of the climate crisis ............................Error! Bookmark not defined.
3.The political dimensions of the climate crisis...............................Error! Bookmark not defined.
4.The social dimensions of the climate crisis ..................................Error! Bookmark not defined.
Evaluating the response to the climate crisis .................................Error! Bookmark not defined.
Efforts to reduce greenhouse gases (GHGs): ineffective and inadequateError! Bookmark not defined.
Efforts to improve climate diplomacy: “profoundly disappointing”Error! Bookmark not defined.
Efforts to improve financing for climate change: the prospects are grimError! Bookmark not defined.
Efforts to increase participatory decision-making about the climate crisis: not moving fast
enough ..............................................................................................Error! Bookmark not defined.
The debate over geoengineering as a solution to the climate crisis ............. Error! Bookmark not
defined.
Reasons for poor response to the climate crisis .............................Error! Bookmark not defined.
Conclusion .....................................................................................Error! Bookmark not defined.
CHAPTER 2 ..................................................................................Error! Bookmark not defined.
Comparing various methods ..........................................................Error! Bookmark not defined.
of reducing carbon levels ...............................................................Error! Bookmark not defined.
Principles to guide the selection of a carbon-reduction method ....Error! Bookmark not defined.
The carbon-reduction method should be fast ...................................Error! Bookmark not defined.
The carbon-reduction method should be formidable .......................Error! Bookmark not defined.
The carbon-reduction method should be fair ...................................Error! Bookmark not defined.
The carbon-reduction method should be globalist ...........................Error! Bookmark not defined.
The carbon-reduction method chosen should not make carbon a commodityError! Bookmark not defined.
The carbon-reduction method chosen should be predictable ...........Error! Bookmark not defined.
The carbon-reduction method chosen should be simple ..................Error! Bookmark not defined.
The major components of the fee & dividend method of carbon reduction Error! Bookmark not
defined.
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The next sections take a closer look at each of these major components of Fee & Dividend.Error! Bookmark
Fee & Dividend is based on the rising price of carbon ....................Error! Bookmark not defined.
Fee & Dividend levies a uniform carbon fee ...................................Error! Bookmark not defined.
Fee & Dividend is a full-dividend method ......................................Error! Bookmark not defined.
Evaluating the Fee & Dividend method of carbon reduction ..........Error! Bookmark not defined.
The cap-and-trade method of carbon reduction .............................Error! Bookmark not defined.
Evaluating the cap-and-trade method of carbon reduction ..............Error! Bookmark not defined.
Alternative methods of carbon reduction .......................................Error! Bookmark not defined.
The cap-and-dividend method of carbon reduction .........................Error! Bookmark not defined.
A Domestic Tradeable Quotas (DTQs) System ...............................Error! Bookmark not defined.
The Kyoto2 proposal for carbon reduction ......................................Error! Bookmark not defined.
The Cap & Share method of carbon reduction ................................Error! Bookmark not defined.
The Contraction and Convergence (C&C) method of carbon reductionError! Bookmark not defined.
The Greenhouse Development Rights framework ...........................Error! Bookmark not defined.
Conclusion .....................................................................................Error! Bookmark not defined.
CHAPTER 3 ..................................................................................Error! Bookmark not defined.
THE INTERNATIONAL MONETARY SYSTEM ......................Error! Bookmark not defined.
—A RECENT HISTORY ..............................................................Error! Bookmark not defined.
“The current international currency system is the product of the past.” .... Error! Bookmark not
defined.
Major monetary events of the recent past: 1944 to 2011 ...............Error! Bookmark not defined.
1944: The Bretton Woods U.N. Monetary and Financial ConferenceError! Bookmark not defined.
August 15, 1971: The end of the gold standard ...............................Error! Bookmark not defined.
1969: Establishing Special Drawing Rights (SDRs) as an alternative currencyError! Bookmark not defined.
Destabilizing monetary trends that must be counteracted .............Error! Bookmark not defined.
How currency manipulation destabilizes a monetary system ..........Error! Bookmark not defined.
How currency speculation destabilizes a monetary system .............Error! Bookmark not defined.
