The Rio+20 Multistakeholder Dialogues: First Reactions from World Economic Forum Global Agenda Council Experts An Informal Discussion Paper Summary The United Nations Conference on Sustainable Development (UNCSD) will take place in Rio de Janeiro, Brazil, on 20-22 June 2012. The shorthand name given to this conference is “Rio+20.” It refers to the fact that UNCSD will reflect on 20 years of progress since the historic UN Conference on Environment and Development in August 1992, which was also held in Rio de Janeiro. • • The 1992 Earth Summit: in 1992, 108 heads of state (and 17,000 registered participants) attended the United Nations Conference on Environment and Development in Rio. The conference focused on the links between environment and development. This was a seminal conference for sustainable development. Key outcomes included the UN Convention on Climate Change, the UN Convention on Biodiversity and Agenda 21. The 2002 World Summit on Sustainable Development: in 2002, 82 heads of state (and 21,000 registered participants) attended the World Summit on Sustainable Development (convened by the UN General Assembly to review progress 10 years after Rio 1992). The summit focused on the link between environmental protection and industrial growth. In 2012, 20 years after the Earth Summit, Brazil is readying to chair the United Nations Conference on Sustainable Development once again. The President of Brazil and her government are determined to make Rio+20 a success, building on the historic achievement of their predecessors with the 1992 Earth Summit and reflecting Brazil’s enhanced role in today’s global economy. In an innovative move that aims to broaden the impact of the Rio+20 Summit, the Brazilian Chair (which is co-hosted by the Minister of External Affairs and the Minister of Environment) wishes to capture the imagination of those outside of the United Nations system. To do so, the Chair’s vision is for Rio+20 to promote a truly multistakeholder conversation about sustainable development at the time of the Summit, involving NGOs, academics, civil society groups and business leaders from every geography and sector, in addition to the usual cohorts of government and international officials. Consequently, the Government of Brazil is promoting a set of multistakeholder dialogues, which will culminate in thematic panel discussions during four days of civil society activity in Rio, 16-19 June 2012, just before the formal Summit of Government Leaders begins. The aspiration is for this multistakeholder process to generate practical ideas and recommendations on how to get things done at scale; and that these ideas will generate discussions, with some gaining traction and coalescing into a broad-based multistakeholder agenda for action to support and complement the intergovernmental outcome from the “bottom up”. In this way, the Government of Brazil hopes that Rio+20 can create a legacy of delivering more than just a global summit of government leaders; it can also be an event that encourages stakeholders from across NGO, academic, civil society and business communities to discuss and identify ideas, and then take action by joining and forming various partnerships, coalitions and initiatives that can help governments – especially in developing countries – deliver the vision for sustainable development that world leaders set out in their official Summit declaration. To deliver this vision, Brazil has launched 10 multistakeholder, web-based dialogues for Rio+20. These include: • Food and nutritional security • Sustainable development for fighting poverty • Sustainable development as an answer to the economic and financial crises • The economics of sustainable development – sustainable patterns of production and consumption • Sustainable cities and innovation • Unemployment, decent work and migration • Energy • Water • Oceans • Forests 1 Each of these web-based tracks is live as of 16 April 2012. Experts outside of governments and the United Nations are invited by the chair to join them to set out their ideas for practical action. The tracks can be found on https://www.riodialogues.org. To engage in the discussion threads, registration information can be requested via [email protected]. To help the Government of Brazil frame and launch these 10 web-based dialogues, 14 experts from the World Economic Forum’s Global Agenda Council Network with an interest in the Rio+20 process provided a first response. They have assembled a rapid first reaction to each of the 10 themes that Brazil’s chair set out. These experts come from academia, NGOs, business, global think-tanks and international finance. The experts and the themes to which they provided a response are listed below: • • • • • • • • • • Sustainable development as an answer to the economic and financial crises – Dr Gerard Lyons, Chief Economist and Group Head, Global Research, Standard Chartered Bank; Member of the World Economic Forum Global Agenda Council on Banking & Capital Markets Sustainable development for fighting poverty – Dr John McArthur, Senior Fellow, United Nations Foundation, with support from Lord Malloch-Brown, Chairman, FTI Consulting; Members of the World Economic Forum Global Agenda Council on Benchmarking Progress and Institutional Governance Systems respectively Food and Nutritional Security – Dr Fan Shenggen, Director-General, International Food Policy Research Institute; Member of the World Economic Forum Global Agenda Council on Food Security Energy – Mark Halle, Executive Director, IISD, with support from Bob G. Elton, Adjunct Professor, University of British Columbia; Member and Chair of the World Economic Forum Global Agenda Councils on Sustainable Consumption and New Energy Architecture, respectively Water – Stuart Orr, Global Freshwater Program Manager, WWF , with support from J. Carl Ganter, Director, Circle of Blue and Jeff Seabright, Vice-President, Environment and Water Resources, The Coca Cola Company; Members and Chair, respectively, of the World Economic Forum Global Agenda Council on Water Security Sanitation – Sanjay Bhatnagar CEO, WaterHealth International, Member of the World Economic Forum Global Agenda Council on Water Security The economics of sustainable development: sustainable patterns of production and consumption – Helio Mattar President and Member of the Board, Akatu Institute for Conscious Consumption; Member of the World Economic Forum Global Agenda Council on Sustainable Consumption Sustainable Cities and Innovation – Dr Chris Luebkeman, Director, Global Foresight and Innovation, Arup Group; Member of the World Economic Forum Global Agenda Council on Design Innovation Unemployment, decent work and migration – Sharan Burrow, General Secretary, International Trade Union Confederation; Member of the World Economic Forum Global Agenda Council on Employment & Social Protection Oceans – Tony Haymet, Director, Scripps Institution of Oceanography UCSD, with support from Dr Greg Stone, Senior Vice-President and Chief Scientist for Oceans, Conservation International, Member and Chair, respectively, of the World Economic Forum Global Agenda Council on Oceans Their viewpoints can be found uploaded as framing documents on the relevant Rio+20 web-based dialogue platforms. They are also brought together in this informal discussion paper. Overall, the nine commentaries contain a strong starting point for the chair’s Sustainability Dialogues, with a focus on equity and poverty reduction running through them all. At the macro level, they include suggestions about the structural changes that will need to be made to global policy institutions to reflect the shift in balance of economic and financial power, including for example, a more outwardly engaged G20 and the need for a common global financial agenda. On poverty eradication, they reflect on the success of the Millennium Development Goals (MDGs) and suggest a next-stage MDG programme to “get extreme poverty to zero”, which includes launching a new generation of regionally-scaled, public-private funds to support farmers – for example, an African smallholder equivalent of the International Finance Corporation. To lower unemployment and create decent jobs, there is a proposal to encourage governments and corporations to invest the equivalent of 2% of GDP into the green economy of 12 target countries across seven industries. This will create 48 million decent jobs over five years combined with implementing a Universal Social Protection Floor Initiative by 2020. Many of the experts suggest that new forms of partnership and collaboration at scale are the primary vehicles that can get things moving. A common theme is the need to draw in new players and replicate or scale-up those successful public-private collaborations that seem to be working, for example in food security (Brazil’s Bolsa Familia, the Scaling Up Nutrition Movement); in agriculture (Baixo Carbono, World Food Programme partnerships with business); and in 2 water (Water Resources Group, Alliance for Water Stewardship). In other areas, recommendations are to replicate new collaborations (for example, in the city space to replicate New York’s 2030 Initiative and help other mayors draw up multistakeholder strategies and financing plans for sustainable city growth); and to create new partnerships (for example, to help transform the wayward sanitation MDG into a significant business and economic opportunity for local entrepreneurs). New partnerships for open source data collection, integrated data analysis and best practice sharing also emerge as a common practical suggestion across many of the expert’s suggestions. These are seen as effective ways to create more transparency and to empower and connect stakeholders. Connecting people and information from different partnerships and initiatives around the world seems to be a commonly supported, practical empowerment strategy. Similarly, there is much focus on initiatives that approach sustainable development as one common strategy across different types of nexus – e.g. water, food and energy; agriculture, nutrition and economic development; sanitation, health and education. Finally, the need to promote multistakeholder engagement not just for projects but also with governments as they develop national regional and city policies and plans emerges as a clear theme (e.g. in energy – New Energy Architecture; in Agriculture – New Vision for Agriculture; and in Water – Water Resources Group). The suggestion is that these kinds of strategic partnership can help governments to create joined-up and financially sound sustainable development strategies at scale. In a similar vein, smaller groups of nations engaged in public-public plurilateral initiatives can have a positive and quick impact at scale in certain regions, as the 16 nation-strong Pacific Oceanscape Initiative suggests. Can such a model be usefully replicated for the Arctic nations to manage their ocean ecosystem as the ice disappears? Across multiple themes and issues, some consistent messages already emerge from a first wave of expert thinking; while at the same time a variety of pathways for innovation and action are opening up. Might this first set of commentaries signal the sorts of themes and practical ideas that may emerge from the Sustainable Development Dialogues of the Rio+20 chair, after several weeks of wider, expert discussion online and in Rio in June? A final comment is a note of thanks. The experts who contributed are all Members of the World Economic Forum’s Global Agenda Council Network; and they responded rapidly (between 6 and 13 April 2012) and with enthusiasm to the challenge set by the Government of Brazil. Their submissions are deliberately short and designed to be accessible; in each case, they express their personal opinion of what the real challenge is; they identify existing initiatives that seem to be helpful in addressing this challenge; finally, they set forward their own concrete recommendations for action – perhaps specific suggestions to the international community on ways to scale up the things that seem to be working, or additional new ideas on practical ways to fill the missing gaps. A disclaimer is of course required and should be noted by the reader: the views expressed in this informal discussion paper simply represent a collation of various informal