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Version 2
By Frans C. Verhagen, M.Div., M.I.A., Ph.D., sustainability sociologist, Founding President of the International Institute of Monetary Transformation Presented to the Economic and Climate Crises Communities In Government, Business and Civil Society, Particularly Their Heads of State
[email protected]
New York City
March 30, 2009

“As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man, who tries methods, ignoring principles, is sure to have trouble.”
Ralph Waldo Emerson, 1890s


1. Last week some 2000 climate scientists from 85 countries met in Copenhagen. At
the same time the G20 finance ministers and five members of international
financial institutions (IFIs) met in Horsham near London. The media coverage, at
least in the USA, was minimal about the Copenhagen conference and rather
copious about the Horsham meeting.

2. This Manifesto is addressed to both those communities and particularly their
heads of state, because it is incumbent upon them to conduct a political process
that is fair, transparent and inclusive. They are the ones who, in last instance, have
to decide on the principles, policies and programs that would put humans and
other sentient beings in the position to survive and thrive within a planet that still
is habitable if the right decisions are made during this pivotal year 2009. Though
World Bank president Robert Zoellick considers 2009 “a dangerous year”, I
consider the year 2009 an axial or pivotal year. It is the outcome of the meetings
of both the economic and climate crises communities on April 2 in London, the
ongoing UNFCC meetings in Bonn, the UN financing conference in New York in
June, and the UNFCCC conference in Copenhagen in December that provide the
pivot or axis for the next three decades and, probably, for the 21st century.

3. This Manifesto is presented to press the global political leadership into becoming
statesmen and stateswomen who are willing to think outside the box of present
international financial institutions and not use the IMF/IBRD as a crutch in
solving the economic crisis. As a matter of fact, the Tierra Solution upon which
this Tierra Manifesto of 2009 is based rests upon the theory that one can solve the
economic crisis only by resolving the climate crisis. The time has passed to treat
the economic and climate crises sequentially: no lasting solution is possible
without attacking both crises simultaneously. Not doing this means measures that
may give some relief in the short term while aggravating both crises in the midand

4. I consider the G20 Summit the first crucial step in 2009 for the world community
to relieve the pain and suffering of billons of our fellow citizens and other sentient
beings. In last instance, these are inflicted upon them by the economic and climate
crises, which are not so much caused by greedy and selfish people, as by an
international economic system that enriches the few, impoverishes the many and
imperils the planet.

5. Therefore, transformational change is needed in the monetary, financial,
economic systems to relieve all that suffering and reduce the damage to the
planet. Rather than dealing with the international economic system first, the
Tierra Solution addresses itself first to the international monetary system, which is
the basis of the international and financial and economic systems and the glue that
binds them together.

6. Transforming the international monetary system means building a new monetary
architecture that replaces the Bretton Woods institutions which have difficulty in
even reforming its voice and representation structures as became evident in the
ECOSOC Briefing in New York on March 9.

7. One way of bringing this transformation about is transforming the present
international reserve currencies into one international reserve currency that is not
based on the currency of a nation or a region. Though several proposals have been
made and are being made now for such non-national international reserve
currency which would be based upon a basket of commodities, major currencies
or the consumer price index, they fail to connect with the largest challenge of all,
i.e. the climate crisis and base it on carbon emissions.

8. There is a golden opportunity for humankind’s political leadership to transform
Keynes’ “bancor” currency by basing it on the challenge of drastically reducing
carbon emissions. Once we, the global climate crisis and economic crisis
communities of 2009, accept this challenge of a carbon emission-based
international reserve currency unit–it can be considered as the third carbon
reduction method besides cap-and- trade and the carbon tax–and its associated
monetary architecture of an Tierra International Monetary Union (TIMU),
humankind is set on its way to pursue detailed monetary, financial and economic
policies that will work in the short-, medium- and long-term. Sustaining and
sustainable futures can be envisioned for societies in both the global North and
South, using this monetary framework or pathway.

9. The Tierra Manifesto of 2009 presents a transformed international monetary
system that creates a necessary, though not sufficient condition, in resolving the
economic crisis through resolving the climate crisis. It resonates with the recent
words of president Hu Jintao that “Challenge and opportunity always come
together—under certain conditions, one could be transformed into the other”.

