This article was submitted by Michael Baran, Chief Consultant with GEPSD Economic Consulting.
re we being too timid in our expectations of what the global financial system is capable of? This may be because the environment from which the financial system was founded has changed. We no longer find ourselves on an earth with vast areas of land and resources available for plunder. The rapid economic growth prevalent for many periods in history appears to be stalled. How can we modify the financial system to accommodate new avenues of growth? Perhaps, to start with, we need to look at how we can adapt our financial system to enable monetary flow to all economic sectors in sufficient amounts.
In this time of global economic uncertainty the following issues or obstacles appear to be overwhelming. If looked at from another perspective they are in reality significant opportunities:
The G20 economic community individually, and as a whole, given the debt situation many nations find themselves in, may not be in a position to initiate large scale bold initiatives such as the opportunities indicated above. This is a paradox, since taking on those initiatives would in fact set the global economy on a revitalized path to a 21st century global economy.
What is holding us back? The challenges include:
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The challenges listed above are a symptom of a financial system that is not working as it should. The reality is we need to add a mechanism to the financial system that will give it the capacity and scope to help fund all of the above opportunities fully.
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The mechanism Gepsd recommends is the ECO$ financial system, a complementary financial system that can easily be added to the current financial system. It is based on goods and services supplied by nature to industrial and urban economic activities at commercial rates – for example, natures’ oxygen used by buildings, vehicles, and machinery. The ECO$ financial system would of course require recognition by the G20 economic community. The system funds would be utilized to fund projects that have a direct and indirect benefit to nature.
The following chart is the proposed method of distribution of funds. Note the broad spectrum of businesses and organizations that may utilize the funds. The control factor is the project must meet regular business plan requirements as well as be approved by an association of environmental organizations as well as the national government environment agency.
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Alternatively, the G20 political leaders could try the avenue of closing tax loopholes, expropriating offshore wealth, reducing corruption, and other measures. However, the reality is that we need to establish plans for economic recovery now. Who knows when, and if, the bulk of the funds would ever be recovered if the legal enforcement route were chosen? The longer we delay dealing with the obstacles head on the more risks we will face: economic risk, political risk, and environmental risk.