Rationale and motivations for sustainomics

Published: February 9, 2007, 1:28 pm

Topics:

Sustainable Development (main)

Note: The author welcomes comments, which may be sent to mind@mindlanka.org MIND.

Addressing key sustainable development challenges today

The first and main rationale is the urgent need to address key sustainable development challenges of the 21st century, described below.

Poverty, Inequity and Human Well-being

• alleviating poverty for the 1.3 billion people who live on less than $1 per day and the 3 billion people who live on less than $2 per day.
• providing adequate food, especially for the 800 million people who are malnourished today – this will require food production to double in the next 35 years without further land and water degradation.
• supplying clean water to the 1.3 billion people who live without clean water, and provide sanitation for the 2 billion people who live without sanitation.
• supplying adequate energy for basic needs, and providing access to the 2 billion people who live without electricity.
• providing a healthy environment for the 1.4 billion people who are exposed to dangerous levels of outdoor pollution and the even larger number (especially women and children) exposed to dangerous levels of indoor air pollution and vector-borne diseases.
• providing safe shelter for those who are vulnerable to natural disasters and those that live in areas susceptible to civil strife.

The extreme poverty and deprivation captured by these statistics are further highlighted by high levels of global inequality. For example, the richest fifth of the world population currently consumes about 60 fold more than the poorest fifth. Highly inequitable income distributions also persist within many countries.

Globalization

Globalization is a major sustainable development challenge. There are many benefits, but the focus here is on identifying potential risks, in order to address the underlying problems. This phenomenon has been driven by two fundamental forces - underlying technological change, which has accelerated the integration of markets, and the freer movement of raw materials, goods, services, labor, capital, information and ideas. For example, during 1950-98 world exports of goods increased 17-fold (from $311 billion to $5.4 trillion), the global economy expanded six-fold; and international tourist arrivals increased 25-fold (from 25 million to 635 million); during 1970-98 the number of transnational corporations grew eight-fold (from 7,000 to 54,000); and during 1960-98 the number of non-cellular telephones lines linked directly to the global phone network grew eight-fold (from 89 million to 838 million) ^[1].

Globalization also implies a gradual weakening of the influence of individual national governments. While this process may improve opportunities for economic growth, recent research has pointed out that it fails to provide equal opportunities either across or within nations ^[2]. In addition, globalization is associated with significant social and environmental costs that are rarely assigned monetary values and often fall on the poor and disadvantaged, while the benefits accrue mainly to the wealthy.

The environmental costs of globalization (due to pollution of air (Air pollution emissions), land and water, and depletion of natural resources) are mostly associated with increased free trade across borders and industrial activities. Pollution may shift to (mainly developing) countries where environmental protection laws and property rights are not adequately enforced or do not exist. Meanwhile, the burden of global environmental issues like climate change will fall disproportionately on poorer countries that have contributed least to the problem. Furthermore, these countries are less well equipped to deal with such impacts due to lack of financial and technical resources ^[3]. Biodiversity loss has worsened due to the wave of globalization, and stimulation of unsustainable development activities, reduction of forests, over-fishing, land degradation, etc. ^[4]. Loss of biodiversity in turn impacts on sustainable development, as it undermines ecosystem system health and reduces resilience ^[5]. For example, globalization has promoted monoculture agricultural practices that favor commercially successful crops, and reduce the diversity of less successful crop varieties.

The social costs of globalization often remain hidden and indirect before surfacing suddenly in the form of societal disruption and conflict. The widening of the gap between rich and poor is a frequent issue that is raised by many critics of globalization. Open borders for flow of capital and finished products combined with technological advancement has increased the power of multinational corporations and given them enormous economic profits. However, there are growing questions about how fairly these profits are distributed between multinational corporations and workers (especially in developing countries). Inequity is worsened when seemingly borderless multinationals externalize costs of production in order to increase profits, while jeopardizing social and environmental resilience within borders. Among the many social costs of globalization are increasing social unrest, unemployment, dissolution of families and communities, and instability of socio-economic systems ^[6].

