Climate change impacts are, however, coming to us all — developing and developed countries alike. For instance, Hurricane Maria’s devastation in the Caribbean and extreme heatwaves in Europe exemplify how no region is immune. The chapter discusses how even developed nations face significant challenges, such as wildfires in Australia and California, and flooding in Germany. Comprehensive policy responses are essential to address these widespread impacts. Insights from experts such as Ken Ofori-Atta, Ghana’s Minister for Finance, highlight the extensive effects of climate change, including infrastructure damage, economic costs, health effects, and migration. The chapter calls for a unified global effort to mitigate climate risks, improve infrastructure resilience, and implement robust economic and health strategies to protect all populations from the escalating consequences of climate change.

Exploring the economic ramifications of climate change, this chapter features insights from financial experts such as Sara Jane Ahmed, Managing Director and V20 Finance Advisor of the CVF-V20 Secretariat. It discusses the adverse effects on GDP growth, inflation, debt, and credit ratings, particularly in vulnerable economies. The chapter highlights the crucial role of financial markets, insurance, and climate finance in addressing these challenges. Innovative financing solutions such as Green Bonds and pre-arranged and trigger-based financing, including loss and damage finance, are explored as means to build economic resilience. The importance of sustainable economic policies and international cooperation is emphasised, with case studies from countries successfully integrating climate resilience into their economic planning. The chapter calls for increased investment in climate adaptation and mitigation to safeguard economic stability and promote sustainable development.

In South America, investment chapters have been used by some governments, notably in Chile, Colombia and Peru, to replace outdated bilateral investment treaties and extend countries’ investment protection commitments. In other countries, such as Brazil, investment chapters are a means to rethink the governance of foreign investment altogether. This chapter traces the evolution of South America’s PTA investment chapters from 2001 to 2022, focusing on the types of reforms adopted and the domestic factors that shape the reforms governments are willing to accept. It finds that PTA investment chapters exhibit an increasing diversity of reforms over time, although the vast majority of agreements are designed to maintain traditional investment protection standards. This variation is partly driven by the legitimacy crisis of international investment law. Arguably, this crisis has created more political space for South American preferences in investment treaty lawmaking. However, who dominates reform debates is just as important for countries’ reform preferences as their experience with investor-state arbitration. Regardless of reform preferences, the main outcome of PTA investment chapters has been further fragmentation in an already complex and incomplete area of international economic law. This fragmentation, if allowed to continue, may exacerbate the very challenges that governments are seeking to address through their reform efforts in order to promote sustainable and inclusive development.

This chapter explores how the landlocked state of Ethiopia has been dealing with loss and damage, identifying several paradoxes in its climate change policy development. First, despite growing awareness of Ethiopia’s vulnerability to the impacts of climate change in the late 2000s, early climate policymaking was focused on mitigation strategies rather than adaptation. Second, in many ways, Ethiopia does not fit the classic mold of a country grappling with loss and damages since until relatively recently in the history of the UN climate change system, loss and damage had been more narrowly framed as an issue that concerns Small Island Developing States. Using insights from semi-structured interviews and policy document analysis, the chapter argues that the trajectory and emphasis of global climate governance and commitment to a green economic development model shaped Ethiopia’s early domestic priorities in climate policy development. It also shows that political awareness of loss and damage has increased as the Ethiopian government has navigated the consequences of climate change and with the growing prominence of loss and damage within the UN. Moreover, the chapter finds that potential novel opportunities to draw on international sources of climate finance have been a driver of growing policy engagement.

