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European Commission

MEMO

Brussels, 18 June 2012

Questions and answers on Rio+20

What is being discussed at Rio+20?

Twenty years after the original earth summit, the UN decided the theme this time around would be two-fold:

1) the green economy in the context of sustainable development and poverty eradication

2) the global governance for sustainable development

What has happened since 1992 and the first Earth Summit in Rio?

We have made quite some progress since 1992. Over the past decade, 65% of global growth has been in developing countries and they now account for 35% of global GDP compared with 18% in 1992. However, it is clear more still needs to be done. Millions are still hungry every day. If we carry on using resources at the current rate, by 2050 we will need the equivalent of more than two planets to sustain us, and the aspirations of many for a better quality of life will not be reached.

What is at stake if we don´t reach an ambitious agreement in Rio?

Scientists warn us that in the future, two major challenges could bring us to a global tipping point: the rise in population growth and the increasing rate in our production and consumption patterns. By 2050 the world population is estimated to reach 9 billion, and by 2020, 3 billion people could be lifted out from poverty. This increase in population and consumption will further increase the pressure on already diminishing resources and our natural capital.

Unsustainable economic growth has increased the stress on the earth's limited natural resources and on the carrying capacity of ecosystems, with 60% of the world's natural resources already being used unsustainably or at their limit. Many environmental problems have not been solved and have become more acute, and economic, social and environmental problems are closely linked.

Unless we manage our natural assets and resources in a more sustainable manner, our economies and environment will suffer and we will not be able to alleviate poverty and achieve more equity. The poorest in our societies will suffer most if we continue using our resources unsustainably as their lives and livelihoods depend very directly on water, land, seas, forests and soil. There are new and emerging challenges that pose a serious threat to sustainable development – from climate change and increasing water scarcity to low resilience to natural disasters and biodiversity and ecosystem loss.

Creating a green, circular economy is the only way to tackle these challenges.

What is a green economy?

A green economy is one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. Growth in a green economy is driven by investments that reduce pressures on the environment and the services it provides us, and at the same time enhancing energy and resource efficiency.

Why is the EU arguing for a green economy?

The green economy is a means to sustainable development; a strategy to get prosperity for people and the planet, today and tomorrow. There can be no sustainable development without social equity; no growth without proper management of our diminishing natural resources that our economies depend on. We need sustainable development to achieve prosperity for many instead of misery for all.

Some fear that the green economy is an imposition by developed countries to hamper growth in developing countries. This could not be further from the truth. The green economy is our collective survival strategy, because we all depend on natural resources for our general wellbeing as well as for continued economic growth.

Throughout the previous century, the price of key resources fell quite steadily. This came to an abrupt end in the first years of this century, and those prices are still climbing. This is the case around the globe. Forward-thinking companies already understand that resource prices are unlikely to fall, and that producing goods and services with fewer inputs makes sense in order to remain competitive. Going green means turning challenges like resource constraints into opportunities. Going green means changing our focus from short-term to long-term solutions.

How can we achieve a green economy?

We will need to change the way we grow, the way we use key resources such as water, land and soil in order not to run out and leave a growing population hungry and jobless. We need to create a circular structure, where nothing is wasted and growth is driven by reducing pressures on the environment; where jobs are created through measures that fill our stomachs and protect the environment, simultaneously. In order for things to remain the same, we must change.

What are the top priorities for the EU at Rio +20?

We want to start something irreversible; something that has real impact on people's lives. At the end of the day, this is a conference about people; about us, about our future.

Recognising the green economy as a vehicle to sustainable development would be an important step in this process. Agreeing on the crucial need to turn the world away from unsustainable consumption and production patters would make it possible to agree on key areas for sustainable development. The EU is focusing on five priority areas, essential for our future, and what we refer to as 'pillars of life': sustainable energy for everyone, water efficiency and access to clean water for all, halting the degradation of soil and ecosystems, preservation and sustainable use of the resources of the oceans, and moving to more resource-efficient and zero waste economy. These goals are essential for sustainable growth and inextricably linked to the issues of food security, poverty reduction and social development.

Agreeing on a process is important but not enough. This should be underpinned by concrete global targets, such as significantly reducing the world’s food waste and marine litter. Finally, we would like to see a process created in Rio that is irreversible and can measure progress. We need to widen our scope for measuring wealth and prosperity that looks beyond GDP, including taking into account the value of natural capital. We would like to see an agreement that all large listed companies should take into account natural capital accounting mechanisms in their statistics – either you comply with environmental standards, or you explain why you don’t.