10. Without dwelling too much on the differences that became apparent in the
meetings of finance ministers and governors of central banks of the G20 in
Horsham on March 13 and 14, the Manifesto presents an alternative framework
for government policy, business strategies and civil society action that will be a
necessary, though not sufficient, condition for measuring up to the hugely
important and urgent challenges of economic recovery and climatological redress.
This framework is not a blueprint, but a road map that sets out principles and
policies and presents some programs to implement them.

11. The Manifesto starts out with the principles of a transformed international
monetary system which are different from those principles involved in reformist
approaches to the international monetary system. Though these approaches still
dominate, the transformational approach may surge to eminence when both
economic and climate crises deepen as they will during this year. It is clarity and
priority of principles that are needed for this transformational approach to emerge
rather than failing around with all kinds of methods without those principles. The
wisdom of one of America’s philosophers about principles and methods, quoted
above, are eminently applicable to the present crisis predicament of people and

12. Note that the Tierra Manifesto of 2009 is divided into four parts where each
paragraph can be referred to with a letter and number for easy discussion and
consensus building.

13. Also note that this is version 2 of the Manifesto, mainly due to the issuance of the
important draft report of the UN General Assembly President’s Commission on Monetary
and Financial Crises on March 19 from which three paragraphs are being marked up
below. http://www.un.org/ga/president/63/commission/financial_commission.shtml

1. No stability in the monetary, financial, economic systems is possible without the
the principles of equity and sustainability. 2009 solutions to the economic and
climate crises are to be placed within an ethical context in order to lead to
sustainable and stable monetary, financial and economic systems. Article 3 of the
1992 UNFCCC speaks to ethical obligation. (It warrants its own theme group
among the other three theme groups of Secretary General Ban’s climate change
efforts.) As a matter of fact, the TIMU system’s flow of Tierras from the
ecological debtor countries in the global North to the ecological creditor countries
in the global South would provide, on a basis of justice and equity, the funds for
mitigation and adaptation measures and economic development in the global
South. Fortunately, humankind is blessed with an integrated value document for
the 21st century that is complementing the 20th century Universal Declaration of
Human Rights. The Earth Charter with its integrated social and ecological values
was adopted in 2000 after a five year long global consultative process.
Unfortunately, only a few national governments and a few UN organizations are
using it as the basis for their integrated value-based planning.

2. In order to resolve a nation’s economic and climatological crises its government,
business and civil society have to come to adopt a global approach given the fact
that we live in a globalizing world. Once a clear global picture has been acquired
of what is happening and what has to be done on the global level in respect to the
economic and climate crises, a nation’s government, business and civil society are
able to plan strategically on the national level. Presently, too much national
striving is taking place rather than engaging in a global striving.

3. Cooperation is essential in resolving both the economic and climate crises the
meaning of which was well expressed by Britain’s Chancellor of the Exchequer
when he welcomed the 25 representatives to Horsham last week

4. The two major crises in our local and global economies and in the local and
global climate have to be approached simultaneously, not sequentially. The Tierra
Manifesto of 2009 will show below in its policy section how the economic crisis
can be resolved by resolving the climatological crisis. Recently, internationally
known economists Joseph Stiglitz and Sir Nicholas Stern emphasized the need to
consider both crises simultaneously and give priority to the climate crisis, given
that the scope of the climate crisis is humanity’s greatest challenge even in these
dire economic times.

5. The most basic system among the world’s monetary, financial, economic systems
is the monetary system. It is the glue of the financial system, which is, in its turn,
is the glue that keeps the economic system together. It is the dimension that most
politicians and scientists, let alone common people, are little aware of.

6. In periods of severe economic and climate crisis humanity has to engage in longterm
thinking without neglecting mid-term and short-term solutions. George
Monbiot’s recent view of humanity loosing the climate battle calls for urgent
rethinking. More riots, suicides, abused women, greater environmental destruction
are going to happen in 2009 unless confidence is going to be built up. Unless
principles are clear in this rethinking of values, norms and institutions, all kinds of
financial and climate measures and methods are not going to work and people and
planet will suffer more deeply.


Based upon the above principles, I am presenting the Tierra Solution and its TIMU
Architecture to the business and civil society and particularly the government and IFIs
participants in the four major conferences in 2009. They are briefly described here
together with their institutional location at the UN. Further information can be found in
the section of the six components of the TIMU architecture on www.timun.net and in
TIMU: The Transformative Approach to Monetarily Solve the Economic Crisis by
Solving the Climate Crisis which is due to be published this summer by Cosimo
Publishing in New York.

