Joined: 23 Sep 2008
Location: West Dorset, UK
|Posted: Wed Mar 25, 2009 2:41 pm Post subject: E4 DECLARATION: SCHUMACHER THINK-TANK
|I am posting below the E4 Declaration which I hope will inspire some interesting discussions. Please see also Resurgence Magazine's website at: www.resurgence.org
THE E4 DECLARATION
EVERYBODY IS TALKING about stabilising the economy so that we can return to “business as usual”. But that worldview has created a fourfold crunch - a crisis of Ecology and the sustainability of the Earth; a multi-faceted crisis in the Economy which has led to a crisis of Equity where the rich get obscenely richer and the poor get horrendously poorer – and in order for this regime to exist, we have shelved our Ethics.
Do we really want to return to that scenario? Surely we can design an economic system that serves the planet and all species better? Recently, Schumacher College invited a group of leading economists, activists and thinkers to address the current fourfold economic crisis. Building on the idea of the Green New Deal, what follows is the ‘E4 Declaration’ based on the four tenets of Ecology, Economy, Equity and Ethics.
WHAT POLICIES DO WE NEED NOW?
We first need a Green New Deal with a clear focus on green investment. Investments today determine the shape of the economy tomorrow, and so must be adapted to future needs. To counter recession, tax relief must be used to stimulate green demand.
Re-regulate the financial sector
No more absurd credit-creation mechanisms
- Limit the capacity of banks to generate unsustainable credit by ensuring a global framework that reinstates appropriate reserve-requirement ratios.
- Require transparency of financial instruments and ensure appropriate scale of financial institutions by splitting-up big banks and implementing tougher auditing.
- Make sustainability and ethical criteria central to pension funds and to independent credit and risk rating (for example by compulsory carbon reporting).
New green investments
Stimulate investments to save the planet
- Set up new, and extend existing credit institutions that drive green and local investments, for example through lower interest rates.
- Advance green and fair procurement by increased use of the state’s purchasing power to stimulate information, training and jobs for green infrastructure, sustainable energy and biodiversity.
- Provide safe and sustainable investment opportunities with state guarantees for projects that have high sustainability and ethical ratings.
- Provide incentives and investment for ecosystem services and biodiversity (for example for farmers and for rural and marine regeneration).
- Encourage businesses to help one another through regional complementary currencies providing liquidity in times when credit is scarce.
Fairer taxes and rising green taxes
Tax ‘bads’ not goods
- Shift the tax-base from labour to resources.
- Introduce fairer taxes to reduce social inequality.
- Outlaw off-shore tax havens and tax corporate profits in the countries where they are earned.
PRINCIPLES OF TRANSFORMATION
The more we increase green investment, the more we need to shrink investment in unsustainable parts of the economy, lest we risk overshooting ecological and social limits, and thus trigger new boom and busts. Therefore we need new principles. Today’s economy has two major structural flaws: economics is designed single-mindedly to maximise financial returns and does not recognise ecological limits. Thus, increasingly, financial capital is growing at the expense of other types of capital. We need a vision that both supports human rights and wellbeing and acknowledges that human beings are part of Nature. This leads to an Economy firmly rooted in Ecology.
The E4 Declaration recommends eight principles:
Quality of life
The basic aim of the economy is to meet human needs equitably and to improve quality of life. To achieve this, we need to measure economic success by metrics of wellbeing.
The economy must be designed on the basis of ecological systems. Environmental values must play a central role in reaching economic decisions, and we must move as rapidly as possible towards a resource-light economy.
Society should aim to develop more direct relationships between buyer and seller and to meet local needs with local production. At the same time, local initiatives must also be geared to global realities.
Diverse social, cultural and economic systems are more resilient against sudden collapse. Diversity must be actively promoted, protected and treasured.
From ownership to stewardship
Society should support a diversity of business models that encourage individual and mutual ownership, and social entrepreneurship at a small scale, but encourage stewardship and shared ownership on the larger scale.
Stable and dynamic
The optimum health of any complex system is at a balance-point between efficiency and dynamic resilience.
Every single human being has basic rights that must be met by social and economic systems. The current economic system manufactures poverty and inequality. Also we must ensure intergenerational equity so that the young are not compromised by the requirements of the old, and vice versa, and the rights of future generations are protected.
Beauty and elegance
Beauty and elegance lift the spirit and enhance human wellbeing.