viewpoints emerging from a series of thought pieces provided by Global Agenda Council Members in response to the thematic areas identified by the Government of Brazil Chair of Rio+20 for its multistakeholder dialogues. Neither the individual pieces they prepared nor this informal discussion paper necessarily reflect the institutional viewpoints of any of the organizations, institutions or companies that the individuals represent, or of the World Economic Forum; and the different contributors do not necessarily agree with each other’s perspectives or the overview provided. The remainder of this informal paper sets out each of the expert overviews in full. Perhaps you will agree with what they are saying, or have alternative ideas or experiences. Either way, these commentaries will hopefully inspire you to move from being a passive reader of other people’s ideas to signing on and engaging in the debate with those who join the Government of Brazil’s web-based Sustainable Development Dialogues for Rio+20. That, in effect, is the ultimate intent of this informal paper – to engage you in the multistakeholder debate that the Government of Brazil has created for Rio+20. Dominic Waughray Senior Director, World Economic Forum 16 April 2012 3 2 Global Agenda Council Member Contributions to the Government of Brazil’s Web-based Sustainable Development Dialogues for Rio+20 The nine submissions are presented below, with the title, author and a quote from the author when available. They each follow the same structure – a problem statement; an identification of initiatives that may offer some way of addressing the problem; and recommendations on what to do next. Each author was asked to keep within 1,000 words or less. 2.1 Sustainable development as an answer to the economic and financial crisis Dr Gerard Lyons, Chief Economist and Group Head, Global Research, Standard Chartered Bank; Member of the World Economic Forum Global Agenda Council on Banking & Capital Markets “Time is running out. In a hyperconnected world, leaders have limited time to react to the pressures that are building in the global economy. They need to be more proactive in building sustainable growth.” Dr Gerard Lyons The Challenge Agreement is needed on what sustainable development is. A big challenge is that it can be all things to all people. Given this, and the absence of any measurable end-goal, it is necessary to achieve consensus on what needs to be done. There needs to be recognition that sustainable development is achieving solid and environmentally friendly growth where living standards rise as equitably as possible. It is about having accountable global institutions with common goals and that set the agenda to avoid a repetition of the crisis. National agendas should support this. Sustainable development should be consistent with achieving the Millennium Development Goals. Despite a growing global economy in recent years, it is a divided and disconnected world facing many policy challenges. The division is most apparent between a fragile West and a resilient East, and the disconnect is seen in high rates of youth unemployment in the West, rising income inequality across the globe and in the Arab Spring. There is an urgent need to address the factors that have led to this divided and disconnected global recovery. The crisis reflected an imbalanced global economy and a systemic failure in the financial system. A better regulated financial sector is needed. So, too, is balanced growth. The lack of growth in the West partly reflects the inevitability of deleveraging, as debt is repaid, but it also reflects the need for a pro-growth agenda. More could be done to boost demand and generate jobs. This was a Western financial crisis but the consequences were global. The "innocent" suffered alongside the guilty: global trade fell as trade finance dried up and demand collapsed. Although emerging economies are not decoupled from events in the West, they need to focus more on boosting domestic demand as a driver of future growth. The final challenge is to make global policy institutions credible and effective. They need to change to reflect the shift in the balance of economic and financial power. Initiatives for Action After a promising start, the global policy response is falling short. When there was "fear in their eyes" in the wake of the crisis there was a desire to act. The G20 London Summit pulled the world economy back from the brink. Once there was a feeling we were past the worst, policymakers tended to talk global but act national. The West has been unable to address its lack of growth. In part this is because policymakers are focusing on the wrong problem, with an austerity agenda. It goes without saying that a solution is needed to the euro crisis. The main policy focus has been on regulating the financial sector. Progress has been mixed. The financial sector needs to be well regulated with high governance standards. The crisis showed the sheer scale of the shadow banking industry and of inter-financial activity that had little economic benefit. These must be squeezed. There are fears that excessive regulation may limit the ability of banks to lend and may threaten trade finance, undermining global trade. The wrong type of regulation could encourage more business to shift into the shadow, unregulated industry, sowing the seeds of the next crisis. 4 A common global financial agenda is vital, led by the Bank for International Settlements and the Financial Stability Board. Also it is clear that the West is learning from the East in terms of the use of macro-prudential policy management that helps prevent bubbles, while the East is learning from the West about ways to deepen and broaden capital markets that help domestic demand. One disappointment is the collapse of the Doha Round. The replacement of multilateral trade by bilateral free trade agreements is a second-best outcome. Multilateral solutions are needed. The world’s most competitive and open economies must lead from the front. What to Do Policy-makers need some quick wins, where immediate progress is possible, as well as focusing on longer-term structural change. The most important area is "Vision and Context". Politicians have been unable to provide the context and a vision so that people can understand why the crisis happened and what lies ahead. Global rebalancing is happening, but needs to continue and become enshrined in future thinking. The alternative would be mutually-assured economic destruction. Countries that are savers need to spend more, debtors save more and currencies adjust. If only the debtor nations adjust then a deflationary bias is built into the global economy. Growth can be green. High food and energy prices pose economic and social problems. This needs to be addressed by environmentally friendly policies, increased investment in commodity producing regions, and by green technology. A clear set of priorities and values needs to be established governing global institutions driven on trust. The G20 needs to engage more actively with other international groups. Emerging economies need to switch from export-led to domestically-driven growth. Progress is being made but still requires: boosting social safety nets to deter excess savings; supporting small and medium-sized firms, key for job creation; and deeper and broader capital markets to help underpin domestic-driven growth. Above all, policy must be focus on three types of infrastructure: funding the hard infrastructure needed across the globe; building soft infrastructure, such as skills and education; and creating the institutional infrastructure that the West takes for granted and which is needed across the emerging world. Time is running out. In a hyperconnected world, leaders have limited time to react to the pressures that are building in the global economy. They need to be more proactive in building sustainable growth. 2.2 Sustainable development for fighting poverty Dr John McArthur, Senior Fellow, United Nations Foundation, with support from Lord Malloch-Brown, Chairman, FTI Consulting; Members of the World Economic Forum Global Agenda Council on Benchmarking Progress and Institutional Governance Systems, respectively “Rio+20 comes at a time when the world needs to find both its motivating long-term vision and its near-term actions that kick-start the way forward. Governments and private actors alike, we all need to start firming up our next wave of goals to sustainably end poverty.” Dr John McArthur "We have to convey that the Millennium Development Goals have had a revolutionary impact, contributing to improving lives at a rate never equalled in human history, but now we have to signal we can do even better." Lord Malloch-Brown The Challenge Over the past generation, the world has achieved remarkable success in reducing the number of people living on less than US$ 1.25 per day. According to recent World Bank estimates, the first Millennium Development Goal (MDG) for halving extreme poverty was reached globally by 2010. In 1990, 43% of the developing world lived in extreme poverty. Today, the figure has dropped to roughly 21%. 5 Nonetheless, more than 1 billion people still live on less than US$ 1.25 per day, so there is still a major challenge in sustainably tackling the “second half” of extreme poverty. We recommend a vision of “getting to zero” by 2030, as recently outlined by Aryeetey et al. (2012). The task remains especially important among the fast-growing populations of South Asia, where more than one in three people still live in extreme poverty, and in sub-Saharan Africa, where the ratio is nearly one in two. But the coming generation must also raise its sights beyond finishing the job on extreme poverty. Today, roughly 43% of the developing world lives under the poverty line of US$ 2/day, i.e. the same proportion that lived below US$ 1.25 in 1990. The updated global task through to 2030 is therefore double-barrelled: first, to eliminate extreme poverty and, second, to cut US$ 2/day poverty by at least half. The MDGs have formed the central reference point for global development efforts since they were established as international targets in 2000. A new generation of development goals will soon be needed. Like the MDGs, they will need to address much more than boosting incomes. A broad framework of Getting to Zero entails ending chronic hunger, ensuring universal access to secondary education, ensuring universal access to safe drinking water and sanitation, reducing child and maternal deaths to current upper middle-income country levels, and tackling key environmental priorities that will underpin development success. Achieving this suite of goals will in turn reinforce further progress in economic growth. The pursuit of new goals will need to surmount a crucial tension. On one side stands the need for simplicity and consistency. Lengthening the list of goals or adding a perceived “grab bag” of targets is likely to diminish a framework’s political traction for implementation. On the other side stands the need for adaptation to new realities. The entire world is developing a shared sense of a sustainability imperative alongside the risks of inequality. A large (and growing) share of the extreme poor is now located in middle-income countries and fragile states. Issues like energy, climate change, food prices and population growth will interact to produce new and unpredictable challenges. An Initiative for Action Amid the complex and multi-layered discussions on the need for “sustainable development goals” to guide a post2015 global agenda, we recommend that Rio+20 establishes guiding principles to ensure goals for Getting to Zero are consolidated as at least one primary component of any overarching framework through to 2030. And while governments surely maintain primary responsibility to address the needs of their people, the successful implementation of any such framework will require broad inputs from – and perhaps corresponding targets for – nongovernmental stakeholders, including civil society, the private sector and academia. What to Do At a more practical and immediate level, we underscore two categories of innovations that can be launched more immediately to support poverty reduction over the coming five to 10 years. Each will require a coalition of entrepreneurs