June 20, 2012 / 10:22 AM / 7 years ago

COLUMN-Economy trumps environment in Rio: Gerard Wynn

(The author is a Reuters market analyst. The views expressed are his own.)

By Gerard Wynn

LONDON, June 20 (Reuters) - The financial crisis has definitively trumped the environment in a telling conjunction of G20 and green summits in Mexico and Brazil this week.

The focus of the Mexico meeting, an unfolding drama of a possible collapse of the euro and return to global financial crisis, has distracted from an environmental threat that may be urgent, planetary and irreversible, but less palpable.

The conference in Rio de Janeiro, which marks the 20th anniversary of the seminal 1992 Earth Summit that led to conventions on climate and biodiversity, will fall far short.

And the architects of the Rio event, which concludes on Friday, have not helped.

One mistake was to try and turn the financial crisis to advantage by focusing on the notion of an alternative growth model, under a slogan of “green economy”.

The idea is fine to illustrate examples of more efficient growth but has become a bland mantra that ignores growth that cannot be green, from building roads to boosting farm yields in Africa.

And in practice, the kinds of big actions that drive green growth, such as phasing out fossil fuel subsidies and putting a price on carbon emissions, were always beyond the Rio summit.

A 49-page draft text, published on Tuesday, mentions the “green economy” 23 times, alongside statements such as: “We recognise that the planet Earth and its ecosystems are our home”; and “it is necessary to promote harmony with nature”.

It would have done better to focus on hard, specific actions and especially on quantifying the real limits to world growth posed by environment threats.


The Rio summit still could take useful steps toward limiting environmental harm.

Governments will at the end of the week launch a process to agree on sustainable development goals (SDGs) to succeed the millennium development goals that expire in 2015.

That may prove to be a significant step if the proposed goals are specific.

The goals will be finalised a year or so later as countries sign off on them at the United Nations. Also they will be voluntary, rather than binding, but that’s the most to expect from a conference of 193 countries.

“SDGs should be action-oriented, concise and easy to communicate, limited in number, aspirational, global in nature and universally applicable to all countries while taking into account different national realities,” the text says.

Another important proposal is to develop alternatives to the standard measure of national wealth - GDP.

Economic growth is more important than ever to emerging economies in the wake of the Arab Spring and to developed nations that are shouldering debt and staring at relative decline.

Safeguarding the environment is also as important as ever.

The two are linked.

Both the financial crisis and CO2 emissions will place big burdens on future generations - one to pay off government debt over decades and the other locking in higher temperatures that will make human existence much less pleasant from 2030 or so.


The Rio summit this week could have rammed home the need for a new balance sheet approach to national accounting that includes the liabilities we put on our descendants such as pension fund deficits and the risk of future droughts and floods resulting from CO2 emissions, rather than just measuring a country’s existing output and wealth.

That concept is at the core of so-called sustainable development, a term defined in a seminal U.N. report in 1987 as growth that meets present needs without compromising those of future generations.

Sustainable development is meant to be the focus in Rio, and the conference could set a deadline to develop a new GDP measure, but the issue is mentioned in just one of 283 paragraphs.

“We recognise the need for broader measures of progress to complement GDP in order to better inform policy decisions,” the text says, recommending further work on the issue.

There are ample signs that our current global economy is not sustainable.

WWF’s Living Planet Report last month estimated people were using 50 per cent more resources than the Earth can provide in the long term and found biodiversity had shrunk by nearly a third since 1970, based on populations of vertebrate species.

The OECD’s recent “environment outlook to 2050” found urgent attention needed in the areas of climate change, biodiversity, water and the health impacts of pollution.

To tackle these, data and indicators are needed which Rio could coordinate and feed into the SDG targets and new GDP scores.

As the U.N.’s Global Environment Outlook said earlier this month: “The lack of reliable ... data on the state of the environment is a major barrier to increasing the effectiveness of policies and programmes. Many of the most important ... are not monitored.” (editing by Jane Baird)

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