1. Instituting the Tierra international reserve currency and making it part of a
nation’s carbon account in its balance of payments as the basis of Tierra
International Monetary Union (TIMU) Architecture: this transformative monetary
approach will be able to provide a road map to recovery and a framework for
policy development, business strategies and civil society action. Details of
proposals of earlier economists and social scientists who have been advocating a
non-national international currency can be useful in working details for the Tierra
international reserve currency. Notable among this non-national and non-emission
based proposals are called “bancor” (Keynes, 1944), “Intor (Mundell, 1960s),
“global green back” (Stiglitz, 1990s), “ebcu” (Douthwaite 1990s), Terra (Lietaer
1990s). “Tierra” (Verhagen, 2009).

2. The World Central Bank is to administer the carbon accounts in the Treaty
nations’ balance of payments, present technical assistance to the Tierra
Administrative Boards, particularly in the global South, fix the exchange rates
based upon the carbon price on the world market, monitor capital flows,
particularly of the “shadow financial system”, promote the closing of offshore
banking and strengthen accountability and transparency in the banking system
and, in these difficult economic times, provide liquidity in a way and volume
decided by the Treaty nations’ central banks.

3. Removing the money creation function from commercial banks or letting the old,
400 year old fractional banking system continue is a basic decision to be made by
all in both the economic crisis and climate crisis communities during this axial
year. James Robertson of the New Economics Foundation who was for several
decades a White Hall official, engaged in monetary matters and Ellen Hodgson
Brown, lawyer and author may be useful guides here. Banks would become
lending institutions that would not creating money anymore by fractional banking.
Money creation would revert back to the public sector whose right and
responsibility it is in the first place. It is clear from the present financial mess that
banks that are competing with one another using this important governmental
function, is a prescription for disaster. Given the complexity of the globalization
of the various asset classes, a regulatory scheme will always be coming up short,
given the ethically challenged commercial and investment bankers, be they
separated by “Chinese walls” or not. As part of this transformation of the banking
system, privately owned central banks such as the US Federal Reserve System are
to be integrated into their governments’ Treasury departments. Though this
removal of fractional banking is not an essential condition in the TIMU monetary
structure, the International Institute of Monetary Transformation believes that
such drastic change away from centuries of privately owned banking is

4. Establishing fixed exchange rates based upon the one carbon emissions-based
international reserve currency of the Tierra will have many advantages,
particularly in these times of crises where nations or regions still try to gain
advantage by playing with their valuation of their currencies.

5. Adopting a bioregional approach to economic planning which would replace the
market fundamentalism and the Washington Consensus that has been the basis of
the world’s economy during the last thirty years. Without changing the present
economic philosophy that has not worked globally, the monetary transformation
will not work. Irish economist Richard Southwaite, senior fellow at IIMT, has
written the Growth Illusion book that points out that present economies are
running backwards and making their citizens worse off and that they are to be
restructured based upon local, rather than global imperatitves.

6. Adopting a position of frugal trade where economies in the global South are not
made export oriented, but geared towards domestic satisfaction of needs and
where transportation miles of food, goods and services are reduced in order to
reduce carbon emissions. Rethinking international trade is opportune now given
that it is down by 70% and that its economic and climatological impacts have
been negative. Becoming locavores has many advantages for people and planet.

7. The above six paragraphs presented the six essential components of the TIMU
Architecture. I consider the architecture the next step in transforming the
international monetary system, the reform of which was started in the highly
underestimated UN GA President’s Commission Draft Report mentioned in A 13.
I am adding in this version two of the Tierra Manifesto of 2009 the following
mark-ups that I have sent to the personal notice of both Dr. Clark and
Ambassador Clark of the President’s Commission on Monetary and Financial
Crises who have been very positive on the Tierra Solution of a carbon-based
international reserve currency. The capitals in the quoted paragraph are mine
recommendations for the present draft text, recommendations that the reader may
pass on to their head of state and finance ministers.
Proposed change in capitals for paragraph 47 about A New Global Reserve Currency:

“47. But a two (or three) country reserve system, to which the world seems to be moving,
may be equally unstable. The new Global Reserve System WHICH CAN BE CARBONBASED,
feasible, non-inflationary, and could be easily implemented, including in ways which
mitigate the difficulties caused by asymmetric adjustment between surplus and deficit
Proposed change in capitals for paragraph 52 about “A Global Economic Coordination

“52. A globally representative forum to address areas of concern in the functioning of the
global economic system in a comprehensive way must be created. THIS CAN BE DONE
COORDINATION COUNCIL. At a level equivalent with the General Assembly and the
Security Council, such a Global Economic Council should meet annually at the Heads of
State and Government level to assess developments and provide leadership in economic,
social and ecologic issues.”
Proposed change in capital for paragraph 78 about “More stable and Sustainable
Development Finance.”