One of the main challenges that globalization poses concerns the inadequacy of current systems of governance to manage this new integrated world. Globalization permits positive as well as negative economic, environmental or social activity in one country to be transmitted to another – for example, an economic downturn or an upturn in USA is easily felt in countries in Asia, or the economic “footprint” of Japan may have a heavy influence on deforestation in South East Asia. At the same time, advances in information sharing and international communications may help to make development more sustainable. For example, the Global System for Sustainable Development based at MIT seeks to map information on sustainable development and make it widely accessible, as a dynamic, distributed global knowledge network operating on the Internet ^[7]. Another example is the open source philosophy of Linux, which provides free operating system software ^[8].

On the positive side, the rise of the General Agreement on Tariffs and Trade and the World Trade Organization has led to a dramatic increase in world trade, and a corresponding jump in standards of living. Elimination of trade barriers would generate global gains in economic growth in excess of $750 billion US per year ^[9]. The beneficial effects of competition stemming from globalization improve the position of all parties, with the potential for increased output as a result of the rationalization of production on a global scale, the spread of technology and competitive pressures for continual innovation on a worldwide basis ^[10], and economies of scale that can potentially lead to reductions in costs and prices. The result is a potential for greater human well being throughout the world. Countries that have grown prosperous through extensive trade interactions are less likely to use armed conflict to resolve their differences. Trade and investment, and the economic growth they encourage, are very positive forces in reducing international tensions. For less developed countries, globalization offers access to foreign capital, global export markets, and advanced technology while breaking the monopoly of inefficient and protected domestic producers. Faster growth, in turn, promotes poverty reduction, democratization, and higher labor and environmental standards ^[11].

In brief, globalization is not an inanimate process – it is controlled by people. The sustainomics approach suggests that it will be possible to shape this force for the greater good, based on sound science and ethics.

Private-public balance

Between 1985 and 1994, $468 billion worth of state enterprises were sold off to private investors, globally. However, with a few notable and highly controversial exceptions, governments have not been as eager to sell off their vast natural resource holdings, including forest lands, parks, and waterways ^[12]. Some economists argue that natural resources would be better managed economically and environmentally by the private owners than by governments. However, since non-use values of the resource have no monetary value, this may discourage owners from conserving the resource, leading to unsustainable overexploitation of the resource without considering the long term benefits of conservation.

Privatization of state property may provide a unique opportunity to address not only existing financial issues, but also environmental ones which are neglected due to a lack of investments or poor knowledge of new technology. However, unless a clear legislative framework is set up to deal with the problems under the new system, the profit maximizing private sector may not invest the required amount of capital to minimize environmental impacts and acquire environmentally friendly technology. Inadequate regulation may also cause social problems by permitting privatized providers of basic needs like energy and water services to raise prices to levels that are not affordable by the poor.

Multinational organizations usually transfer modern, environmentally friendly technology and install advanced pollution control equipment in their plants. However, this may not be the latest technology although it is in compliance with the (lower) environmental standards in developing countries. These lower standards are due to two reasons. One is to attract more foreign capital from the international investment market and the other is due to the delay in identifying and introducing new standards.

Another problem may arise if the government agency usually involved in privatization of State Owned Enterprises (SOEs) is mainly interested in generating a higher income from the transaction, rather than in solving any environmental problems. Lack of transparency in the privatization process will exacerbate such problems.

Environmental damage

Global environmental trends have reached a dangerous crossroads as the new century begins. ^[13]. Signs of accelerated ecological decline have coincided with a loss of political momentum on environmental issues. This failure calls into question whether the world will be able to reverse these trends before the economy suffers irreversible damage.

New scientific evidence indicates that many global ecosystems are reaching critical thresholds. The Arctic ice has already thinned by 42 percent, and 27 percent of the world's coral reefs have been lost in the last century, suggesting that some of the planet's key ecological systems are in decline. Environmental degradation is also leading to more severe natural disasters, which have cost the world $608 billion over the last decade – as much as in the previous four decades combined. One sign of ecological decline is the risk of extinction that hangs over dozens of species of frogs and other amphibians around the globe, due to pressures that range from deforestation to ozone depletion. With many life support systems at risk of long-term damage, decisions need to be made whether to move forward rapidly to build a sustainable economy or to risk allowing the expansion in consumption, the increase in greenhouse gas emissions, and the loss of natural systems that undermine future development.