Chapter 1 explains how economics plays a crucial role in sustainable development, affecting the well-being of current and future generations. Economics explores how scarce resources are allocated and distributed and analyzes the trade-offs in decision-making. The stock of capital assets, or economic wealth, in an economy determines economic opportunities and individuals’ standard of living and prosperity. Economics recognizes that the economy is embedded in nature and that natural capital contributes to economic welfare in three ways: natural resources provide inputs to production, the environment assimilates waste and pollution, and ecosystems provide essential goods and services. A pessimistic view is that environmental scarcity will limit economic growth, leading to economic collapse. An optimistic perspective is that human creativity, innovation, and technological advancements can avert environmental scarcity, allowing economies to prosper. Economics can help guide society toward a more optimistic development path by creating incentives and safeguards for sustainable use of the environment.

Public trust, political will, and the right leadership are all necessary to create and to lift up to the global level a living democracy for a sustainable world. Given the challenges before us, we are running out of time to bring about the necessary disruption in the stalled and stalemated political status quo by significantly expanding direct democratic participation through sortition as the first step toward creating and restoring mutual public trust. Trust must be built by exercising trust. We need trust in governments and between and among governments. Most important, we need trust between and among people who have faith in their fellow men and women to assume the responsibilities of self-rule. Trust can be created by working together in trust. With mutual trust, we can summon the political will to overcome our current inertia and make the changes needed to uplift democracy for a sustainable world. We can find and follow the right leadership. And we can follow the path from the Pnyx to secure at last the global realization of living democracy.

In addition to right representation, our new framework for democratic global governance must comprise global circles of participation chosen by global sortition. We must make something new work for the world by giving new life to human institutions at every level of governance. To accomplish this, we must employ random selection to create an interlinked network of global participation that will be a central part of a new system of democratic global governance. We must establish, globally, multiple levels of multidimensional and multiconnected circles of participation through random selection, reflecting the diversity of views in the entirety of the world, ascending and descending through interaction at different tiers of governance, linking, overlapping, and jointly acting in different sectors and on different subjects of governance, in an ongoing expression of human imagination and democratic will. Among these sortition circles must be circles for nature and circles for the future. We must make these global circles into rings of human action in which everyone throughout the world will have an equal opportunity to participate.

In 508 bc, after defeating a Spartan effort to restore authoritarian Peisistradid rule in Athens, Cleisthenes and the Athenian citizenry overthrew aristocratic rule in the city-state and replaced it with a form of direct popular rule that rapidly evolved into the world’s first genuine democracy. The reforms made by Cleisthenes and his popular allies at that time formed the foundation for an ever-evolving direct and participatory Athenian democracy that lasted for nearly two centuries before its demise by military defeat. The political structure of the city-state was reorganized to bring citizens from different places together in self-governance; the Assembly was accorded full political powers, and all Athenian citizens were made equal before the law and equally entitled to participate in the governance of the city-state. Central to direct democratic governance were random selection of officeholders by sortition and frequent rotation in office. Further reforms during the succeeding decades made Athenian governance still more democratic and – after brief authoritarian interruptions during and immediately after the Peloponnesian War – more committed not only to democracy but also to the rule of law, until ultimate military defeat by Macedon in 322 bc.

As Hannah Arendt taught us, we must create something new in the world. Human action can make a new beginning for humanity. We must pursue self-liberation through participation with others in mutual action to attain full human flourishing in a sustainable world. The participatory action we take must be democratic action. Democratic action is the only kind of action that can lead to the full flourishing of human freedom. Only democracy provides an institutional framework for the fullest extent of political freedom, economic freedom, and every other kind of freedom. We must embrace the responsibility of freedom by working together to apply reason to the world. This requires active engagement for a common purpose in a truly participatory democracy. A common purpose can be found in seeking accomplishment of the social, economic, and environmental aims of sustainable development. As John Dewey insisted, democracy must become a way of life. Democratic participation is the way to attain a deeper freedom. We see this in the emergence of a multitude of bottom-up sustainable development networks worldwide.