spanning both public and private sectors. • A “Missing Rural Middle” Guarantee Fund for Africa: Much of sub-Saharan Africa’s poverty is constrained by low productivity subsistence agriculture and the lack of an African Green Revolution. Throughout the region, smallholder farmers have almost no access to market-based credit that is adequate in scale, risk-adjusted to account for Africa’s unique climate and pest risks, and structured over extended maturities to allow for season-toseason experimentation as farmers introduce new crops. Recognizing the very limited asset base available for collateral, farmers also need to pool efforts in order to access inputs and market connections at manageable cost. This implies private cooperatives or farmers’ associations. A financing vehicle is therefore needed to provide these farmer groups with access to “patient capital” loans of perhaps US$ 25,000-US$ 100,000 at a time. The mechanism should launch in the context of a broader ecosystem of business support and agricultural extension services that help farmers identify market opportunities, develop business plans, introduce new farming techniques and implement marketing programmes. The financing facility would focus on the risk-adjustment component of private capital. To reach 25 million smallholders over five years (roughly one-quarter of the total), annual public financing on the order of US$ 5 billion would be required to backstop US$ 25 billion of annual private lending. Institutionally, the vehicle could be framed as the African smallholder equivalent of the International Finance Corporation. • Universal Access to Bank Accounts and Smart Cards: More than two-thirds of adults in the developing world are estimated to be without a bank account. And the poorest-of-the-poor typically lack any means to claim or assert 6 access to public services. This is increasingly anachronistic in a world that is fast approaching universal access to cheap broadband mobile telephony. Following the early regulatory and entrepreneurial lessons of mobile banking in countries like Kenya, there is no reason why governments and financial institutions cannot partner with technology providers to establish programmes by which every adult in the world has access to a low-cost savings account, a major enabler for escaping from poverty. Depending on the evolution of cost curves, these accounts could be accessed either through their mobile phone or smart phone, or through a “smart card” that can interact with someone else’s phone. The same system of smart cards could serve as an interface for accessing government services and programmes, ranging from emergency health services to farmer input vouchers to conditional cash transfers. Nearly 5 billion new mobile phone accounts were added between 2000 and 2010. At least 1 billion savings accounts and smart cards should be issued by 2020. 2.3 Food and Nutritional Security Dr Fan Shenggen, Director-General, International Food Policy Research Institute; Member of the World Economic Forum Global Agenda Council on Food Security “The shift to a more sustainable development path or green economy is a must, but it must not be achieved at the cost of other development goals, particularly food and nutrition security.” Dr Fan Shenggen The Challenge Sustainable development is once again at the centre of global policy discourses in 2012. The shift to a more sustainable development path or green economy is a must, but it should not be achieved at the cost of other development goals. These key goals include poverty and hunger eradication, food and nutrition security, increased access to clean water, improved public health, resilience and disaster preparedness, enhanced energy security, and inclusive and equitable growth. Food and nutrition security for all must be made a top priority. The state of global food security and nutrition continues to be worrisome despite substantial progress in the last few decades. Over 900 million people worldwide are hungry as the latest estimates of the Food and Agriculture 1 Organization of the United Nations indicate. According to IFPRI’s 2011 Global Hunger Index, 26 countries still have 2 “alarming” or “extremely alarming” levels of hunger. This is not a situation these countries can afford to bear as 3 hunger costs developing countries about US$ 450 billion per year. Developing countries also continue to struggle with serious nutrition problems that have long-lasting impacts on welfare. Billions of people suffer from deficiencies in micronutrients such as vitamin A, iron, iodine and zinc, and this “hidden hunger” contributes to morbidity and mortality, especially among women and children. The economic cost of 4 micronutrient deficiencies has been estimated to be between 2.4% and 10% of GDP in many developing countries. In the face of a complex mix of challenges including rapid urbanization, growing natural resource constraints, rising energy prices, and climate change, global food and nutrition security has become more difficult to achieve. While these challenges have become increasingly interconnected, efforts in achieving food and nutrition security while protecting natural resources remain fragmented – that is, without considerations of the cross-sectoral impacts and synergies. Weak capacity to design and implement country-led innovative strategies also remains a major challenge to improving food and nutrition security sustainably. Initiatives for Action Large successes in agricultural development and food and nutrition security enhancement have been driven by investments in science and technology, infrastructure such as roads and irrigation schemes, policies that provide 1 Food and Agriculture Organization of the United Nations, The State of Food Insecurity in the World 2010 (Rome, 2010). K. von Grebmer, M. Torero, T. Olofinbiyi, H. Fritschel, D. Wiesmann, Y. Yohannes, L. Schofield and C. von Oppeln, 2011 Global Hunger Index(Bonn, Washington, D.C., and Dublin: Deutsche Welthungerhilfe, IFPRI, and Concern, 2011). 3 Action Aid, Who’s Really Fighting Hunger? HungerFree Scorecard 2010 (The Hague, 2010). 4 For summary of studies see Stein, A and M. Qaim, The Human and Economic Cost of Hidden Hunger. Food and Nutrition Bulletin 28:2 (2007): 125– 134. 2 7 5 incentives and support markets to function, and productivity enhancement social protection. The Green Revolution in Asia, which improved the livelihoods of close to 2 billion people, is an example. In the North Arcot district of Tamil Nadu in southern India, for instance, about 30% of the increased calorie consumption of farmers and landless workers 6 was attributed to increased rice production due to the use of modern varieties. In China, the introduction of hybrid rice technology led to a 44% increase in production and about a 68% increase in yields. This production growth 7 allowed China to feed an additional 60 million people per year. Brazil’s Zero Hunger programme is another example of an initiative that impacted food and nutrition security, particularly through its main component – Bolsa Familia – a conditional cash transfer programme. Bolsa Familia has benefited about 45 million poor people, one-quarter of Brazil’s population, by providing a basic income to more than 8 11 million families through cash transfers. These cash transfers have helped recipients to improve diet quantity and quality: nine out of 10 families improved their eating habits, seven out of 10 families increased the variety of food consumed, and nine out of 10 children were able to eat three or more meals a day. Overall, the Zero Hunger 9 programme achieved a 61% reduction in child malnutrition. Other innovative initiatives such as bio-fortification of food crops have had tremendous impacts on nutrition. In Mozambique, a pilot project to promote vitamin A biofortified orange sweet potato resulted in vitamin A intakes nearly doubling for women, and increasing by two-thirds 10 for children. The commitment of African governments in 2003 to allocate 10% of their national budgets to support 6% annual agricultural growth under the Comprehensive African Agricultural Development Programme shows promise. Some 20 African countries have now developed agricultural and food security investment plans, and recent trends show that agricultural growth has been accelerated in many countries. Also promising is the global initiative “Scaling Up Nutrition” movement. In 2011, 24 countries with high rates of undernutrition joined the movement and began to set nutrition goals. More than 100 organizations have endorsed the movement. What to Do The goal of improving food and nutrition security while protecting the natural resource base can be achieved, but business as usual will not be sufficient. A “business as unusual” approach that is smarter, more innovative, better focused and cost-effective is needed. This approach must include the following elements: • New nexus approach to integrate food and nutrition security into sustainable development: the silo approach to sustainable development is not acceptable anymore. Despite the fact that trade-offs between green growth, environmental sustainability, and food productivity exists, it is important to explore and develop complementary solutions. Several agricultural practices in Africa, such as combinations of inorganic fertilizer, mulching and manure, offer triple-wins in terms of productivity, smallholder incomes and sustainability. Technological innovations in the agriculture, water and energy sectors are critical to increase productivity, provide adaptive buffers against emerging challenges and enhance the nutritional value of food crops. Green agriculture initiatives, such as the ABC Low Carbon Agriculture programme in Brazil (Agricultural Baixo Carbono), are already being implemented in different parts of the developing and developed world. • New measures to evaluate cross-sectoral impacts: the full costs and benefits of natural resource use in food production have not been taken into consideration by stakeholders in their decision-making. The prices of food and natural resources have not fully reflected social and environmental costs, such as impacts on climate change and health. Full costing will provide an incentive for producers to adopt resource-saving technologies and practices and for consumers to change their diet behaviour to reduce waste and losses along food value chains. 5 D.J. Spielman and R. Pandya-Lorch, Fifty Years of Progress, In Millions Fed: Proven Successes in Agricultural Development, D.J. Spielman and R. Pandya-Lorch, eds. (Washington, D.C.: IFPRI, 2009). 6 Hazell, P.B.R., Transforming Agriculture: The Green Revolution in Asia, In Millions Fed: Proven Successes in Agricultural Development, D.J. Spielman and R. Pandya-Lorch, eds. (Washington, D.C.: IFPRI, 2009). 7 J. Li, Y. Xin, and L. Yuan, Pushing the Yield Frontier: Hybrid Rice in China, In Millions Fed: Proven Successes in Agricultural Development, D.J. Spielman and R. Pandya-Lorch, eds. (Washington, D.C.: IFPRI, 2009). 8 J. Graziano da Silva, Zero Hunger and Territories of Citizenship: Promoting Food Security in Brazil’s Rural Areas, In the Poorest and Hungry: Assessments, Analyses, and Actions, J. von Braun, R. Vargas Hill, and R. Pandya-Lorch, eds. (Washington, D.C., 2009). 9 United Nations Conference on Sustainable Development, “Brazil launches Centre of Excellence against Hunger”, accessed April 11, 2012, http://www.uncsd2012.org/rio20/index.php?page=view&nr=715&type=230&menu=38. 10 IFPRI, Reducing Poverty and Hunger through Policy Research, Highlights of Recent IFPRI Food Policy Research for the Bill & Melinda Gates Foundation (Washington, D.C., 2012). 