Climate change, growth and money

A chara, – The financial system is currently dependent on GDP growth. Without continual economic growth, the money supply, based as it is on debt, will be choked off. Yet as the EPA’s recent report on Ireland’s greenhouse gas emissions, noted in the May 31st article “Ireland locked in trend of rising carbon emissions, says EPA”, makes clear, growth is seriously endangering our climate.

Rather than trying to decouple GDP growth from carbon emissions, which is pretty much impossible, a far more sensible and attainable goal would be to decouple GDP growth from the money supply. Money's dependence on debt is a historical accident. Money should instead be issued debt-free, along the lines suggested in the 2012 IMF working group paper The Chicago Plan Revisited.

Without such reform, all the emissions-reducing schemes and other climate-protection measures that Ireland and the EU introduce will continue to be in vain, fatally undermined by our short-term need to keep the financial system functioning. The pressure on the economy to expand in order to generate sufficient interest to sustain debt, and ward off economic collapse, is enormous.

Make money debt-free at issuance, and a whole vista of new opportunities will open up – social as well as environmental.


Strange though it may seem, the most effective climate action – action that would provide crucial support in eliminating emissions, making the planet safe for future generations – could well be carried out by central bankers. – Is mise,


Communications Officer,

Feasta: the Foundation

for the Economics

of Sustainability,


Co Tipperary.

Sir, – The present problem is that we can and are producing far too much of practically everything, and instead of trying to continually “grow” production further, we desperately need to restrain output confining it to a safe margin greater than what the world can consume. There is no mechanism within economic ideology for restraint. It was sectionally applied to the Common Agricultural Policy and saved farming in Europe for the last 50 years. Instead of extending it to practically everything however, it was recently jettisoned as if the appetite for consumption knows no limits. There are limits, however, which are already being exceeded. Increasing surplus is destroying markets and trade, both global and local, and causing trade tariffs to raise their ugly heads, as is happening with aluminium exports from many countries into the US.

New economics require new ideology including agreed global restraint so that gross oversupply is controlled while ensuring all economies get a fair deal in a limited trading situation. This type of thinking is anathema to purist economic growth philosophy, but the difficult task must be accomplished if gross overproduction, massive market failure, hostile trade wars and financial collapse are to be avoided. The prospect of prosperity in a situation of managed sufficiency is indeed challenging but modern technology gives us little option. Restrained production must be coupled with restoration of small and medium business combined with sustainable employment, despite automation continually reducing dependence on human labour.

A new type of corporate feudalism is taking hold, where ever increasing numbers are abandoned by small business and employment into a serfdom of crippling debt, reduced entitlements, creeping joblessness and never-ending dependency.

Technology has raised economics onto an unprecedented plateau of excellence, success and abundance with potential for more than enough for all despite nobody having to work very hard anymore.

Technology has changed the playing field so that under present principles, only the few win; the majority hang on through debt and dependency.

Unless the system changes to once more include the masses, there will be enormous unrest, social disorder, extremist politics and outright hostility.

This is the best economic time that ever existed but its benefits must be accessible to all. – Yours, etc,



Co Sligo.