FROM now on, it’s every nation for itself. UN environmental diplomacy hit the buffers here in Rio de Janeiro. In future, green action will come about through economic self-interest or not at all.
An environmental crusade that began 20 years ago in this same city with high hopes that governments could join forces to rescue the planet and develop sustainably has come to an end with a toothless declaration that commits nobody to anything.
The Rio+20 Earth Summit was “more of a whimper than a roar”, said Manish Bapna, president of the World Resources Institute, an environmental NGO. “Nothing more than a political charade,” declared aid agency CARE International.
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Coming six months after climate talks in Durban, South Africa, had postponed further action on greenhouse gas emissions till 2020, there is little left of hopes that ministerial agreements at UN meetings can curb environmental destruction. “We can’t legislate sustainable development in the current state of international relations,” said Achim Steiner, director of the UN Environment Programme (UNEP).
Despairing of diplomacy, Steiner and others were instead talking up the potential of a new brand of economics – “green economics” – to solve the world’s problems. In practical terms that means two things. First, encouraging governments to protect their natural resources out of self-interest, as a way of ensuring future economic development. And second, enticing global corporations to take centre stage through a welter of public-private partnerships.
Green economics, the theory goes, will work by quantifying nature and giving it a cash value. As Steiner put it: “Factoring natural capital into the bottom line will bring the real wealth of the planet from the invisible to the visible spectrum.” The hope is that, faced with the potential for monetary loss as a result of environmental degradation, decision-makers will feel compelled to act.
There were glimpses in Rio of how this might happen. Business, it is hoped, will provide most of the investment. As a model for his vision of the future, UN secretary-general Ban Ki-moon has installed industrialists at the heart of his global plan of action to bring electricity and clean cooking fuel to the billions lacking them. The project’s co-chair is Chad Holliday, chairman of the Bank of America and former president of DuPont. In Rio, he said he would unlock private investment to create “the greatest public-private partnership of all time”. “Companies are here because they see opportunities,” he said.
The UK’s deputy prime minister, Nick Clegg, announced that from next year companies listed on the London Stock Exchange would have to publish inventories of their carbon dioxide emissions, so potential investors can factor this in to their decisions. It’s a start, but there’s more to sustainability than carbon emissions. Pavan Sukhdev, former banker and head of UNEP’s Green Economy Initiative, said corporations should also be required to declare other environmental impacts, and account for the natural resources their businesses consume. Governments could then introduce green taxes to encourage efficient use of nature.
There are huge scientific obstacles to making sense of green economics. The metrics are far from straightforward. Natural capital is quite unlike human-made capital, argued Tim Jackson of Surrey University at a side event in Rio. Ecosystems are not like stock in a warehouse. You can’t measure the value a forest carries for nature and humanity just by counting the trees. Nor can you assume that if you keep half the trees, you will retain half of the “services” it supplies – preventing landslides, storing water and capturing and storing CO2, to name but a few. The huge variety of services that a single ecosystem can offer, and the complexity of their interactions, makes it a challenge to put price tags on them.
That has not stopped some from trying. As żěè¶ĚĘÓƵ reported recently, China has developed several schemes for calculating the human and financial value of ecosystems (16 June, p 8). It carries out annual assessments of how much of its GDP is lost to environmental damages, for instance, and pays farmers to restore forests on sloping, landslide-prone land in “ecocompensation” schemes.
In Rio, the World Bank and others unveiled their own methods of measuring the sustainability of economies. Some added social capital, such as how educated and healthy a population is, to the brew of ecosystem measures. UNEP launched its pilot Inclusive Wealth Index, which lumps together the manufactured, natural and human wealth of 20 nations to deduce the sustainability of their growth. This suggests that China badly needs its ecocompensation schemes. Its GDP grew fourfold in the past 20 years but the index estimated that its natural capital declined by 17 per cent in that time. Its “inclusive wealth” has in consequence risen only 42 per cent. Russia, Venezuela, Saudi Arabia, South Africa and Nigeria all showed declining inclusive wealth.
The findings are sometimes perverse, once again highlighting the obstacles green economics will need to overcome. The UNEP measure of natural capital includes minerals and hydrocarbons as well as living things like forests and renewable resources like water. Their value in the index is based on their market value, meaning that as they run out and prices rise, a country’s natural capital appears to grow.
And not everyone is on board. Many environmentalists in Rio were not convinced that an economic approach was the way to go. Mocking the idea, one group put the world’s forests up for sale on eBay. Chee Yoke Ling of the Malaysia-based Third World Network feared the language of green economics was becoming a cover for the corporate takeover of commonly owned natural resources.
But Steiner urged them to embrace the brave new world of nature with a price tag. “The environmental community has been scared of the economy for too long,” he said. “Green economics is the key to governing markets in the name of sustainability.”
“The environmental community has been scared of the economy for too long”
“Environmentalists were urged to embrace the brave new world of nature with a price tag”
The final summit declaration did endorse green economics, but only as an adjunct to economic development. The declaration dropped language requiring corporations to measure the sustainability of their operations, and did not even suggest that governments impose green taxes. Diplomats from developing countries still regard green economics as a rich-world agenda.
Despite this, UN agencies, international bodies like the World Bank, and western corporations and governments all appeared convinced here that green economics was the only way to achieve the goals of environmental sustainability and social progress. Gone are the days of grand declarations orchestrated by the UN to save the world. The feeling was that businesses and national interests are the key levers.
While the bland words of the declaration are unlikely to be remembered as world-changers, the discussions in side events about natural capital accounting and green economics may ultimately be seen “as the moment when we changed the way we account for nature”, says Rachel Kyte, vice-president of sustainability for the World Bank. If not, as Steiner put it: “We will meet here again at Rio+40, even more culpable.”
