Managing our Environment for sustainability

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Managing our Environment for sustainability

Dr. Gro Harlem Brundtland
Managing our Environment for sustainability
UBS Philanthropy Forum
St. Moritz, Switzerland
November 2012

It is a great pleasure to address this important event, which brings together the worlds of finance and philanthropy – along with my colleague from the Board of the United Nations Foundation, Muhammad Yunus.  Professor Yunus, more than anyone else on the planet, has demonstrated through the pioneering work of Grameen Bank on microfinance the direct impact that financial innovation can have on people’s lives.

Today the world is poised between the great and growing dangers of climate change and the economic opportunity presented by a global transition to sustainable energy.  Businesses, investors, and philanthropists, in partnership with governments and banks, can lead the way forward.  It is this synergy between public and private interests on the issue of sustainable development that I will focus on today.

By now nearly Thirty years ago, I was called upon by the United Nations  to create and lead a new independent commission to address major global challenges – threats to the environment and natural resources, increasing population pressures, poverty and lack of development.  In asking me to take on this seemingly impossible and enormous task, the World Commission on Environment and Development, the Secretary-General reminded me: “You are the only Environment Minister to have become Prime Minister.”

An enormous new challenge was upon us all: the risk of permanent damage to our environment and our one earth!  At that time, the issue of sustainability was seen by developing countries to be about luxury problems of the rich countries, overlooking vast poverty and lack of development in large parts of the world.  Today, these same dimensions are still with us as global leaders struggle to agree on a path ahead that is realistic, just, and equitable.  The idea, however, that resources are unlimited and our environment not dangerously affected by our combined human activities is now behind us, whether north or south, rich or poor.

In the Commission’s report “Our Common Future,” we warned that global trends already underway – climate change, desertification, forest degradation, water scarcity, declining biodiversity, and increasing dependence on dirty and dangerous sources of energy – were not only unsustainable but posed a grave threat to the well-being and security of future generations.  Today most of these trends continue, and in some cases, they are even accelerating.  We urgently need to step up the pace of change. 

As economies are teetering, ecosystems are under siege, and inequality – within and between countries – is soaring, we need to realize that these are symptoms that share a root cause, where shortsighted and often narrow interests have superseded common interests, common responsibilities, as well as common sense.

The only durable solutions to today’s crises are those that also position us – technologically, socially, and politically – to solve our longer-term problems.  That means finding opportunities and summoning the resources, even in these trying times, to make the most of them. 

Worldwide, a growing pool of capital is sitting idle, unable to find adequate returns.  These resources must be used to build a new, more secure foundation for future growth – including new public-private initiatives to invest in sustainable energy systems, address energy poverty, and reduce emissions.

The UN Secretary-General has made sustainable development a top priority for his second 5 year term.  His High-level Panel on Global Sustainability, on which I had the honor to serve, presented its report earlier this year.

We made clear that the current global development model is unsustainable.

We can no longer assume that our collective actions will not trigger tipping points as environmental thresholds are breached, risking irreversible damage to both ecosystems and human communities.
We all need to recognize that the drivers of that challenge include unsustainable lifestyles, production and consumption patterns, and the impact of population growth.

As the global population grows from 7 billion to 9 billion by 2040, with the emergence of three billion new middle-class consumers over the next 20 years, the demand for resources will rise exponentially. By 2030, the world will need at least 50 per cent more food, 45 per cent more energy, and 30 per cent more water – all at a time when environmental thresholds are throwing up new limits to supply.  This is true not least for climate change, which affects all aspects of human and planetary health.

We now need to measure and to price what matters.  The marketplace must reflect the full ecological and human costs of economic decisions and establish price signals that make transparent the consequences both of action and inaction:

1.    Pollution, including carbon emissions, can no longer be free.

2.    Subsidies should be made transparent and phased out for fossil fuels by 2020.

3.    We must build new ways to measure development beyond GDP.

Science must point the way to more informed and integrated decision-making, not only on climate change, but also on biodiversity, ocean and coastal management, water and food scarcities, as well as planetary boundaries – defining the scientific thresholds that can set a “safe operating space” for humanity.

Limited public funds should be used strategically, as incentives  to unlock greater private investment flows, share risks, and expand access to the building blocks of prosperity, including modern energy services.
Throughout the 20th century, economic growth was measured by the accumulation of physical, financial, and human capital without regard to changes in natural capital and without taking account of social risks.  In the 21st century, the goal must be a “green economy” that can generate economic growth and improvements in people's lives without harming the environment.

This means taking advantage of the vast potential to maximize resource productivity, especially with respect to energy and water, and reducing waste.  It means investing in sustainable technologies that will create jobs and support the poor, improve health and education, and build more resilient and equitable societies. 

It also means investing in women.  I believe the next increment of global growth could come from the full economic empowerment of women.  Half of humankind's collective intelligence and capacity is a resource we can no longer afford to lose out on!  We must now stop all discrimination against girls and women.  By instead empowering women, we will unleash the largest untapped potential for sustainable development.  This transformation to a green and inclusive economy will generate millions of new jobs and lift millions of people out of poverty.

In my country, Norway’s own history, it is clear that a policy of inclusiveness, investing in all of our people, and combined with sound resource management policies was the strategy that led to continuous and sustainable growth.
Women are a vital force for growth and sustainable development. Countries and companies with higher levels of gender equality have faster growth and better performance. In fact, a recent analysis found that the very high participation of women in the workforce generates a larger part of Norway’s GDP than the whole of Norway’s Petroleum sector!

