On June 20–22 global leaders gathered in Rio de Janeiro for the Rio+20 United Nations Conference on Sustainable Development (UNCSD) to discuss the future of our planet, society, and environment. While officially deemed a success, the outcome of the meetings has been met with mixed reactions: Detractors found that the meetings made little important political progress, that they merely reaffirmed existing agreements and committed countries to little. There was disappointment voiced at the lack of attendance by many important heads of state. Some even pointed out the irony of the meetings taking place during an inferno-like summer with global, record-breaking highs in temperature—and no new agreements on climate change. Indeed, the final document, entitled The Future We Want (TFWW), while carefully acknowledging the multitude of issues involved in global environmental negotiations, painstakingly avoids taking almost any new position on the key polemic issues where deep changes are needed to steer our global environment away from disaster. For instance, it makes no new commitments in the energy sector, merely encouraging “sustainable” use of traditional fuels, and the inclusion of renewable sources in “appropriate” energy mixes. Language around climate change is also very noncommittal, “underscoring” the urgency of an “effective and appropriate international response,” and reaffirming the principle of common but differentiated responsibilities.
The Rio+20 outcome may seem vague because it has taken a new tack toward global cooperation. In the 20 years since the first UNCSD meeting in Rio, it has become clear that attempts to achieve ironclad, top-down global political commitments on environmental issues (notably on CO2 reduction) are deeply challenged. The lack of new binding commitments in the Rio+20 outcome can be seen as recognition that a binding treaty approach is not working, and as evidence of a shift toward a more flexible scheme of principles. It sets forth a new voluntary economic approach that leverages the strengths of the economy and environment under a green economy framework. While many parties are frustrated by the Rio+20 outcome, it arguably offers a consensus that could lead to fruitful social and environmental outcomes. Whether a voluntary approach will be adequate to achieve the drastic political and economic changes that are needed to avoid the disastrous environmental outcomes that are predicted, for instance, in the global climate, remains to be seen. But it is probably better than political impasse, and it is worthwhile to examine the potential of this approach and consider what the next steps for world and local leaders might be.
TFWW softens the bipolar divide between developed and developing countries, which has stalled climate negotiations in the past. It no longer holds developed countries responsible for historic carbon debts or technological assistance to developing countries. In the document’s new brand of “common but differentiated responsibilities,” sustainable development actions are bottom up and voluntary. Climate change is framed in the forward-looking terms of equal access to sustainable development, and the ability to grow under a green economy. Instead of being bound, parties will implement sustainable development policies where and as they find appropriate. (The word appropriate appears 59 times in the 53-page document.) Countries and companies are urged to work together with a goal of shared prosperity under the rubric of green economy.
Furthermore, several concrete actions did come out of Rio+20 and should be noted. TFWW establishes a new high-level political forum on sustainable development, charged with developing a set of sustainable development goals based on natural capital, and it strengthens the mandate and funding of the United Nations Environment Programme (UNEP), the UN agency focused on green economy. We can expect these institutions to grow in importance in global environmental negotiations along with the green economy approach to development. Also, by the end of the meeting, more than 700 pledges, valued at over US$500 billion, were registered for concrete actions through, for example, individual institutional commitments or partnership agreements. Each of these was required to commit to quantifiable outcomes within a fixed time frame, and can be seen as demonstrating existing commitment to sustainable development, even without promises of resource transfers from political leaders. It remains to be clarified whether the pledges are really new financial commitments, and whether they will be carried out.
Embedded in TFWW is a tacit recognition that treaties have not been an effective approach toward global cooperation on climate. During the run up to Rio, the UNEP Global Environment Outlook report indicated that progress was evident only in a few of the more than 500 internationally endorsed goals on sustainable development. Despite the fact that most of these endorsed goals related to natural capital, political commitment was never adequate to ensure their implementation. There is no guarantee that TFWW will be more successful in its objectives, but there are several promising and new elements that argue for change-making potential in this approach.
Governments and businesses have explicitly agreed through TFWW that natural capital is the core element of sustainable development and identified “green economy in the context of sustainable development and eradication of poverty” as the approach that will strengthen our relationship with ecosystems and move us toward a more sustainable economic development path. This marks a shift in the dominant perspective, and the first time that ecosystems were placed by consensus at the center of the development agenda. By embracing the concepts of green economy, Rio+20 affirmed that sustainable development has its roots in ecosystem maintenance, that the main drivers for ecosystem degradation are economic, and that the solutions must involve modifications to our economic approach. Green economy is presented as a tool that provides options, but not a rigid set of rules, thereby taking a bottom-up approach that seeks to identify ways to bring business, government, society, and environment into alignment through better accounting.