Monetary systems should be redesigned to serve all of these principles and not simply to maximise financial gains.
GLIMPSES OF THE FUTURE
All aspects of human activity must function in accordance with the above principles. This section focuses only on four key areas to give a flavour of the changes that can be made, and are already happening, to create a just and sustainable economy. These are: food and agriculture; money; governance; and energy.
Food and Agriculture
If the food supply chain was designed according to the principles of the ‘Four Es’ we could feed everybody who is ever likely to be born to the highest standards of nutrition and gastronomy. All we really need to do is to develop food and farming expressly to feed people without compromising healthy ecosystems – what has been called “Enlightened Agriculture”. The basics are:
- Husbandry should be largely traditional – but this does not imply a simple reversion to the past. We need to build on the traditional crafts with excellent science and to ease physical burdens with truly appropriate technologies. Science and high-technology at present are designed to replace traditional crafts. In short we need a ‘New Agrarianism’.
- Investment in a truly sustainable organic food system where, as far as possible, food is produced, prepared and consumed locally. Wealth created from the food chain should remain within communities.
- There are many initiatives already in train that are helping to bring about the necessary transformation and these must be supported. They include the slow and organic food movements which foster food culture, and schemes to increase access to land, such as community-supported agriculture, land trusts and food co-operatives.
Money is a human-made construct and the way it works can be changed. We can create money systems which are stable and help the real economy to work within ecological limits rather than forcing us beyond those limits. We need to:
- Expand accounting to include social and environmental capital.
- Encourage complementary currencies that promote social and environmental value as well as supporting geographical areas or economic sectors at different scales.
- Re-localise the finance system with strong support for community-based institutions and investments.
- Support and develop the new models of money creation (for example TERRA Global Reference Currency) and interest-free lending into appropriate-scale experimentation, action, research and evaluation. This will replace compound interest with a more intelligent circulation mechanism
- Ensure finance systems are subordinated to the interests of the community and of the ecosystem. Chiemgauer currency in Germany, JAK Bank in Sweden, Wirtshaftsring in Switzerland, and time banks are examples which are already making money work for people rather than the other way around.
We can transform governance through a positive vision for what people want to see in their local, national and international areas, giving people control of their own lives. We need to:
- Adopt the principle of ‘subsidiarity’ so that decisions and responsibility are taken at the lowest possible level. Communities are already recognising this need, for example in the worldwide Transition Movement, connected via a network able to spread benefits through knowledge-sharing.
- Introduce a sliding scale of regulation so that the larger an organisation the more heavily it is regulated.
- Strengthen the rights of stakeholders.
- Decouple governments from corporations.
- Ensure that transnational corporations are accountable and subject to democratic oversight.
- Introduce maximum and minimum wages with a maximum ratio of difference between most and least paid.
- Take responsibility for environmental refugees.
- Develop appropriate and effective international institutions for a just economic and ecological order.
Rapid technical advances and price reductions in large-scale renewables have the potential to replace coal and nuclear generation. This necessary investment should not overshadow the development of smart local solutions which are an essential part of providing a resilient energy network. We need to:
- Start a global carbon ‘cap and trade’ system, based on IPCC science, that internalises the environmental cost of carbon dioxide at source, ensuring that fossil fuels are fully costed.
- Rapidly deploy energy efficiency programmes (for example retrofitting existing housing and other buildings), providing mass employment opportunities.
- Upgrade the electricity grid to allow contributions from remote large-scale renewables (for example offshore wind and concentrated solar power).
- Encourage implementation of small-scale, local, renewable, and high efficiency technologies.
- Adopt smart policy measures to support the above actions (for example government guaranteed feed-in tariffs, and roll-out of renewable obligations).
- Remove institutional barriers to sustainable energy (for example by rethinking grid tariffs and policies, and re-designing smart local mini-grid systems).
This declaration is a work-in-progress. The continuing task of developing it and applying it in practice is within the capacity of us all to undertake. If you support this Declaration and the continuing work, please send it to the Prime Minister and to the Chancellor of the Exchequer. Ask them to see the current economic crisis as an opportunity for change and use it to create a sustainable and just economic order by adopting the principles and policies presented in this declaration. Show your support and join the discussion at: www.e4declaration.org .
The Schumacher Think-Tank was attended by members of various organisations including the Sustainable Development Commission, New Economics Foundation, Advocacy International, the Soil Association, WWF One Planet and othes. For a full list of attendees, see www.e4declaration.org .