Saving our planet
What’s the problem?
Do you ever wonder how on earth we are going to make the changes we need to in the face of climate change? You and I can keep recycling and consuming in ways which improve our lives and those of the rest of the planet, but what we really need is a much larger, more systemic change of direction. Don’t you ever think that our economies are not changing fast enough? Or that they are only making small changes and those almost exclusively when and how it suits short-term profit motives?
What’s so bad about that?
We need large scale structural change to our economies and societies, including to our energy systems, our agriculture, our patterns of consumption and to what we consider to be “the good life”. We need urgently to live well within limits. We face catastrophic warming and large scale species declines and extinctions if we don’t make changes.
We urgently need our economies to change direction and a key element of that will be redirecting finance to solutions to help us in the transition to a new economy and society. Until finance is energising new projects and new ways of thinking and doing we are unlikely to get the change we need. It won’t be enough on its own, but unless finance is on our side it will be extremely hard to achieve.
What’s the alternative?
Finance should be given a strong direction to direct investment, credit and liquidity to projects which help us make the transition to living within the planetary limits.
How will it help?
Change can come surprisingly quickly, but we need to start, and we need to change the behaviour of our corporations, including financial firms. This starts with measuring and disclosing the impacts that businesses have on the planet. Financial firms should, through bans, quotas and incentives, shift money to projects that enable us to manage the transition to a new economy and society and to negotiate energy descent. Enormous financial resources, largely funded by the pensions, insurance and other savings of normal citizens, are still directed towards industries that are actively harming the planet, and they need to be urgently redirected to projects, both large and small, that will help humans live as part of and in balance with the rest of life on this planet. The mission to save the planet will need new thinking about we value things, large amounts of private and public investment, and plans for a just transition so that people who rely on high carbon industries for their income are not left behind.
What steps could we take to get started?
- Promote public banks, stakeholder banks, network of people’s banks, ethical banks, and small banks.
- Promote local, mutual and cooperative banks, pension and insurance providers and other financial institutions to give stakeholders as say in what gets financed.
- Promote democratically accountable multi- and bi- lateral development and investment banks including green investment banks.
- Remove state aid, fiscal accounting, and other barriers to public banking.
- Launch citizen wealth funds where the people have a direct input into which projects are financed.
- Use public guarantees to support green investments.
- Tax carbon emissions at a level high enough to, at the very least, deliver the Paris climate goals.
- Restrict carbon allocations in Emissions Trading Schemes to ensure a carbon price high enough to achieve, at the very least, the Paris climate goals.
- Promote green and brown loan tagging.
- Penalise mis-selling of green finance products.
- Increase transparency by ensuring carbon disclosure for portfolios (similar to France’s Article 173 rule).
- Make sure that Environment Social and Governance (ESG) considerations are a part of investments’ firms’ duties towards their clients. Increase transparency by demanding ESG disclosure based on public evaluation models or taxonomies.
- Lead by example, by making public and municipal investment and pension funds disinvest from harmful, speculative or unsustainable activities and invest in green and socially transformative projects.