A provocative way to finance the fight against climate change | Michael Metcalfe


Will we do whatever it takes
to tackle climate change? I come at this question
not as a green campaigner, in fact, I confess to be rather
hopeless at recycling. I come at it as a professional observer
of financial policy making and someone that wonders
how history will judge us. One day, this ring that belonged to my grandfather will pass to my son, Charlie. And I wonder what his generation and perhaps the one that follows will make of the two lives
this ring has worked. My grandfather was a coal miner. In his time, burning fossil fuels for energy
and for allowing economies to develop was accepted. We know now that that is not the case because of the greenhouse
gases that coal produces. But today, I fear it’s the industry in which I work
that will be judged more harshly because of its impact on the climate — more harshly than
my grandfather’s industry, even. I work, of course,
in the banking industry, which will be remembered
for its crisis in 2008 — a crisis that diverted the attention
and finances of governments away from some really, really
important promises, like promises made at the Copenhagen
Climate Summit in 2009 to mobilize 100 billion dollars a year to help developing countries
move away from burning fossil fuels and transition to using cleaner energy. That promise is already in jeopardy. And that’s a real problem, because that transition
to cleaner energy needs to happen sooner rather than later. Firstly, because greenhouse gases, once released, stay in the atmosphere for decades. And secondly, if a developing economy builds
its power grid around fossil fuels today, it’s going to be way more costly
to change later on. So for the climate, history may judge
that the banking crisis happened at just the wrong time. The story need not be this gloomy, though. Three years ago, I argued that governments
could use the tools deployed to save the financial system to meet other global challenges. And these arguments are getting
stronger, not weaker, with time. Let’s take a brief reminder
of what those tools looked like. When the financial crisis hit in 2008, the central banks of the US and UK began buying bonds issued
by their own governments in a policy known
as “quantitative easing.” Depending on what happens
to those bonds when they mature, this is money printing by another name. And boy, did they print. The US alone created four trillion
dollars’ worth of its own currency. This was not done in isolation. In a remarkable act of cooperation, the 188 countries that make up
the International Monetary Fund, the IMF, agreed to issue 250 billion
dollars’ worth of their own currency — the Special Drawing Right — to boost reserves around the world. When the financial crisis moved to Europe, the European Central Bank
President, Mario Draghi, promised “to do whatever it takes.” And they did. The Bank of Japan repeated those words —
that exact same commitment — to do “whatever it takes”
to reflate their economy. In both cases, “whatever it takes” meant
trillions of dollars more in money-printing policies
that continue today. What this shows is that when faced
with some global challenges, policy makers are able to act
collectively, with urgency, and run the risks of unconventional
policies like money printing. So, let’s go back
to that original question: Can we print money for climate finance? Three years ago, the idea of using money in this way
was something of a taboo. Once you break down and dismantle the idea that money is a finite resource, governments can quickly get overwhelmed
by demands from their people to print more and more
money for other causes: education, health care, welfare — even defense. And there are some truly terrible
historical examples of money printing — uncontrolled money printing — leading to hyperinflation. Think: Weimar Republic in 1930; Zimbabwe more recently, in 2008, when the prices of basic goods
like bread are doubling every day. But all of this is moving
the public debate forward, so much so, that money printing
for the people is now discussed openly in the financial media, and even
in some political manifestos. But it’s important the debate
doesn’t stop here, with printing national currencies. Because climate change
is a shared global problem, there are some really compelling reasons why we should be printing
that international currency that’s issued by the IMF, to fund it. The Special Drawing Right, or SDR, is the IMF’s electronic unit of account that governments use to transfer
funds amongst each other. Think of it as a peer-to-peer
