Contact: Faye Yates
Director of External Relations
Columbia Earth Institute
(212) 854-3830
Rachel Gogos
Office of Development Studies
United Nations Development Programme
(212) 906-3689
Note to Editors: Professor Chichilnisky will be available at a press
conference to be held April 9 at 8:45 A.M. in the Hank Shannon Conference
Room, 21st floor, UNDP, DC1 Building, One United Nations Plaza.
EMBARGOED FOR RELEASE
12:01 P.M. EDT, APRIL 9, 1997
International Bank For Biological Capital
Proposed By Columbia Economist
A report issued today (April 9) by the United Nations Development Program
proposes establishing a new global institution that would help the environment
while growing the global economy.
The author of the report, Graciela Chichilnisky, Director of the Program on
Information and Resources and UNESCO Professor of Mathematics and Economics
at Columbia University, proposes an International Bank for Environmental
Settlements (IBES), which would be fundamentally different from a standard
financial market, such as a stock exchange.
"For the first time in history," Professor Chichilnisky said, "human activity
has reached levels at which it can alter the atmosphere of the planet and change
irreversibly the complex web of species that constitutes life on Earth.
"Humans have the ability to destroy in a relatively short period of time the
massive infrastructure that supports the survival of the human species."
Professor Chichilnisky's report is an attempt to create an institution that
would redress environmental imbalances of the past.
The proposed IBES would have a much larger role than a stock market
because where stock markets trade private stock, the IBES would trade public
goods, such as rights to use the atmosphere, and securities based on watershed
services, the Columbia economist said. The new institution would encourage
development of innovative financial instruments to obtain market value from
environmental resources without destroying them. In the report, Professor
Chichilnisky maintains that the World Bank, the International Monetary Fund and
GATT all fall short of what a proposed IBES would do to help redress
environmental imbalances of the past 50 years.
"The international bank proposed by Professor Chichilnisky is both
innovative and timely," said Inge Kaul, Director of the Office of Development
Studies. "It is an ingenious way of addressing a very complex issue."
The report points out that our industrial society is in the process of
transforming itself into a knowledge society in which humans can achieve a new
form of economic organization where the most important input of production is no
longer machines, but human knowledge. "Instead of burning fossil fuels to power
machines, we increasingly will be using information to power knowledge," Professor
Chichilnisky said.
She points out that information is a much cleaner fuel than coal or petroleum
- one that puts humans rather than machines at the center of economic progress.
Thus, Chichilnisky predicts that economic progress will be knowledge intensive
rather than resource intensive.
Professor Chichilnisky uses the following example: When transportation
networks are replaced by telecommunication networks, communication takes place
more efficiently and effectively without the use of fossil fuels. She also points out
that the telecommunications industry in North America already employs more
people than the automobile and auto parts industries together.
The report deals most extensively with the emission of greenhouse gases,
mostly derived from the burning of fossil fuels, such a coal and petroleum, to
generate energy. Professor Chichilnisky said, however, that the same principles
could be applied to all environmental assets, including biodiversity, soil and forests.
The Program on Information and Resources is a unit of the Columbia Earth
Institute, a division of Columbia University focused on studying global issues that
transcend traditional academic and research boundaries. Professor Chichilnisky
and other researchers at the Earth Institute are currently at work to determine the
value of biological capital.