European Commissioner for Environment
Rio+20 - Making sure the future we want is the future we get
Workshop on Rio+20 high level conference – debate on green economy
Rio de Janeiro, 16 March 2012
Ladies and Gentlemen,
I remember staying in Ethiopia not long ago, and seeing every morning the women leaving the city, on foot. They would return hours later carrying whatever wood they had found to cook with. Every day they were walking further and further, walking for many hours, and bringing back less wood.
There are some who presume that when we talk about green economy, we are talking about an agenda set by rich countries that have the luxury to consider the environment because we have high living standards. We have central heating and cars, and do not need to walk for hours to get wood. They presume that the focus on green economy will push forward the environmental pillar of sustainable development to the detriment of the economic and social pillars. They presume that taking care of the environment will compromise the goals of poverty alleviation and eradication.
They could not be more wrong. The green economy is just as much about economic growth, poverty eradication and social justice as it is about the environment. As Achim Steiner said recently (1)“Green economy is not an alternative to sustainable development, but a means of implementing it”.
Those Ethiopian women were depending on a renewable, but dwindling resource – timber. A resource that needs to be managed. A resource that has pressures on it from many sources of demand, local and international. A resource that is not always priced in a way that reflects it's real value. A resource that has complicated inter-relations with many other resources, such as land, water and biodiversity, and a resource which has wider implications for our climate.
The economic growth and development opportunities of the poorest nations depend on how they manage their forests, their water, their land-use, their energy needs and their biodiversity.
So don't be fooled into thinking that green economy is just about the green, it is in the first place about the economy. In the European Union we have been developing a green economy approach for a couple of years, but we don't call it green economy. We call it resource efficiency. The reasons we are developing this approach are just as legitimate and applicable to Ethiopia, China or Polynesia, as they are to Germany and Sweden.
The main reason we are taking this road is that we don't actually have a choice. Global megatrends make resource efficient growth a necessity - in fact an inevitability - for rich countries and poor countries; for resource-rich countries and for resource-poor countries.
We all know that we will share our small planet with 9 billion people by 2050. Even more significantly, it is predicted that there will already be 3 billion extra middle class consumers by 2030. That is great news. Great news for those 3 billion whose living standards will rise, and great news for the businesses that will thrive on providing for their demands. But those demands will also put immense strain on many resources. And that pressure will be the most significant limiting factor on our ability to grow and provide higher living standards.
We will need three times more resources – 140 billion tons annually2 – by 2050. The demand for food, feed and fibre is projected to increase by 70%. Yet already today 60% of our ecosystems underpinning these resources are degraded. Without efficiency gains, by 2030, we will need 40% more water than we can access.
The scale and effects of increases in consumption will be hundreds of times greater than the early industrializations in Europe. The population of China today is one-hundred times greater than that of the United Kingdom during its industrial revolution, and China will achieve growth levels in 10 years that took the UK one-hundred years. So we are talking about a resource shock that will be 1000 times greater3... And that is just China.
The resource scarcities and pressures that will result from the consumption of these massive middle classes will be a constraint on growth for us all. Countries at all stages of development will have to prepare for this.
No country should assume that it can replicate the resource-intensive growth in the 20th century. That industrialisation was based on two centuries of innovation but also availability of cheap resources. And those days are over. Whatever one may think about the equity of resource flows in the past, that is the reality today, and will be the reality tomorrow. Commodity and resource prices started to rise at the beginning of this century and they will continue to rise.
So we have to realise that "Business as usual" is simply not an option. And at Rio we must decide how we are together to lay the path to a global transformation to a green economy. We have to put into place the economic and market conditions that can facilitate the economic transformation and mobilize the necessary resources for this. Together we can ensure that challenge becomes and opportunity.
The question is not "how do we get a green economy and provide flanking measures to deal with poverty and social equity?" The green economy is itself central to delivering sustainable growth, social equity and poverty eradication. There will be no jobs if there is no growth. But there will be no growth if it is not green growth. There will be no green growth unless we take care of our resources. It comes down to the basic economics of maintaining one's natural capital.
Of course the policy responses will be different in countries at different stages of development and with different resource mixes. Some of the response will happen automatically; just as higher labour prices drove labour productivity increases, so higher resource prices will drive higher resource productivity. But just waiting for that market-driven adjustment will cause much pain, dislocation and poverty, and for as long as prices of resources do not reflect their real value, the effects will still not be enough.
So the responsibility of policy makers in all countries is to prepare for that transition.
In Europe we are taking serious decisions to structurally adjust our production and consumption behaviour. We are integrating resource efficiency into our mainstream policies by greening our agriculture, by eliminating environmentally harmful subsidies, by shifting taxes from labour to pollution and resource use, and by encouraging industry to take a longer-term view and to invest in technologies that will reduce our impact on resources. We are investing in helping our people get new skills and are determined to drive out youth unemployment and poverty. Yes, we know poverty in Europe too. And we are only at the start. Resource efficiency, or green economy if you want, is now at the heart of the European Union's socio-economic policy agenda.
For the economies of Europe, which import more than half of their raw materials, this is essential. And it will be a vast challenge as we have spent two centuries investing in resource intensive systems. We have gotten pretty used to our resource-intensive lifestyles and we are locked-in to resource intensive infrastructure and capital.
