At the upcoming Rio+20 Earth Summit in Brazil, more than 135 heads of state and government, and up to 50,000 participants, including business executives and civil-society representatives, will come together to express their collective commitment to advance inclusive, sustainable development. However, despite the goal of unity and collective action underpinning the summit, the best way forward for the global economy is to build on the actions that individual countries and regions are taking in pursuit of their own interests.
Despite the summit’s aspirational rhetoric, there is no consensus about how to achieve sustainable development, exemplified by disagreement over the potential of “green growth.” Advocates argue that “clean tech,” “smart financing” and “investment-grade” public policies will usher in a new and enlightened era of economic growth that does not degrade the environment. However, for opponents, green growth is more like “green-washed growth” — a merely cosmetic change to the business-as-usual approach that gave us the global financial crisis, perpetuates poverty and exacerbates inequality.
Given this divergence, policymakers must grasp today’s immediate opportunities, rather than rely on the desirable — but remote — possibility of global consensus. Counting on today’s resource-intensive, profit-driven world economy to deliver quickly the global public goods of environmental security and development requires profound optimism, especially given the dire political and economic circumstances of key powers, notably Europe and the US.
Capital markets’ shortsightedness — on plain display in recent years — does little to raise hopes. Although investment in clean technology is on the rise, it is far from reaching the more than US$1 trillion a year needed to deliver green energy and infrastructure fit for the 21st century.
Robust policy interventions are needed, but global policy platforms are in disarray. The WTO oversees a trade regime that is antagonistic to the economic and industrial strategies that are needed to bring green technology to scale. Global climate negotiators lack the mandate, incentive and competencies to reach a much-needed consensus that facilitates economic transformation.
Yet today’s global economy is all we have, so we need to make the most of it in driving forward the green changes that are needed. That means taking advantage of unilateral action by individual countries or regional groupings to put the global economy on a more sustainable path.
Some useful policies are already in play — China’s massive public subsidies are powering up a cadre of internationally minded clean-tech companies; Europe is attempting to extend its carbon-trading scheme to non-European airlines; and the US is moving toward energy security through domestic shale-gas exploitation.
Moreover, many less developed countries, anxious to secure for themselves a place in tomorrow’s global economic order, are taking unilateral action to seize links of the global value chains of low-carbon industries, notably renewables.
Rather than seeking to contain this unilateralism, world leaders should leverage it in pursuit of global public good. Such a strategy’s success depends on three factors — a focus on a small number of big-ticket national and regional actions; adequate policy leverage over these actions; and international coalitions to steer them along a legitimate path.