8 To achieve this, new measures are needed to track, monitor, and evaluate impacts across sectors. These new metrics are necessary to assess, for example, the food security implications of natural resource strategies as well as the natural resource implications of food security strategies. Mechanisms to track, monitor and evaluate these implications are crucial build-up evidence for sound policies. A global effort is needed to coordinate the effort. • New talents at the country level: strengthening countries’ capacity to design strategies for agricultural development and food and nutrition security while protecting natural resources will be vital. Greater technical and financial support should be allocated towards establishing institutions for the design, implementation, monitoring and evaluation of policies related to food and nutrition security and natural resources use. IFPRI’s Regional Strategic Analysis and Knowledge Support System and Country Strategy Support Programmes, for example, are designed to support country-led development strategies and have been doing so in the last few years. • New players: new actors, such as the private sector, must be engaged because they play a key role in enhancing food and nutrition security and natural resources protection. The private sector, with the right incentives, can provide – at a greater scale – effective and sustainable investment, unique expertise and innovation. A holistic approach to such an engagement is imperative and the role of public-private partnerships is also crucial. The PepsiCo and World Food Programme partnership to transform nutrition in Ethiopia while supporting sustainable growth is an example of comprehensive and promising initiatives that should be scaled up. 2.4 Energy Mark Halle, Executive Director, IISD, with support from Bob G. Elton, Adjunct Professor, University of British Columbia; Member and Chair of the World Economic Forum Global Agenda Council on Sustainable Consumption and New Energy Architecture, respectively “The energy choices we make today will determine patterns of energy use for decades to come. This is why we need to ensure that both the policy framework and the pattern of incentives and disincentives favour a rapid transition to clean energy.” Mark Halle “Developing countries need GDP growth to increase living standards and alleviate poverty. We must ensure that this GDP growth is decoupled from an equivalent growth in energy use and resulting carbon emissions. Time is short for us to see leadership that will achieve this goal.” Bob G. Elton The Challenge We must decouple GDP growth from increases in energy use, with all of its environmental impacts, including carbon emissions. Historically, when GDP increases, so does energy consumption. And increased energy consumption leads to massive environmental impacts, not least of which are high carbon emissions. Today, the global energy bill is US$ 5 trillion per year. An additional US$ 6 trillion is spent on infrastructure – factories, power plants, buildings and highways. These investment choices lock in energy patterns for decades to come. The International Energy Agency argues that, absent serious change now, we will shoot past a 2°C world by 2017 and will likely experience global warming of up to 5°C within this century – temperatures the world has not seen in several million years that will condemn future generations to a profoundly less liveable world. Globally, 90% of growth in energy demand between now and 2030 will come from non-OECD countries. These countries will need to find affordable and safe energy solutions that will meet fast-growing domestic demand. Similarly, the vast majority of the 1.3 billion people who lack access to electricity today live in developing countries and their lack of access leads to continuing poverty while exacerbating environmental degradation. Markets are not delivering solutions at anything close to the needed pace. This is partly because of price distortions caused by subsidies, both to producers and consumers of energy. In 2010 for example, over US$ 400 billion was spent on subsidies to fossil fuel consumption, with roughly a further US$ 100 billion spent on subsidies to fossil fuel production. Because of the high estimated capital requirements (US$ 38 trillion investment required in energy supply infrastructure between 2011 and 2035) and the long-term risks related to energy investment, private investment in energy is well below what is required to ensure energy access for all, much less clean energy for all. 9 Further, these estimates – high as they are – do not account for many of the social and environmental externalities. One recent report found that, if the social and environmental costs associated with coal in the United States were 11 added to the actual cost of coal, the coal price today would rise by 175%. Taken as a whole, government energy policy tends to be an opportunistic patchwork. There are targets, but often no plan. This is as true in the OECD world as in the developing world. Yet, the speed and scale of the necessary transformations require strong coordination among governments and the private sector to achieve a substantial decoupling of economic growth and energy consumption, together with a substantial investment in energy access for those who do not have it. Initiatives for Action There are useful initiatives around the world, but they do not add up to a prospect of success. 12 The World Economic Forum is supporting an approach to the New Energy Architecture that encourages governments to take a coherent view of their energy architecture and strike a balance among energy security (which includes energy access), economic development and environmental values. The challenge of meeting global energy needs is not susceptible to simple solutions. There are many worthwhile approaches being tried; but while these are necessary, they are insufficient to achieve the transformation we need, for example: • • • • • Investment in energy infrastructure such as the “smart grid” will enable solutions to be integrated into the energy infrastructure without picking winners and will also give more information to energy users Some developing countries are committing to energy intensity reduction targets; China’s 12th Five-Year Plan, for example, aims at a 16% reduction in energy intensity by 2015 There are many approaches to increasing the production of renewable energy, such as renewable portfolio standards, which encourage investment and innovation that in turn lead to lower costs There are different approaches to managing demand effectively, notably when crises occur such as Japan's Fukushima disaster; For example, in Japan after the Fukushima disaster, peak electricity use fell by nearly onefifth from 60GW to 49GW in the Tokyo region compared to the previous year Access to energy for millions of people has been achieved through a combination of small-scale, village-level work and grid expansions in countries where economic growth allows it; Bangladesh increased the electrification rate from 17% to 41% between 1998 and 2009 as a consequence of the innovative microfinance approach adopted by Grameen Shakti, among others There is increased recognition that energy architecture will be most effective if there is free movement not only of energy but also of related goods and services. Energy resources are distributed unequally, and not every country can afford its own self-contained system. There are some good examples of effective governance of energy systems that span borders (e.g. the Columbia River Treaty between the US and Canada). There are free trade discussions among countries on removing barriers in the goods and services area. All of these activities, while promising individually, have not led to a sufficient decoupling overall between GDP growth and energy use, even in OECD countries; the prospect of achieving this decoupling in developing countries is far away. What to Do Leaders must rise to the difficult challenge of articulating the need for a New Energy Architecture that achieves the balance each country wants to achieve among energy security, economic success and sustainable development. Leaders clearly aim for economic growth that delivers a higher quality of life and prosperity for their citizens. Energy is not consumed for its own sake, but to enable prosperity and allow for a more abundant life. The New Energy Architecture needs to recognize that fact. Instead of subsidizing ad hoc solutions that appear attractive, governments should focus on policies that have the greatest chance of encouraging innovation, capital investment and partnership with the private sector. The two that most clearly do that are: 11 Michael Greenstone and Adam Looney, A strategy for America’s energy future: Illuminating energy’s full costs, The Hamilton Project, Brookings Institution, May 2011 12 http://www.weforum.org/issues/energy 10 • • Investment in energy infrastructure and technology, including smart grids and other transportation assets: this will be valuable almost regardless of which energy supply and demand innovations become economic; and infrastructure investment to help energy access can and should be evaluated in terms of the economic development it enables, and not just as an energy investment Creating the policy framework that enables the best solutions to be implemented, so that supply side and demand side investments are evaluated together; perverse subsidies are removed or reduced and pricing is as close to market-based as is feasible Properly conceived regional energy investments and freer trade in energy-related goods and services will also greatly reduce unneeded investments that developing countries can ill afford, provided there is good governance such as treaties in place to manage energy security and environmental risks. 2.5a Water Stuart Orr, Global Freshwater Program Manager, WWF , with support from J Carl Ganter, Director, Circle of Blue and Jeff Seabright, Vice-President, Environment and Water Resources, The Coca Cola Company; Members and Chair respectively of the World Economic Forum Global Agenda Council on Water Security "The global water crisis is universally threatening and immensely complex. The causes are many – climate change, population growth, over-use – and the ramifications are felt in all areas from environment to security to economic development. Fortunately, innovative models and inclusive decision-making are offering new hope for how the world can respond to one of its most critical challenges.” J. Carl Ganter “Water is a vital enabler of sustainable development and a resource under growing stress. Taking action to improve water security will yield multiple development benefits, including food security, energy security and public health. It’s the most powerful investment of time and energy we can make.” Jeff Seabright The Challenge The world’s demand for fresh water is growing so fast that, by 2030 agriculture, industry and expanding cities will face such scarce supplies that the confrontation could disrupt economic development and threaten political stability and public health. Places as disparate as North Africa, California’s Central Valley and India’s northern states, among others, are already facing similar threats to their livelihoods, while population growth, ageing infrastructure, pollution and resource-intensive ways of life are crashing into limits of local fresh water supplies. The impacts of climate change will be most visible in the water cycle as extremes of drought and flooding. Water security concerns are already prompting planners, experts, businesses and policy-makers to design new standards for measuring water risk. Today, virtually every industry in the world faces sweeping systemic transformation over the next decade in their strategic planning, production practices and business models. This is in addition to the widely known tragedy that more than 750 million people lack adequate access to safe drinking water. But the world’s capacity to respond to these water security risks is in doubt as existing institutions and policies at almost all levels remain siloed and ill-equipped to accommodate informed debates on water use trade-offs. The local nature of water resources further strains institutional capacity; the world faces not one global water challenge, but many local ones with global consequences. Most notably, placing water at the centre of economic planning – a green economy or otherwise – requires critical thinking about a water-secure economy. Meeting needs for food, water and energy presents a challenge for societies as these sectors are highly interlinked and often compete for the same resources. In addition, demand in these sectors individually is projected to grow between 30% and 50% by 2050. Addressing these interlinked and competing interests requires systemic thinking, integrated policy reform and comprehensive solutions that consider specific local conditions and diverse industries