In 1992, the first Rio Summit – a United Nations-led meeting also known as the Earth Summit – showed the world that economic security and human wellbeing are fundamentally dependent on environmental goods and services. But 20 years on, most of the economic problems identified persist, while others have joined them.
Under the current global economic framework, increased competition and the sheer scale of economic activity have hurt the environment, workers and consumers. Poverty has become entrenched, while new problems of unsustainable consumption have escalated. While almost a third of the world’s population struggles to survive on less than US$2 (13.7 yuan) per day, the lifestyles of citizens in wealthy industrialised countries result in an ecological footprint three to five times greater than the earth’s capacity.
Yet there is evidence of an increased sensitivity by governments and businesses since Rio on the need to protect environmental and social assets. While the majority of companies remain silent, some are starting to disclose information on their ecological footprint and sustainability performance. The public, too, is concerned: a 2010 Globescan survey of 23 countries revealed that people were most concerned about the unsustainable state of the economy and ranked poverty and environmental damage as the top two constituent problems.
Both the threat of climate change and the search for answers to the current economic crisis have created an important moment for increased reflection. In 2009, the UN General Assembly passed a resolution agreeing to hold another Earth Summit. Rio 2012 can chart a new course, but only if it is conceived in inclusive, forward-looking and innovative ways.
Rio 2012 will be a failure if its main output is a “consensus text” that merely recalls past agreements, or creates further weak and unenforceable ones, reflecting the lowest common denominator of willingness to change among participating government officials. It is much more important to focus on implementation of existing targets and accountability for action. The meeting must produce strong but implementable commitments that do not mire countries in endless administration but instead result in real change. It must challenge countries to make unilateral or shared political commitments to change, and to show how they will be accountable.
Rio 2012 must also engage directly with the transformation of those governance and economic systems that underlie unsustainability, rather than cherry-picking isolated issues or only tackling symptoms. There is growing consensus that we need to focus on the fundamental factors that lock us into unfair, inefficient and unsustainable behaviour – and which condemn much of the world’s population to poverty.
Paradigm shift
The vision that we have carried since the first Earth Summit is of an economy that produces a range of social and environmental, as well as economic, benefits for individuals, communities and society. It is a vision of environmental governance that restores and protects the resilience of ecosystems and thus secures the many services they provide. And it is a vision of development that uses natural resources sustainably, allocating environmental benefits and costs fairly.
This vision was an ambitious one, but the actions that have been taken to achieve it have been limited and halting. Instead we find ourselves, 20 years after Rio, facing converging environmental, social and economic crises, with the structure of our economy being part of the problem rather than the solution.
Prevailing incentives and stock-market practices prioritise profit-taking over the protection of nature and livelihoods. Fiscal policies and investment contracts include measures that hurt the environment, such as subsidies for extraction, refining and consumption of fossil fuels and incentives to over-consume finite resources like water and land. Tax regimes tax “goods” such as jobs rather than “bads” such as environmental damage.
A disinclination to regulate industry over the past three decades has eroded labour standards, weakened social-welfare policies and, despite widespread adoption of the conventions agreed at Rio, damaged the environment. This prevailing economic paradigm – debt-fuelled, fossil-fuelled, consumption-based growth with insecure jobs – is entrenched globally, but we still rely on it to solve the very problems it is creating.
If we are serious about “delinking” environmental impact from growth, deeper structural changes in how we produce, trade and consume will be needed. Achieving a green economy ultimately means nothing less than transforming the economic paradigm. This level of change is possible, but time is running out.
Seeds of change
The lack of progress in Copenhagen was largely a result of the disappointing level of commitment from many of the world’s governments. In contrast, leaders of Sri Lanka, Costa Rica, the Maldives and Palau have demonstrated vision and leadership by committing to a carbon-neutral development pathway. Political leaders in other countries need to show comparable courage.
This must include a redefinition of progress in development. GDP-driven policies have led to many of the problems we are now confronting and the need for new methods and indicators has been increasingly acknowledged. Bhutan has done away with GDP and replaced it with an index of Gross National Happiness. Other initiatives are seeking to develop new measures that could be applied more widely. Most notably, a commission established by the president of France has developed recommendations for a global measurements system that emphasises people’s well-being rather than economic production.
