Guest Article #1
Cooperation for a Green Economy
As the Commission on Sustainable Development convenes in New York, the thoughts of an increasing number of nations are turning towards next year's Rio+20 Conference in Brazil—two decades after the Earth Summit and its pioneering outcomes and agreements.
No one doubts that the intervening years have witnessed extraordinary achievements, from economic growth that has lifted millions out of poverty to the almost 100 percent phase-out of the chemicals damaging the Earth's ozone layer.
At the same time, few dispute that the promise of Rio 1992—namely sustainable development—remains a promise unfulfilled. The price of the growth patterns of the last two decades has been increasing environmental degradation and, in many parts of the world, rising social inequities.
Bridging the gulf between vision and reality, by evolving sustainable development onto a far more decisive and realizable footing, is the fundamental challenge for the current generation of leaders.
The two major themes for next June's summit are a Green Economy in the context of sustainable development and poverty eradication, and the institutional framework for sustainable development.
In this first guest editorial, I would like to address the first theme.
UNEP—in collaboration with a wide range of partners—earlier this year published Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication.
The report suggests that investing two percent of global gross domestic product (GDP) in 10 key sectors—ranging from energy to agriculture, transport and forestry—with the right enabling policies can grow the global economy up to 2050, but without the shocks, crises, scarcities and instability increasingly inherent in the current, “brown” economy.
For example, investing about one and a quarter percent of global GDP each year in energy efficiency and renewable energies could cut global primary energy demand by nine percent by 2020 and close to 40 percent by 2050.
Savings on capital and fuel costs in power generation would average US$760 billion a year between 2010 and 2050.
Social outcomes, too, improve under a Green Economy scenario: Employment levels in the energy sector would be one-fifth higher than under a business as usual scenario as renewable energies take a significant share of primary global energy demand by mid-century.
The report underlines that the “green shoots of a Green Economy” are emerging across the world in both developing and developed countries. The challenge next year is how to accelerate, scale up and embed the transitions through public-private partnerships and leadership that address some of the absurdities in current economic configurations while unleashing investments and steering society towards wider notions of wealth generation.
What are some of the promising proposals on which nations could cooperate?
Here are a few illustrative examples that could be considered.
Globally, public purchasing accounts for 23% of GDP, which is more than enough to tip entire markets into the sustainability space, beginning perhaps in areas such as forestry or buildings.
Phasing down or phasing out subsides, such as the approximately US$650 billion a year supporting fossil fuels, and a closer look at investment agreements might prove fruitful.
There are over 2,600 bilateral investment treaties. Most contain clauses under which government action – for example legislating a preference for clean energy – can be challenged as a form of indirect expropriation by those invested in conventional energy.
Instead of GDP, some are suggesting alternatives, for example a Genuine Progress Indicator or GPI as a metric that measures the “sustainability of income through economic but also social and environmental indicators.” While it is estimated that GDP in the United States has grown steadily between 1950 and 2004, as measured by GPI it has actually stagnated since the 1970s.
Rio+20 could provide the frameworks, financing and market mechanisms to support such cooperation, for example by fast-tracking plans for Reduced Emissions from Deforestation and Forest Degradation (REDD).
Growth certainly is needed in order to lift more people out of poverty and find employment for the estimated two billion people that could be unemployed or underemployed by 2020. But it must be a type of growth that keeps humanity's footprint within ecological boundaries.
The world is rich in case studies and inspirational ideas to realize a sustainable 21st century. Rio+20 also needs to prove that the world is rich in the leadership, vision, cooperative spirit and determination to implement them.