and stakeholders that often lack effective incentives and institutional structures for joint cooperation. Initiatives for Action • On Enabling Capabilities – new perspectives of the critical and interlinked needs of food, water and energy are starting to break down the silos in which most governments have viewed and addressed water challenges. The 11 2011 World Economic Forum book, Water Security – the Food, Energy, Water and Climate Nexus, published by 13 Island Press, and a recent conference about water, food and energy hosted in Bonn by the German 14 government framed the issues and developed science and policy recommendations. More holistic debate on meeting future development and environmental challenges can now be better informed by those committed to not repeating errors of the past, single-minded policy outcomes and no-regrets decisions on future economic and development pathways. There are also new tools, fresh data and contextual comparisons for measuring water risks and stress in specific regions, supply chains and economic sectors. • On Policy Reform – many governments are increasingly introducing and implementing new policies and initiatives to improve water management and conservation and related issues. In 2011, for example, China issued the No.1 Policy Document on Reform and Development in Water Sector, which elevated threats to water supply to an urgent national priority. Elsewhere, civil society, governments and business have come together in organizations such as the Water Resources Group to help build a common and comprehensive fact set on water issues, convene stakeholders across perspectives and water uses, and help facilitate transformational water policy reform. • On Mechanisms to Deliver – companies are increasingly aware of their impact on water resources and the risks they and their supply chains face from water scarcity and contamination. Initiatives such as the Alliance for Water 15 16 Stewardship and the UN Global Compact’s CEO Water Mandate have pioneered a new model of corporate water policy and management that is transforming companies’ internal operations and supply chains and sustainability, while also facilitating collaboration with other businesses, governments, NGOs and communities. These trends mark a new era in water resource management that is producing measurable results and a new sense of urgency, including the growing importance of water governance, the arrival of new and committed actors in the water sector, and more comprehensive and systemic thinking about trade-offs and choices. What to Do • Quantifying Challenges, Enabling Responses: A prerequisite for collective policy action on sustainable water resource management is adequate assessment and analysis. However, the necessary localized data is often minimal, outdated, kept secret or not easily accessible. Considering the proliferation of powerful data collection and analysis tools, there is a need to create a uniform, coordinated and ongoing series of programmes that trains users – from corporate risk managers to local researchers – to collect, interpret and share data. This effort will need cross-sector collaboration and resources, and can be activated through existing networks of international and regional conferences, local business and civil society. Application of best-practices data collection, use of the latest risk assessment and analytical tools and translation of the information to actionable responses will lead to better informed decisions and measurements for defining success. A recommendation is to leverage existing frameworks, findings and solutions toolkits, such as those of the Water Resources Group, as examples of opensource data collection, best practices, contact sharing and paths for engaging and empowering stakeholders, and informing governments. • Increase and share on-the-ground knowledge: Water challenges are local with global connections and consequences, and no solutions model can be applied universally. Efficient, timely, strategic responses require decision-level, trusted information from varieties of sources and perspectives that engages the public and reaches beyond water experts. This includes: discovery and sharing of innovations in technology, practice and policy; understanding needs of local and regional environmental systems; engaging political, cultural, industrial and communities to share successes and failures; and creating commitments to transparency and accountability. A recommendation is to develop stronger communications channels that reach across business, government, NGOs, media and stakeholders to create policy awareness and participation. • Integrate water considerations into climate change and mitigation: As countries prepare their climate responses, they need to take the water-food-energy nexus into consideration and include a focus on water resource management as a part of their national action plans on climate adaptation and carbon mitigation. Cutting emissions and saving water are not always compatible since some low-carbon technologies use more water than 13 http://www.weforum.org/reports/water-security-water-energy-food-climate-nexus http://www.water-energy-food.org/ 15 http://www.allianceforwaterstewardship.org/ 16 http://www.unglobalcompact.org/issues/environment/ceo_water_mandate/ 14 12 conventional fuels. A recommendation is to consider the consequences for local water resources when planning carbon mitigation and climate adaptation strategies. • Policy Reform: A water-secure economy must formulate public policy that considers water, energy and food as interconnected issues and creates institutions to advance those policies. The architecture for global water management is vast – it rarely needs expanding. There is a growing need to invest in institutions that are most in need of innovation, training, support and resources. Water reforms must continue to be supported, encouraged and implemented. This requires a coherent and mature dialogue among government, local communities, NGOs and the private sector on the management of water and the associated implications for the environment and the public. A recommendation is to learn from examples of countries – such as Jordan, which are implementing water policy reforms – to reduce water demand, boost efficiency, increase the number of stakeholders involved in decision-making, and address economic, social and sustainability goals. • Institutional Reform: Because of water’s profound, cross-cutting impacts, institutional reform is the backbone of progress. However, water governance is typically fragmented across ministries, making it extremely difficult to successfully address complicated issues that intersect economic affairs, human rights, environment and national security. In many instances, water is managed with competing agendas that discourage coordination and institutional consistency. Reform is needed that leads to inter-agency cooperation and agility. A recommendation is to create greater and accelerated collaboration across government ministries and empower a coordinating agency with responsibility and authority. 2.5b Water-Sanitation Sanjay Bhatnagar CEO, WaterHealth International, Member of the World Economic Forum Global Agenda Council on Water Security “With the right institutional support on finance, policy and governance, sanitation stands ready to be transformed into a significant economic and business opportunity.” Sanjay Bhatnagar The Challenge Sanitation is a big idea that can cover everything from the provision of facilities and services for the safe disposal of human urine and faeces to the maintenance of hygienic conditions (through services such as garbage collection, solid waste, wastewater and storm water disposal and reuse). The report card on sanitation is not good. In 2010, about 2.5 billion people did not have access to improved sanitation facilities, while 1.4 billion were estimated to lack access to safe drinking water. A significant number of these (~1 billion people) live in urban slums. Despite general improvements in urban sanitation programmes, these numbers are rising, not falling. Sanitation is starting to hit the headlines because of population growth and density, rapid urbanization with a serious infrastructure deficit, water body pollution and the urgent need to find alternatives to fresh water. Poor sanitation has been identified as a major cause of disease worldwide and is considered one of the most accurate indicators of urban poverty and health problems. More children die of diarrhoea, a preventable condition directly linked to faecal exposure, than of AIDS, malaria and measles combined. Experts agree that inaction can cause serious social, political and economic disruption and that better sanitation could drastically decrease, and eventually end, the occurrence of these easily preventable conditions, while bringing a host of other development benefits. Every dollar spent on improving sanitation generates economic benefits that far exceed the required sanitation investments (about nine times). It is estimated that achieving the MDG for sanitation would result in US$ 66 billion gained through time, productivity, averted illness and death. It is a matter of grave concern that, despite such consensus, countries are not making sufficient progress on the 17 sanitation front. Initiatives for Action The most promising of the existing initiatives use frameworks built around the integrated water, sanitation and waste management methodologies. These approaches recognize the interdependence between various components of the water cycle (how potable water is brought into a catchment area, how wastewater is collected, treated and 17 2012 Report on progress in water and sanitation by UNICEF and WHO 13 discharged, how storm water is collected and discharged) and their interplay with the waste cycle (how waste is collected, stored, treated and transported). The framework has several important components that are being developed and tested around the world, such as: • • • • • Recognition that excreta and wastewater are not a waste, but a valuable resource that can be reused and recycled; waste processing is customized through a better understanding of its nutrient potential and the use of appropriate technology Better management of water through use of innovative toilet designs that conserve water; promoting the use of rainwater tanks to reduce demand for water and size of storm water pipes; and recycling of waste water to meet outdoor household uses, especially in urban areas Reducing energy in waste and wastewater treatment and extracting energy from waste products Intelligent design of wastewater treatment facilities because effluent varies with land use and people and technology choice is important to simultaneously balance safety and reduce energy consumption Design and implementation of decentralized systems that are customized to the effluents and local environment and can prove cost effective where network models maybe difficult or expensive Communities where these experiments have been conducted are finding that such integrated approaches are not only more economical but also have a smaller ecological footprint. An important observation has been that, while technology does play a role, management and education are the most important issues. Within this framework, a number of important initiatives are being undertaken to understand and solve the challenges of access and water scarcity. Some illustrative examples include: • • • • • • • 18 19 Decentralized models of sanitation in India (Sulabh ) and Kenya (Ecotact) 20 Integrated water management in the Australian Gold Coast Integrated urban water management – Active, Beautiful and Clean Waters programme in Singapore Wastewater reuse for industry – Gippsland Water Factory in Victoria, Australia Municipal wastewater reclamation for power and drinking water – Luggage Point Water Reclamation Plant near 21 Brisbane, Australia 22 Water reuse for agriculture – Atotonilco WWTP for CONAGUA in Mexico Water-Energy Nexus – Masdar City in Abu Dhabi What to Do Each community, region or country needs to work out the most appropriate and cost-effective way of implementing sanitation in the short and long term and then act accordingly. For example: • • • For countries with very low access to basic sanitation, increasing