Even after a decade of declining poverty in many nations, 1.2 billion people lack access to clean water and hundreds of millions breathe unhealthy air. Poor people in developing countries are pushed to destroy forests and coral reefs in a desperate effort to raise living standards. Environmental degradation is increasing vulnerability to natural disasters – mainly among the poor. In 1998-1999 alone, over 120,000 people were killed and millions were displaced in regions such as India and Latin America, due to their inability to withstand disasters. Lack of land has led people to settle in flood-prone valleys and unstable hillsides, where deforestation and climate change have increased their vulnerability to disasters such as Hurricane Mitch, which produced economic losses of $8.5 billion in Central America in 1998 - equal to the combined gross national products (GNPs) of Honduras and Nicaragua. Unless fossil fuel use slows dramatically, the Earth's temperature could rise as high as 6 degrees above the 1990 level by 2100, according to the latest climate models. Such an increase could lead to more extreme events, acute water shortages, declining food production, and the proliferation of deadly diseases such as malaria and dengue fever, which will especially harm the poor.

Conflict and competition for resources

Violent conflict blights the lives of hundreds of millions of people. It is a source of systematic violations of human rights and a barrier to progress towards the Millennium Development Goals (MDGs). Poverty and the lack of progress towards the MDGs may themselves exacerbate conflicts.

For many people in rich countries the concept of global insecurity is linked to threats posed by terrorism and organized crime. Meanwhile, the interaction between poverty and violent conflict in many developing countries is destroying lives on an enormous scale. Failure to build human security by ending this vicious cycle will have global consequences. In an interdependent world the threats posed by violent conflict do not stop at national borders. Development in poor countries is a key element in achieving global peace and collective security. Current approach may be overemphasizing military strategy and not paying adequate attention to addressing poverty and human security concerns.

The nature of conflict has changed, and new threats to collective security have emerged. The twentieth century was defined first by wars between countries and then by Cold War fears of violent confrontation between two superpowers. Now these fears have given way to fears of local and regional wars fought predominantly in poor countries within weak or failed states, and with small arms as the weapon of choice. Most of the victims in today’s wars are civilians. There are fewer conflicts in the world today than in 1990, but the share of those conflicts occurring in poor countries has increased – often arising from the struggle for valuable resources (like water, oil, gold, diamonds, etc.), and exacerbated by foreign interests. In an increasingly interconnected world, local conflicts could spread quickly. More effective international cooperation could help to remove the barrier to MDG progress created by conflict, creating the conditions for sustainable development and real human security.

The human development costs of violent conflict are not sufficiently appreciated. In the Congo deaths attributable directly or indirectly to conflict exceed the losses sustained by Britain in the First and Second World Wars combined. In the Darfur region of Sudan nearly 2 million people have been displaced because of conflict. Conflict undermines nutrition and public health, destroys education systems, devastates livelihoods and retards prospects for economic growth. Of the 32 countries in the low human development category as measured by the United Nations Development Programme (UNDP) Human Development Index (HDI), 22 have had some conflict since 1990. Countries that have experienced violent conflict are far more likely to be performing well below the MDG projections for 2015 (see "Prospects and status of millennium development goals"). Of the 52 countries that are failing to reduce child mortality, 30 have experienced conflict since 1990. Suche costs underline the need for conflict prevention and resolution, and post-conflict reconstruction, as three fundamental requirements for building human security, accelerating progress towards the MDGs, and making development more sustainable.

As indicated earlier, globalization and privatization could intensify competition for resources and lead to conflicts. Both international and national mechanisms need to be strengthened to prevent and manage conflicts. Due to the rising demand for goods and services along with the economic development, the level of extraction or utilization of natural resources increases. Higher demand and competition for oil, coal, water, land, forest products, recreational areas, and other natural resources lead to long run depletion of, and competition for those resources – especially when there are no appropriate policies for sustainable utilization.

Competition for scarce natural resources will intensify in the future due to the unsustainable present usage of natural resources. This issue is linked to the environmental harm problem discussed above. It will be necessary to invest more on research and development to identify more efficient method of resource use to fulfill human requirements, and find effective conservation measures. Furthermore, greater efforts need to be devoted to enhancing both international and national institutional mechanisms and management capacities to respond to the competition for natural resources and harm to fragile ecosystems. Promoting pluralistic, multi-stakeholder, multi-level consultation is important for resolving differences and avoiding conflicts (see "Vision for a practical way forward", below).

