ICCG Think Tank Map: a worldwide observatory on climate think tanks THE GREEN ECONOMY AT RIO+20: WHO SAID WHAT? Annalisa Savaresi, ICCG

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1 ICCG Think Tank Map: a worldwide observatory on climate think tanks THE GREEN ECONOMY AT RIO+20: WHO SAID WHAT? Annalisa Savaresi, ICCG

2 The green economy at Rio+20. Who said what? Annalisa Savaresi (ICCG) Abstract The United Nations Conference on Sustainable Development (Rio+20) recently convened in Rio de Janeiro to secure renewed political commitment for sustainable development. The Conference included a green economy in the context of sustainable development and poverty eradication as one of its main themes. Negotiations over the definition and policy content of this term have led to some controversies. This paper gives an overview of the debate on the notion of green economy, with the objective to provide a snapshot of this evolving concept in the framework of Rio+20 Conference. 1

3 The origins of the notion of green economy The notions of green economy and green growth are rooted in environmental economics, where they have been deployed to identify the conditions of compatibility of economic growth and environmental sustainability. 1 The inherent idea is not new but has gained increased traction in recent years. The policy discourse on green growth was first endorsed in the context of the UN Economic and Social Commission for Asia and the Pacific (UNESCAP), which in 2005 adopted it as a paradigm for improving environmental sustainability and promoting the environment as a driver for economic growth and development. 2 The Republic of Korea endorsed the concept in national legislation 3 and championed the adoption of an international green growth agenda by the G8 4 and the OECD. 5 The OECD has defined green growth as fostering economic growth and development while ensuring that natural assets continue to provide the resources and environmental services on which human well-being relies. 6 In this context green growth is not understood as a replacement for sustainable development, but rather as an operational policy agenda to give rise to economic growth consistent with resilient ecosystems. 7 Also the World Bank has engaged in this policy discourse by publishing a report that emphasises inclusiveness as a key component for a switch to green growth in all nations. 8 The policy discourse on green growth has thus evolved rapidly from a development paradigm to a global strategy to overcome the economic recession and tackle environmental scarcities, which has been promoted by major international bureaucracies. The discourse on the green economy closely resembles that on green growth and the two issues have increasingly been regarded as one and the same. 9 The main promoter of the policy discourse on the green economy has been the Green Economy Initiative launched in 2009 under the leadership of UNEP. The Initiative has made a case for directing economic stimulus spending of governments towards green sectors and activities, such as energy efficient buildings, sustainable energy, sustainable transport, ecological infrastructure and sustainable agriculture. 10 A blueprint report published in 2011 set out to dispel the myth that green economy is a luxury only wealthy countries can afford. The report suggests that the greening of economies is not a drag on growth, but rather a new engine for it, as well as a strategy for the elimination of persistent poverty. 11 The green economy is defined as one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. 12 The report makes the case for investing two per cent of global GDP in greening key sectors of the economy. 13 Within this framework, growth in income and employment is expected to be driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services. The conceptual underpinning is that achieving sustainability rests almost entirely on getting the economy right. 14 Also the UNEP vision of a green economy is not intended to replace sustainable development. 15 The reports prepared by the OECD, UNEP and the World Bank include similar policy prescriptions 1 See for example: Pearce, D., A. Markandya, and E. Barbier, Earthscan, London. Blueprint for a Green Economy. London: Earthscan, 1989 and P. Ekins, Economic Growth Human Welfare and Environmental Sustainability: The Prospects for Green Growth. London. Routledge (2000). 2 UNESCAP, Seoul Initiative on Environmentally Sustainable Economic Growth (Green Growth) 21 March 2005 UN Doc E/ESCAP/SO/MCED(05)/6. 3 Republic of Korea, Framework Act on Low Carbon, Green Growth, For an overview, see Republic of Korea, Green Growth in Motion: Sharing Korea s Experience, (2011). 4 G8 Leaders Declaration 2009: Responsible Leadership for a Sustainable Future. 5 Declaration on Green Growth Adopted at the Meeting of the Council at Ministerial Level on 25 June 2009 [C/MIN(2009)5/ADD1/FINAL] 6 OECD, Towards Green Growth (2011). Available at at 9. 7 Id., at Id., at See for example, World Bank, Inclusive Green Growth, (2012), at UNEP, Global Green New Deal, (2009), at UNEP, Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication, (2011), at Id., at Id., at Id., at Ibid. 2