the effectiveness of managing household excreta through improved sanitation access has the biggest health implications and their efforts should legitimately be focused at this level Countries seeking a more complete solution (especially in urban environments) would want to examine incorporating more sophisticated approaches, which include off-site sanitation, improved management of solid waste and wastewater, and stormwater drainage Countries that have already achieved universal access may be interested in taking a more ecological approach to sanitation through which they seek to contain, treat and reuse waste and wastewater where possible – thus minimizing contamination and making optimum use of available resources Irrespective of where a country lies in its focus and evolution, the effectiveness of its approach and ability to scale will require attention to getting several things right: • • Incorporation of innovative technologies and business models for improved access to sanitation, wastewater treatment and reuse or sludge treatment and disposal; the use of new distributed delivery models should be considered where population density makes network solutions difficult or expensive Finance: There is a strong need for financial instruments and finance pools to upgrade legacy systems, lay down new networks (where appropriate) and finance treatment and reuse facilities 18 http://www.sulabhinternational.org/ http://www.ecotact.org/ 20 Integrated Water Management – Pushing the Boundaries 21 http://en.wikipedia.org/wiki/Western_Corridor_Recycled_Water_Scheme 22 http://www.w-e-x.com/downloads/Miguel%20Guevara.pdf 19 14 • • • Policy: Demand management should be effected through policies that promote water-saving devices and pricing policies that encourage water conservation; these can serve to reduce capacity requirements for sanitation systems; separately, some sort of feed-in tariff may be considered for water reuse initiatives Governance: It is important to focus on awareness, institutional capacity-building and streamlining to increase the ability of governments to work with private sector Mechanisms to deliver: The complexity of the challenge and the pace at which solutions need to be designed and implemented require governments and private sector to engage and find ways to work together; copying successful implementations in one part of the world does not guarantee success in another because an essential policy piece or governance piece is missing With the right institutional support on finance, policy and governance, sanitation stands ready to be transformed into a significant economic and business opportunity. 2.6 The economics of sustainable development: sustainable patterns of production and consumption Helio Mattar, President and Member of the Board, Akatu Institute for Conscious Consumption; Member of the World Economic Forum Global Agenda Council on Sustainable Consumption “Corporations tend to have a perception of high risk associated with the possible opportunities in sustainable production and consumption, which restrains corporations from joining hands with consumers in building a more sustainable future.” Helio Mattar The Challenge Within the present model of production and consumption, 16% of humanity – 1.1 billion people – is responsible for 78% of the consumption of total population of 7 billion people in the world today. Although this is a very small minority, the capacity of regeneration of natural renewable resources has already been exceeded by 50%, a totally unsustainable situation. On the other hand, more than 150 million people will be joining the global middle class each year from now to 2030 – more than 3 billion consumers who will be able to make choices of products and services, which will worsen the situation of unsustainability if there is no change in the pattern of production and consumption. The demand for natural resources would need three to four planets Earth to be supplied. This additional demand is already driving commodity price volatility and supply-side constraints in a way that could limit growth. Between 2000 and 2010, prices of widely-used commodities such as cotton, palm oil and cocoa increased by 75%, 230% and 246%, respectively. In July 2011, cotton prices were the highest they had been in 300 years. And if the whole of humanity would get to consume within the same production and consumption model, it would be necessary to have the natural resources of five planets to supply all products and services demanded. This would mean that it would be necessary to have an 80% increase in productivity in the use of natural resources to supply that demand with the one and only planet available to humanity. To do that just by changes in technologies would demand an extraordinarily long period of time, risking the very survival of humanity. Today, there is a need for concomitantly changing the model of production and consumption. The discussion proposed below aims at establishing and operating a framework towards that objective. Given the perception of most corporations that environmental and social sustainability will only pose a threat to their economic sustainability in the very long term, and given that changes in consumer behaviours and in public policies have a direct relationship with the way corporations tend to act, opportunities for more sustainable business models tend to be introduced at a very slow pace. A strong myopia by businesses leads them not to consider weak signals given by the market, whether related to changes in consumer demand, or to increases in the long-term relative price of some natural resources. However, the present changes in consumer’s perception, relative to the importance of social and environmental issues, are already sufficient to suggest that there may exist very significant opportunities for more sustainable business models. For example, 80% of emerging market consumers say they have more trust in a brand that is 15 ethically and socially responsible. Around 50% of consumers recently surveyed in over 40 countries by Aegis Media stated that they do everything they can to protect the environment; however actions do not reflect this – with only a small proportion buying ethical brands and paying more for organic food. Moreover, even if bigger changes in consumer perceptions are yet to occur, corporations can take the opportunity to educate consumers towards more sustainable behaviours in a mutually beneficial way, helping increase the reputational capital of the corporations as well as avoiding the risk of being taken by surprise by changes in public policies that respond either to environmental/social needs or to pressure by social networks. The lack of a clear vision by corporations about what can be concretely considered a sustainable business leads them to stick to changes in technology that are insufficient in building shorter-term sustainability. Corporations tend to have a perception of very high risk associated with the possible opportunities in sustainable consumption, which restrains corporations from joining hands with consumers in building a more sustainable future. Initiatives for Action The initiative described herein is that of establishing a framework of alternative ways to providing well-being to consumers within which corporations can work on changing the model of consumption when compared to the present products and services offered in the market. Vague or general statements about the characteristics of more sustainable business models do not provide the necessary comfort for corporations to face what they perceive as the threats and opportunities related to more sustainable consumption. Hence, corporations do not engage in a virtuous cycle of product/service development and education of consumers, and prefer to stick to changes in technology to produce almost exactly the same goods and services, with insufficient contribution to sustainability. New ways to fulfil the expected well-being by consumers are not explored and put in practice, so consumers keep behaving in the same way. The Akatu Institute for Conscious Consumption proposed a framework that establishes an easily understandable typology of more sustainable businesses that consider sustainability both on the supply and the demand side of the economic equation. This framework allows for the identification of concrete examples and goes a long way in changing the perception of businesses in relation to opportunities, threats and risks related to sustainability. It points out to directions in which consumers will be provided the same level of well-being as with today’s products/services and that can be achieved by changing the attributes of products/services in the following directions: • • • • • • • • • • Durability more than fast obsolescence/disposability (e.g. substitution of disposable plastic bags by durable ones) Dematerialization/virtual options more than material ones (e.g. emergence of e-commerce in substitution to the physical dislocation of consumers and merchandises to stores) Full use of raw materials through waste reduction/reuse/redesign of products (e.g. Patagonia’s campaign to rebuy used clothes made by them, remodel and sell them again in the market) Deriving satisfaction from the use of products more than from excess consumerism, (e.g. Patagonia’s Friday advertising campaign of Patagonia, which proposed to consumers not to buy clothes if they did not need them) Healthy products even if not as tasteful (e.g. reduction of salt, sugar, and oils in several industrialized foods) Well-being from emotions/ideas/experiences more than from material products (e.g. cultural travelling, which goes far beyond the physical visit to cities) Local development and production when possible and economically feasible (e.g. buying of exotic ingredients for cosmetics, which helps the local development of communities) Shared rather than individual use of products (e.g. shared bicycles in Paris and São Paulo, at no cost or at very low fee) Socially and environmentally more sustainable production well communicated to consumers (e.g. the guarantee of the Sustainable Amazon Forum – a coalition of companies, including the largest retailers, and NGOs in Brazil – to provide meat from cattle raised in areas that were not deforested in the Amazon region) Cooperative more than purely competitive production and distribution systems (e.g. 120 small construction material distribution businesses cooperating in buying, advertising and storing merchandise) Each item of the typology above will result in a more efficient use of natural resources to supply the equivalent – and sometimes greater – well-being to consumers. It also provides concrete examples of new business models that are socially and environmentally more sustainable in the long term and, at the same time, economically feasible. And it offers a framework within which to provide examples and make the case for positive business impacts on societies and the environment. 