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Economic and Financial Systems for Well-being

Economic and Financial Systems for Well-being - Priority themes sustainability research
Immagine: Hansjakob Fehr

Using six priority themes, the "White Paper on Sustainability Research" outlines Switzerland's most urgent research needs in order to meet the UN Sustainable Development Goals.

Our current economic system tolerates or even encourages highly unsustainable practices. Finance is increasingly disconnected from the real economy and the huge volumes of assets traded in uncontrolled, speculative and manipulated financial markets have contributed to economic and financial instability. The costs of resulting crises, overconsumption, pollution, resource depletion, and social inequalities are far too high, both for present and future generations. Our current economic paradigm must be transformed into one that serves sustainable development.

Key unresolved questions

There is extensive
theoretical literature concerning sustainable economic systems. One main problem is the implementation of such systems. An informed and broadly-based debate on
implementation is required to develop innovative policy
recommendations. Such a debate should ask how dealing with environmental resources, limits, and societal values can be put at the core of the economic system. To that end,
existing theories on growth, capital, property, profit, competition, power, well-being, and the role of the financial sector need to be critically discussed and analysed.

Unresolved questions include:
– What are the main discrepancies between current models of economic systems and the sustainability principles of the UN?
– What are promising understandings, visions, and models of sustainable economic systems? What are their underlying assumptions and paradigms, and what are their key characteristics? How can they be concretized, at different scales and for Switzerland specifically, and how can corresponding transformation be fostered?
What are inspiring success stories?
– How can models interlinking economics and finance be constructed to include environmental and social concerns?
– What are scientifically robust arguments substantiating
that economic policy and public debates solely guided
by GDP and the growth imperative are not compatible with sustainable development and thus need to be complemented with alternative metrics? How can such new metrics be established?

Sustainable economic systems will almost certainly entail altered patterns of production and consumption. It would
be useful to identify realistic options for change in differ-
ent sectors and regions. Also, it is unclear what the implications could be for the current, largely globalized division of tasks in these systems.

Unresolved questions include:
– What are concrete options, requirements, and framing
conditions for national and global sustainable produc-
tion and consumption, and for which sectors?
– What are the major tasks in developing technical systems and societal structures to enable altered patterns of production and consumption? What are potentials and limitations of the circular economy? What is the potential of sufficiency in consumption and how can it be fostered?
– Where might increased efficiency be enough to minimize costs to the environment and society, where are major innovations also needed in the supply of goods and services, and where do we need to rethink demand more radically?
– How can the value of common-pool resources and
non-commodity ecosystem services appropriately be
considered for realizing sustainable production and
consumption patterns?

The current national and in-
ternational tax systems and national systems of public fi-
nances were set up several decades ago and have not been adequately adapted to meet the challenges of sustainability, globalization, and increasing inequality.
Questions include:
– What elements of the present tax systems contribute to unsustainability or hinder the solutions to sustainabili-
ty problems?
– What are truly inclusive approaches to public finance, subsidies and taxes, given that e.g. taxing mainly labour or consumption is counterproductive?
– How can the tax system evolve into a mechanism that lessens environmental pressure, contributes to the income generation, reduces social inequality, and stimulates the economy to become sustainable?

The current financial system is largely globalized and its mechanisms are extremely complex.
Alternative business models and regulatory reforms for
the financial system are needed to turn it into a sector that serves sustainable development.

Unresolved questions include:
– What are the role and core characteristics of a sustainable financial system? What form and degree of global collaboration would a sustainable financial system ideally feature?
– How would money creation occur in a sustainable economy? What would be the implications for the roles of capital, debt, property, and power?
– What are the contradictions between the financialization of the economy and the principles of sustainable development?
– How can the banking and financial system support the
real economy in its transition to more sustainability?
What is the role of central banks investments, especially in mitigating climate change?
– How can the considerable systemic risks emanating
from toxic financial assets be measured and eliminated?

To achieve the goal of developing sustainable economic and financial
systems, economic research must be conducted in close
collaboration with other disciplines and societal actors.
The general public, and students in particular, need to understand what is at stake and be involved in a critical debate about our economic and financial systems.

Key questions are:
– How can the scientific discourse about different schools of thought in economics and finance be promoted in research and teaching activities? What conditions and structures need to evolve?
– How can an open debate about the economic and financial system be organized in such a way that it results in policy recommendations serving sustainable development goals? Who needs to be included in this debate,
and how can power imbalances be dealt with?
– Which systems of sustainable economies would be preferred by the different relevant actors, and what consid-
erations shape the respective social discourses?
– How can a fruitful interdisciplinary discourse be established between business, scientists, economists, sociologists, political scientists, and philosophers? Which
structures need to evolve to link these disciplines again

Read White Paper on Sustainability Research:

Video: Research on alternative forms of economic activity (economic and financial systems that serve sustainable development).

Our current economic system tolerates or supports practices that are highly unsustainable. Unrestrained trading in financial markets has contributed to economic and financial instability. This has resulted in the problems of over-consumption, environmental pollution, resource shortage and social inequalities. Our current economic paradigm must therefore be reshaped to serve sustainable development. Dr. Stephanie Moser and Dr. Christoph Bader from the Centre for Development and Environment (CDE) at the University of Bern are working on a research project in which they are investigating various projects and companies that are seeking new and more sustainable economic paths. One such company is the «Energiewendegenossenschaft», which installs solar systems "for free" in the canton of Bern. It provides a professional with whom private individuals and other do-it-yourselfers can build their own solar power systems.
This video was created by students of the Multimedia Production course in the Corporate Communications module at the Bern University of Applied Sciences. The multimedia projects were created as part of a collaboration between WWF Switzerland and the three Multimedia Production classes at the Universities of Applied Sciences in Graubünden and Bern.

Priority theme: Economic and Financial Systems for Well-being (Swiss German)