What advantages would a green economy bring?

The green economy is not only a prerequisite for continued sustainable growth. It also carries with it huge business potential. By 2050, the global business opportunities dependent on biodiversity and the ecosystem services it underpins could have a value of between $800 and $2300 billion per year. The 'renewables' sector already created 300.000 new jobs over the last 5 years. According to a recent report by the International Labour Organisation, the transformation to a greener economy could generate 15 to 60 million additional jobs globally over the next two decades and lift tens of millions of workers out of poverty.

Some further examples from the EU: Energy efficiency measures, for example, could lead to 2 million jobs in the EU by 2020. Actions such as insulating walls and roofs, energy-efficient windows and efficient boilers could bring more than hundred thousand jobs a year. These figures would be far higher on a global scale. Another example is the jobs created with improved waste management, which would create over 400 000 jobs in the EU by 2020. By recycling 70% of key materials, the EU could create over 560 000 new jobs by 2025.

We cannot speak of a green economy without getting business onboard. The more clear and predictable conditions we set in Rio, the better the chance the business and finance sector will make investments that move the world in a sustainable direction. We need consistency and patience, in order to change the way we consume and produce

What benefit does Green Economy bring to the poor and developing countries?

Between 70 and 85% of opportunities to boost resource productivity are estimated to be in developing countries. Countries that learn to use their natural capital in a smart and sustainable way will be the winners of tomorrow.

Developing economies have an opportunity to leapfrog to efficient technologies and systems that will permit them to exploit their resources, from forests and biodiversity to land and minerals, in ways that are sustainable and capable of supporting increases in consumption. Examples include local renewable energy generation to water metering, and from satellite monitoring of forests and land-use to development of farmer's skills in soil maintenance.

What is the EU´s view on global environmental governance and the institutional framework?

If an ambitious outcome were to be produced at Rio+20, with agreement on increasing the productivity of sustainable agriculture around the world, for example, or on improving water efficiency, the world would still need to be able to monitor progress towards those goals. This is why the EU has argued for the need to upgrade the international framework for sustainable development.

If the United Nations Environment Programme (UNEP) were to be transformed into a specialized Agency, it could serve as a stronger platform that can set the global environment agenda. This would mean a stronger mandate and universal membership – putting the world on a faster track to change.

What is EU doing in order to contribute to sustainable development?

At EU level: The Europe 2020 Strategy to transform the EU into a knowledge-based, resource-efficient, low-carbon economy, providing a sustainable response to the challenges that we will face until 2050. One of the concrete actions under this 2020 Strategy is making the transition towards a more resource efficient Europe and we have presented a roadmap on who to get there. The have agreed on binding targets for climate and energy, put in place an Emissions Trading System, and has one of the world´s most sophisticated environmental legislation including management of our biodiversity and ecosystems, air quality, water and waste. Implementation of this environmental legislation has boosted the growth of EU eco-industries, which now account for over 2.5% of EU GDP and provide jobs to over 3.4 million people.

Globally: With €53 billion of development aid in 2011, the European Union together with its 27 Member States remains the world biggest donor, providing more than half of global official aid. EU Official Development Aid has reached 0.42% of EU GNI, which exceeds the efforts of other major donors. EU aid has pulled millions of people out of poverty and saved countless lives over the last ten years. Despite the financial crisis, the EU ministers recently reaffirmed its commitment of 0.7% of EU GNI for official development aid.

What has the EU achieved since the Johannesburg commitments in 2002?

Progress can be seen in areas such as poverty eradication, access to clean drinking water, access to energy services in places like Africa and ACP, the sustainable management of natural resources, trade and globalization, and more coherent policies at home.

The European Water Initiative (EUWI) was launched by the EU member states and the European Commission in 2002, and it has helped to improve access to water across the world and to put water at the heart of development policies. The initiative involves the EU and partner regions (donors, governments, civil society and the private sector). Since its establishment in 2002 it has had a significant impact in the water sector and helped establish the EU-ACP Water Facility, providing €700 million specifically to secure access to water and provide basic sanitation for some of the poorest people in Africa, the Caribbean and the Pacific. The facility has helped an estimated 17.8 million people to access clean water so far.

The EU also launched an Energy Initiative for Poverty Eradication and Sustainable Development (EUEI) at Johannesburg. The goal was to provide the access to energy necessary to achieve the Millennium Development Goals, including halving the number of people in extreme poverty by the year 2015. It is also part of the EU response to achieve universal access by 2030 in the context of Sustainable Energy for All. The EUEI helps develop financial instruments to boost public-private partnerships that invest in clean technologies.

