The Ecor As Global Money: Towards a Green Bretton Woods System to Finance Sustainable and Just Transformation

19 Pages Posted: 19 Jul 2022

See all articles by Nicolás Aguila

Nicolás Aguila

University of Witten/Herdecke - Institute of Economics and Business Administration

Paula Haufe

University of Witten/Herdecke - Institute of Economics and Business Administration

Joscha Wullweber

University of Witten/Herdecke - Institute of Economics and Business Administration

Date Written: July 6, 2022

Abstract

Global South countries face significant challenges to finance sustainable and just transformation. These challenges stem partly from the hierarchical character of the current international monetary system, which requires Global South countries to obtain U.S. dollars to finance the imports necessary for sustainable investments. To overcome this hurdle, we propose the foundation of a Green Bretton Woods System. A Green World Central Bank (GWCB) would be allowed to create its own unit of account, which for the present purposes we shall call the ecor. New ecor reserves could be created by the GWCB on demand. The ecor would be a global special purpose money similar to Keynes’ ‘bancor’. Various structures would ensure that the ecor could only be spent for social-ecological projects. Deficit countries would be granted loans in ecors that would be credited to their GWCB accounts to finance imports needed to combat the climate crisis and advance the process of sustainable and just transformation in their societies and economies. In this way, the amount of ecors would adjust endogenously to the real demands for socio-ecological change and would not be limited by reserves, or funding conditions from private finance. GWCB accounts of surplus countries would be debited in ecors, and the amount debited would only be allowed to be spent within the system. This would prevent a run on ecors. At the same time, it would provide an expansionary mechanism to overcome unjust international imbalances.

Keywords: Green Bretton Woods, green international monetary system, special purpose money, sustainable and just transformation

JEL Classification: E12, E42, F33, Q57

Suggested Citation

Aguila, Nicolás and Haufe, Paula and Wullweber, Joscha, The Ecor As Global Money: Towards a Green Bretton Woods System to Finance Sustainable and Just Transformation (July 6, 2022). Available at SSRN: https://ssrn.com/abstract=4152448 or http://dx.doi.org/10.2139/ssrn.4152448

Nicolás Aguila

University of Witten/Herdecke - Institute of Economics and Business Administration ( email )

D-58448 Witten
Germany

Paula Haufe

University of Witten/Herdecke - Institute of Economics and Business Administration ( email )

D-58448 Witten
Germany

Joscha Wullweber (Contact Author)

University of Witten/Herdecke - Institute of Economics and Business Administration ( email )

D-58448 Witten
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
227
Abstract Views
901
Rank
254,207
PlumX Metrics