16 What to Do Over the past few years, many businesses have adopted some of the elements of the framework above. The World Economic Forum, the World Business Council for Sustainable Development and the United Nations Global Compact have within their networks a range of proactive businesses that are looking to engage on sustainable consumption in a more action-oriented way through the potential of their positive environmental and social impacts. Three ideas for action include: • • • Within the identified businesses, evaluate the communication to consumers to establish principles for communication that would increase the probability of generating better financial returns at lower reputational, environmental and social risks Identify the key public policy leverage points that can be used in provoking or supporting the new businesses within the proposed framework, one of them being education in schools, directed towards sustainability and a more sustainable model of consumption Identify actionable partnerships between corporations and civil society organizations that could play a positive role in the establishment of new businesses within the proposed framework 2.7 Sustainable Cities and Innovation Dr Chris Luebkeman, Director, Global Foresight and Innovation, Arup Group; Member of the World Economic Forum Global Agenda Council on Design Innovation “Participation is what shapes our world. We all have significant roles to play; we can choose to participate in making positive change or stand idly by as others make decisions that will impact the future of our planet. Sustainable urban innovation is only possible with visionary leadership and a vital citizenry who are empowered to co-create their own sustainable and resilient communities.” Dr Chris Luebkeman The Challenge Global population continues to grow at a frenetic pace with estimates projecting urban citizens to make up two-thirds of the world’s expected 9.3 billion inhabitants by 2050. Most of this anticipated growth will be concentrated in the cities and towns of the less-developed regions of the world. Asia, in particular, is projected to see its urban population increase by 1.4 billion, Africa by 900 million, and Latin America and the Caribbean by 200 million. The challenges that this brings are untold. The systems that are required for citizens to sustainably thrive in their urban communities are still evolving, at best. Most exemplars are one-offs and culturally dependent; our challenge is to find and share solutions that can undergo an acclimation to make them appropriate for their culture. The great challenge is to enable a global urban movement from survival mode, to one of “thrival”. Sustainable urbanization is a fundamental global challenge for communities that find themselves at either end of the development pyramid. To meet the needs of citizens, urban life is supported by a number of equally important systems: wellness, mobility, nourishment, entertainment, energy, waste, water, information, shelter, commerce, learning, security and governance. Success today and in the future will depend on how well integrated and resilient these systems are. These systems are well documented separately, but the implications and potential manifestations of future constraints are less well documented. As we continue to work towards achieving the Millennium Development Goals, we will also see an increased desire to own and consume. This exacerbates increasing global inequality and challenges the carrying capacity of the planet and local capacity to deal the implications. So perhaps the big questions huddle around the issue of resilience: how can our urban communities become more resilient? What will this mean in the context of resource limitations? How can citizens be empowered and emboldened to innovate their own sustainable solutions? What is the infrastructure that is not just needed, but desired, to encourage the innovation that every community will need at every level? Is it an issue of access to knowledge? How different are the perspectives from both ends of the pyramid? How will the potential of innovation blowback be harnessed? How should we govern our growing urban metropolis? How can the timescales required for systemic urban change be reconciled with the short-mindedness of most democratic political cycles? Are 19th century institutions still fit for purpose in the 21st century? 17 Initiatives for Action Future generations will come to depend upon our resolving these questions efficiently and effectively, soon. Fortunately, there are examples of success to be found. Three are illustrated below: • Urban leadership: Many assume that the future of governance lies in the city-state rather than the nation-state. No matter the view on this matter, metropolitan areas shape the world's social, cultural, technological, environmental and economic agendas. With this comes an opportunity for elected mayors to take responsibility for their city and implement sustainable policies. During the 1990s, London, Tokyo and Seoul all elected mayors for the first time in modern history and have sent in place a legacy of long-term investment. For example, Mayor 23 Bloomberg and the leadership team of New York created PlaNYC2030, which is an exemplar of a strategic and tactical future roadmap. Similar initiatives have been undertaken around the world; each one now having started the dialogue on how to make their city more sustainable and resilient in the face of global change. This is a crucial first step that every community should take. It depends upon both good leaders and active citizens to then walk the path of positive change. • Mobility infrastructure: Mobility is fundamentally about the access of urban citizens to opportunity of all kinds. This is crucial to the health and well-being of all individuals. Many examples are found around the world of culturally sensitive solutions. Bogota has been a pioneer of bus rapid transit (BRT) and has inspired other cities to implement similar systems. The City’s CicloRuta is one of the most extensive cycle path networks in the world, connecting with major BRT routes, parks and community centres, helping to provide a means of transport for all citizens and recovering public space. This has been an oft-quoted example of contemporary urban mobility innovation and should be taken as an inspiration. • Collaborative Consumption: The new generations of urban citizens have different expectations in different parts of the world. In some, there is a rapid explosion in swapping, sharing, bartering, trading and renting of assets of all kinds. This has been enabled by mobile- and app-based peer-to-peer marketplaces in ways and on a scale not previously considered. Two mobility examples that have been spreading are car clubs and city cycle hire. Car sharing clubs, like Zip Car or carsharing-Berlin, are found in over 600 cities in over 20 countries around the world. These groups reduce overall car use, vehicle miles travelled and thus carbon emissions and the total number of vehicles parked in urban areas. This is freeing up space to make other urban amenities for cycling or walking, street trees and/or public open space (www.carsharing.net). At the other end of the mobility scale are bikesharing schemes. Hundreds of cities have implemented cycle hire schemes in recent years to encourage residents and visitors to make short journeys around the city by bike, reducing the pressure on the congested road network and overcrowded public transport. The City of Zhuzhou, Hunan Province, is reporting in the Rednet News an average of 150,000 daily trips on its 13,000 bikes. That's 11.5 trips/bike/day on a system whose age can be counted in months. The popularity of the schemes has been phenomenal. Sharing resources in this way can extend into many other aspects of city life to make cities less resource hungry and more sustainable. What to Do Action in – and for – sustainable urban innovation depends on everyone. We need to consider that every citizen should have a voice in what is happening to them and their community. It is vital that the leadership and citizenry be empowered to co-create sustainable and resilient communities. Globally, these communities come in such a broad spectrum of sizes, scales, shapes and densities that singular recommendations could be perceived as mundane. Yet, there are a few which are crucial: every mayor should work towards the development of a strategic vision that is created transparently with input from all stakeholders from citizen to politician, technician to industry and local business to global capital. The strategic vision should remain steadfast and constant during times of political, social and financial change or tumult and should endure beyond election cycles. With expected growth comes a need for prior planning, which includes an urban life with accessibility and mobility for all, with the intent of levelling socioeconomic inequality. This means formal regional plans for growth and policies and financing to support them. An explicit and implicit support of gathering urban data for global comparison would encourage transparency in behavioural conditions to allow global institutions to provide neutral comparators to help assess success and provide access to the best thinking in the world to those communities that would not otherwise have it. 23 http://www.nyc.gov/html/planyc2030/html/home/home.shtml 18 It is a rare circumstance in history when such pressing needs place demands on business, citizen and government, which, if done properly, can result in positive long-term growth, profitability and resource efficiency. 2.8 Unemployment, Decent Work, Migrations Sharan Burrow, General Secretary, International Trade Union Confederation; Member of the World Economic Forum Global Agenda Council on Employment & Social Protection “At Rio+20, world leaders can change this trajectory, address employment, decent work and social protection for all hand-in-hand with energy security, food security and development. There are no jobs on a dead planet, no equity without rights to decent work and social protection, no social justice without a shift in governance and ambition and ultimately no peace for the peoples of the world without the guarantees of sustainability.” Sharan Burrow The Challenge We face a 600 million jobs challenge in the next decade. Currently, 200 million people are unemployed including 75 million young people, and 1.52 billion workers are in precarious employment, many of whom are women. 40 million 24 people are estimated to enter the labour force every year into economies that cannot accommodate them. This is an economic and social time bomb. About 910 million workers earn wages less than US$ 2 per day. Between 2008 and 2011, 55 million more people became “working poor”. Almost 60% of the world's workers have no secure employment contract. 75% of the world's people have no social protection. Even where laws recognize rights to collectively bargain, workers rights to negotiate with employers for improved wages and conditions are denied in many countries. Never has the world generated so much wealth, while inequality between the richest and the poorest has become wider. The widening pay gap is a result of falling wages for the lowest paid and huge increases and bonuses for the top earners. A substantial proportion of those people living in poverty are in “middle income” countries including India, China and Nigeria. As countries emerge from poverty, the dominant development models show increasing national and regional inequalities within them. 70% of the growth in employment in sub-Saharan Africa, 50% in South-East Asia 25 and the Pacific, 25% in Latin America and the Caribbean are informal jobs. Some 220 million people, equivalent to 3% of the world’s population, are migrants. This number is equivalent to the fifth most populous country. People migrate to find better work. Yet, in many countries, migrants are excluded from coverage of labour laws and denied legal and workplace entitlements and rights afforded to others. Migrants are often exploited, subject to discrimination and marginalized without decent work and social protection. The international deficit of care and health workers drives the feminization of migration, now at 50%. The challenge for resettlement of some 200 million climate migrants by 2050 is not even in the planning stages in impacted countries or within global institutions. Unemployment, underemployment and the combined effects of inequality and social exclusion represent a threat to human security. Gaping inequality, poverty and unemployment are driving increased social unrest and consequently social and economic risk. Despite efforts that have raised living standards, projections into the future are of a 26 disturbing reversal of those trends if environmental deterioration and social inequalities continue to intensify. These facts render current economic models both socially and economically unsustainable. Initiatives for Action Despite having employment-related targets for achieving poverty alleviation and gender equality, national and global goals have overlooked the fact that growth can be jobless. A sustainable development framework for employment requires economic and social policies to be coherent and investments made to create jobs. Three country examples of such a framework are illustrated below: • Brazil: The social housing programme “My Home My Life” was launched in March 2009. It provides housing for low-income families, integrating solar water heating where appropriate. Poor households around the world spend a disproportionately high share of their income on energy. As of 2011, up to 500,000 houses are expected to be 24 International Labour Organization, (ILO) Global Employment Trends, 2012. 