How unregulated capital flows destabilize a monetary system .......Error! Bookmark not defined.
How derivatives destabilize a monetary system ..............................Error! Bookmark not defined.
The Great Recession of 2007-2009: A Breakdown of the Economic System .... Error! Bookmark
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The G20 Response to the Great Recession: Spread a Trillion Dollars around the WorldError! Bookmark not
The U.N. Response to the Great Recession: Create a New Global Reserve SystemError! Bookmark not defin
The U.S. response to the Great Recession: Inadequate and UnenlightenedError! Bookmark not defined.
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Other responses to the Great Recession ...........................................Error! Bookmark not defined.
1. The IMF Conference: frank but ineffective .....................Error! Bookmark not defined.
2. The INET/CIGI Conference: talking shop but no clear visionError! Bookmark not defined.
3. The G20 Seminar in Nanjing: A Bold Initiative from the FrenchError! Bookmark not defined.
Conclusion .....................................................................................Error! Bookmark not defined.
CHAPTER 4 ..................................................................................Error! Bookmark not defined.
TENSIONS AND SHORTCOMINGS OF THE CURRENT GLOBAL
MONETARY/FINANCIAL SYSTEM .........................................Error! Bookmark not defined.
“Global imbalances are a reflection of today’s decentralised international monetary and
financial system. All the main players around the world are rationally pursuing their own self
interest. But the finance crisis has revealed that what makes sense for each player individually
does not always make sense in aggregate.” ..................................Error! Bookmark not defined.
Theoretical tensions and monetary outcomes ................................Error! Bookmark not defined.
The Questionable Quad: Four International Financial Institutions (IFIs) ... Error! Bookmark not
defined.
The Questionable International Monetary Fund (IMF) ...................Error! Bookmark not defined.
The Questionable World Bank and its International Finance Corporation (IFC)Error! Bookmark not defined
The Questionable World Trade Organization ..................................Error! Bookmark not defined.
The Questionable Bank of International Settlements (BIS) ............Error! Bookmark not defined.
The limited impact of voluntary monetary and financial organizations ...... Error! Bookmark not
defined.
The New Rules for Global Finance Coalition..................................Error! Bookmark not defined.
The Bretton Woods Committee .......................................................Error! Bookmark not defined.
The Reinventing Bretton Woods Committee ...................................Error! Bookmark not defined.
The Bretton Woods Project ..............................................................Error! Bookmark not defined.
Six modes of monetary arrangements ............................................Error! Bookmark not defined.
Regional monetary unions .............................................................Error! Bookmark not defined.
The Latin Monetary Union ..............................................................Error! Bookmark not defined.
Monetary unions in Africa, Asia, and the Americas ........................Error! Bookmark not defined.
The European Monetary Union and the euro ...................................Error! Bookmark not defined.
Encouraging trend of more public banks .........................................Error! Bookmark not defined.
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The Role of Complementary currencies ........................................Error! Bookmark not defined.
Examples of complementary currencies ..........................................Error! Bookmark not defined.
How complementary currencies differ from micro credit and local exchange trading systems
(LETS) .............................................................................................Error! Bookmark not defined.
An expanded view of complementary currencies ............................Error! Bookmark not defined.
Complementary currencies and credit creation................................Error! Bookmark not defined.
Removal of the global reserve system ...........................................Error! Bookmark not defined.
The origin of the global reserve system ...........................................Error! Bookmark not defined.
Advantages and disadvantages of the present global reserve systemError! Bookmark not defined.
Countries that issue reserve currencies ............................................Error! Bookmark not defined.
Countries that use a reserve currency ..............................................Error! Bookmark not defined.
The International monetary system as a whole ................................Error! Bookmark not defined.
Reforming the present global reserve system ..................................Error! Bookmark not defined.
Reforms Proposed by the U.N. Department of Economic and Social Affairs (UNDESA)Error! Bookma
Reforms proposed by the U.N. Conference on Trade and Development (UNCTAD)Error! Bookmark n
Shortcomings of the present international monetary system .........Error! Bookmark not defined.
Conclusion .....................................................................................Error! Bookmark not defined.
