We need a whole new kind of capitalism as we aim for sustainability

It's time to have a broader vision.Photo: MorBCNToday we stand at the crossroads. In one direction lies business as usual, the road we've traveled for decades. Down that path, we'd forgo serious measures to rein in our oil consumption, we'd continue buying oil from the dwindling number of oil-rich nations to drive our SUVs a mile to the grocery store, and we'd scrape Alberta clean to find a few years of tar to put in our tanks. We'd decapitate more mountains in Appalachia to heat our homes and power our flat screen televisions, pumping out climate warming carbon with every watt.

But another path exists, and it leads to a far brighter future. We can consciously shape a new and enlightened global economic order for the 21st century, much as the world's developed nations, guided by economist John Maynard Keynes, shaped an enlightened and prosperous global order at the Bretton Woods conference near the end of World War II.

The goal would be a form of capitalism with a highly regulated financial sector that would steer industry to protect the global commons -- our air, water, fisheries, and forests. We would shape the economy not for the profit of the few but for the benefit of all humanity, rich and poor alike. We'd create a truly sustainable low-carbon economy, one that preserved and restored the environment in a manner that's fair to the world's poor. We'd shape it to create a healthier world.

To do this, we'll need new monetary rules to regulate world trade and commerce. They must tamp down the wild and destabilizing trade in national currencies and restrict capital movement across borders that nullifies healthy competition and cooperation among nations. In this way, the new rules will encourage long term investment in stable enterprises that produce tangible goods and services.

New rules must ensure that wages in the developing world are sufficient to meet basic human needs. We must forgive the national debts of developing countries as reparation for past trade inequities and the wholesale extraction of natural resource wealth by industrialized nations. And we must replace unfair terms of trade with new rules that ensure fair prices for basic goods from developing countries, to make sure debt does not re-accumulate. By promoting equity, we can counter poverty and environmental destruction, which adds to climate change and encourages the emergence of new infectious diseases that can race around the globe.

We must also establish financial incentives such as tax breaks or subsidies to persuade the private sector to promote reductions in carbon emissions, in part by stimulating producers of clean energy and energy-efficient technologies. Conversely, we must dismantle perverse subsidies that drive deforestation and subsidize the production and consumption of fossil fuels.

We'll also need new funds and grants to support what the private sector for the most part cannot: building new infrastructure for the low-carbon economy and preserving our atmosphere, watersheds, and wetlands, our forests, fisheries, and oceans. They should come from a large global environment and development fund.

Money from this fund would help nations -- particularly the most vulnerable -- prepare for the coming climate. It would help assess vulnerabilities to the impacts of climate change, develop and adopt early warning systems, and create clean, robust, resilient energy systems.

The International Energy Agency has called for $500 billion per year for 20 years to move the world toward clean, low-carbon energy. This figure is in line with what Sir Nicholas Stern proposed in his famous 2006 report on the economics of climate change: a global fund that dispenses 1 percent of global GDP, or $350 billion per year.

To come up with such huge sums, we'll need creative, equitable methods of financing. Individual nations could contribute, but taxes on financial transactions are probably the fairest and most lucrative way to go. A so-called Tobin Tax, originally proposed by Nobel Prize-winning Yale economist James Tobin, offers several benefits. By levying just a quarter of a penny on every dollar used in currency transactions, which total more than $2 trillion per day, we could slow currency speculation, which disrupts economies, and generate as much as $500 billion per year for global environmental initiatives -- a reasonable investment in our common future.

We must also restructure and reform our current international financial institutions -- the World Bank, the International Monetary Fund, and the World Trade Organization. These institutions have elevated the rights of transnational corporations over the rights of sovereign nations and their citizens through their destructive lending and trade policies, at great social and environmental cost.

It is now time to resurrect John Maynard Keynes' grander vision for international financial governance, retooled to meet today's needs. Establishing an institution for enhanced governance over global trade and finance would control currency speculation and dispense grants for biodiversity efforts, climate change initiatives, and global water projects -- projects that serve society and preserve the global commons.

For hundreds of years, our global economy has been driven by endless growth and consumption. But in a world with finite resources and a limited capacity to recycle waste, endless consumption is not possible. Ultimately, we're going to have to consume less, generate much less waste, and create very different ways of doing business, in which companies are rewarded for conserving rather than consuming, for serving rather than growing. At long last we need a form of economic development that is truly sustainable.