25 ILO (2012) op cit. 26 United Nations Development Program: Human Development Report 2011 19 equipped. It is estimated that this will generate 30,000 green jobs over the next four years not including the 27 employment created through the construction work itself. • Germany: The large-scale Building Rehabilitation Program is part of the government’s Energy Concept 2050, which includes the goal of achieving a “climate neutral” building stock by 2050. Established in 2001 in response to an economic crisis in the building sector, the programme provides favourable loans for retrofitting buildings to improve energy efficiency. Data shows that every euro of public funds invested “crowds in” four euros of private 28 investment. One billion invested in building stock safeguards or creates around 25,000 jobs. • South Africa: The New Economic Growth Plan was agreed in 2010. It aims to create 5 million jobs in the next 10 years through a series of partnerships between the state and the private sector working across the green economy in the agriculture, mining and manufacturing sectors. Expansion in construction and the production of technologies for solar, wind and biofuels are supported by the draft plan for electricity, which proposes that green energy sources contribute 30% of new energy generation in the next 20 years. Clean manufacturing and 29 environmental services are projected to create 300,000 jobs over 10 years. What to Do To effectively address the global dimensions of these challenges, we need policy coherence, better planning and financial commitments to be coordinated. The world needs to re-orient economic priorities towards a new prosperity for all that respects human rights and the planet’s critical natural resource boundaries. The principles of this greener and more inclusive global economy must be vastly different from those governing the economies of today. They must include equity between and within countries, decent work for all people including formalizing the informal economy, education and employment opportunities for women and young workers, and a social protection floor for all. The “just transition” approach that acknowledges and secures jobs and livelihoods is central to such principles. Specific examples include: • Investment in green jobs: Investing 2% of GDP in the green economy of 12 countries across seven industries can 30 create 48 million jobs over five years. All governments, international institutions and corporations need to allocate investments according to a green investment model, shifting away from the business-as-usual scenario. The outlook for transitioning to a greener economy will benefit workers, business, national economies and future generations. Green jobs reduce the environmental impacts of enterprises and economic sectors to sustainable levels, while providing decent work and living conditions to all those involved in production to ensure workers’ rights are respected. Green jobs are not only those traditional jobs people think of as green – like making solar panels, manufacturing wind turbines, water conversation and sustainable forestry. They also include retrofitting-related jobs in the construction and public transport sectors, and making energy efficiency improvements in manufacturing plants, along with services supporting all industries. A decent job ensures safe work, fair wages, respect for workers’ rights and social protection. • The social Protection Floor: The United Nations describes social protection as “the missing piece in a fair and inclusive globalization”. The Social Protection Floor is a set of basic social security rights, services and transfers to help promote human rights and support decent living standards worldwide. Basic income security and access to essential services through the various phases of life require healthcare, child benefits, basic retirement pensions and income support for the working poor, the unemployed and pregnant women. In Rio, trade unions demand heads of state commit to the extension of social protection in countries where programmes exist, to implement the Universal Social Protection Floor Initiative by 2020 and to commit funding for its establishment in the poorest countries. • A financial transactions tax (FTT): Innovative approaches are needed to address both environmental concerns and social inequities exacerbated by speculative financial sector practices. A global FTT could provide a revenue base to fund programmes to alleviate poverty, support sustainable development and climate action. A global FTT would tax specific financial transactions from the very sector that created the global financial crisis. 27 Source: ILO Office Brazil Source: German Federal Ministry of Transport, Building and Urban Development 2010 29 Source: South African Government Information November 2010 30 ITUC 2012: “Growing Green and Decent Jobs”, based on economic analysis by the Millennium Institute: www.ituc-csi.org 28 20 Governments, international institutions, business and civil society, together, need to commit to this framework and take their respective roles to implement these actions. 2.9 Oceans Tony Haymet, Director, Scripps Institution of Oceanography, University of California, San Diego (UCSD), with support from Dr Greg Stone, Senior Vice-President and Chief Scientist for Oceans, Conservation International, Member and Chair, respectively, of the World Economic Forum Global Agenda Council on Oceans “Advances in technology have opened up new opportunities to observe, manage and enforce sustainable use of the global ocean. That the threats are now so measurable and real makes it easier for the community of nations to act immediately." Tony Haymet “It is now clear to political leaders, scientists and, increasingly, the public and business community that the future wellbeing of all humanity depends on a healthy ocean. Now is the time to take action for better management and conservation." Dr Greg Stone The Challenge The ocean is a neglected part of our planet, despite being 71% of Earth’s surface. It suffers from misuse, neglect and lack of clear governance. For example, the ocean has absorbed 90% of human-caused heat since 1850, causing it to be warmer and higher (due to thermal expansion and melting of ice previously grounded on land). It has absorbed onethird to one-half of the extra CO2 emitted by human activities, leading to a 30% increase in acidity and concomitant difficulty for any organism making a calcium carbonate shell (coral, oysters, pteropods, etc.). The ocean receives sewage, oil spills, shipwrecks and enormous amounts of plastic pollution that becomes fragmented but appears not to decay on the human timescale. Its vital role in transportation is threatened by piracy. Its once bountiful and apparently inexhaustible source of protein is threatened, with one-third of fisheries conservatively estimated to be over-fished. There is currently no visible mechanism to secure the global food supply, let alone expand it to feed 9 billion people. Shortcomings of the current and predominating architecture to effectively tackle these issues: Unlike most terrestrial and atmospheric jurisdictions, global ocean governance is made up of an anachronistic, sector-based patchwork. This includes, for food, the FAO in Rome; for transportation, the IMO in London; for mineral prospecting and Internet cables, the International Seabed Authority in Jamaica; the London Dumping Convention; and the Intergovernmental Oceanographic Commission (IOC) in Paris, which is handed responsibility for a number of issues including tsunami warning systems and the global ocean observing system. IOC receives less than 2% of the UNESCO budget. At present there are no effective governance arrangements to secure our food supply, for declaring high seas (non EEZ) marine protected areas, to share the molecular resources of the high seas (candidate pharmaceuticals) or to regulate oil and gas extraction. By some estimates, half of the seafood we eat arrives at our tables via illegal, unreported and unregulated (IUU) fishing. Existing mechanisms for governing the Arctic Ocean, as it becomes increasingly ice-free in most summer seasons, are clumsy at best. Initiatives for Action • On Ocean Responsibility: Led by the island nation of Palau and others, the UN General Assembly will consider in June 2012 a resolution to address the impact of pollution on the “global commons” of the atmosphere and ocean, particularly the impact on low-lying and island states that emit the least pollution of all. The draft resolution reads: The General Assembly [… preamble deleted] decides, in accordance with Article 96 of the Charter, to request the International Court of Justice, pursuant to Article 65 of the Statute of the Court, to urgently render an advisory opinion on the following question: What are the obligations and responsibilities under international law of a State for ensuring that activities under its jurisdiction or control that emit greenhouse gases do not cause, or substantially contribute to, damage to another State or States? There are many possible quantifiable measures of a judgment on this issue, including the magnitude of monetary compensation for a nation or nations affected by the actions of another nation. 21 • On small island states: Pacific Oceanscape is an initiative that has been endorsed by all 16 Pacific island leaders, which covers 8% of the Earth's surface. Sixteen Pacific island nations are working to design the Pacific Oceanscape initiative, which was formally endorsed by the Pacific Islands Leaders Forum in August 2010. This collective community across all sectors is organized and acting. The initiative envisions a secure future for Pacific island states based on ocean conservation and management at a new level of regional cooperation. The collective objectives are integrated ocean management, adaptation to environmental and climate change, a network of marine protected areas, liaising, listening, learning and leading. This initiative was begun by Kiribati and their creation of the 400,000 square kilometre Phoenix Islands protected area. The Cook Islands followed by declaring a 1 million square kilometre protected area. Other nations are considering their own new protected areas. The initiative has created a "domino" effect. These nations also tend to vote together at the United Nations on ocean issues. This level of integrated, cooperative ocean management provides a model that could be replicated in other regions. What to Do The required actions to save and repair the ocean are well-known and easy to state, but require concerted action by the community of nations. • On greenhouse gas emissions: The Kyoto Convention in 1998 was designed to have an impact on human emissions of CO2 and other greenhouses gases. Together these cause warming and sea-level rise, and CO2 dissolving in the ocean causes acidification. Quantitatively at least, there had been little or no detectable result, with CO2 levels rising at an ever increasing rate, with barely a pause during the so-called “Global Financial Crisis”. Even the most optimistic estimates place the CO2 reduction from Kyoto at less than 0.5%. Urgent new accomplishments are needed from the next climate COP in Doha to arrest the inexorable rise in CO2, flatten out the global concentration and eventually start a decline. • Managing fisheries and aquaculture sustainably, ending perverse subsidies to damaging industries, and fairly using molecular and other common resources are also all obvious actions. • Smaller groups of nations can have impact on certain regions for certain issues, including the nations surrounding the Arctic and the Pacific Island nations. • However, most ocean issues require a new respect for the principles of “multiple use management” and an agreement that managing resources “sector by sector” is not only flawed but self-defeating. The knowledge to address the issues, and many of the global governance mechanisms such as the ITO, already exist. What is needed is the will and constancy of purpose to use this knowledge and these mechanisms to benefit the entire community of nations. 22
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