The global financial system is a major component of our global society. The available analyses of sustainability, however, have poorly assessed the role of the financial system in scenarios of future global change. Here we contrast current global flows in the financial system with the future economic costs of a worldwide transition to renewable energies under the baseline and 450. ppm scenarios for emissions of greenhouse gases proposed by the IPCC. We show that annual global financial flows are three orders of magnitude greater than the annual economic costs of policies for global sustainability. A small global tax on financial transactions of 0.05% could thus provide the required funds for the deployment of renewable energies. To assess the roles of the financial sector in future policies for sustainability, we identified 14 key international actors and enumerated 16 key policies for sustainability that should be implemented to achieve effective global ecological and financial sustainability. We conclude that the proposed structural reforms to the financial system are essential steps urgently required for financing a global transition to a sustainable economy. Consequently, we suggest that the international scientific community should urgently pursue an academic consensus on policy recommendations for the financial sector. © 2012 Elsevier Ltd.
- Financial system
- Renewable energy