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We are about to obliterate 60% to 80% of life on Earth, what can be done if shutting down the whole global economy is not an option?


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Summary

In order to limit global warming to 2°C and avoid the worst effects of climate change, the world needs to invest an additional $36 trillion in clean energy—an average of $1 trillion per year for the next 36 years.

Ceres calls this challange the Clean Trillion http://www.ceres.org/issues/clean-trillion/clean-trillion

IEA estimates that $1 Trillion of green finance is needed annually, between 2014 and 2050. But Nicholas Stern says what could be needed is another $2-3 Trillion a year.

2012 investments reached $281 Billion.

We’ve never been here as a species, and the implications are truly dire and profound for our species and the rest of the living planet. We are currently in the midst of the sixth mass extinction in planetary history, with between 150 and 200 species going extinct daily, a pace 1,000 times greater than the “background” extinction rate. This event already exceed, both the speed and intensity of the Permian mass extinction. The difference being that ours is human caused, isn’t going to take 80,000 years, has so far lasted just a few centuries, and is now gaining speed in a non-linear fashion.

We have a clear picture of a steady state economy or Green Economy. We are just currently missing the transition road map to get there. Our current economic order would disintegrate into epic level unemployment, depression and debt default, without a feasible road map for a transition. This proposals financing infrastructure is also a road map for a transition to a global steady state economy (Green Economy).

We have the technology, and means, solar, wind (with sea container size batteries) algae-fuels and geothermal power, zero energy buildings, fast and efficient mass transit, vertical farms, offshore windfarms, desert solar power stations, to start the much delayed global Transition to a sustainable global economy, a Green Economy. What we need is a financing so massive that even the armament of World War II and rebuilding after the war, will seem small in comparison.


Category of the action

Mitigation - What U.S. Federal Agencies can do to mitigate climate change


What actions do you propose?

The global GDP is $72 Trillion 

We have global total assets of $75.9 Trillion   http://www.ceres.org/images/clean-trillion/total-assests-institutional-investors

What we need is a minimum of $36 Trillion, but could amount in the excess of $100 Trillion.

What we need is 100% renewable energy. 100% circular economy, all raw-materials circulated within the economy, not incinerated or put into landfills. And 100% food security with food banks, greenhouses, rooftop farms, vertical farms and local farmers markets. Plenty of fresh water and resilient communities with readily available micro finance, business mentors and education. We need gender equality, justice and we need all of this yesterday. We need a Global Green Economy, now!

WE NEED A NATIONAL GREEN INVESTMENT BANK

How It Works

Commercial Banks create money almost literally ‘out of nothing’. That is what Commercial Banks do. A National Green Investment Bank can also create money ‘out of nothing’. And by using the National Green Investment Bank to give loans to State Green Investment Banks that in turn give loans to Community Green Investment Banks, we would have combined assets of several Trillion. It is only a matter of policy whether or not to have a National Green Investment Bank.

Why do we need this three stage infrastructure of National, State and Community Green Investment Banks?

One National Green Investment Bank will not create enough money to do the job. And if all the decisions and political power are concentrated in the hands of the few, we will not build resilient communities. We have to build a three stage infrastructure that is interdependent on each other. This way we create enough money. But at the same time we return the power to the people, we return democracy, we return justice and resilience to the communities.

Do we have enough capital to back the loans?

The National Bank is backed by governments ability to collect taxes. The State Bank is backed by the commercial banks capital, and the Community Bank is backed by capital of the community.

If a National Green Investment Bank was given 1 billion of reserves, it could give up to 80 billion in fractional reserve loans. The 79 million would be loaned into existence out of nothing. Now, the 80 million could be given as loans to Commercial Banks, say filial or accounts in Bank of America or Deutsche Bank or such. The loans to 80 different financial products of these banks 1 million each, would in turn have the right to create fractional reserve loans worth 6.400 billion. Now these 6.400 billion would be loaned to Community Green Investment Banks, banks that are run by you and me, our community. Each would be given 1 billion in loans and together all our Community Green Investment Banks would have the loaning ability of 512.000 billion.

If the World Bank implemented this proposals financing infrastructure to its US$12.2 billion of annual climate financing, or if the New York Green Bank with proposed US$80 billion of climate change financing, implemented this proposals financing infrastructure, that would create enough financing, and many many times over, for a global transition to a low-emissions economy, a Green Economy.

