The Rio+20 United Nations (UN) conference on sustainable development,
to take place in Rio de Janeiro in June, does not aim to produce
multilateral “hard law” agreements, unlike the Earth Summit in 1992, which among
other outcomes led to the UN Framework Convention on Climate Change (UNFCCC).
Instead, the core of the draft outcome document produced by the UN is a proposal
to agree by 2015 to a set of sustainable development goals, a framework
for reporting by large companies and the World Trade Organistion (WTO) as
the means of implementation. The first round of negotiations concluded on 27 January 2012.
Humans have always altered their local environment; with industrialisation,
urbanisation, motorisation and increase in incomes they have begun to alter the
planet. The emerging concern is that the adverse effects of economic activities exceed
those of resource extraction. There is scientific evidence that the planet will
soon be unable to absorb the waste carbon dioxide of excessive consumption. The
lifestyle that comes with affluence, witnessed in the industrialised countries with
high levels of natural resource consumption, particularly energy and high levels of
waste, like carbon dioxide, threatens half of humanity which has yet to enjoy the
benefits of increased incomes. Transforming societies towards living in balance
with the natural environment will also lead to more equity, even development
and coherence in the global agenda.
Defining a Green Economy
The theme of the Rio Conference is “green economy in the context of sustainable
development and eradication of poverty”. There is as yet no consensus on the
definition of a green economy, principles of international cooperation, framework
for action and global vision for the future. The divergence between countries centres
on whether the transition to global sustainability will be based on the economic
or on the social dimension of sustainable development. Creation of new markets
will require making transparent the costs of actions or inaction, with sustainable
development considered a process and not a goal.1 Future growth in developing
countries, because of the existence of ecological limits, poses the moral question
– if sustainability cannot be achieved through technological efficiency, how
much of the world’s resources does any one nation or individual have a right to
for their well-being? The unresolved question is whether developed countries
will recognise the need to change particular kinds of resource consumption for
the sake of others’ development.
In this context, defining the global goals will be contentious. The shift to
greener economies can be seen as a process, augmenting ecosystem services
and controlling environmental damage. It can also be considered a goal dependent
on new technologies in all fields. Attention will need to be focused on social
design and social innovation, especially in cities where the majority of the human
population will soon be living. Taking a middle ground, a green economy should
be defined in terms of minimising the adverse effects of economic activities on
global ecosystem services depending on the stage of development, while using
innovative technology to provide equal opportunity and prosperity for all.
There are three areas of major disagreement between countries with respect to
international cooperation for the transformation to sustainable development.
First, strong objections have been voiced on including in the outcome a rights-based
approach under the principle of common but differentiated responsibilites that
have shaped international cooperation around the environment. Interestingly
enough this was also the last principle reluctantly agreed upon in the negotiations
on the Rio Declaration in 1992 only because it was reproduced from a communique
of ministers of environment of the Organisation for Economic Cooperation and Development (OECD).
Differentiation, based on stages of development rather than historical responsibility
for environmental damage, is important because a key role will need to
be played by all governments as the transformation cannot be left to market forces.
Global ecosystem services are both a global good and are not priced by the
market, and policy is responsible for the creation of markets for new technologies
like wind and solar energy. Governments also play a major role in initiating research
on new technologies, because they serve a wider good and the benefits accrue to
society. In responding to a problem that is global in nature and scale, ways have
to be found to deal with the distributional challenge, as the costs will fall more
heavily on developing countries because of their low levels of income. For example,
intellectual property rights also have a “global goods” dimension.
Second, the suggested establishment of a 10-year “framework on sustainable
consumption”, which many consider to be the key element in the global transition
to sustainability, is relegated to the status of one amongst a number of programmes
rather than the central element of the framework for action. At the
World Summit on Sustainable Development in 2002, the last paragraph to be
agreed upon was on sustainable consumption and production. A consensus
was possible only when developing countries agreed to a “framework of programmes”,
and that too at the national and regional level, but not at the global level.
A focus on consumption, rather than production patterns, as the driver of
change also means that the objective of enhancing ecosystem services will be
met through different measures at different costs for individuals in different
countries, because individual preferences are shaped by societal forces and definitions
of the national interest. Therefore, an analysis of patterns, trends and drivers
of natural resource use is needed to enable governments to design policies that will
help societies, rather than individuals, remain in balance with nature. This
change in values will be reflected in the way we define and measure progress,
which should not be based on markets as ends in themselves generating greater
aggregate wealth, but rather on human well-being achieved through access to
adequate ecosystem services. A technological transformation will not occur without
a societal transformation driving it.
Third, since international standards are the basis for national measures with a
global impact, a consensus is being sought on the WTO as a means of implementation.
This will lead to using the Dispute Settlement Understanding to secure competitiveness
concerns of units in industrialised countries in the face of the shift in global
economic power, just as global rules were used to create private rights under the
Convention on Biodiversity in 1992. It will also lead to shift to technologies with
state enforcement through the trade regime by inserting intellectual property
rights in the WTO in 1995 to support a new engine of growth.