CHAPTER 5 ..................................................................................Error! Bookmark not defined.
Fractional reserve banking .............................................................Error! Bookmark not defined.
Reserve banking in general ..............................................................Error! Bookmark not defined.
David Korten’s Agenda for a New Economy ..................................Error! Bookmark not defined.
The Chicago Plan of the 1930s ........................................................Error! Bookmark not defined.
AMI’s American Monetary Act .......................................................Error! Bookmark not defined.
Increasing the number of public banks ..........................................Error! Bookmark not defined.
Public control of the U.S. Federal Reserve System .......................Error! Bookmark not defined.
Questioning the Fed .........................................................................Error! Bookmark not defined.
Legislative efforts by Ron Paul and Dennis Kucinich .....................Error! Bookmark not defined.
Smart monetary power in the 21st century ....................................Error! Bookmark not defined.
Conclusion .....................................................................................Error! Bookmark not defined.
CHAPTER 6 ..................................................................................Error! Bookmark not defined.
MONETARY JUSTICE AS THE GUIDING PRINCIPLE ..........Error! Bookmark not defined.
OF GLOBAL GOVERNANCE? ...................................................Error! Bookmark not defined.
The need for values and value-based planning ..............................Error! Bookmark not defined.
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The Contextual Sustainability Framework and monetary justice ..Error! Bookmark not defined.
CSF’s three foundations and four values .........................................Error! Bookmark not defined.
Applying the contextual sustainability framework ..........................Error! Bookmark not defined.
Increasing the acceptance of sustainability economics ..................Error! Bookmark not defined.
The requirement of heterodox thinking ...........................................Error! Bookmark not defined.
Pursuit of the de-financialization of the economy .........................Error! Bookmark not defined.
Strengthening bioregionalism ..........................................................Error! Bookmark not defined.
Advancing frugal trade ....................................................................Error! Bookmark not defined.
Advancing low-carbon economies ...................................................Error! Bookmark not defined.
Advancing Sustainable Communities Development in global North and SouthError! Bookmark not defined.
The pervasiveness of sustainability ethics .....................................Error! Bookmark not defined.
The Findings of the Rock Ethics Institute........................................Error! Bookmark not defined.
The Earth Charter’s principles .........................................................Error! Bookmark not defined.
Monetary justice as the guiding principle of global governance? .Error! Bookmark not defined.
Monetary justice in its regular and transformational sense .............Error! Bookmark not defined.
The rationale for taking monetary justice as the guiding principle of global governance ..... Error!
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The possibility of making monetary justice the guiding principle Error! Bookmark not defined.
Conclusion .....................................................................................Error! Bookmark not defined.
PART II..........................................................................................Error! Bookmark not defined.
FUTURE: The Tierra Fee and Dividend System: contents, significance, strategies, prospects
CHAPTER 7 ..................................................................................Error! Bookmark not defined.
How a carbon-based monetary standard (CMS) would work ........Error! Bookmark not defined.
Who determines what constitutes “money”? ...................................Error! Bookmark not defined.
Developing a proximity formula for a carbon-based monetary standardError! Bookmark not defined.
Identifying the sources of carbon emissions and developing measures for decarbonizing
society ....................................................................................Error! Bookmark not defined.
Incorporating the evaluation techniques of the Financial Standards IndexError! Bookmark not defined
Using indexes developed by financial markets ......................Error! Bookmark not defined.
Extensive use of the Environmental Performance Index .......Error! Bookmark not defined.
Extensive use of the Global Greenhouse Gas Standard for CitiesError! Bookmark not defined.
Technical and political challenges of the proximity formula Error! Bookmark not defined.
Two main applications of the Carbon Monetary Standard ..............Error! Bookmark not defined.
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Option #1: Revaluate national currencies ..............................Error! Bookmark not defined.
Option #2: Introduce the Tierra world currency ....................Error! Bookmark not defined.
Comparing the gold and carbon standards .............................Error! Bookmark not defined.
The Tierra currency and the carbon standard ................................Error! Bookmark not defined.