The Limits To Debt

Why do world governments take insufficient Climate Change action, or even back down on given promises? Like the 1972 Club of Rome book "Limits To Growth" suggested, we are now living in a Anthropocene, but simultaneously with "limits to growth", we have also reached the limits of debt. We are not seeing a robust economic recovery because public investment remain below growth-sustaining levels.

The lack of economic recovery scares governments. We have rising unemployment, higher energy and raw material prices. But nontheless it is estimated that $ Trillions in “green finance” is required to prevent climate change. That is simply an staggering amount of excess cash required!

Peak Debt + Peak Oil + Anthropocene = The Perfect Economic Storm

Economics is a science that looks for economic patterns of the past, to model the future. We are entering a world of a Perfect Economic Storm! That economic storm is completely impossible to model (predict) with economics because it is something that will happen only once in the history of the planet earth. We, the global civilization of planet earth, have reached the limits of debt and simultaneously we have reached Peak Oil. Peak Debt means that we have more to pay back in interest (interest rates, marginal, rise, despite central bankers efforts to keep them as low as possible, because a more hazardous world makes more debts default), then what can be loaned in new loans. Peak Oil means that the production of oil cannot keep up with the consumption of oil, which means that the most important energy source of our planet becomes more expensive, leaving less and less money for food, travel and for the production of all other things. Together with Anthropocene, a world which is now filled up to the brim with humans, resources of all kinds are diminishing. Fish from the seas are being over fished. Trees from the forests are being cut into furniture and building materials. Iron ore from the ground can not be mined with the speed that it is consumed. Fresh water is running out. Soil degradation is commonplace. Desertification affects larger and larger land masses. Together these three form a Perfect Economic Storm. The limits of debt mean that we simply must have economic growth in some form or another, to pay back the debts our governments have taken. But Peak Oil and the Anthropocene make economic growth impossible. But because we are at the limits of debt, all governments must first and foremost seek economic growth at all costs. This deadlock of political power, the impotent search after economic growth, will be the only political goal worth pursuing, sadly, until the Perfect Economic Storm begins. And when the Perfect Economic Storm begins, when all stock markets crash, all debts fail, all banks fail, all currencies fail, when unemployment skyrockets and all governmental infrastructure collapses, nobody, absolutely nobody wants to be there. The world is deadlocked between the need to find money to finance climate change, to avoid a runaway greenhouse effect, by economic growth. And the utter impossibility of finding sustainable economic growth in the Anthropocene.

We have to understand that $ Trillions of excess cash CAN be found, when the concept of fractional reserve banking (FRB) is put under scrutiny.

FRB created an expanding money supply that in combination with cheap energy and technological improvements got us into the growth imperative which led to the Anthropocene, which in turn led us into a risk of runaway climate change.

But FRB is also the one thing that can create money ‘out of nothing’ to finance climate change, finance the Transition to a Green Economy. Perhaps FRB should be abolished, to achieve a Green Economy, but before abolishing FRB, it should be used to create the one thing that can finance the Transition; National- State- and Community Green Investment Banks.

Legally nothing prohibits any Nation from setting up a National Green Investment Bank, that gives loans to State level Green Investment Banks that in turn give loans to Community level Green Investment Banks. With this banking system in place, we just happen to have $ Trillions of excess cash, annually, that are loaned in 50 year, low interest loans, into existence, to finance climate change.

Isn´t carbon taxes enough? Why can´t we have a Tobin tax on financial transactions, wouldn´t they suffice? Well, of course any and all means necessary to get the financing, but in consideration of the perfect economic storm, all other financial instruments will be impossible to implement politically. Only those that create money out of nothing will be politically even remotely possible. Commercial Banks create money almost literally ‘out of nothing’. That is what Commercial Banks do. A National Green Investment Bank can also create money ‘out of nothing’. And by using the National Green Investment Bank to give loans to State Green Investment Banks that in turn give loans to Community Green Investment Banks, we would have combined assets of several Trillion. It is only a matter of policy whether or not to have a National Green Investment Bank.