payment network, like Bitcoin, but for governments. And it’s truly global. Each of the 188 members
of the IMF hold SDR quotas as part of their foreign
exchange reserves. These are national stores of wealth that countries keep to protect
themselves against currency crises. And that global nature is why, at the height of the financial
crisis in 2009, the IMF issued those extra
250 billion dollars — because it served
as a collective global action that safeguarded countries
large and small in one fell swoop. But here — here’s the intriguing part. More than half of those extra SDRs
that were printed in 2009 — 150 billion dollars’ worth — went to developed market countries
who, for the most part, have a modest need
for these foreign exchange reserves, because they have flexible exchange rates. So those extra reserves
that were printed in 2009, in the end, for developed
market countries at least, weren’t really needed. And they remain unused today. So here’s an idea. As a first step, why don’t we start
spending those unused, those extra SDRs
that were printed in 2009, to combat climate change? They could, for example, be used to buy bonds issued
by the UN’s Green Climate Fund. This was a fund created in 2009, following that climate
agreement in Copenhagen. And it was designed to channel funds
towards developing countries to meet their climate projects. It’s been one of the most
successful funds of its type, raising almost 10 billion dollars. But if we use those extra
SDRs that were issued, it helps governments get back on track, to meet that promise
of 100 billion dollars a year that was derailed by the financial crisis. It could also — it could also serve as a test case. If the inflationary consequences
of using SDRs in this way are benign, it could be used to justify the additional, extra issuance
of SDRs, say, every five years, again, with the commitment that developed-market countries
would direct their share of the new reserves to the Green Climate Fund. Printing international money
in this way has several advantages over printing national currencies. The first is it’s really easy to argue that spending money to mitigate
climate change benefits everyone. No one section of society benefits
from the printing press over another. That problem of competing
claims is mitigated. It’s also fair to say that because it takes so many countries
to agree to issue these extra SDRs, it’s highly unlikely that money printing
would get out of control. What you end up with
is a collective, global action aimed — and it’s controlled
global action — aimed at a global good. And, as we’ve learned
with the money-printing schemes, whatever concerns we have
can be allayed by rules. So, for example, the issuance of these extra SDRs
every five years could be capped, such that this international currency
is never more than five percent of global foreign exchange reserves. That’s important because it would allay well, let’s say, the ridiculous
concerns that the US might have that the SDR could ever challenge
the dollar’s dominant role in international finance. And in fact, I think the only thing that the SDR
would likely steal from the dollar under this scheme is its nickname, the “greenback.” Because even with that cap in place, the IMF could have
followed up its issuance — its massive issuance of SDRs in 2009 — with a further 200 billion
dollars of SDRs in 2014. So hypothetically, that would mean that developed countries
could have contributed up to 300 billion dollars’ worth of SDRs to the Green Climate Fund. That’s 30 times what it has today. And you know, as spectacular as that sounds, it’s only just beginning to look
like “whatever it takes.” And just to think what amazing things
could be done with that money, consider this: in 2009, Norway promised one billion dollars
of its reserves to Brazil if they followed through
on their goals on deforestation. That program has since delivered
a 70 percent reduction in deforestation in the past decade. That’s saving 3.2 billion tons
of carbon dioxide emissions, which is the equivalent of taking
all American cars off the roads for three whole years. So what could we do with 300 other pay-for-performance
climate projects like that, organized on a global scale? We could take cars off the roads
for a generation. So, let’s not quibble about whether we can
afford to fund climate change. The real question is: Do we care enough about future generations to take the very same policy risks
we took to save the financial system? After all, we could do it, we did do it and we are doing it today. We must, must, must do
“whatever it takes.” Thank you. (Applause)