The most radically revolutionary idea in the world remains the notion that “we the people” are capable of governing ourselves. This idea began with Cleisthenes and the ancient Athenian democrats, but it is only partly fulfilled today. Human rights have meaning only if they have genuine content. It is in the exercise of rights with content through genuine democratic participation that our natural capacity for self-rule can be enlarged and we can become more capable of self-rule. In sharing the capability, knowledge, and potential that each of us possesses, we can confront the real world and cooperate to make it into a better world. By acknowledging our unity as one species, accepting our place as a part of nature, and asserting control of our technosphere, we can become one global network. As it is, we comprise a living system, a universal agent of systems thinking, and, through collective action, we can become a much more successful one. Full democratic participation can accomplish the fullest effectiveness of this living network. It can produce sustainable development. If everyone participates, then the benefits of this collective action will be maximized; but if some are left out then their knowledge and potential will be lost to the whole, and thus the network will be less capable of making a sustainable world. The billions of people who are invisible must be made visible by expanding the circle of our moral imagination, and all must be enabled to achieve self-liberation by participating in their own governance.

Participation is meaningless without communication. Just as the Athenian leader Pericles communicated with his citizens in his famous Funeral Oration, so must we communicate with one another to take and coordinate human action through human cooperation. Communication is not possible without a space in which to communicate. The basis of participatory democracy must be communication and action taken together in a public space. We must therefore have more public spaces for democratic participation by everyone, including those among us who have been excluded, who have been marginalized and invisible. Within these public spaces for participation, communication must occur through deliberation with people coming together and talking things through on fair and equal terms to arrive at a mutual decision based on mutual rational criticism. This deliberation must include everyone, and it must be face to face. Local experiments throughout the world have shown that this can be done. By using an ancient sortition machine they called the kleroterion, the ancient Athenians showed how the collective wisdom of the people can be summoned and employed in making public decisions. They also learned through hard experience – exemplified in the trial and execution of Socrates – that collective wisdom and collective action through democratic decision-making are best when the decision-makers are educated to be the best citizens and make the best decisions.

Not one of the numerous global risks we confront can be averted without better governance through global cooperation. All these risks – the ones we face now and the ones we may soon face next – transcend national borders, cross the globe, and therefore require global solutions. Moreover, many of these risks are interconnected; thus, they require interconnected solutions. Within the biological and chemical container of the Earth’s biosphere, human civilization is not a collection of individual structures of living that are entirely separate and distinct. It is a complex system of interconnected – and interdependent – networks of all kinds, many of which extend across our imagined political borders. Moreover, the ecologies of the world that human cities and states inhabit are all connected through natural systems. The atmosphere, hydrosphere, and cryosphere of the Earth, the biosphere that comprises the Earth’s ecosystems, are all connected. The many parts make a whole. To find planetary solutions, we must employ systems thinking to create institutions and other political arrangements to achieve effective Earth system governance, which must see and treat the world as a whole. To do this, we need human cooperation in problem-solving at every level of human endeavor. Foremost among our tools in this task must be democracy, and democracy must be devoted to sustainable development. Although democracy is in retreat throughout the world, we must fulfill our duty of optimism by establishing democracy everywhere and at every level, including democratic global governance.

The challenges for governance in ancient Athens are dwarfed by the challenges for governance in our own time. Humanity seems incapable of cooperation for collective action. We are failing in problem-solving. This failure is evidenced at every level of governance. It is especially obvious in global governance, where an escalating avalanche of ecological and other crises has already begun and hurtles toward us. The failure of democracies is particularly distressing in that it is the democracies that, in the eyes of those who support and believe in them, are supposed to do the most to meet the common needs of humanity. The human species has survived and thrived because we have cooperated. We must do so now if we are to meet the challenges before us and secure the fullness of human flourishing through sustainable development. We have, however, not yet found the common will that is indispensable to taking the collective action that is necessary to achieve our goals for humanity. Like the ancient Athenians in their triremes, we must learn to row together to serve the public good. We must, like them, form participatory knowledge networks for the public good. This requires vastly more public participation in self-rule at every level of human governance. New cooperative networks for sustainable development are examples of the kind and extent of popular participation we need to continue to survive and succeed as a species.

