Rio+20: Dancing to the tune of the green economy


This article is part of our special report Rio+20: Charting a green future?.

The Rio Earth Summit in May 2012 will try to set a global vision on greening the economy, with France leading European calls to establish a brand new World Environmental Organisation (WEO).

The 2012 UN Conference on Sustainable Development (UNCSD) – or 'Rio+20' summit – is being held exactly two decades after a landmark international conference in Rio de Janeiro.

Nicknamed the 'Earth Summit', the 1992 conference agreed on a plan of action (Agenda 21) and a declaration setting out the principles underpinning sustainable development.

A follow-up meeting ten years later in Johannesburg recognised that fundamental changes in the way societies produce and consume were essential to achieving global sustainable development. All governments were invited to promote sustainable consumption and production and a plan to reinforce the implementation of the Agenda 21 was adopted.

Hosted by Brazil, the 2012 summit will seek to secure a renewed commitment to sustainable development and assess progress made over the past two decades. Its two main areas of focus are:

  • The green economy in the context of sustainable development and poverty eradication, and;
  • the institutional framework for sustainable development.

A May 2010 UN report provides an assessment of the progress and gaps in implementation of sustainable development decisions since 1992 and reviews the two themes of the 2012 conference.

At European level, the EU's Sustainable Development Strategy (SDS), adopted in 2001, provided a long-term vision and the overarching framework for sustainable environmental, economic and social development in Europe.

The EU's climate change and energy policies are evidence of the impact that the SDS has had on the political agenda, with the EU emissions trading scheme (EU ETS) established as the cornerstone of EU policy to combat climate change.

But the Union's efforts did not stop there and the bloc has now started to integrate the sustainability dimension into many other policy fields as well, such water efficiency in agriculture, the use of renewable energies in transport and sustainable consumption and production.

To complement the EU SDS, the bloc’s core priorities are set out in the flagship 'Europe 2020' strategy, which seeks to promote smart, inclusive and sustainable growth by developing a more resource-efficient, greener and competitive economy.

Today, almost all EU member states have their own national sustainable development strategies (NSDS) in place. But comparing national strategies is complicated by the fact that they vary widely from country to country. A recent report by the European Sustainable Development Network (ESDN) provides a comprehensive update on national strategies in the EU 27.

Twenty years after the Rio Earth Summit, the United Nations (UN) believes it is time to secure a renewed political commitment to sustainable development at global level.

In May 2012, government, business and civil society leaders from all over the world will gather once again in Rio de Janeiro to attend the UN Conference on Sustainable Development – commonly referred to as Rio+20 – to agree approaches for the next two decades and address emerging challenges, such as biodiversity, ecosystem loss and water security.

Twenty years after the Rio Earth Summit, the United Nations (UN) believes it is time to secure a renewed political commitment to sustainable development at global level.

In May 2012, government, business and civil society leaders from all over the world will gather once again in Rio de Janeiro to attend the UN Conference on Sustainable Development – commonly referred to as Rio+20 – to agree approaches for the next two decades and address emerging challenges, such as biodiversity, ecosystem loss and water security.

The European Commission is currently drafting a communication to coordinate the EU's input into the 2012 conference. It will be published in June 2010.

Greening the economy

The Rio+20 summit will build on the United Nations Environment Programme's (UNEP) initiative for the green economy, which seeks to assist governments in reshaping policies and investments in a range of sectors, including clean technologies, renewable energies, water services, green transportation, waste management, green buildings and sustainable agriculture and forests.

A major goal of the initiative is to address market failures in tackling the environmental fall-out of economic activity (applying the 'polluter pays' principle or the so-called 'internalisation of externalities'). It also addresses social goals, such as jobs, the overall macroeconomic framework and development policy.

According to the UN, policy instruments for the green economy include:

  • Getting prices right by removing subsidies and imposing taxes on activities that harm the environment. The objective is to internalise externalities, support sustainable consumption and incentivise greener business choices;
  • Public procurement policies that promote green businesses and markets;
  • Ecological tax reform to shift the tax base away from 'good' factors of production (such as labour) to 'bad' factors (such as pollution). The objective is to "correct environmental externalities" while boosting employment;  
  • Public investment in sustainable infrastructure (transport, renewable energy etc.) and natural capital to restore, maintain and, where possible, enhance the stock of natural capital;
  • Social policies to reconcile social goals with existing or proposed economic policies.

Phasing out environmentally harmful subsidies

A separate UN report on the green economy, published in February 2011, said annual investment of €950 billion – or 2% of global GDP – in ten key sectors could kick-start moves to a "low-carbon, resource-efficient green economy".

The report, entitled 'Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication', argues that the high-carbon 'brown economy' is increasingly prone to price shocks, crises and scarcities. 

By contrast, investment in areas such as renewables, energy efficiency, forest preservation and improved water sanitation could stabilise or improve economic growth while ameliorating inequalities.