99 thoughts on “A provocative way to finance the fight against climate change | Michael Metcalfe

  1. Finance something that cannot be fought? Fix a naturally occurring circumstance that doesn't need to be fixed? No thanks.

  2. If you want to fight climate change, ridiculously high rates of cancer, diabetes, and heart disease, unconscionable animal cruelty, water shortages, deforestation and desertification, antibiotic resistant bacteria, land, water, and air pollution, poverty and starvation, mono-culture crops, species extinction, and land shortages, STOP EATING MEAT..

  3. oh more climate change b.s. nice, if there actually was climate change maybe Chem trails, fake weather and everything doused in fluoride and round up and all the land clearing should be discussed. but TED gave you 15 minutes. wow you wasted it

  4. Ridiculous.
    I'm doing my part to reduce climate change by not having kids. And so are powerfull economies like Japan and Germany.
    The recipe for reducing climate change is education and contraception in Africa, the Middle East, India and the Far East.
    Like all economic preventive measures what he suggests will only make the problem it's supposed to fight worse in the long run. But alas, a banker will never tell you this.

  5. September 21, 2014 More Than 1000 International Scientists Dissent Over Man-Made Global Warming Claims Challenge UN IPCC

    Panel Note: This report was originally published in 2010. It is of utmost relevance to the ongoing debate on climate change. Link to Complete 321-Page PDF Special Report More than 1,000 dissenting scientists (updates previous 700 scientist report) from around the globe have now challenged man-made global warming claims made by the United Nations Intergovernmental Panel on Climate Change (IPCC) and former Vice President Al Gore.

    http://www.globalresearch.ca/more-than-1000-international-scientists-dissent-over-man-made-global-warming-claims/5403284

  6. Apparently the church of climate change is tired of trying to convince people of its importance, now they go full crony and ask your government for forced handouts instead (not like this is any news). A banker asking for printed money to stuff his pockets gets applauded all of a sudden when he plays the right tune. What a crafty little snake oil seller.

  7. So this bloke is trying to push the digital global currency, cashless society in exchange for saving the planet… Hmm, this idiot is a UN mouthpiece preaching the globalization of government. My eyes are on you Pricky.

  8. Climate Change is a lie. I know exactly how to counter the problem…arrest every politician who wants it as a tax to fund their lavish lifestyle

  9. Give us all your money on solutions that won't work and won't change how anything is going whoops!!

  10. How to stop climate change in 10 easy steps

    Step:
    1. Stop eating meat
    2. Stop eating dairy
    3. stop eating eggs
    4. stop buying anything that comes from animal domestication (including pets)
    5. stop buying palm oil or other products that devastate forest habitats
    6. look for plant based foods that have lower energy consumption
    7. Ride a bicycle or use public transit for long distances if necessary
    8. Live a zero waste lifestyle, producing only a few grams of trash a year by composting and not buying things in bulk that have no containers like oats, vegetables, fruits etc.
    9. Grow or find your own food
    10. Petition your local government to makes steps towards these changes in schools and businesses.

    Stop waiting on people to do things for you.

  11. many muslim countries and regions will be drowned like bangladesh and indonesia huge part of northern africa and middle east

    huge chunk of imperialistic europe will be drowned especially low elevation european countries like germany low countries and UK

    the river valley of china will also be underwater so thats less commie

    the bible belt of america will also be underwater so less america

    CLIMATE CHANGE IS WONDERFUL!!!

    i will just watch people drowning while im living comfortably here in bogota colombia at 8,675 feet above sea level XD 😛

  12. When governments print money they steal the wealth of the people. Printing money does not magically create value. Printing money steals value from everyone. There is no incentive for people to work or entrepreneurs to innovate in such a vampiric system. Printing money has not solved the economic crisis, it only prolonged it.

  13. Printing money to try and solve a problem is no better than stealing to solve a problem. Theft is theft no matter how nicely you talk about it.