Within the document’s exhaustive acknowledgements is a new and important set of interrelated agreements related to ecosystems, economy, and business: (1) ecosystems and biodiversity are the very foundation of our global economy and human well-being, (2) economic valuation of natural assets should be used to develop comprehensive economic measures that make environmental assets visible to the global economy and guide development policy, and (3) businesses have a key role in this economic shift and should include social and environmental factors in their decision making and reporting.
This focus on green economy is pragmatic and efficient in that it leverages two proven and powerful systems that are foundations of the world as we know it—ecosystems and the economy—in order to achieve sustainable development. According to green economy thinking, these systems can be self-propelling engines toward sustainable development if they are made to function in a mutually reinforcing and socially inclusive way. Natural and social capital can be seen as assets similar to financial assets, which must be invested in and maintained. Better information reveals the true costs of resource decisions and helps decision makers to choose more wisely between development trade-offs. The idea of natural capital accounting was in existence during the first Rio meeting in 1992, but only recently has it started to gain traction in terms of implementation and agreed upon methods. Theoretical frameworks, assessment tools, and metrics are being developed to measure the green economy. These include the Economics of Ecosystems and Biodiversity study (TEEB), the UN System of Environmental-Economic Accounts (SEEA), and Mexico’s Green GDP. Meanwhile, there is a strong new trend in business toward reporting on the impact of operations on environmental and social factors (for instance, the Carbon Disclosure Project and Bloomberg’s new sustainability metrics) as well as using methodologies like shared value to guide social impact.
Having established these agreements, policy makers and business leaders now have an opportunity to lead the way toward a transition to an inclusive green economy in partnership. The first step toward strengthening the planet’s natural foundation is properly ascribing values to natural elements in order to reflect their contribution to human well-being. This measure can never reflect the esoteric or ethical value of natural assets, but at least begins to recognize their importance in terms of our dependency on them. Then the transition to a green economy can be mapped by incorporating the values of biodiversity and ecosystem services into policy and management decisions.
The green economy approach is also indispensable in today’s environment of limited public financial resources because it leverages the enormous power of markets and businesses to finance environment-friendly new production methods. Making social and environmental sustainability profitable is key, and a necessary condition to attracting a flow of resources toward greener production methods at the massive scale needed to meet the needs of a rapidly growing global population with limited stocks of resources. TFWW recognizes this, underscoring the need for a proper enabling environment, and international cooperation in finance, debt, trade, innovation, and entrepreneurship. It also repeatedly notes the importance of public-private partnerships, as well as sustainability reporting by businesses, to advance sustainability.
Given the challenges in establishing new near-term binding environmental agreements, individual governments, businesses, and other parties should take bottom-up action along the lines of this agreement in their jurisdictions. There are several concrete ways that policy makers can take steps toward the green economy:
- Strengthen ecosystem and biodiversity governance and institutions at local and national levels;
- Create a more favorable environment for sustainable investing at all levels;
- Restructure measures of economy and ecosystem governance to reflect the value of natural assets, and encourage businesses to include reporting and metrics that reflect interactions with environment and society; and
- Invest in generation and management of high-quality ecosystem data through monitoring and assessment, creative use of information technology, and publicly available interfaces.
Building on the importance of small and large businesses, it is also crucial for governments to prioritize the attraction of private funds into sustainable activities in order to finance the transition to a green economy and create equitable access to sustainable livelihoods. Policy steps can set the stage for business investment, ranging from improving the general investment climate to creating markets, providing financing and incentives, building capacity, and improving regulations in certain areas.
The new framework of green economy is also useful because it allows subnational entities, such as companies, nongovernmental organizations (NGOs), and local entities, to take action. Natural accounting and holistic measures of value creation can help companies and local governments make decisions regarding economic or conservation activities that will impact their environment. It can also help them with the economics of reaching a more resilient and prosperous future.
A dearth of new commitments was disappointing to many, but it is worth considering TFWW in terms of offering opportunities for pragmatic action and cooperation. The voluntary, common but differentiated approach may offer the only immediate practicable solution to Northern-versus-Southern hemisphere political cleavages that have stymied global environmental agreements so far, notably regarding CO2 emissions. The consensus expressed in TFWW around voluntary actions, a forward-looking approach to international cooperation, and a concept of equal rights to sustainable development, just might provide fertile ground for better cooperation. It offers a way to act both nationally and locally to rebalance our impact on resources, bringing production in line with ecological limits. World leaders of policy, business, and civil society can take immediate action to transition toward a green economy, honor Rio+20 pledges, and define the forthcoming sustainable development goals. They have set the stage in this agreement for a new kind of development design. If successful, the green economy and voluntary approaches will provide a framework for cooperative assessment, decision making, and action that will reconcile the demands of our growing population with the limits of the environment that we depend on.