Developing countries must now take the leadership in evolving a new paradigm,
with new global rules. In the coming years they will be making increasing demands
on limited ecosystem services provided by the global commons, or carbon space,
to absorb emissions of carbon dioxide, as they consume vast quantities of steel,
cement, aluminium, chemicals and fertilisers needed for infrastructure, urbanisation
and food security essential for growth in incomes. The global vision for
the 21st century must be defined in terms of achieving universal human
well-being within the planetary limits by 2050 by limiting consumption, rather
than by creating new markets.
Framework for Action
The note circulated by the UN to assist in the negotiations2 suggests a new global
framework, focused on natural capital rather than on the eradication of poverty.
The “zero draft” of the outcomes includes provisions that governments agree on the
need to develop a global policy framework for “all listed and large private companies”
(the Secretary General’s Panel has suggested a market capitalisation of more than
$100 million) to integrate sustainability within the reporting cycle. It also suggests
the development of “green economy road maps” by global industry sectors, which
could provide a starting point for long-term investor engagement and benchmarking
through pricing risk and management quality. This is supplemented
with suggestions for environmental pricing of national ecosystem goods and services,
while being silent on the services provided by the global atmospheric commons.
Also unresolved is which upgraded global body, the Commission on Sustainable
Development, the United Nations Environment Programme or the WTO
should provide an oversight of the policies and monitor progress of measures taken
at the national level. Here again, there is divergence of perspectives on whether
the objective of the annual reviews and dispute settlement should be to provide
investors with timely information on the links between sustainability and economic
performance at the micro- and macro-levels and respond to competitiveness
concerns of the private sector. Or whether governments need to know about shifts
in consumption and production patterns so that they can exchange experiences and
monitor progress of the joint research, development and deployment of innovative
technologies to enable human well-being for all within planetary limits.
We now know that the degree to which natural resource use affects ecosystem
services and causes adverse impacts on the environment does not depend on the
amount of resources used, but rather on the types of resources used and the ways
in which they are used. No doubt, a larger and richer global population with expanding
consumption needs will place growing demands on natural systems
for food, water and energy, but the development aspirations of the world’s
poor are not in conflict with efforts to solve the climate, or the ecosystem scarcity
problem because only certain longer-term trends, rather than middle-class
lifestyles, need to be modified.
The proposed outcomes of the conference include ensuring universal access to
energy, doubling the rate of energy efficiency improvement and the share of
renewable energy. It is, however, not considered a strategic goal. The hard lesson
from the demise of the Kyoto Protocol is that targets are only useful if baselines
are well defined, the scope is clear, and loopholes are closed. In this case the note
specifically states that the objective will be “a basic minimum level” rather than an
adequate level, or global average. The millennium development goals, agreed by
the UN in 2000, did not include electricity as a basic human need and consequently
did not recognise its unique impact on natural resource use. The global policy
issue is whether we can have this without reliance on coal in the absence of access
to innovative technologies that are commercially available at affordable cost.
Beyond energy, real targets are being sought for critical areas of “natural capital”
such as food, forests and soils, as well as oceans and freshwater, equating
sustainability with a green economy where economic value creation is not coupled
with environmental degradation. The formulation ignores different stages of
development, where natural resources are needed for establishment of infrastructure
essential for the eradication of poverty. For example, urbanisation in developing
countries will involve a population shift that is more than five times larger than
what happened in developed countries, with its attendant requirement of natural
resources. Sustainable development goals should be centred on sustainable
consumption and production and recognise stages of development.
The note recognises the limits to current measures of gross domestic product,
which are suitable only for measuring economic activity. It does not include, in
the framework for action, development of solutions to the current invisibility of
natural capital and the effects of economic activites on global ecosystem
services in standard growth models, because that would imply modifying
longer-term trends in developed countries and redistribution.
China and India will soon become the largest users of natural resources. In
the context of future conflict amongst developing countries over the sharing of
scarce ecosystem services, they (along with the other BRIC countries like Brazil
and Russia) have the responsibility to shape the global rules now being negotiated,
because the UN has so far ignored distributional issues. The distinction that
was made in the international cooperation with respect to investment, trade,
development and environment in the way global rules were framed between
1950 and 2002 needs to be reviewed by recognising stages of development,
instead of a functional and territorial division. Patterns of natural resource use,
and the resulting standards of living, have to be common for all so as to lead to
a more prosperous and safer world.
Resilient People, Resilient Planet: A Future Worth Choosing, Secretary General’s High Level Panel on Global Sustainability,
United Nations, 30 January 2012.
The Future We Want, United Nations, 10 January 2012.
Mukul Sanwal (email@example.com) has held senior policy positions in the Government
of India (1971-1993) and the United Nations (1993-2007). He was closely involved with the
Rio Conference, 1992 and the World Summit on Sustainable Development in 2002. He is
associated with think tanks in India, and has been a visiting professor at the University of
International Business and Economics, Beijing.