  14. does anyone honestly believe that we can stop the climate from changing? does anyone believe that there was a time in earth's history where the climate was not changing? let me tell you about a neat little cycle of climate change that the earth has had ever since the moon formed. its called "seasons", maybe you have heard of them. historically we have divided the constant climate change into 4 different "seasons" we call them "winter", "spring", "summer" and "autumn" (or "fall"). this continual cycle of climate change is caused by the wobble of earth on its axis, and the cycle repeats every year. there is long term climate change as well, which is constant and has never been halted in earth's history. we do not have the same climate that there was during the age of the dinosaurs (way more oxygen back then in the atmosphere, way less CO2 and no ice age because of it).

    i believe in climate change. i just don't believe it can be stopped. i don't believe that climate change is unnatural (although i do believe that humans have a non-negligible impact on it). what i don't believe is that it can be halted or stopped. even if we had thousands of years to design something to stop it, it would take more resources than are available on earth. perhaps one day in the future we will have giant mirrors in space that shine sunlight on the earth in patterns controlled by an immense AI that keeps the climate stable and unchanging. but we are a long way away from that, centuries, perhaps millennia.

    i also believe in greedy bankers who like to manipulate currency. we have a long history of that as well. it might be easier to stop climate change than it is to stop greedy bankers from finding new ways to fleece you out of your wealth.

  15. nice idea. won't fly though. buying carbon dioxide reductions just delays climate change, we must instead work towards making it more economical to behave in a climate friendly way than not doing so

  16. I just can't parse how there are so many people still denying the climate change,saying they don't believe it and it's a conspiracy…you can't "not believe" facts. The climate change is happening and it's real,sadly it doesn't matter how much you ignorantly try to repudiate it.

  17. I also think to reduce carbon we should start eliminating all humans that choose not to work. I know that would reduce the population in the US alone by millions. Globally that would have to make a good dent in our carbon footprint as a hole.

  18. I'd like to share a revelation that I've had during my time here. It came to me when I tried to classify your species and I realized that you're not actually mammals. Every mammal on this planet instinctively develops a natural equilibrium with the surrounding environment but you humans do not. You move to an area and you multiply and multiply until every natural resource is consumed and the only way you can survive is to spread to another area. There is another organism on this planet that follows the same pattern. Do you know what it is? A virus. Human beings are a disease, a cancer of this planet. You're a plague and we are the cure.

  19. Anyone thing that title is counterproductive? Taking care of the environment is the action of not doing as much as doing certain things. It takes power/energy to "finance" in the first place, guys. -_-

  20. actually none of the money printed in EU were used for any kind of investiments…
    good luck convincing merkel to print money for any kind of european project..

  21. wait there is a difference between printing money and giving it to the government(weimarer republic) and printing moey to reinflate to help the economy …what a nonsence is he talking about?

  22. Climate change is happening! We are on the precipice of another ice age. The only solution is to burn more fossil fuels!

  23. The industries most harshly judged by future generations will be determined by which make for the best buzz words for writing history textbooks.

  24. this climate change hoax is still financed? loll Al Gore became the first 'carbon' billionaire inventing this scam

  25. I have no respect for this guy. Printing money is stealing from the people. Especially the poor are hurt. They saved the finance system with this method and it seems to look like a very short term fix for a problem wich will come back again in the next 10 years. And now suggesting to continue printing money to fix other problems? Why not make those pay who have the money, like big companies or very rich people? No instead we try to take the money from the small people. As long as they don't really realize it, nothing will get better.
    I'm all against destroying our planet, but why not solve those problems on the back of the people who've made and still make decisions against the environment? Thanks "financial expert" Michael Metcalfe.

  26. So this guy wants to put the world bank and IMF in control of a global currency. No. They are pure evil. The U.S gave banks 1 trillion and E.U gave 3 trillion in 2008. So in exchange for that we get to give the dicks who caused this even more control of the global economy. I say Boo banker person. Boo.

  27. How come that there is so many climate change deniers in these comments? Why did you even watch the video if you don't think it's a problem?

  28. The flaw in this plan is this: "this benefits everyone". The rich, the ruling class, doesn't care about anyone except itself. They will never support a truly democratic financial arrangement for everyone. Capitalist greed will trump the "commonweal" every time.

  29. A hoax as big as Climate change has plenty of income potential for shakedown artists and thieves, such as these redistributionists….