“78. The international community needs to explore a variety of mechanisms of
PAYMENTS, regular emissions of a new global reserves (SDRs), revenues
generated from the auction of global natural resources (such as ocean fishing rights
and pollution emission permits), and international taxes (such as a carbon tax, which
would simultaneously help address problems of global warming, or a financial
services tax, which would simultaneously help stabilize international financial

Hopefully, the April 2 Summit where Anglo-American capitalism is on trial together with
President Obama’s policy of “fortifying the IMF” which is part of that system, is bold
enough to start reversing that growthism and debt-ridden system into the direction of a
supranational regulatory system that makes the public sector as the sole sovereign in
creating money. It is significant that recent US Federal Reserve and the US Treasury are
engaging in direct lending without the intermediary of commercial banks, the money of
which is coming to be known as “helicopter money”. Cf.

Like in the 1890s, the US polity may engage again in a wide-ranging national debate about who and how should create money, particularly if the US Congress decides as proposed by an excellent and long editorial in the Sunday NY
Times of March 29 to start in-depth hearings as happened in the Pecora inquiry during
the 1930s. Perhaps, America the Tarnished which lost its 1990s role model status as
argued by influential NY Times columnist and Princeton Economics professor Paul
Krugman in the NY Times of March 30, may find its economic, cultural and political self
by going through such purifying national conversation under the leadership of a bold,
intelligent and humble president. At such point transformation rather than reform
becomes possible.

8. Agreeing on a set of global stimulus packages is part of the Tierra Solution’s
global and cooperative approach to the economic and climate crises. The
economic crisis and climate crisis communities may consider to have them funded
directly by their Treasuries rather than by their privately owned central banks.
Spending money into circulation in that way without the intermediary of a
commercial banking system would not cause inflation, as long as the money is
matched with programs and does not cause excess credit. It is significant that North
Dakota which has a publicly owned central bank has economically outperformed all other
states in the USA. Spending billions on alternative energy projects together with carbon
reduction via the Tierra international reserve currency would be a mighty way forward in
combating the climate crisis in the global North and South.

9. Deciding to submit Tierra’s TIMU Architecture to detailed consideration by the
UN General Assembly President’s Commission on Monetary and Financial
Crises. Its senior advisor, Dr. Michael Clark, is intimately cognizant of the Tierra
Solution and its TIMU Architecture and has spoken very positively about it
during a public DPI briefing on January 15 at UN headquarters. (The Commission’s
chairman, professor Stiglitz, has been proposing the global greenback international
reserve currency which is not emission based.) The President’s Commission can also
survey the IMF, World Bank, national central banks and Treasury departments for
additional input and support of a carbon-based international reserve currency. Presently,
China is still pushing for supersovereign international reserve currency to replace the
dollar and it is in the interest of developing countries not to be forced to hold dollars in
their reserves for which they paid minimal interest and which reduce the scarce funding
for domestic economic development.

10. Raising the institutional level of the UN GA President’s Commission on Monetary
and Financial Crises given that it represent the G192. This could be done by
making the Commission an integral part of the UN General Assembly operations
as an additional standing committee.

Once principles and policies are agreed upon, hundreds of related programs can be
developed to bring this transformed international monetary system into life.
Briefly the following programs warrant mention. They can be developed and
implemented by government, business and civil society organizations. It is recommended
that the three sectors cooperate as much as possible, following the ICLEI approach,
where government, business and civil society have been working together under the
Local Agenda 21 umbrella.

1. The Two-In-One program: showing how the two major crises have to be tackled
simultaneously, not sequentially is essential in promoting the Tierra Solution and
its TIMU Architecture.

2. Monetary education program: new secondary and tertiary level educational
resources have to be developed using information from IIMT, FAESTA,
American Monetary Institute, Oxfam UK and from the links and documents
sections of those organizations’ websites.