How the Tierra compares to other global currencies .......................Error! Bookmark not defined.
The bancor .............................................................................Error! Bookmark not defined.
Collective Reserve Unit (CRU) .............................................Error! Bookmark not defined.
The Phoenix ...........................................................................Error! Bookmark not defined.
DEY international unit ...........................................................Error! Bookmark not defined.
Global Greenbacks .................................................................Error! Bookmark not defined.
The Petro dollar......................................................................Error! Bookmark not defined.
Ebcu .......................................................................................Error! Bookmark not defined.
Ingredients for the establishment of a world currency...........Error! Bookmark not defined.
The Tierra and the SDR ...................................................................Error! Bookmark not defined.
Fixed exchange rates and the carbon standard ...............................Error! Bookmark not defined.
Advantages and disadvantages of the new carbon-based fixed exchange ratesError! Bookmark not defined.
The balance of payments mechanism in the Tierra monetary system ......... Error! Bookmark not
defined.
The Global Central Bank in the Tierra monetary system ..............Error! Bookmark not defined.
Global monetary authority is needed ...............................................Error! Bookmark not defined.
The functions and objectives of the Tierra Global Central Bank ....Error! Bookmark not defined.
Accounting at the Tierra Global Central Bank (GCB) ..........Error! Bookmark not defined.
Monitoring by the Tierra Global Central Bank......................Error! Bookmark not defined.
Regulation by the Tierra Global Central Bank ......................Error! Bookmark not defined.
Credit and liquidity creation by the Tierra Global Central BankError! Bookmark not defined.
Characteristics of the Tierra Global Central Bank ...........................Error! Bookmark not defined.
The Bank is a credit-based financial system ..........................Error! Bookmark not defined.
The Bank is affiliated with the U.N. ......................................Error! Bookmark not defined.
The Bank is self-funding ........................................................Error! Bookmark not defined.
The Bank is legitimate ...........................................................Error! Bookmark not defined.
The Bank will be governed democratically ...........................Error! Bookmark not defined.
The Tierra Monetary Court ............................................................Error! Bookmark not defined.
Comparison of the Tierra Monetary Architecture and the IMF .......Error! Bookmark not defined.
Conclusion .....................................................................................Error! Bookmark not defined.
CHAPTER 8 ..................................................................................Error! Bookmark not defined.
PERSPECTIVES ON THE TFD GLOBAL GOVERNANCE SYSTEM ... Error! Bookmark not
defined.
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The monetary perspective on the TFD global governance system Error! Bookmark not defined.
The U.S.-China currency dispute .....................................................Error! Bookmark not defined.
The fragile euro ................................................................................Error! Bookmark not defined.
Reformist monetary proposals .........................................................Error! Bookmark not defined.
The climate perspective: The TFD as a post-Kyoto alternative to reduce greenhouse gases Error!
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The UNFCCC attempts to achieve a binding climate agreement ....Error! Bookmark not defined.
The General Agreement on Reductions of Emissions (GARE).......Error! Bookmark not defined.
The ALBA climate negotiations ......................................................Error! Bookmark not defined.
Financing of climate in the TFD system ........................................Error! Bookmark not defined.
Governmental sources of financing for climate ...............................Error! Bookmark not defined.
Article 4 of the 1992 UNFCCC .............................................Error! Bookmark not defined.
Unitaid....................................................................................Error! Bookmark not defined.
International taxation .............................................................Error! Bookmark not defined.
Private sector financing for climate .................................................Error! Bookmark not defined.
Civil society sources of financing for climate .................................Error! Bookmark not defined.
Carbon-offsets companies ......................................................Error! Bookmark not defined.
Personal Approaches. .............................................................Error! Bookmark not defined.
Advocacy by Civil Society for More and Better Official Funding.Error! Bookmark not defined.
The TFD perspective on the global financial system.....................Error! Bookmark not defined.
Monitoring and regulating of the international financial system .....Error! Bookmark not defined.
Providing credit and liquidity and the monetizing of debt ..............Error! Bookmark not defined.
The TFD perspective on the global economic system ...................Error! Bookmark not defined.
