Institutional frameworks required to underpin the transition to a Green economy from the perspective of the private sector and the mutual roles of government and civil society.
I don’t believe we can discuss the green economy in the context of sustainable development and poverty eradication without starting at the financial crisis as that is framing our present political and economic landscape.
The bipartisan Levin–Coburn Report issued by the US Senate found:
“that the financial crisis was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street”
As the economy tanked in 2009, the top 25 hedge fund managers collectively earned $25.3 billion.
This was at a time in the US where a record 2.8 million properties with a mortgage got a foreclosure notice.
Regulation had been stripped away….the results we have all lived through, the lives destroyed, the families impact on.
This cannot happen with the environment.
Business and traditional economic leaders had taken it as an article of faith that the model of capitalism they followed would allow for – and encourage – an ever-expanding cycle of production and consumption.
The current global economic system and its governance have not been effective in addressing the emerging problems that countries are starting to face.
Instead, the drivers of the global economy amplify and exacerbate them.
Ours – future generations will surely decide – is the irresponsible generation. They will look upon 1992 to 2012 as a lost twenty years, during which we could have laid the foundations for a more sustainable world. Instead we have increased unsustainable consumption patterns in developed countries and exported them to developing ones, with increasingly negative and destructive impacts on the world’s environment and on poor people. We knew the problems, we knew most of the answers - but we failed to scale them up to deliver what was needed.
Rio+20 must ensure we take a different economic path. And while the term 'green economy' has become controversial in some circles, it at last puts economic affairs on the table. I believe we should see it as a just transition to one that puts sustainability and people, equity and fairness at its core.
As populations rise and expectations grow or at least remain the same, we are going to face a series of ecological crises in the years to come.
There are clear parallels between the ecological and financial crises. Banks and financial institutions privatized gains and socialized losses. We are doing the same with the planet's natural capital. Our present lifestyles are drawing it down at irreplaceable rates from other parts of the world and from future generations.
Jakob Rockstrom has suggested that we have nine limits to growth.
Two weeks ago 3000 of the top world’s scientists met in London at the Planet Under Pressure Conference and they said:
“Humanity’s impact on the Earth system has become comparable to planetary-scale geological processes such as ice ages. Consensus is growing that we have driven the planet into a new epoch, the Anthropocene, in which many Earth-system processes and the living fabric of ecosystems are now dominated by human activities. This recognition has led researchers to take the first step to identify planetary and regional thresholds and boundaries that, if crossed, could generate unacceptable environmental and social change.
To balance the Planetary Boundaries Kate Raworth of Oxfam has suggested social foundations on food, water, jobs. These help tell us what kind of society we want to create and between the planetary boundaries and the social foundation is the safe and just space for humanity.
The challenge for industry, civil society and governments is defining that within the context not of one country but global.
The fundamental belief of the ‘green economy’ model is that it is possible to increase economic prosperity, increase the number of decent jobs, reduce poverty and build healthy, active communities by beginning a proactive, environmentally informed economic transition.
If that is obtained, the green economy model holds the potential to bring together the simultaneous needs for economic security and environmental protection, and to integrate the complex array of reforms in policy initiatives, regulatory actions, voluntary business standards and personal lifestyle behaviours necessary to achieve immediate-, mid-, and long-range transition to a sustainable global system.
Rio should recommend I have identified the following
- Reforming costly and harmful subsidies in all sectors (of ‘harmful’ subsidies on fossil fuels
- Using financial incentives, taxes and tradable permits to promote green investment and innovation
- Promote financing required for a just and fair green economic transition,
- Through a possible Earth Bond, new investment in clean energy and other sustainable development areas.
- Agree to introduce a financial transaction tax (FTT).
- Call for the amending of the Sovereign Wealth Funds Santiago Principles to include sustainable development principles
- Promote the support the development of micro finance, micro credit and to serve those people at the base of the pyramid
- Support the development of comprehensive wealth accounting. It has been focused on three asset areas: Producing capital; Natural capital; and Human and social capital.
- A UN Sustainable Development Council
- Agree to negotiate a convention on Corporate Social Responsibility and Accountability:
As I am sure you know AVIVA, HSBC and other banks and insurance companies and pension funds worth $2 billion are calling for a convention on corporate sustainability out of Rio and this should be supported.
As the UN Secretary General has called for a revolution I would like to echo that call what we need is a fundamental revolution, not in 40 years’ time, nor in only one country, but in the next ten years and across the globe.
As Senator Robert Kennedy put it in 1968:
“A revolution is coming— a revolution which will be peaceful if we are wise enough; compassionate if we care enough; successful if we are fortunate enough. But a revolution is coming whether we will it or not. We can affect its character; we cannot alter its inevitability”.
Let's work for a world built on sustainable societies, responsive citizens, active civil society, responsible industry and accountable government.
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