A Sustainable Environment: The Big Picture

Rachel Kyte is vice-president and head of the Sustainable Development Network at the World Bank. She has overall responsibilities for the organisation’s global work in agriculture, the environment, infrastructure, and urban and social development.

This is a very important opportunity to talk about where we are, and where we are going, and how we’re going to get there.

In June 2012, at Rio+20, we will celebrate twenty years of the original Earth Summit. Just twenty-five years after the Brundtland Report, we have an opportunity to sit, talk, evaluate and get ready for the next chapter in a journey towards sustainable development as a common goal. This triple win of environmental progress, social progress and economic progress still holds true for many of us. It is still what we want it to be, but it has proven to be remarkably elusive over the last twenty years. I want to talk a little bit about how the world has changed in the last twenty years and how we can do something about that elusiveness.

Progress—but More to Do

There has been immense progress in the last twenty years. GDP growth has exceeded population growth which has meant that we’ve been able to add incredible wealth to society at a time when we’ve been adding 1.2 billion people to the planet.

In 1992, 40 per cent of the world’s population was living in poverty. We estimate that by the time we get to Rio in June 2012 that figure will have halved. That’s incredible progress. At the same time, 1.4 billion people live without access to electricity, 2.6 billion have no access to sanitation, 880 million have no access to safe, clean drinking water, a billion go to bed hungry every night and 900 million live more than two kilometres away from an all-weather road.

And where does the progress, where does the growth, where do the jobs come from? For most people they come from small businesses. Yet 2.3 billion small businesses still have no access to finance in today’s world, and 1.7 billion households have no access to any form of bank account, which means they cannot save effectively and cannot insure effectively and therefore cannot build their own resilience to the shocks that make the poor so vulnerable and least resilient to a fall back into poverty.

But when we look at the three pillars of social progress, of economic progress, and of environmental progress, it’s probably in the field of environmental progress where we seem to have made the least progress. The values are wrong. If the biodiversity is living, we put a value of zero on it. If it’s dead, if it’s felled, if it’s on our plate, we put a high price on it. We are operating far beyond the safe space in the area of climate change, in the nitrogen cycle, in ocean health and biomass. Biodiversity is under severe pressure. In some cases it is irreversibly lost. This is the area where we’ve probably got the furthest to go.

When I think about Rio next year, I like to think about how the world has changed in the last twenty years. In 1992, when we looked for solutions in Agenda 21, the action plan that came out of the Earth Summit, we were looking for public-sector solutions. We were looking principally for the role that overseas development aid would play in financing sustainable development in the developing world. Today, every problem has a public–private solution. The role of the private sector in driving growth and development is well understood. Leveraging the private sector with public finance, public policy, regulation, legislation, is the focus of work. We need to mobilise all forms of capital and finance in order to support sustainable development, including the domestic capital markets which have grown and developed in the poor countries that have seen so much growth since Rio 1992.

Twenty years ago, it was really a story of the ministries of the environment. If that is the collected audience of Rio 2012, we will have failed to begin with. The challenge of sustainable development now is a challenge for ministers of finance, of planning, of development, of energy, of agriculture, of the environment, and more.

Famously, twenty years ago, the phrase “and women and children” was added 140 times to the final document of Rio in the last preparatory committee meeting. Why? Because nobody thought about the perspective or the reality of the lives of women and children until that time. Now, we in the World Bank Group at least understand that if we look at development growth from the perspective of gender, we can see the pathway towards smart economics and smart business. Sixty per cent of small farmers in Africa are women, yet they only have access to 5 per cent of the credit available for the agricultural sector in the continent. Imagine if we did something about that! About getting resources into the productive hands of women who, we know, make different family and community investment decisions with that income! They invest in their children’s education. They invest it in family health. They invest it in different inputs and in the stewardship of the land.

Twenty years ago, the story was one of a transfer of technology and finance from North to South, from global North to global South. This is a very flat Earth now, and investment and technology are flying North to South, South to South, South to North. And this has to be understood and recognised in how we choose to move forward.

What Kind of Growth?

Twenty years ago, it was very much a story of development. Really, the story now is one of growth, but of a choice around what kind of growth. It has to be green growth. It has to be inclusive growth. It has to be sustainable growth. Sustainable development is our goal, achieved through a pathway of growth which is different, is about making choices and about letting people realise opportunities. But each one of those opportunities and each one of those choices is being redefined and reframed by climate change. In fact, climate change is taking away opportunity and choice, especially for the most vulnerable, especially for the poor, especially for the poor living in low-income countries. We’ve calculated again that the two-degree temperature rise which we are trying to manage through the United Nations Framework Convention on Climate Change will take away four to five percentage points of GDP growth for sub-Saharan Africa alone. That’s four to five percentage points of GDP growth that they can ill afford just to give up.

