Transforming the International Monetary System: A crucial “new and emerging challenge” for the Rio 2012 Earth Summit

By Frans Verhagen

This think-piece proposes that the present unjust, unsustainable, and, therefore, unstable international monetary system, which presently functions without a standard, be transformed into one that has carbon-based standard. Such a carbon-based monetary system, the most important pillar of the Tierra Fee & Dividend (TFD) global governance system, put forward in this proposal, would replace the present one, characterized by financial imbalances, volatile exchange rates, currency disputes, currency manipulation and speculation and, last but not least, a global reserve system that costs non-hard currency nations billions of dollars annually. Additionally, such a transformation would contribute to solving the challenges posed by the climate crisis, sustainable development and a dysfunctional monetary system simultaneously in that it would also provide the basis for an integrated global governance system. Thus the TFD addresses itself to the two main objectives of the Rio 2012 Earth Summit process, i.e. promotion of a green economy as part of sustainable development and the establishment of a global governance system. Moreover, as noted above, it also addresses the climate crisis, an area of concern that is not included in the present planning process though it is widely acknowledged to heavily impact economies—green or otherwise—and all programs of sustainable development.