During the past two months we have seen Governments commit more than USD 3000 billion towards stabilizing financial markets. A further USD 2000 billion have already been announced for economic stimulus packages. Never in the history of humankind has so much money been allocated with so little preparation and strategic analyses
Paradigms about the role of the state, the effective functioning of markets or economic policy which have been propagated for the past two decades as certainties equivalent to the laws of physics have been abandoned almost overnight. Historians and scholars will no doubt spend years assessing the validity of these emergency responses to the crisis in our financial markets. However, as societies confronted by multiple challenges today (eg. food security, poverty reduction, energy security, climate change, environmental degradation) we do not have the luxury of addressing these challenges with hindsight. We have just mortgaged our capacity both nationally and globally to address these challenges by appropriating in excess of USD 5000 billion for coping with a financial crises and pre-empting a potentially even more dramatic economic crises.
In seeking to remind ourselves that the other crises cited above have neither subsided and that the costs of leaving them unattended will by far exceed the costs of our current predicaments in the financial markets, we are not suggesting a trade-off. The concept of a Global Green New Deal and the broader agenda of accelerating a transition towards a Green Economy is an attempt to engineer a win-win strategy. We simply cannot afford to limit the financial and economic rescue packages to the current narrowly conceived and emergency driven agenda. The attached paper suggests a number of key elements which have the potential to achieve multiple benefits – liquidity, economic stimulus, job creation, energy efficiency and diversification as well as scaling up global efforts to move towards a low-carbon economy.
It is imperative that these elements become not only part of the public policy discourse about the current crisis but are also embraced and further articulated by the financial institutions and architects of our international financial system.
A global Green New Deal is not an alternative answer to the current rescue efforts for our financial system. But it should become a key building bloc in determining the strategy and priorities for how we can ensure that USD5,000 billion plus are not simply expended like water to put out a fire. We must find more intelligent ways to invest these resources to address multiple challenges. Otherwise there will simply be no money left for investing in the drivers for a low carbon, energy efficient and less polluting economy which can generate tomorrow’s jobs and livelihoods for nine billion people.
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