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Inclusive Green Economy Given Go Ahead by Heads of State at Rio+20

Green Economy

Rio de Janeiro – The Rio+20 Earth Summit ended on June 22 with a range of outcomes which, if embraced over the coming months and years, offer the opportunity to catalyze pathways towards a more sustainable 21st century.

Heads of State and more than 190 nations gave the green light to a Green Economy in the context of sustainable development and poverty eradication.

Nations agreed that such a transition could be ‘an important tool’ when supported by policies that encourage decent employment, social welfare and inclusion, and the maintenance of the Earth’s ecosystems from forests to freshwaters.

The decision supports nations wishing to forge ahead with a green economy transition while providing developing economies with the opportunity for access to international support in terms of finance and capacity building.

Meanwhile, the Summit also gave the go-ahead to a set of Sustainable Development Goals (SDGs) to bring all nations – rich and poor – into cooperative target setting across a range of challenges from water and land up to food waste around the globe.

The SDGs are expected to compliment the Millennium Development Goals (MDGs) after 2015: they reflect the reality that a transition to an inclusive green economy and the realization of a sustainable century needs to also include the footprints of developed nations as well as developing ones as they aim to eradicate poverty and transit towards a sustainable path.

Other potentially positive outcomes include a ten-year framework on sustainable consumption and production with a group of companies announcing initiatives to move forward, including in the area of sustainable government procurement of goods and services.

There was also a decision to work towards a new global indicator of wealth that goes beyond the narrowness of GDP, and encouragement for governments to push forward on requiring companies to report their environmental, social and governance footprints.

After some four decades of discussion and calls for the environment programme of the UN to be strengthened, governments agreed on an upgrading of the United Nations Environment Programme (UNEP).

Meanwhile, the World Congress on Justice, Governance, and Law for Environmental Sustainability, supported by the Brazilian Supreme Court and UNEP among others, committed to use international and national laws to advance sustainability, human and environmental rights and the implementation of environmental treaties.

The Congress, involving some 200 delegates including senior judges, attorney-generals, chief prosecutors and senior auditors, called on governments to back an Institutional Framework for the Advancement of Justice, Governance and Law for Environmental Sustainability in the 21st Century backed by UNEP.

Achim Steiner, UN Under-Secretary General and UN Environment Programme (UNEP) Executive Director, said, “”World leaders and governments have today agreed that a transition to a Green Economy-backed by strong social provisions-offers a key pathway towards a sustainable 21st century.”

“Several other important agreements were also forged that can assist in enabling that transition, ranging from assessing the potential of a new indicator of wealth and human progress beyond the narrowness of GDP to increasing the level of accountability and transparency of companies in respect to their environmental, social and governance footprints,”” he added.

“The outcome of Rio+20 will disappoint and frustrate many, given the science, the day-to-day reality of often simply surviving as individuals and as families, the analysis of where development is currently heading for seven billion people and the inordinate opportunity for a different trajectory. However, if nations, companies and civil society can move forward on the positive elements of the Summit’s outcome, it may assist in one day realizing The Future We Want,”” said Mr. Steiner.

“Meanwhile, after almost four decades of discussion, and for some disappointment, governments have decided to upgrade UNEP, including in key areas such as universal membership and improved financial resources – this is welcome as one important way for improving the authority, the influence and the impact of the world’s minister responsible for the environment in terms of moving development onto a more sustainable track,”” said Mr. Steiner.

Beyond GDP

Rio+20 addressed growing concern that Gross Domestic Product (GDP) may have outlived its usefulness in a world where natural resource scarcity, pollution and social exclusion are also becoming drivers of whether a nation’s wealth is truly going up or running down.

The Summit’s outcome document requests the UN Statistical Commission to work with other UN bodies including UNEP and other organizations to work towards identifying new options for measuring progress.

The Commission’s work will draw on a range of assessments and pilot projects on going across the globe.

  • Inclusive Wealth, which is based on the World Bank’s Adjusted Net Saving indicator, is developing a more inclusive indicator of national wealth, covering not only produced capital, human capital, and natural capital, but also critical ecosystems – and through the UN, a new Systems of Environmental and Economic Accounts has been proposed for use by member states.