Energy fuels human progress and lies at the heart of every country’s core interests, from job creation to economic competitiveness, from providing cleaner air to empowering women.  This is why the Secretary General of the United Nations has focused so strongly on “Sustainable Energy for All” – his initiative to help ensure universal access to modern energy services, to double the use of renewable energy and double the rate of improvement in energy efficiency globally, all by 2030. 

Simply put, development is not possible without energy, and sustainable development is not possible without sustainable energy. 

12 years ago, the United Nations adopted the Millennium Development Goals, - goals by which we measure human progress. Energy is not mentioned in the Millennium Development Goals, but we need not necessarily create a new MDG for energy; rather, we should recognize that energy is necessary for all the MDGs – that energy is, in the Secretary-General’s words, “the golden thread that connects development, social inclusion and environmental protection.” Access to energy is crucial to all people – rich and poor.  It means many things: the inability to read at night, to travel to a job, to keep life-saving vaccines refrigerated.  In Sub-Saharan Africa alone, an estimated 200,000 health clinics lack electricity – and women give birth at night beneath dim and dirty kerosene lamps.  Addressing this energy gap is a particularly ripe target for an innovative blend of philanthropy, investment, and government support.

It is hard to believe that a decade into the 21st century, exposure to indoor air pollution from the use of wood, dung, and coal for cooking and home heating is still one of the world’s biggest public health problems.  Yet 2.7 billion people still use these fuels, and more than 1 billion people have no access to electricity.

In the global economy, meanwhile, our appetite for fossil fuels is undiminished even as the warning signs of a warming planet multiply.   The global potential for improving energy efficiency is enormous. The US has half the energy efficiency of Japan, and China has only one-ninth!

Globally, the good news is that the production and deployment of renewable energy technologies, such as wind turbines and solar panels, has expanded rapidly in recent years, totaling $ 211 billion in 2010. At the same time, prices for turbines and solar panels have been falling.

We must do much more at the local, national, and international level to hasten the sustainable energy transition.  This requires investment.  It requires policies that will create incentives for the right kinds of investment.  Each year private companies invest approximately $5 trillion in energy infrastructure projects.  Re-aligning even a small share of this totalto sustainable energy would go a long way toward changing our course.  Philanthropy has a role here as well, in particular  in alleviating energy poverty, and in typical off-grid areas, working with governments and development banks to de-risk these investments and increase the flow of private capital, which too often is still on the sidelines.

For 30 years, much of the business community has stuck to the well-known mantra that change will happen if everything is just left to market forces! But the market cannot alone spark the changes that are needed. Business, investors, activists, and scientists cannot alone change the way we produce and use energy.  Business now needs, and calls for, much more government action to inspire innovation and the solutions to reach a sustainable world.
They can anticipate change, they can facilitate it, they will profit from it, but they cannot drive it.  Public policies are needed to stimulate markets, remove barriers, level the playing field, and establish clear objectives and targets for renewable energy and energy efficiency.

At the same time we need to undo old-fashioned policies that create the wrong incentives and keep us locked in unsustainable ways of doing business.  A good example is fossil fuel subsidies, which still exist in many countries.  In fact, annual subsidies for established fossil fuels are estimated to cost between $350 and $500 billion worldwide, depending on the oil price.  These are resources that could be channeled to clean, low-cost, sustainable energy technologies.  To ensure that vulnerable groups are not hurt as subsidies recede, we can look to countries like Indonesia that have implemented poverty alleviation and social protection programs in combination with subsidy reform.
In the current situation it would be easy, but profoundly mistaken, to suppose that addressing the problems of poverty, ecosystem degradation, and climate change is a luxury we can’t afford or an agenda item we’ll have to put off for another day.

The truth is that the same failures of governance that have produced political and economic upheaval around the world in recent months and years are also behind our inability so far to set an environmentally sustainable and socially equitable course for our common future.

The old-fashioned thinking that the private and public sectors are two separate arenas, and that the public sector alone is the one responsible for social goals and policies to benefit all, is long gone.  Good businesses realize that they cannot succeed in societies that fail.  We are all in this together, and we need to move together towards the best incentives and disincentives to reach our common goals. 

All of us – young and old – must work to promote a greater sense of shared responsibility, not only as citizens of our respective countries, but as equal members of an increasingly inter-connected global community.  A greater sense of shared responsibility is essential to prepare for a future that is safer, more prosperous, and more secure.

Good businesses do realize that they cannot succeed in societies that fail.

I am frequently asked: Why, 20 years after Rio, are we not succeeding in changing our ways and building a sustainable future? Is the reason political, social or technical`?
I believe it is all three. We are facing a challenge larger than our present systems of governance are able to adequately address and act upon. This is the case in the majority of countries around the world, but, above all, it is our still too limited ability for global governance that is the crux of the matter.

Partnerships will be crucial.  The traditional separation between the public and private sector is becoming increasingly irrelevant as our societies realize how interdependent we all are, in a world with mounting common challenges and threats.  Not just the public and voluntary sectors, but also the business community will be socially and globally responsible.
We will all benefit from the many large and small decisions taken by businesses and companies who look beyond the short-term perspective as they choose investments and solutions for the future.  These are the actors and innovators we will see succeed, these will prove to be the heroes of the younger generations.

I remain optimistic.  Advances in science have given us a better understanding of climate and ecosystem risks.  Billions of people, even in developing countries, are socially connected by technologies that that have shrunk the world and expanded the notion of a global neighborhood.

Reserving prosperity and security for a select few, even if that were morally acceptable, simply isn’t possible.  As long as we all live on the same planet, we will have to make it happen for all of us, or it will not happen at all.  I believe we can do it.  There is no alternative path ahead.