The TFD would coordinate social, environmental, and economic aspects of global governanceError! Bookma
The TFD would contribute to sound energy use by the decarbonization of societiesError! Bookmark not defi
The TFD would contribute to full employment and social protectionError! Bookmark not defined.
The TFD perspective on global trade.............................................Error! Bookmark not defined.
Increased stability of exchange rates ...............................................Error! Bookmark not defined.
Reduced transaction and reserve currency costs ..............................Error! Bookmark not defined.
Implementation of environmentally oriented trade policies ............Error! Bookmark not defined.
Allocation of emissions by international aviation and marine transportationError! Bookmark not defined.
Moving from the WTO to UNCTAD ..............................................Error! Bookmark not defined.
The TFD perspective on global governance ..................................Error! Bookmark not defined.
International coordination in monetary, climate, and development mattersError! Bookmark not defined.
The Yale/UNITAR conference’s emphasis on coordination ...........Error! Bookmark not defined.
The “Whole Earth Economy” ..........................................................Error! Bookmark not defined.
International cooperation among nations .........................................Error! Bookmark not defined.
The TFD and international coordination..........................................Error! Bookmark not defined.
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Monetary governance and sustainable development .......................Error! Bookmark not defined.
Conclusion .....................................................................................Error! Bookmark not defined.
CHAPTER 9 ..................................................................................Error! Bookmark not defined.
THE TIERRA STRATEGY ..........................................................Error! Bookmark not defined.
Characteristics of a successful TFD Strategy ................................Error! Bookmark not defined.
Present the magic of a big plan like the TFD...................................Error! Bookmark not defined.
Emphasize the value of monetary justice.........................................Error! Bookmark not defined.
Maintain resiliency...........................................................................Error! Bookmark not defined.
Find leverage points of entry ...........................................................Error! Bookmark not defined.
Be prepared and look for opportunities ...........................................Error! Bookmark not defined.
Institutionalizing the TFD outreach effort .....................................Error! Bookmark not defined.
The U.N. Commission of Experts on Monetary Transformation, Climate Change, and
Sustainable Development.................................................................Error! Bookmark not defined.
Understanding the U.N. Commission’s mandate ...................Error! Bookmark not defined.
Understanding the objectives of the U.N. Commission .........Error! Bookmark not defined.
Membership of the U.N. Commission ...................................Error! Bookmark not defined.
The U.N. General Assembly Resolution Strategy Group ................Error! Bookmark not defined.
The National TFD Global Governance Working Groups ................Error! Bookmark not defined.
The challenge of monetary literacy education .................................Error! Bookmark not defined.
Role of the International Institute for Monetary Transformation (IIMT) .... Error! Bookmark not
defined.
Conclusion .....................................................................................Error! Bookmark not defined.
CHAPTER 10 ................................................................................Error! Bookmark not defined.
PROSPECTS FOR THE TIERRA SYSTEM ................................Error! Bookmark not defined.
1. Cultural reasons, objections, and responses .................................Error! Bookmark not defined.
Objections and related responses: ..........................................Error! Bookmark not defined.
2. Ecological reasons, objections, and responses .............................Error! Bookmark not defined.
Objections and related responses ...........................................Error! Bookmark not defined.
3. Economic reasons, objections, and responses..............................Error! Bookmark not defined.
Objections and responses .......................................................Error! Bookmark not defined.
4. Ethical reasons, objections, and responses ..................................Error! Bookmark not defined.
Objections and responses .......................................................Error! Bookmark not defined.
5. Monetary reasons, objections, and responses ..............................Error! Bookmark not defined.
Objections and responses .......................................................Error! Bookmark not defined.
6. Political reasons, objections, and responses ................................Error! Bookmark not defined.
Objections and responses .......................................................Error! Bookmark not defined.
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Promising developments ................................................................Error! Bookmark not defined.
Monetary developments ...................................................................Error! Bookmark not defined.
Growing assertiveness of emerging economies and other developing nationsError! Bookmark not defined.
Increased efficacy of civil society....................................................Error! Bookmark not defined.
Conclusion .....................................................................................Error! Bookmark not defined.
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