Poor governance

Poor governance has caused the massive waste of resources, which has hampered efforts to address sustainable development problems like poverty, hunger and environmental degradation (see "Property rights and ecological-social interactions"). Corruption, inefficiency, greed, rape of natural resources, and other manifestations of bad governance abound. Overcoming them is a major challenge for those who govern and are governed.

Good governance needs to be participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable, inclusive, and follow the rule of law ^[14]. Among the key outcomes are that corruption is minimized, the views of minorities are taken into account, the most vulnerable in society participate in decision-making, and policy becomes responsive to the present and future needs of society.

Where there is poor governance, there is more scope for corruption. An overview of corruption around the world demonstrates that its most common causes are economic in nature. Corruption thrives in the presence of excessive government regulation and intervention in the economy; substantial exchange and trade restrictions; and complex tax laws. Corruption is further favored by lax spending controls, and when the government provides goods, services and resources at below-market prices (for example foreign exchange, credit, public utilities and housing, access to education and health facilities, and access to public land). There is potential for corruption when officials take decisions that are potentially costly to private individuals or companies – e.g., tax incentives, zoning laws, timber rights and rights to extract mineral resources, investment permits, privatizations, and monopoly rights over exports and imports or domestic activities ^[15]. Factors that contribute indirectly to corruption include, the quality and remuneration of the civil service, the effectiveness of deterrents, the example set by the country's leadership, the nature of meritocratic recruitment and promotion in civil service, the quality and effectiveness of legal enforcement, and the degree of transparency in government operations ^[16].

Poor governance can have a major negative impact on economic performance by reducing investment and economic growth. It diverts public resources to private gains, and away from needed public spending, reduces public revenues, misallocates talent to rent-seeking activities, and distorts the composition of government expenditures and of tax revenues ^[17]. Empirical evidence suggests that corruption reduces spending on publicly provided social services ^[18], and results in lower spending on health care and education services, such as medicine and textbooks ^[19]. Higher levels of corruption also tend to be associated with rising military spending ^[20]. Corruption can worsen poverty and equity (see "Economic, social, and environmental elements of development"), because it exacerbates an unequal distribution of wealth, and unequal access to education and other means to increase human capital ^[21].

Given the high costs of corruption, why do governments not eliminate it? Because, when corruption is endemic, the likelihood of detection and punishment decreases and incentives are created for corruption to increase further. Individuals at the highest levels of government may have no incentives to control corruption or to refrain from taking part in rent-seeking activities. At the same time, eradication of corruption may be costlier in countries where the level of institutional development and the general economic environment is weak ^[22]. Empirical evidence suggests that the rule of law (including effective anti-corruption legislation), the availability of natural resources, the economy’s degree of competition and trade openness and the country’s industrial policy affect the breadth and scope of corruption ^[23].

Fulfilling major global agreements on sustainable development

A second powerful motivation for developing the sustainomics framework is provided by the need to meet the many major global targets relating to sustainable development (SD), widely agreed by world leaders in recent years (see "Brief history of sustainomics").

The Stockholm Conference on the Human Environment in 1972 was a watershed gathering that brought international community together to focus on development and environment issues. It focused on benefits of science and technology on economic growth. After fifteen years, the report of the World Commission on Environment and Development ^[24] served as another important milestone, which brought the concept of sustainable development into the mainstream. They succinctly paraphrased sustainable development, as “meeting the needs of the present generation without jeopardizing the ability of future generations to meet their needs”. However, due to lack of an operational definition and experience, little success was realized in practice.

The next step was the Agenda 21 document agreed at the UN Earth Summit (UNCED) in Rio de Janeiro in 1992 ^[25], which was intended as a blueprint for putting SD into practice. Although the conference was able to generate worldwide enthusiasm, funding for the ambitious Agenda 21 targets never materialized. The UN Commission for Sustainable Development (CSD) was established to monitor progress on Agenda 21, but many indicators of SD declined, particularly the environment indicators. Greater progress was made on other important agreements produced in Rio – e.g., the framework convention on climate change (UNFCCC), convention on biodiversity (CBD). Modest progress was also achieved after Rio with several new international agreements, including the Montreal Protocol (ozone), Kyoto Protocol (climate), and UN Convention to Combat Desertification.