The ancient Greeks subjected nature to human questioning. As personified in the natural observations of Aristotle and the other work of his Lyceum, they pointed the way to our natural science. They believed in the unity of man and nature. So, today, must we. In the modern view, nature is something separate and apart from man that is to be subordinated to human purpose. Nature, too, is still treated today as something without limit. Our science, and the technology it has produced, are behind the material bounty that is enjoyed by billions of people in the modern world and that is sought by billions more who hope to share in it by securing and embracing the benefits of technology. Continued technological innovation and dissemination is necessary for sustainable development. Yet there is a long list of potential risks if technology is not deployed properly. Moreover, we humans are increasingly shaped and made captive even of the technosphere we have created that increasingly pervades our biosphere. The choices we make about technology will do much to shape our future. In making those choices, we must reorient our relationship with nature. We must see the world and our place within it differently. We must see ourselves as part of one connected form of life that is connected to all the other forms of life, which are in turn all connected to the rest of nature on the imperiled Earth and are mutually dependent on all these planetary connections for perpetuating life.

The growing number of global heat waves is one expression of the calamities of climate change resulting from human greenhouse gas emissions. Sea levels are rising as global temperatures continue to increase, creating an array of climate risks. While humanity postpones ambitious climate action, the planetary biosphere on which we depend is changing, perhaps irreversibly. Deforestation, desertification, habitat loss, biodiversity loss, environmentally harmful mining, ocean pollution, relentless consumption, and plastics addiction are all a part of this heedless destruction by our careless and wasteful species, which increasingly threatens the continuation of human civilization. Humanity is now an agent for geological change. Further, human-created ecological risks are compounded by the confluence of the risks of pandemics and armed conflicts. Alone among all the species of the Earth, we have the power either to destroy the world or to transform it to achieve the full measure of the flourishing of our species. Burdened by our lack of wisdom, and driven by the worst in our nature, we seem bent on our own destruction. Ours is a species that must wake up. We must recognize that not changing our ways may be an act of self-destruction. If we do not act together to lift ourselves up – and especially to lift up the majority of us who are at the bottom of our global social and economic pyramid – then time may soon run out for achieving the heights of human aspiration. Human life may become mostly a matter of survival.

Necessary tools for the success of the new participatory framework for democratic global governance will be expertise, rules and rule enforcement, and interaction among the new circles of participation across and up and down the different levels of governance. We must be able to discern when expert advice is needed and when to heed it to produce better results. We must also be able to tell what is expert advice and what is not. In the process of democratic decision-making in the new network of democratic global governance, there must be a balance between the combination of right representation and collective wisdom on the one hand and technical and other forms of expertise on the other; for such a balance will produce the best results. What is more, just as we need a different kind of democracy, so too do we need a different kind of rules. A reorienting of global rules away from the limitations of the Westphalian system and in a planetary direction is required for the new network of democratic global governance. There must also be continuous interaction among all the participating parts and all the different levels of the new framework of democratic global governance.

In the world today, we must make a new Cleisthenic moment. To achieve sustainable development and to accomplish its other global goals, the United Nations must be modernized and reformed to become more democratic. Other international institutions of all kinds must be made more responsive to the “grass roots” of the world through participatory and other democratic reforms. In addition, new global institutions must be established to address global concerns. Moreover, global democratic governance must be speeded up and enhanced through the rising voice emerging from new and parallel channels of democratic participation outside the bounds of borders and governments, including the global proliferation of grassroots networks for sustainable development. These participatory networks must surround and inspire the reshaping of global governance into a governance that is truly democratic. We must reform democratic representation to make it right. And we must couple it with collective wisdom derived from the random selection of sortition. We must construct a framework for enabling democratic global governance that will blend right representation with sortition to produce better results for sustainable development and for all else of common concern for all of humanity.