For developing economies, the opportunity will be to leapfrog to efficient technologies and systems; 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 vast increases in consumption. From 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. There are great opportunities. Today it takes 6 tons of resources to produce $1000 of value in Africa, compared to 0.8 tons in Western Europe, or 3.8 tons in Latin America. For many African countries the challenge will be to use rich resource endowments responsibly to fund human capacity and infrastructure development needed for sustainable development.
For developed and developing countries there will be certain principles that will be common. I would say that there are three essential elements to any green economy strategy, wherever in the world:
First we must recognize that the linkages and trade-offs between the resources we use to provide for our needs are so complex that we must use market based instruments. We must try to ensure that prices better reflect the real value of resources and their externalities, so that they can be allocated properly.
Second, we must understand that it is only in partnership with the private sector that we can achieve decoupling of economic growth from resource use. Such a major adjustment of our economic direction will require major innovation breakthroughs and we must help industry to make the improvements in resource productivity.
Finally, it is by providing clear signals and predictability to industry in terms of regulation and non-regulatory approaches, that we can bring forward the right investment decisions to set us on a path to green growth. Industry must have a reasonable perspective of return on investment.
I am European Commissioner for Environment, but I have found myself increasingly arguing that the green economy makes business sense. Increasing resource productivity, reducing waste and energy consumption appeal to every company as they mean reduced costs and increased competitiveness.
Sustainable resource use has also broader and longer-term implications for the resilience of the economy, security of supply, stability and reduced resource price volatility, preventing resource bottlenecks and risks from systemic collapse of certain natural systems.
It can also open new markets and benefits from launching innovative technologies or business models. For instance, it has been estimated that by 2050, the global business opportunities dependent on biodiversity and the ecosystem services it underpins, could have a value of between $800-2.300 billion per year.
Let me mention one (perhaps controversial) example here in Brazil. When the EU decided to oblige a blending of biofuels in transport fuels, we also set the so-called sustainability criteria biofuels had to meet before they could be counted towards the target. This measure, even though controversial at the time, has created a very large market for sustainably produced biofuels. Forward-looking producers here in Brazil as well as in other countries have made a lot of profit from this measure. But it has also spurred the spread of what can be called green technology.
Another good example is the strict application of our European waste legislation where the separation of waste and its careful management are creating thousands of jobs, whilst providing us with valuable recycled raw materials … all from treating waste as a resource instead of as a problem.
Brazil has taken on perhaps the greatest challenge in modern day international policy making in the organization of Rio+20. With less than 100 days until the Conference we're entering the final straight to the finish line.
Therefore time is precious and we should all be clear about what we want out of the Conference.
First, as I have said already, we need to consider how the Green Economy can address all three dimensions of sustainable development - social, economic and environmental.
Second, we need to establish global objectives and targets to drive the overall process and transformation and focus our efforts towards sustainability. I believe we are in a position to develop global targets that can drive and accelerate progress: for example, on sustainable energy, for which we already have targets proposed by the UN Secretary General, on improved water efficiency, on stopping land degradation and loss of ecosystems, on oceans, and on reducing waste and moving more to a recycling society. These are the five areas on which European Union is calling for focus and clear operational targets.
Third, we need to ensure tangible outcomes. As we all know, ambiguous and unfocused statements and agreements will not suffice. So we must set out a clear agenda for the future. Rio+20 must enable the start of a world-wide transition towards a greener and more inclusive economy and to a sustainable future. To achieve this, tangible actions and commitments will have to be agreed and upheld by governments. The biggest challenge, for us governments and policy makers, will be to demonstrate our real commitment to engage in a new, sustainable economic model based on a balanced integration of economic, social and environmental objectives. This will be the only way to convince civil society to act and engage in this new path; without civil society, this much-needed transition will simply not happen. This will require action at all levels - international, national and regional.
Finally, countries need to have the means and capacity to implement actions on the ground. Here, development co-operation and assistance can play an important role in catalysing investment and strengthening capacities, in particular in least developed countries. But the bulk of resources for this transition need to be mobilised from other public and private sources, nationally and also internationally. And all our international institutions, existing or new, should be equipped for ensuring this promise of sustainable development can be delivered.
Ladies and Gentlemen,
Be assured that the European Union is open and willing to engage in discussions with all countries and partners on how to further shape an agenda at Rio for securing ambitious, concrete and operational outcome for the generations to come. I am here this week to see with our Brazilian friends - who have the great privilege but even greater responsibility of being hosts - how we can together make Rio 20+ as a success. Some years ago some were questioning if multilateralism can work. Some still do. But we have seen over the past year and a half, in Nagoya negotiations on Biodiversity and in Durban on climate change, that if we join forces we can make the world a better place. I hope that building on this platform of trust, we can together make sure that we improve the lives of billions of people around the globe.
Rio must not become a zero-sum game, with each country and region looking only after narrowly perceived interests. If that happens we will all get zero for everyone. At the Rio conference we must put in place operational targets and concrete actions within agreed timelines to tackle the resource pressures that will be the most critical in the coming years. We must build on the review of Millennium Development Goals in doing so and develop wider goals for countries at every level of development to deliver on.
As I hope my example of Ethiopian women illustrated, it is the poorest in our societies that will suffer if we do not take care of resource scarcities as our economies develop, as their lives and livelihoods depend so very directly on water, land, seas, forests and soil. As Mahatma Ghandi said “there is enough in the world for everyone’s need, but not for everyone’s greed”.
At Asia Pacific conference on resource efficiency in late 2011.
UNEP Resource Panel
Based on McKinsey figures.