Recurring oil crises, environmental disasters and climate change have spurred some countries to emphasise sustainable development in national strategies. Guyana has recently become the first country to release a low-carbon development plan built largely around climate-change mitigation through management of its vast forests and investment of expected revenues from international funds. And some nations have seized the opportunity offered by the economic crisis to reorient national economies in a green direction; 81% of South Korea’s massive fiscal stimulus package has been earmarked for green investment.
Meanwhile, Germany’s 250,000 jobs in the renewable energy sector are expected to triple by 2020 and hit 900,000 by 2030. And China, the world’s largest manufacturer of wind turbines and solar panels, had 1.12 million renewable energy related jobs in 2008, a figure increasing by 100,000 a year. Green employment is an area in which real progress is occurring, but much more is possible.
Much of what is now contributing to the emergence of a green economy is coming not from governments or the mainstream business sector but from economic actors that are often overlooked. Waste recycling, for instance, employs millions of poor people in cities throughout the world, very often in terrible conditions. Not only are the contributions of these actors rarely considered in economic planning, but in many countries some of them are systematically excluded. The economy needs to identify, scale up and strengthen these initiatives, which have positive environmental and social as well as economic outcomes.
Energy production and consumption continue to be the largest contributors to greenhouse gases; yet energy is the sector where new green approaches are most prevalent, driven by legislation and increasing scarcity. Filling the gaps in electricity networks and promotion of conservation are two separate objectives that are converging in the recognition of small-scale providers. For example, rural cooperatives in Bangladesh already serve 2.5 million households, with lower transmission losses and 95% collection rates.
Elsewhere, Bogotá, in Colombia, has implemented a rapid-transit bus system, which uses high-speed vehicles that produce considerably less carbon dioxide than traditional bus systems. And Woking, a UK town with 100,000 residents, has decentralised energy production by building a network of local generators to deliver heating, cooling, lighting and power to public and private buildings from a range of sources, including solar, wind, hydrogen, biomass and natural gas.
Substituting current energy requirements with renewables is, however, only half of the equation. To be effective, the drivers of climate change must also be tackled from the demand side; the continued growth of energy demand is impossible to reconcile with the lower-hanging fruits of potential renewables. A demand-side approach would entail energy-efficiency measures on the one hand (as are already been pioneered by industry) and the discouragement of profligate consumerism on the other.
More needed
The measures illustrated above have made important steps towards the vision of a green economy but they alone are not enough to achieve the transformation we believe is needed. That transformation will depend on fundamental global shifts in how development is understood and pursued. The very language that the world uses to discuss the economy will need to change in order to break away from the neo-liberal paradigm that has served a few well, but has served our planet and too much of society so poorly. Rio 2012 can help the world to understand and commit to big shifts.
In order to break out of current systems and infrastructures that the world is “locked into” – such as fossil fuel-based mobility, fragmented decision-making processes and national or local regulations to global challenges – more radical innovation processes and pathways need to be set out. In many cases, innovation will need to involve many more stakeholders and industries – bottom-up, community or workplace innovations revealing pathways for reorganising society. It may be rooted less firmly in market contexts.
Leaving environmental protection in the hands of the market or governments alone has failed. What is needed now is a sustained global commitment, matched by robust financial mechanisms, to recapitalise eroded soils, depleted water bodies, degraded forests and fisheries and other parts of the natural-resource base, and to incentivise investment in such “green infrastructure” that provides countless goods and services to society, from flood protection to timber, recreation and clean drinking water.
The more that profitability can be aligned with the creation of positive sustainable development outcomes, the more likely it is that business will strive to deliver these. This will require not just getting the prices right but also the incentives. The World Trade Organisation and other international trade and financial institutions often undermine efforts to move in this direction at present. But if the goals and values by which they operate are reframed these institutions can be important partners in achieving a more sustainable world.
The Green Economy Coalition is an alliance of international business, trade unions, research and environmental organisations, hosted by the International Institute for Environment and Development (IIED).
This article was first published by the IIED as “Green, fair and productive: How the 2012 Rio Conference can move the world towards sustainability.” It is summarised and used here with permission.
Homepage image from Tuca Viera