"A Green Economy is not about stifling growth and prosperity," said Pavan Sukhdev, the head of UNEP's Green Initiative. "It is about reconnecting with what is real wealth; re-investing in rather than just mining natural capital, and favouring the many over the few."

Figures provided in the report suggest that the world currently spends 1-2% of global GDP on environmentally-unfriendly subsidies for areas such as fossil fuels and agricultural pesticides.

"Phasing them down or phasing them out would generate multiple benefits while freeing up resources to finance a green economy transition," the report says.

EU vision for Rio+20

Regarding the Rio+20 talks, the European Commission agrees that a global vision on how to move towards a green economy "will be absolutely necessary, not only to meet global challenges, but also to achieve the EU's own policy aims". Resource efficiency and the green economy are indeed at the heart of the EU's new growth strategy, 'Europe 2020'.

As the EU prepares for the summit, the bloc will have to develop a common vision on the concept of the green economy and decide what concrete measures it is ready to take towards achieving this goal in the long term.

The EU executive wants to boost the role played by the green sector in the global economy, create greener and better jobs, reduce energy and material use in production processes, reduce waste and pollution, and slash greenhouse gas emissions.

Among the EU's top priorities are a new international framework to accelerate public and private investment in the green economy – either with national voluntary goals or obligatory targets to be achieved by 2020. New partnerships on resource efficiency and eco-innovation could also be set up.

Towards a 'World Environment Organisation'?

The second major theme of the Rio+20 summit centres on "the institutional framework for sustainable development" across its three pillars – social, environmental and economic.

At global level, the two main institutions currently involved in sustainable development issues are the United Nations Environment Programme (UNEP), established in 1972, and the UN Commission on Sustainable Development, created in 1992 as a follow-up to the Rio Earth Summit.

However, over the past decade, environmental conventions have multiplied and public agencies and departments have mushroomed at all levels, leading to a patchwork of regulations. Businesses have created their own environmental departments, and many new research and academic institutions have also been established.

The explosion in the number of "green" institutions is proceeding at a faster pace than in the economic and social pillars of sustainable development.

To ensure consistency at global level, French President Nicolas Sarkozy has championed the idea of a World Environment Organisation (WEO) that would be responsible for ensuring coherent and effective action across multiple levels of decision-making.

The current talks are mainly focused on the establishment of a specialised UN agency for the environment or upgrading the existing UNEP, which lacks the authority to push ambitious policies.

At EU level, the European Commission agrees that the world needs to improve the efficiency of 'green' international organisations and that the UN structures, international financing institutions and multilateral environmental agreements need to achieve higher degrees of synergy between their actions to make a difference.

A group of ministers and high-level representatives on international environmental governance (IEG) has identified a series of "system-wide responses" to improve IEG. These include:

  • Strengthening the science-policy interface;
  • developing a UN system-wide strategy for the environment;
  • realising synergies between multilateral environmental agreements;
  • linking global environmental policymaking and financing;
  • developing a system-wide capacity-building framework for the environment, and;
  • strengthening strategic engagement at regional level.

Pricing the earth, trading nature services

The Rio+20 summit is also likely to address the results of 'The Economics of Ecosystems and Biodiversity' project (TEEB), which is part of the UN's Green Economy Initiative.

Along the lines of the UK's Stern Review on the economics of climate change, the initiative has over the past two years made massive calculations in an attempt to put a price on nature services. By demonstrating the economic value and 'market prices' of soil, forest or fresh water it hopes to convince policymakers to implement the polluter pays principle across different policy areas.

In its specific report for business, the initiative suggests that biodiversity and ecosystem conservation could offer new opportunities for business, which can either develop green products and services or trade "biodiversity credits".

The report even predicts the emergence of biodiversity and ecosystem service (BES) markets alongside existing ones, such as the EU's emissions trading scheme (ETS) for carbon dioxide.

Judicial cooperation

In recent years, UNEP has also paid more attention to cooperation with judicial authorities as a focal point for the implementation of environmental law at national level.

The judges programme at UNEP aims to promote networking between judicial authorities by sharing legal information and ensuring compliance with international environmental law at national level.

A "global initiative on public prosecutors and environmental law" is set to be launched at the Rio+20 summit.

(For a full range of stakeholder contributions, click here.)

UN Secretary-General Ban Ki-moon has called for "revolutionary action" to achieve sustainable development, warning that the past century's heedless consumption of resources is "a global suicide pact" and time is running out to provide an economic model for survival.

Speaking this year at the World Economic Forum in Davos, Switzerland, he described sustainable development as "the growth agenda for the 21st Century," citing a litany of development errors based on a false belief in the infinite abundance of natural resources that he said had fuelled the global economy over the last century.

"We mined our way to growth. We burned our way to prosperity. We believed in consumption without consequences. Those days are gone. In the 21st Century, supplies are running short and the global thermostat is running high," Ban Ki-moon said.

In their common response to UNEP's Rio+20 questionnaire, the EU and its member states noted that "approaches to the green economy will have to take into account differences between countries and therefore will need to offer a certain flexibility". In this respect, the bloc argues that the international community needs to take into account the diverse socio-economic contexts in developing countries, emerging economies and developed countries while also addressing the social impacts of proposed measures.