  30. Does this IMF currency fit the conspiracy theory of many secret societies' agenda of a global/universal currency?

  31. the problem is consumerism and an utterly insane economic model…. the solution is conservation and a sane economic model. what this guy is talking about is jibberish.

  32. Toxic waste is harmful to life; Carbon Dioxide is plant food.
    – therefore –
    Fight toxic waste, not Carbon Dioxide.

  33. " issuing $250 billion worth of international currency to stem the collapse of the economy. In this delightfully wonky talk, financial expert Michael Metcalfe suggests we can use that very same unconventional monetary tool to fund a global commitment to a green future."

    Will there ever be another TED Talk that isn't just leftist propaganda?

    Avoid any democrat process by having unelected and unaccountable technocrats print money for their international slush fund.

    What a bunch of elitist thugs.

  34. Your bank is destroying the environment and so we need a one world government and coin via a global tax? now where did i hear that before? TED is a globalist scam under the pretense of progress.

  35. Such a shocking observation – that when governments face REAL risks, they are able to take drastic steps to combat them (even incredibly risky steps). And since this is true, why don't we spend $30 B buying a new climate (or just superfunding the UN so that they can slush fund even more liberal causes? The logic of it brings me to tears – of laughter. Thank you, sir, for such profound nonsense.

  36. Coal burns clean when the smoke and fumes are passed through scrubbers. The remaining carbon can be used in filtration systems. The most important fact, plants NEED CO2 in order to photosynthesize. I am done watching these TED talks because TED has been manipulated into spewing ridiculous garbage.

  37. The industry this guy belongs, financial, contributes nothing to any real human problems, and our problems are only technical in nature. The problem of environmental degradation is rooted in our global socioeconomic system that inherently incentives people to gain and maintain a differential advantage over others and without consideration for environmental impacts, no love here.

    Of course the debate on degradation of the planet's life support systems is demarcated and changing the socioeconomic system is never considered…

    Please people view the documentaries "Paradise or Oblivion", "Future By Design", "The Choice Is Ours 2016" for what is becoming the best feasible socioeconomic alternative unlike any 'ism's' that have been attempted in the past.

  38. inc climate deniers without proof, arguments, nor reason that hasn't been disproven 10 times over by people who actually study and investigate the natural world.

  39. I paused the video before it started.
    I'm just here to say TED needs to stop with the clickbait titles and sensationalist presentation that made traditional news media a joke.

  40. Huh? Did I miss something? We need to use fabricated money to throw at a problem but never mention what steps are needed to solve the problem? How can he end with, "Thank you," and how can the audience applaud? All we need now is for the emperor to come out wearing his new clothes.

  41. This argument doesn't make sense to me. Not with this guy, and not with Naomi Klein or any of the others I have heard using it.

    The whole point of the financial system is to lend out money. If it is dysfunctional, pumping in money might help since money is at the core of what banks are doing.

    This is not true for any part of the real economy, whether its education, health care, or building green energy infrastructure. For any of these, the essence is not money itself, but whatever product or service is being delivered. This makes the situation completely different, and any historic example where governments print large amounts of money to solve such real-economy issues ends in disaster.

    Saying "the recession was a problem, there we printed money; climate change is a problem, so let's also print money" seems very naive to me.

    If I am missing anything here, please let me know.

  42. I really like the idea of "Green Bonds". Printing money is extremely dangerous, whereas you can always find an investor wanting to invest his money on a nice safe bond.

  43. This is perhaps the stupidist way to finance anything I have ever heard. Let's just create money out of nothing for however long we want until some arbitrary problem is "solved". Nothing bad could happen…

    With the banking crisis, a large pot of money DISappeared, crippling the the finance system's ability to function. Money had to be returned to the system simply to get the system moving again. There was no other option. Climate Change has other options. We're just unhappy with the results.

    The US went on to print a lot more money than it needed to support massive and needless overspending, which was only reduced when control of first the House and then the Senate changed from liberal to conservative.

