Time to Reform the Global Casino


Human Wrongs Watch

ST. AUGUSTINE, Florida, Oct 20 2015 (IPS) – The year 2015 highlights the global shift from traditional money-based, gross domestic product (GDP)-measured economic growth to the new models of sustainable, inclusive human development embodied in the United Nations Sustainable Development Goals (SDGs) ratified by its 193 member nations.

Hazel Henderson Credit:

This historic shift still involves ideological and political struggles between incumbent industries of the earlier Industrial Revolution and the disruptive forces and technologies of our succeeding Information Age.

The battles continue between the fossilized economic and financial sectors and those rising in the knowledge-richer technologies and cleaner, greener companies based on efficiency, renewable energy and “shareconomies.”

This multi-generational shift also involves deeper processes of changing world views, social organizations and evolving cultures in our global human family of some 7.5 billion people.

These historic changes in 2015, now visible in the SDG 17’s intertwined goals, go far beyond the earlier Millennium Development Goals (MDGs).

They embrace the major problems and opportunities for continuing the successful evolution of human societies on planet Earth.

The SDGs close the obsolete textbooks on money-based, GDP-measured economic growth. Today, the social and environmental costs of this earlier GDP model are evident to all in pollution, ecological and social disruption, widespread effects of climate change, global warming and rising sea levels – all measured daily by 120 Earth-observing satellites.

All this physical evidence of humans stressing ecological limits and planetary boundaries also led to the focus on finance as driver of these failed models of GDP-growth and short-term profits.

The “free market” models of Britain’s prime minister Margaret Thatcher and US president Ronald Reagan in the 1980s drove “financialisation” and globalization which privatized and deregulated economic activities – divorcing them from their social context and consequences.

Finance became a global casino, the servant of fossilized industrialization and its overemphasis on investing in coal, oil and gas.

This is highlighted in the research of the British NGO Carbon Tracker: trillions of “assets” in fossil fuel companies balance sheets became potential liabilities because they could not be burned without further damage to the climate.

Client Earth, a public interest law firm, announced it is monitoring 250 corporations and their directors for possible legal action pursuant to the Companies Act of 2006.

Many science policy analysts, including this writer, and millions of citizens have been pointing out the failures of economics and its GDP-growth fetish which still drives financial markets.

Yet, it took decades before today’s physical evidence, growing crises and millions of ethical investors produced the global transitions now recognized in the UN’s SDGs.

This fossilized global finance is addressed in the two-year, ground-breaking United Nations Environment Programme (UNEP) Inquiry: Design of a Sustainable Financial System, whose report The Financial System We Need was released October 8, 2015.

This two-year Inquiry was steered by a global advisory board of central bankers, stock exchange and pension fund executives, regulators led by UNEP administrator Achim Steiner, and was co-directed by Nick Robins and Simon Zadek.

It explores how to reshape and align crisis-prone global financial markets with the new SDGs – beyond short term speculative high speed trading toward serving needs of the real world economies.

The UN Inquiry report contains many innovative studies including Greening China’s Financial System; Exploring Financial Policy and Regulatory Barriers to Private Climate Finance in South-East Asia; Scaling Green Bond Markets for Sustainable Development; Financial Reform, Institutional Investors and Sustainable Development; Fiduciary Duty in the 21st Century; Values BasedBanking; Insurance 2030 – Harnessing Insurance for Sustainable Development; and reports on these issues from India, Brazil, Indonesia, Bangladesh, Africa and Colombia.

Many innovative critiques are also referenced, including Ethical Markets’ Reforming Electronic Markets and Trading; Britain’s New Economics Foundation’s Financial System Impact of Disruptive Innovation, on the electronic shareconomy, crowdfunding, peer-to-peer lending – all bypassing conventional finance.

Canada contributed research from CIGI (Center for International Governance Innovation) on environmental risk disclosure, its new FALSTAFF model and Central Banks Can and Should Do Their Part in Funding Sustainability, which boldly calls for central banks to use their quantitative easing (i.e., money printing) to buy new green bonds to grow the next economy for real people rather than bailing out past mistakes of big banks.

The Inquiry’s 4th progress report: The Coming Financial Climate reviewed all the findings on how governments, regulators, standard-setters and market actors are starting to incorporate sustainability factors into the rules that govern the financial system.

Although there is much still to be done to de-risk and transform conventional finance, this Inquiry has broken down major barriers and brought together many of the progressive forces taming speculative markets and reforming practices that led to the 2008 crises and resulting human misery.

The battle lines are drawn. Ending tax breaks and subsidies to fossil fuels and nuclear power will accelerate the new cost advantages of the more efficient renewable sectors worldwide.

*Hazel Henderson, president of Ethical Market Media (U.S. and Brazil) is a futurist, science policy advisor and author of Mapping he Global Transition to the Solar Age and other books. Henderson’s article was published in IPS. Go to Original.

2015 Human Wrongs Watch

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