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What Was – and Wasn’t – Achieved at the G20 Summit

The G-20 April 2nd Summit in London acknowledged the group’s interdependence and moved toward greater cooperation now essential to reforming global finance. The G-20 endorsed the goal of building a resilient, sustainable and green economy. “We will make the transition towards clean, innovative, resource-efficient, low-carbon technologies and infrastructure.” The G-20 also reaffirmed their commitment to address climate change and to reach agreement at the December 2009 UN Conference on Climate Change in Copenhagen.

Commitments underway by G-20 countries of $5 trillion are expected to raise global output by 4% and accelerate the transition to a green economy.

Fundamental reforms were not addressed, including the need to re-design debt-based money and banking or to create a new global reserve currency, already proposed by China, Russia, India, Brazil and other G-20 members so as to relieve imbalances and excessive pressure on the US dollar.

More immediate reform of the voting representation on the boards of the World Bank and the IMF are a step forward, together with an additional $750 billion: with $250 billion for a new issuance of Special Drawing Rights (SDRs); $250 billion to support trade finance; $100 billion of additional lending to developing countries, as well as an additional $1.1 trillion from IMF gold sales for concessional finance to the poorest countries.

The heart of the G-20 agreements is to move beyond the “Anglo-Saxon” economics typified by the now-rejected “Washington Consensus” model. Many sensible new rules were promulgated to regulate and oversee global financial firms, including hedge funds, new principles for executive pay, accounting rules, credit rating agencies, excessive leverage and restraining excessive risk taking. Rules for tax and regulatory arbitrage are to be tightened and tax-havens “named and shamed.” However, the hypocrisy reported by Australia’s Griffith University professor Jason Sharman must be addressed: that the US states of Nevada, Delaware and Wyoming, as well as some OECD member countries, must be included in the “shaming.”

No mention was made on correcting GDP as proposed by the European Parliament to include statistics on education, health, environment or poverty gaps; nor on the need for incorporating such ESG factors in company balance sheets and reporting.

My most recent editorial for Interpress Service is “Democratizing Finance.”


April at Ethical Markets and Hazel Henderson

Happy Spring!  April brought a record number of visitors to our three websites as well as, for the first time, companies interested in advertising with us!!  Thus, we are exploring this revenue option (limited to companies that share our goals and meet the highest social, environmental and ethical auditing standards).   *  My recent papers […] Read More..

The Politics of Economics

The death knell for the economics discipline was sounded by Nobelist chemist Frederick Soddy in 1921 (“Mr. Soddy’s Ecological Economy,” New York Times, April 11, 2009). Why were Soddy’s insights into the fatal flaws of economics buried for almost a century? In my The Politics of the Solar Age (1981), reviewed by Langdon Winner (New […] Read More..

Democratizing Finance

The financial meltdown generated by Wall Street and the too big to fail culture of global money-center banks and financiers is generating local initiatives and demands to decentralize and democratize finance. Meanwhile, at the global level, the G-20 countries demands to democratize the voting structures of the IMF and the World Bank are essential to […] Read More..

The New Financiers

A venture capitalist friend of mine asked me in a recent discussion about the financial meltdown, “who will be the new financiers?” I answered immediately, “the new financiers will be the high-level information and knowledge brokers – and they will aggregate the new research on global change processes and lead in structuring the deals now […] Read More..

Worldwide Support Found for Measuring True Wealth of Nations

The “Beyond GDP” Conference in the European Parliament, Nov. 19-20th, released a survey by GLOBESCAN for Ethical Markets Media, LLC, which finds three quarters of people in ten countries agreeing that their governments should look beyond economics and include health, social and environmental statistics in measuring national progress. The survey can be accessed at www.ethicalmarkets.com, […] Read More..