    We have yet to see the long-term effects of quantitative easing. The economies of the world have yet to fully recover from the banking crisis, which is why there's a crimp in the whole lofty "$100 billion a year" goal to begin with.

    This kind of monetary gimmickry rarely turns out well and even more rarely avoids serious unintended consequences. Just ask Greece.

    Play with fire, you will get burned.

  44. Haven't watched it yet.
    But there are ethical super funds (retirement funds) being created. If there's enough demand by shareholders to be more social… if there's enough money in catering to the socially conscious as opposed to destroying the environment, this world could pan out fine

  45. Sorry to be so blunt, but this man should be shot. His policies, if enacted, would lead to EXACTLY what happened to the Weimar Republic and Zimbabwe and his hand waving of that concern is not just irresponsible, it's deadly. People DIE in economic collapses due to currency creation. This man's plans would KILL PEOPLE.

  46. The guy comes off as interesting, but his idea could potentially ruin the global economy. Printing money is NOT the solution to climate change.

  47. Funny how a man who works for a bank is pitching the "climate change" bit. The answers to all our problems is to give them our money. lol

  48. Goodness, I can't believe how he is just completely missing the point of Climate Change Policy.
    Printing money does not magically eradicate the world's unwillingness to act upon climate change.
    All the issues would persist, like countries not prioritizing climate change, but rather invest in health and welfare etc. A sudden surplus of money won't make them shift in priorities.
    What Mr Metcalfe seems to completely ignore is the fact that not everyone is necessarily willing to invest into climate change mitigation or adaptation, and this imbalance of prioritization is the root of the problem.
    This is the typical analogy of giving a poor man a fish to eat versus teaching him how to do the fishing by himself.

  49. Give the money directly to the people. Charge high fees to industries that emit pollution or extract carbon (or other limited natural resources).

    How to Fix Civilization:
    http://gaiabrain.blogspot.com

  50. So when u work in banking system you are a parasite. You just work for your self and in that process you are killing your on children and mine.

  51. A guy more ignorant of how the IMF operates couldn't possibly be giving a talk about it anywhere, let alone TED. Countries do not pay for their external trade in SDRs nor can countries use their SDR reserves at the IMF to pay each other. SDRs can be used only while transacting with the IMF and no country can accumulate SDRs above its quota. The SDR quotas are useful only for determining voting percentage and the loan a country is eligible to from the IMF (not an overdraft, an explicit loan with conditions and a strict repayment schedule) and the loans have to be withdrawn by the member country in one or more of the currencies that form the SDR basket (currently USD, EUR, GBP and JPY and CNY from 1st October 2016). The IMF gets hold of the national/regional currencies that form the basket by swapping the SDRs for those currencies (the Central Banks of the currencies that form the SDR basket hold the SDRs as assets on their balance sheet and create the new currency needed for the swap). So there are no "hundreds of billions" US$ worth SDRs "sitting unused" that can raised by issuing bonds to finance anything. The IMF quotas were increased in 2009 only to allow the member states to borrow more from the IMF. It has no other significance.

  52. So many intelligent comments. TG. Glad most people don't believe. I was thinking just stop spending billions at NOAA and end of problem. Probably end in Nov anyway

  53. One point that I would like to address, is that this speaker talks about 'mere' hundreds of billions of dollars . . . that is less than one tenth , 1/10th of what bankers / governments ''funnel'' into their pockets yearly ! I don't believe any of this nonsense he is spewing !

  54. The earth stopped getting hotter more than 10 years ago. Also, remember the hole in the Ozone layer? It's fixed. Look it up. Global warming isn't really a thing at the moment. It's like the diamond thing, ya know how they're not actually rare?

  55. The ponzi scheme of printing imaginary money puts even more money into the pockets of the one percenters. They create money with a click of a keyboard, then lend it out at huge profit.

  56. Stop letting people from low impact countries enter high impact countries. Next, accept the declining birth rates in high impact countries. Nobody left of center likes having both of those items.

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