Let me just say a word about the Durban Climate Change Conference, which has just come to a close. It’s a good news–bad news story. The good news is that the multilateral wheels haven’t yet fallen off the bus. We’re still moving. We still have the chance to negotiate a second commitment period for states to meet their Kyoto Protocol pledges on reducing greenhouse gas emissions. We still have a global conversation on adaptation. We created the shell at least of a green climate fund. We did more as well.

The bad news is that we punted, we kicked a lot off down the field for another year. Agreements were deferred. Work has been postponed. Time is just not on our side. We have a process problem. We are stuck in how to manage the planet.

Rio 1992 saw all of this. It’s why we have framework conventions—a Framework Convention on Climate Change, a Global Convention on Biodiversity, a set of Forest Principles—which have produced enormous wisdom, work and progress in the last twenty years. But the speed of that progress is having a hard time keeping up with the vitality of our own unsustainable growth at the moment.

So how do we deal with this problem of managing the planet? The problem of managing the planet accrues at every level of account—at the local level, and at the city level, where 80 per cent of global emissions emerge but where 80 per cent of the innovation and the answers will also emerge. Cities are the crucible of our future innovation, and we are urbanising at a rate that the world has never seen before, particularly in Asia and Africa. The problems of managing the planet, of course, are revealed at the national level and importantly we do not yet have the frameworks for comprehensive, global, coherent plans of action at the international level.

Three Essential Elements

Christiana Figueres, the executive secretary in Durban of the Framework Convention on Climate Change, calls for a business plan for the planet. I agree with her, and at the World Bank Group we think of this in terms of the three elements essential for success in any business plan. We need to understand which data and which evidence we are all using in order to build that business plan. We need to agree on the investment plan that underpins it. And we also need to agree on the knowledge we need to marshal and to move around the world so that everybody can make their contribution to a business plan from which they will all either benefit or suffer.

Data and Evidence

After decades of fiddling and decades of experimenting and decades of talking, it is time that we introduced comprehensive wealth accounting. At Rio+20, we should agree simply to move forward with comprehensive wealth accounting that puts a value on natural capital and puts a value on ecosystem services. Until that zero we put on biodiversity alive is changed, we will never change the data that set the evidence underpinning the kinds of choices and decisions we need to make. In the World Bank Group, the acronym for this is WAVES (Wealth Accounting and Valuation of Ecosystem Services). We’ve already persuaded Botswana and Colombia and Madagascar and the Philippines and Costa Rica to lead the way, actually to start implementing this now. And we hope that by the time of Rio+20 others will have joined and that we can simply see through piloting and through actual implementation how to tweak this, but that we’re no longer debating it. We’re now into the process of just doing it.

Investment

Low-income countries desperately need diverse investment flows in order to be able to adapt to climate change and to build the basis for growth going forward, a greener kind of growth. Middle-income countries need to shift their growth patterns now in order to be able make sure that the growth they are enjoying is inclusive. And the flat growth of the OECD and others needs to be retrofitted. The economies need to be retrofitted so that these countries can still be places of innovation and places of ideas and places of freedom of expression really to debate how we move forward.

Knowledge

After twenty years, we in the World Bank Group have put a value on and recognise the need for open data. We recognise the need for transparency. We’ve seen how much it has benefited our own work, and we believe in the democratisation of development.

Acting Courageously, Acting Collectively

So we have seen in the last twenty years that it is possible to reduce poverty. It is possible to restore ecosystems. It is possible to generate extraordinary growth. We now need to make that growth sustainable, and we now need to be able to do all three things at the same time: reduce poverty, protect and restore ecosystems, and produce a kind of growth which allows everybody to enjoy the benefits of that.

When I was in Rio in 1992, then just an activist with a non-governmental organisation, I met a woman who gave me very good advice. She said to me: “Rachel, as you build your career and as you build your family, you will always be faced with choices, a fork in the road. Let me tell you that when you face that choice always choose to do the courageous thing.” We, as a global community, need to do the courageous thing in Rio 2012 and start moving some of this to collective action and put in place a business plan for the planet that is investible and that is doable soon.