3. Three related activist programs: IIMT has developed the Organizational
Statement of Support (O-SOS) program where an organization discusses this
Manifesto and other IIMT documents to arrive at a consensus document that
would be uploaded to the IIMT website. Related to O-SOS is the Tierra
Declaration which provides a template for organizers of economic and climate
crises events to strive towards a consensus document that can be published in
local media and uploaded to the IIMT website. Finally, there is the traditional
Tierra Petition where individuals can sign on. All three are described further
under Actions on www.timun.net.

4. Non-violent civil disobedience program: many more demonstrations, riots will
occur during 2009 and it is important that acts of civil disobedience be nonviolent
to be effective. It is not widely known that the New Deal legislature was
signed by President Roosevelt in the 1930s after widespread demonstrations, riots
and other expressions of a mass protest movement. Such movement will also
strongly emerge this year. Only real change, i.e. value change and
transformational policies based upon clear principles will be able to satisfy these
justified demands.

5. Internet mobilization program: using the enormous resources and capability of the
Internet is a given for a non-violent mass mobilization, the parameters of which
have been studied and implemented since the 1960s by the International Peace
Research Association (IPRA) the organization that I represent at the UN
Headquarters and of which my Earth and Peace Education Associates
International (EPE) has been an active member for almost two decades. One of
the many ways IIMT is marshalling support for the Tierra Solution—other ways
are being described in the events, news and blog sections of www.timun.net– is
by surveying many of the thousand ECOSOC NGOs already registered for the
Copenhagen conference, the results of which will also be part of the forthcoming
TIMU: The Transformative Approach to Monetarily Solve the Economic Crisis
by Solving the Climate Crisis, to be published by Cosimo: a Specialty Publisher of Books
that Inspire, Inform and Engage Readers Worldwide.

1. The Way Forward of the earlier quoted Earth Charter states: “As never before in
history, common destiny beckons us to seek a new beginning. Such renewal is the
promise of the Earth Charter principles. To fulfill this promise, we must commit
ourselves to adopt and promote the values and objectives the Charter………. “Let
ours be a time remembered for the awakening of new reverence for life, the firm
resolve to achieve sustainability, the quickening of the struggle for justice and
peace, and the joyful celebration of life.”

2. About ten years after these words were decided upon in The Hague, where
thousands had gathered to celebrate the Earth Charter benchmark version, the
world and the planet has fallen into an economic and climatological abyss.
Getting out of this abyss demands the best scientific, religious, spiritual resources
that humanity has to offer and can draw upon.

3. In respect to the climate crisis, the one we have to solve before we solve the
economic crisis, the following presents humanity’s three choices. ‘We basically
have three choices – mitigation, adaptation, and suffering. We’re going to do
some of each. The question is what the mix is going to be. The more mitigation we
do, the less adaptation will be required, and the less suffering there will be.’ John
Holdren, President of the American Association for the Advancement of Science.

4. Like the Rio Earth Summit in 1992 which was a historic moment in the life of
humanity and the planet, the 2009 summits, meetings and conferences could also
become a historic process. It could be the pivot in terms of setting direction for
the rest of the decade and, probably, the rest of the century and beyond. The
London Summit, hopefully, will start this pivotal process.

5. There will be heavy lifting on the part of economic crisis and climate crisis
communities to transform the international monetary system, given the present
reformist focus on short-term measures dealing with stimulus packages and
regulatory reform. However, both the economic and climate crises are deepening
and the deeper they get, the greater the opportunity for transformational change
and for transformational institutions such as the TIMU Architecture to emerge.

6. Though the 2009 process will determine the mix between mitigation, adaptation
and suffering, it is also to be viewed in the context of the challenges of the third
revolution of humanity on this planet, i.e. the sustainability revolution, into which
humanity is able to evolve if the 2009 decisions are the right decisions. The
challenge of this revolution is well expressed by former US EPA Administrator
Ruckelshaus when he posed the following question in the early seventies:

“Can we move nations and people in the direction of sustainability? Such a move would be a
modification of society comparable in scale to only two other changes: the Agricultural
Revolution of the late Neolithic, and the Industrial Revolution of the past two centuries. These
revolutions were gradual, spontaneous, and largely unconscious. This one will have to be a fully
conscious operation, guided by the foresight that science can provide. If we actually do it, the
undertaking will be absolutely unique in humanity’s stay on Earth.”

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