Is it legal? Why yes, such is the current structure of our financial system. Wouldn´t we be head over heels in debt? Actually no. All the loans would be given to homeowners to renovate their homes into zero energy, zero environmental impact homes, studentloans, renewable energy projects, mass transit and zero energy buildings, over extended periods of time, say 50 year loans. Because of extended periods of time, absolutely sure bets in investments, only absolutely minimal interest rates could be justified. Our current high interest loans would be slowly tranformed to ultra long 50 year loans, with ultra low interest rates. Do the math, which would you take a 100.000 15y loan with 3,5% interest. Or a 200.000 loan for 50y with 0,25% interest? And we have to understand that simultaneously all prices would go down and our salaries would go up. With absolutely massive loans, absolutely massive investments in renewables, zero energy buildings, vertical farming and such, absolutely massive empolyment would be created. We would be as near full employment as can be reached by any means. With full employment, cheap energy, cheap food, cheap masstransit, cheap housing, available micro finance and mentors we would have all the money we need to make the Transition to a Steady State Economy, Green Economy, New Economy etc. etc. We would no longer be chained to the growth seeking, profit hungering public stock markets, we would be free to make the Transition. With a sustainable global economy, 100% circular economy, all debts would be easily payed by full employment. To accomplish all this we would need only one new institution, the National Green Investment Bank. 

There is no law that prohibits this

Only policy, only political ideology stands in the way of creating a global financing infrastructure that allows us to finance climate change (and other improvements) and start the Transition to a sustainable global economy.

Our current economic system doesn´t follow the constitutions, the legal basis of our nations. Either we have to change all constitutions of all the nations in the world, or then we have to give the planet a chance to survive.

Legally we are now living in a unlawful society that has no legal right to collect taxes, issue bonds, issue legal tender paper money, have courts of law, have a police force, jail or fine people or have an army, to rule or govern in any other way.


Who will take these actions?

Firstly, the government needs to address this lack of financing to address climate change in an adequate fashion, by making a (small) budget for round table seminars, hearings, task forces and reports on the matter.

This will lead to..

Secondly we need international organizations  IEA, OECD, NATO, World Bank and Bank of International Settlements economist making calculations and policy options on the lack of financing to adequately answer the global threat of climate change.

And finally this will lead to..

Thirdly we need the IEA, OECD, NATO, WB and BIS to make recommendations to all nations; create one new institution, the National Green Investment Bank.

And the first and foremost objection; Inflation, is actually no objection at all. If Trillions of funding is invested in long-term projects it will create a spiral towards full employment saving the global economy from a total meltdown. The influx of Trillions and the rising employment levels create temporary inflation pressures, but simultaneously save the total value of money, because this will save the global economic infrastructure = save the value of money. 


Where will these actions be taken?

Firstly in the government.

Secondly at IEA, OECD, NATO, WB, BIS


How much will emissions be reduced or sequestered vs. business as usual levels?

As much as needed.


What are other key benefits?

Survival of 60-80% of life on Earth


What are the proposal’s costs?

The government needs to address this lack of adequate climate change financing, by making a (small) budget for round table seminars, hearings, task forces and reports on the matter.

This is already a mass extinction event. The question is, how far is it going to go? How serious does it become? If we are not able to stop the rate of increase of temperature itself, and get that back under control, then a high temperature event, perhaps another 5-6 degrees [C], would obliterate at least 60% to 80% of the populations and species of life on Earth.

The three living diplomats who have led U.N. climate change talks, claim there is little chance the next climate treaty, if it is ever approved, will prevent the world from overheating. "There is nothing that can be agreed in 2015 that would be consistent with the 2 degrees," says Yvo de Boer, who was executive secretary of the United Nations Framework Convention on Climate Change in 2009, when attempts to reach a deal at a summit in Copenhagen crumbled. "The only way that a 2015 agreement can achieve a 2-degree goal is to shut down the whole global economy."

So, what then is the absolutely worst outcome this proposal could create?

We start the financial infrastructure, and end up building too much renewable energy, vertical farms, mass transit and zero energy buildings. Because money is not the restricting factor the construction would utilize 100% circular economy, that is to say recycled materials. The worst thing that could happen is that we kickstart 100% circular economy and end up having too cheap energy, food, housing and mass transit. That is to say higher living standards than today with net zero environmental impact. 