In 2000, the UN Millennium Summit produced the Millennium Development Goals (MDGs), universally accepted by world leaders as a practical benchmark for measuring progress towards sustainable development (see "Prospects and status of millennium development goals"). Supplementary targets were also agreed at the World Summit on Sustainable Development (WSSD) in Johannesburg in 2002. The WSSD focused on the shortcomings of the post-Rio development process, and sought to reinvigorate sustainable development activities worldwide. It yielded the goal-oriented and comprehensive Johannesburg Plan of Implementation, including targets relating to poverty and WEHAB (water, energy, health, agriculture and biodiversity). Most recently, the UN Millennium Development Project was endorsed in 2005, to press forward with the MDGs.

In summary, there have been several international agreements on sustainable development during the past decades, but with progressively declining targets. At the same time, implementation of these goals has generally fallen short of their aims. The many international conferences and reports have helped to bring about a paradigm shift in development thinking. However, the linkages among scientific evidence, policy making and practical application need to be strengthened. In addition, scientific evidence and analysis are still inadequate on new global trends such as globalization and privatization, which implies that the achievement of MDG and WSSD targets will require dynamic implementation processes that adapt to new knowledge. Therefore, ongoing discussions and consensus-building among scientific experts, decision makers and other stakeholders need to be intensified.

Avoiding worst case future scenarios and learning from past experience

The third major motivation arises from the need to avoid disastrous future outcomes and learn the lessons of history relating to human development. Several ancient civilizations have shown remarkable durability by lasting 4000 years or more, including those located in the Yellow river basin in China, the Nile river basin in Egypt, and the Saraswati river basin in India. Other regions like the Sahel and the dust bowl in the USA have demonstrated the fragility and collapse of carrying capacity in marginal lands exposed to the pressure of unsustainable human activity.

Table 1 Summary of some recent global scenario exercises
Name	Description
Global Scenario Group (GSG)	Global scenarios based on 3 classes – conventional worlds, barbarization (bad), great transitions (good). (Gallopin 1997; Raskin et al. 1998 & 2002)
Global Environment Outlook 3 (GEO-3)	Similar to GSG with emphasis on regional texture (UNEP 2002)
World Energy Council (WEC)	Multiple global energy scenarios to year 2100 (1998)
IPCC Emission Scenarios (SRES)	GHG emission scenarios to year 2100; axes of change are sustainable vs. unsustainable & globally integrated vs. fragmented (IPCC-SRES 2000)
Millennium Ecosystem Assessment (MA)	4 scenarios based on future status of ecosystems (2003): axes of change are globally integrated vs. regional & environmentally proactive vs. reactive.

Building on this historical experience and using modern analytical tools, a number of scenarios of future world development have emerged – see Table 1. While a range of optimistic and pessimistic futures are considered, we are especially concerned about avoiding the more disastrous scenarios. Among the undesirable and alarming outcomes are the “barbarization” scenario of the Global Scenario Group, the Intergovernmental Panel on Climate Change (IPCC) A2 scenario projecting dangerously high growth of greenhouse gas (GHG) emissions, and the Millennium Ecosystem Assessment “order from strength” scenario. These scenarios provide ample motivation for renewed efforts to address the major global problems and prevent the potential deterioration of society into chaos and anarchy.

One particular extrapolation of past experience serves as a powerful rationale for this book. Two catastrophic famines or holocausts during the late nineteenth century, killed tens of millions in the developing world ^[26]. They were the outcome of negative synergies between adverse global environmental factors (i.e., the El Niño droughts of 1876-78 and 1898-1901), and the inadequate response of socio-economic systems (i.e., vulnerability of tropical farming forcibly integrated into world commodity markets). In the eighteenth century, the quality of life in countries like Brazil, China, and India was comparable with European standards. However, colonial dictates and rapid expansion of world trade, re-oriented production in developing countries (from food to cash crops) – to service distant European markets. By the time the El Niño droughts struck in the nineteenth century, the domination of commodity and financial markets by Britain forced developing country small holders to export cash crops at ever deteriorating terms of trade. This process undermined local food security, impoverished large populations, and culminated in holocausts on an unprecedented scale – which have been identified as one major cause of the present state of underdevelopment in the third world. From a sustainomics perspective, the corollary is clear, based on the precautionary principle. The future vulnerability of developing country food production systems to a combination of climate change impacts and accelerated globalization of commodity and financial markets, poses significant risks to the survival of billions, especially in the poorest nations ^[27].