The EU Africa Infrastructure Trust Fund was launched in 2006, together with the European Investment Bank and Member States, to reinforce regional integration by strengthening large continental infrastructure networks. The reliability of the energy supply in Africa is low, creating a huge barrier to people and business productivity. The Trust Fund helps by combining loans from the EU and Member States with the lending capacity of banks to support local infrastructure projects, and it has now approved 57 grants worth almost €300 million. The Caprivi Interconnector project is a good example – a 300 megawatt high-voltage, direct-current transmission connection stretching for 950 kilometers, boosting electricity transmission between Zambia, Namibia and South Africa and delivering reliable and cheaper access to electricity, crucial to development in Southern Africa.

The ACP-EU Energy Facility was established in 2005 to support projects improving poor people's access to sustainable and affordable energy in rural areas. Through the program, the EU has now been involved with more than 140 projects, bringing energy services to almost 13 million people. A powerful example of this project is the PAMENU project in Uganda. With a small budget, the project extended modern energy services to more than a million people. 200,000 households were provided with improved cooking stoves, small hydro power plants were built to supply electricity to 3 communities and 140 instructors in solar technologies were trained.

Who will pay in this time of crisis to achieve the development goals?

Rich countries will help with financial aid, but they will need an engagement from developing countries to take steps towards the green economy. Countries are primarily responsible for their own development. Without this acknowledgement, there is a risk that Official Aid Assistance does not fall on fertile ground, and concrete changes will not happen. There is now an urgent need to leverage other sources of finance and provide framework conditions for private investment, because the opportunities are simply too big to be taken forward by Official Aid alone. To give one example, a recent McKinsey report on resources estimates productivity gains of $280 billion by 2030, mainly in developing countries, as a result of better irrigation techniques and cutting water leakages. That dwarfs the entire EU budget for development.

Geopolitical forces have shifted significantly over the past twenty years and assistance mechanisms must reflect the new reality. Emerging economies such as China, India, Brazil and Russia now have considerable economic influence. At the same time, some developing countries are lagging behind in development.

Which are the main means of implementation proposed for Rio +20?

The Commission would like to see countries identify steps to be taken in their transition to a green economy in their economic and development strategies. Domestic revenue and private investment are essential to financing the green transition, complemented by foreign direct investment, remittances and capital flows including from International Financial Institutions and development banks. A favourable trade and investment environment will be needed to maximize the resources available, with appropriate tax systems, incentives through public procurement, a transparent and stable regulatory framework, and the phasing out of environmental harmful subsidies.

It is clear change will not happen without everyone on board. Not only politicians will need to be convinced – we also need businesses, civil society and individuals involved. The private sector will be the driving force in the transition to a global green economy. Governments will stimulate investment by providing the right institutional and regulatory environment and investing in human development. Through trade in sustainable products, investment in cleaner technology, resource-efficient management, good working conditions, research and innovation, the private sector will play a key role in promoting sustainable consumption and production.

Trade policy can also make an important contribution to sustainable growth. Countries should work to liberalise trade in environmentally sustainable goods and services, with flexibility for least developed countries.

How can developing countries contribute, as they have fewer financial resources?

A green economy doesn't mean bigger costs – it means new opportunities. It is actually easier for developing countries to make the transition towards a green economy, as they are not yet locked into unsustainable patterns. Developed countries can help by ensuring that developing countries avoid some of the mistakes that we made. This is especially important in areas like transport, manufacturing and heavy industry, but it affects all of society, from infrastructural and urban development to consumption patterns and education.

The negotiations in Rio have so far shown little progress. Will we get there in only a few days time?

Indeed, not enough progress has been made until now, but there is still time to improve the chances of positive outcomes if there will be willingness from all sides). The EU is certainly willing to engage and will work hard until the very end for the conference to really address the interlinked challenges ahead of humanity and decide on concrete ways to address them.

Why are the negotiations not progressing?

While there is a general realisation that the world is on an unsustainable path, some actors are nervous about what they see as the implications of greening economies. However, greening the economy is not an agenda imposed by developed countries on developing ones as a means of hampering their growth. Quite the opposite, the green economy is a meant to ensure that we can continue to develop and grow also in the future. The green economy is a way of ensuring we right kind of growth; the sort of growth that reduces the pressures on the environment, while simultaneously creating jobs and feeding people.


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