Time line

New York is already developing a Green Investment Bank.

The World Bank financed climate change by US$12.2 billion in 2012. The World Bank together with six large multilateral development banks delivered US$27 billion in climate change financing in 2012.


Related proposals

NY launches Green Bank to Tackle Climate Change, the creation of a $1 billion Green Bank would unlock $78 billion of financing: http://blogs.edf.org/energyexchange/2013/12/23/ny-governor-cuomo-launches-green-bank-in-aggressive-move-to-tackle-climate-change/?utm_source=twitter&utm_medium=social-media&utm_campaign=main

If the World Bank implemented this proposals financing infrastructure to its US$12.2 billion of annual climate financing, that would create enough financing, and many many times over, for a global transition to a low-emissions economy    http://www.worldbank.org/en/topic/climatefinance/overview

Seven Policy Switches by Blindspot Think Tank http://blindspot.org.uk/seventh-policy-switch/  http://blindspot.org.uk/seven-policy-switches/

Imagine 100 cities where people cooperatively own utilities, banks & create currencies:http://www.shareable.net/contribute

How the U.S. can help stabilize the climate and create a clean energy future:  http://www.usclimateplan.org/


References

The Most Important Climate Change Question: How Will Investors React?  http://business-ethics.com/2014/01/08/1607-the-most-important-climate-change-question-how-will-investors-react/

Climate change: How do we know?   http://climate.nasa.gov/evidence

 IEA: Tracking Clean Energy Progress 2013  www.iea.org/publications/TCEP_web.pdf

The World Bank; financing climate change overview: http://www.worldbank.org/en/topic/climatefinance/overview

Peak Oil is here and it will break economies by Nafeez Ahmed;http://www.theguardian.com/environment/earth-insight/2013/dec/23/british-petroleum-geologist-peak-oil-break-economy-recession?CMP=twt_gu

Rooftop Farm in New York City Grows 50,000 Pounds of Organic Produce Per Year http://ecowatch.com/2014/01/04/rooftop-farm-new-york-city-organic-produce/

Climate change denialism: Follow the money?  http://summitcountyvoice.com/2013/12/23/climatechange-denialism-follow-the-money/?utm_source=&utm_medium=&utm_campaign=

New finding shows climate change can happen in a geological instant: http://phys.org/news/2013-10-climate-geological-instant.html

The Coming ‘Instant Planetary Emergency’: http://www.thenation.com/article/177614/coming-instant-planetary-emergency

The Boulevard Of Climate Catastrophe : Humanity's Path To Perdition & The Moral Imperative To Act  http://www.dailykos.com/story/2014/01/03/1265854/-The-Boulevard-Of-Climate-Catastrophe-Humanity-s-Path-To-Perdition-The-Moral-Imperative-To-Act

How to Get to Full Employment Despite the Political Constraints: Robert Pollin Explains the Economics http://www.huffingtonpost.com/anis-shivani/robert-pollin-unemployment_b_1772332.html?utm_hp_ref=tw

Are Crowdfunded Renewables The Game Changer?  http://cleantechnica.com/2013/12/20/crowdfunded-renewables-game-changer/

Carbon budget attracts controversy as models try to map energy's future;   http://www.eenews.net/stories/1059992080

U.S. Energy facts; http://www.eia.gov/energyexplained/index.cfm?page=us_energy_home

The Past, Present and Future of Money. http://envisioning.io/money/

The revolution is already happening by Michael Townsend http://www.theecologist.org/blogs_and_comments/commentators/2177708/the_revolution_is_already_happening.html

What is Economics? Part 3 of 3, Part 3 looks forwards and sets out 11 ideas that should be in the toolbox of every 21st century economist. http://www.kateraworth.com/2013/11/26/what-is-economics-part-3-of-3-2/

The Global Transition to a New Economy maps innovative projects that challenge business as usual and contribute to the systemic change to our economy that we urgently require. Together, these projects create a world that prioritizes human wellbeing, within environmental limits.  http://gtne.org/

Social Impact Bond Infographic  http://www.rockefellerfoundation.org/blog/social-impact-bonds-infographic?utm_source=Social%20Media&utm_medium=Twitter&utm_campaign=Best%20of%202013