Vision for a practical way forward

Figure 1: Role of Sustainomics in the Long Term Transition to Global Sustainable Development (Sources: Adapted from IPCC (2001a), MA (2005), Munasinghe (2001a), Raskin et al. (2002))

The fourth and final motivation is to set down some ideas which might serve as the first steps along a practical path towards the ultimate goal of sustainable development. This transition is depicted in Figure 1.

1. The top row shows that the extrapolation of current trends driven by forces like globalization and conventional market-oriented policies based on the so-called “Washington Consensus” will pose significant risks. While policy reforms are proposed to correct for market deficiencies, issues arising from both the immediate drivers and underlying pressures are not being addressed systematically within a framework aimed at long-term sustainability (see "Economy-wide policies and the environment"). The main current policies tend to be reactive and defensive. Poverty, inequity, exclusion, conflict, poor governance and environmental damage could worsen sharply under such a business-as-usual approach, and lead to a breakdown of global society.
2. The middle row depicts the practical contribution of the sustainomics approach. It offers an intermediate but practical step which takes us forward via proactive measures that make current development more sustainable. Society moves gradually towards the ultimate goal of sustainable development by influencing key immediate drivers of change, including consumption patterns, population, technology and governance – and thereby shaping global trends and managing market forces. Some aspects of the sustainomics framework also facilitate direct manipulation of underlying pressures. There is emphasis on early action, to overcome the huge inertia of “supertanker earth”, and begin steering it away from its risky current path towards safer waters using existing experience and tools. Co-evolving socio-economic and ecological systems need to be guided by rational human foresight, at a moment in history where a major global transition might lead to disastrous results (see "Dynamics of Interlinked Living Systems").
3. The bottom row indicates the long term (ideal) goal of making the transition to a new global sustainable development paradigm and sustainable lifestyle. Proponents hope to develop a networked, multi-stakeholder, multi-level global citizens movement, a responsive governance structure, improved policy tools, advanced technologies and better communications (including the internet), which will work on underlying pressures linked to basic needs, the social power structure, values, choices, and the knowledge base. GTI ^[28] is one such initiative to build pluralistic global citizens networks. Chapter 6 describes some multi-level, multi-stakeholder, trans-disciplinary dialogues, where networks of experts and practitioners play a key role.

Notes (Rationale and motivations for sustainomics)

Further Reading

• Gallopin 1997.
• IPCC Special Report on Emission Scenarios (SRES) 2000. IPCC, Geneva, Switzerland.
• IPCC 2001a. Climate Change 2001: The Scientific Basis, Third Assessment Report, Cambridge University Press, London, UK.
• MA 2005. Board of Directors Statement, Millennium Ecosystem Assessment, Island Press, Washington DC.
• Munasinghe 2001a. “Sustainable development and climate change: applying the sustainomics transdisciplinary meta-framework”, Int. Journal of Global Environmental Issues, vol.1, no.1, pp.13-55.
• Raskin et al. 1998.
• Raskin et al. 2002. Great Transition – The Promise and Lure of the Times Ahead, Global Scenario Group, Stockholm Environment Institute, Stockholm, Sweden.
• UNEP 2002.

This is a chapter from Making Development More Sustainable: Sustainomics Framework and Applications (e-book). Previous: Overview and outline of Making Development More Sustainable (Rationale and motivations for sustainomics)|Table of Contents (Rationale and motivations for sustainomics)|Next: Brief history of sustainomics

Citation

Munasinghe, M., & Development, M. (2007). Rationale and motivations for sustainomics. Retrieved from http://editors.eol.org/eoearth/wiki/Rationale_and_motivations_for_sustainomics