UNEP and the UN University‘s International Human Development Programme at Rio+20 presented findings from an Inclusive Wealth Index (IWI) looking at several countries including Brazil.

Other pathways towards a new indicator include:

  • The EU effort to go “Beyond GDP” – launched in November 2007, it aims to come up with a broader set of macro-level indexes other than GDP and provide information on how economic growth affects its own foundation (stock of all assets)
  • The accounting of Environmental Goods and Services Sector (EGSS) in select countries. OECD and Eurostat have pioneered the development of a statistical framework for measuring the EGSS.

Consumption and Production

Another potentially significant step forward was the adoption of a 10-year framework on sustainable consumption and production covering several sectors ranging from tourism to government procurement.

During Rio+20, over 30 governments and institutions including Brazil, Denmark, Switzerland and UNEP announced a new global International Sustainable Public Procurement Initiative (SPPI) aimed at scaling-up the level of public spending flowing into goods and services that maximize environmental and social benefits.

Studies indicate that sustainable public procurement, which represents between 15 and 25 per cent of GDP, offers a tremendous opportunity for green innovation and sustainability.

Examples from around the world show that sustainable public procurement has the potential to transform markets, boost the competitiveness of eco industries, save money, conserve natural resources and foster job creation. 

  • Across the OECD group of countries, public procurement represents close to 20 per cent of GDP (over US $ 4,700 billion annually), while in developing countries the proportion can be slightly higher.
  • In India, for example, government procurement is worth about US $ 300 billion and is expected to grow by more than 10 per cent annually in the coming years.
  • Japan’s Green Purchasing Policy has contributed to the growth of the country’s eco-industries, estimated to be worth about € 430 billion in 2010.
  • Europe could save up to 64 per cent of energy – or 38 TWh of electricity – by replacing street lights with smarter lighting solutions.
  • In Brazil, the Foundation for Education Development succeeded in saving 8,800 m3 of water, 1,750 tonnes of waste and 250 kg of organohalogen compounds, providing the equivalent of one month’s economic activity to 454 waste pickers, through its decision to replace regular notebooks with ones made of recycled paper in 2010. 

Sustainability Reporting

An estimated 25 per cent of the 20,000 companies tracked by Bloomberg are reporting their environmental, social and governance footprints-but 75 per cent are not. Such in-depth data offers the opportunity for pension funds to invest in companies with a long-term perspective of profits through sustainability reporting while assisting governments in measuring the contribution of multi-nationals towards national sustainability goals and progress beyond GDP.

On 20 June, several countries including Brazil, Denmark, France and South Africa-several of whom already have stock exchanges requiring better reporting- announced they would move forward on the issue with support from UNEP and the Global Reporting Initiative (GRI).

UNEP Upgrade

Rio+20 also agreed to ‘upgrade’ UNEP in order to strengthen the environmental pillar of sustainable development.

The decisions include addressing the limited membership of UNEP, which currently stands at 58 member states, into a body with universal membership of its Governing Council while increasing UNEP’s financial resources by an increased allocation from the UN’s regular budget.

The Rio+20 outcome also calls on the next General Assembly of the UN to strengthen and upgrade UNEP’s ability to assist member states at the regional and national level and to build on its science-policy interface including through UNEP’s flagship Global Environment Outlook process.

As part of this intensifying global relationship between scientists and governments, theInternational Council for Science led by Nobel Prize winner Yuan-Tseh Lee with UNEP and the UN Educational, Scientific and Cultural Organization also launched the ‘Future Earth’ initiative.

Ways to advance the participation of civil society including cities is also envisaged as part of the strengthening and upgrading process.

Governments, civil society and the private sector have been preparing for the UN Conference on Sustainable Development (Rio+20) for around two years.

Throughout the preparations and during Rio+20, the UN, including UNEP, have been providing assessments, studies and policy pathways aimed at supporting member states on the science and the options for transformational change.

Source: UNEP.