The EU expects to see "a global commitment and common understanding of the green economy in the context of sustainable development and poverty eradication," accompanied by "a UN Green Economy Road Map" which clarifies the steps needed at national and international level, includes a timeline and identifies key actors, (voluntary) targets and a monitoring mechanism.

The bloc also expects the summit to produce "a toolbox or best practice guide of needed actions, instruments and policies" which will transform concepts related to the green economy into real action.

EU Environment Commissioner Janez Poto?nik stressed that while green economy strategies have an obvious environmental dimension, their design and implementation can and should not be the sole responsibility of the environmental community. "We need to move from protecting the environment from business to using business to protect the environment," he said.  

On international environmental governance, Timo Mäkelä, international affairs director at the European Commission's environment department, said the EU's preferred option is to create a UN environmental organisation or agency. "The EU proposal is not about adding a new institution on top of what exists, but about transforming UNEP into a stronger body still based in Nairobi," he said.

The European Council, which represents the EU's 27 member states, has suggested strengthening UNEP's mandate and supporting the agency with "stable, adequate and predictable financial contributions".

The United States stresses that effective green policies should be demand-driven and market-led. "This includes sharing accurate information for consumers so market mechanisms can work to match consumer demands for green products with supply. This also includes educating the public on the impacts of their actions," it said.

The US believes one key outcome of the 2012 summit could be to transfer best practices and identify areas for global cooperation. "Additional outcomes might be support for open source life-cycle inventory/ life-cycle assessment platforms and sharing of these data among countries and industries, compilation of best management practices and lessons learned relative to sustainable intensification of agriculture and food security, elements of a 'green' educational curriculum for different educational stages and situations, and more development of the green economy theme in various economic sectors."

Business Action for Sustainable Development 2012 (BASD 2012) is a coalition of business organisations that was established to coordinate the contribution of business to the Rio+20 Summit. It was formed by the World Business Council for Sustainable Development (WBCSD), the International Chamber of Commerce (ICC), and the United Nations Global Compact.

Chad Holliday, chair of BASD 2012 and chairman of the Bank of America, said that "business can and will be a significant driver of sustainability. Companies are already contributing to a greener future - they innovate and create solutions in production, distribution and marketing of their products and services every day".

Georg Kell, executive director of the UN Global Compact, a platform bringing together companies and UN agencies, emphasised the crucial role of market-based solutions in realising a low-carbon future. He called on governments "to set the right incentives to accelerate the adoption of market-based solutions and reward responsible business practices".  Martina Bianchini, vice-president of government affairs and public policy at Dow Chemical, emphasised the role of business and industry in adopting "the green economy model". She stressed the differences between industrial sectors and underscored the need to balance short and long-term strategies to meet both social and environmental challenges.

Bianchini also underlined the importance of setting global business and industry perspectives and principles to accelerate the transition to a green economy. Peter Paul van de Wijs from the World Business Council for Sustainable Development (WBCSD) stressed that sustainable development is "an effective long-term business growth strategy" and urged cooperation and the development of creative partnerships between governments, business, and civil society in order to address global sustainability challenges.

WWF International notes that in the UK, the Stern review on climate change was a key moment in building momentum on climate change because it made a strong economic case for action. Therefore, it believes that "making a stronger economic case for sustainable development might be a key strategy for increasing support".

Bjarne Pedersen, director of operations at Consumers International (CI), a non-profit group, said "the third Earth Summit must be a showcase for what is being done, not just another talking shop about what is needed".

CI wants to see world leaders take immediate steps in advance of 2012 in the following areas:

  • Tackling subsidies for fossil fuels;
  • addressing the "disinclination to regulate industry which has eroded labour standards, undermined workers' and consumer rights, and weakened social welfare policies";
  • educating and empowering "consumer citizens," and;
  • regulating financial markets, speculation and current stock market practices.

CI is also working on the completion of ISO 26000, which it describes as the first global standard for social responsibility. CI and its member organisations are lobbying for it to be adopted by companies so that consumers can independently judge companies' ethical and environmental credentials.

Jeffrey McNeely, chief scientist at the International Union for Conservation of Nature (IUCN) and the International Resource Panel, hopes that Rio+20 will bring about more effective coordination of international environmental law, with strong enforcement and implementation measures to counter the current patchwork of uncoordinated and soft conventions protocols, and agreements.

Barbara Ruis from the United Nations Environment Programme's (UNEP) regional office for Europe called for greater judicial cooperation on environmental crime at global level. "Environmental crime, including of a transnational nature, poses a central barrier for the effective implementation of environmental law," she said.

According to Ruis, a global body is needed "to assist national environmental law enforcement authorities to engage more effectively across national borders to combat transnational environmental crime".

Ruis also suggests conducting more research into transnational environmental criminal law, developing international legal instruments and harmonising national law in this regard.

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