4 and promote the green economy/growth as a tool for seizing opportunities to advance economic, environmental and social goals simultaneously. In preparation for the Rio+20 Conference, the debate on the policy content of a green economy has greatly intensified, largely building upon this literature, but also significantly departing from it. The notion of green economy within the framework of the Rio+20 Conference The mandate of the Rio+20 Conference unequivocally linked the green economy with sustainable development and poverty eradication. 16 However, twenty years after its embodiment in the Rio Declaration, the policy and normative contours of sustainable development have remained elusive. UNCSD may be regarded as the latest attempt to define more clearly sustainable development. The debate on the green economy was hoped to aid this endeavour. A report by the UN Secretary General clarified UN Members understanding of this expression, listing the green economy amongst several mutually complementary constructions that have emerged to enhance convergence between the different dimensions of sustainable development. 17 The green economy was further described as an omnibus term comprising a suite of economic instruments that could harness economic activity in support of one or more sustainable development goals. 18 The report emphasized that the green economy concept needed to be broadened to make it applicable to sustainable development and poverty eradication, expressing concern that imposing a green economy model could actually slow the development process. 19 The main focus was therefore to ensure that developmental and social objectives are adequately addressed in policy prescriptions on the green economy. Even before negotiations on the outcome document started, information collected by the Conference Secretariat revealed lack of agreement amongst UN Members on a common definition of a green economy. 20 States viewed reaching a global commitment and understanding on a green economy and the provision of financial means in this connection as major challenges. 21 These questions have taken centre stage in negotiations over the draft outcome document in preparation for the Rio+20 Conference (so-called Zero Draft). The Zero Draft The Zero Draft released in January 2012 was compiled on the basis of input received from UN Member states and other stakeholders. The text acknowledged the role of the green economy as a means to achieve sustainable development, based upon the Rio principles. 22 However, emphasis was placed on the fact that the green economy should not be intended as a rigid set of rules, but rather as a decision-making framework to foster integrated consideration of the three pillars of sustainable development in public and private decision-making. 23 The Zero Draft recognized that transition to a green economy requires a mix of policies and measures tailored to each country's needs and preferences, and made two specific references to roadmaps, calling for the adoption of sectoral roadmaps for business and industry, and of a global roadmap prescribing goals from Negotiations over the Zero Draft developed along pathways that have become familiar in recent years, with the text ballooning from 19 to approximately 206 pages, and reaching the preconference stage in an 80-pages version. 25 Negotiations featured classic north-south divides over 16 UN General Assembly, Implementation of Agenda 21, the Programme for the Further Implementation of Agenda 21 and the outcomes of the World Summit on Sustainable Development, UNGA Res 64/236, 31 March 2010, at UN Secretary General, Progress to date and remaining gaps in the implementation of the outcomes of the major summits in the area of sustainable development, as well as an analysis of the themes of the Conference (1 April 2010) UN Doc A/CONF.216/PC/2, Summary, at Id., at Id., a UNCSD, Synthesis report on best practices and lessons learned on the objective and themes of the United Nations Conference on Sustainable Development, A/CONF.216/PC/8 (21 January 2011). 21 Id., at Zero Draft, (10 January 2010), at Id., at Id., at 40 and Earth Negotiation Bulletin, Summary of the UNCSD Informal Informal Consultations: 23 April 4 May 2011 (ENB 2012), at 16. 3

5 the interpretation of the notion of sustainable development and the debate on the green economy proved particularly arduous. Developing countries, guided by the G-77/China, expressed unrest over the perceived predominance of the green economy discourse over that concerning sustainable development. From the beginning, India underscored that the green economy should not result into a normative straightjacket, 26 while the G-77/China insisted on a clear definition of the term and its entrenchment in equity. 27 At negotiations on the outcome text, the group requested the inclusion in the text of an explicit reference to the principle of common but differentiated responsibilities, the right to development as well as the sovereign right of states to exploit their own resources. 28 They furthermore asked that developed countries take the lead on sustainable consumption and production, and facilitate technology transfer. 29 The G-77/China suggested inserting text on avoiding increasing financial burden on developing countries and financialisation of natural resources that could result in the concentration of financial resources in developed countries. 30 They also opposed mentioning in the text the integration of social and environmental costs in economic decision-making, 31 and instead asked to insert references to the fact that the green economy should not result in the imposition of trade barriers, conditionalities on Official Development Assistance (ODA) and finance. 32 Developed countries, on the other hand, emphasised the role of business and industry in the transition to a green economy, and suggested making specific references to UN Global Compact principles on corporate social responsibility (CSR). 33 Some developed countries vehemently supported the adoption of roadmaps to promote and support the green economy at the national and international levels, and a commitment to develop national green economy action plans. 34 They furthermore suggested the establishment of a single capacity development scheme to operate as a clearing house connecting activities and green economy know how. 35 During negotiations these proposals were however opposed by developing countries, which feared that a global roadmap may not respect developmental and economic diversity and impose an external timeline determining the pace of countries transitions to a green economy, potentially limiting their economic growth. 36 These diverging views are at the core of the outcome document that was eventually adopted in Rio. The Rio+20 outcome document. A minimum common denominator commitment to a green economy Negotiations on the outcome document concluded just before the beginning of the conference, thanks to a major diplomatic effort by the host country. 37 Although the document is a political statement devoid of any legally binding implications, the symbolic significance of the Rio+20 Conference and its links with historical gatherings considerably raised the stakes. The section of the outcome document on the green economy is the result of a hard-won compromise over diverging and potentially irreconcilable views as to what the green economy should be like. The gist of the controversy was that no single development model should be imposed, and that developing countries should be free to pursue their development along the paths they see as most fit to the purpose. Lengthy negotiations led to the adoption of a carefully worded text, where the EU and other supporters of the green economy only managed to introduce 26 Earth Negotiation Bulletin, Summary of the first PrepCom for the UN Conference on Sustainable Development: May 2010 (ENB 2010), at Id., at ENB, 2012, at 5, as well as UNCSD Drat Outcome Text, (02 June 2012), at 51 and UNCSD Drat Outcome Text, at Id., at 52 (l) ter and quarter. 31 Id., at 56 and ENB, 2012, at UNCSD Drat Outcome Text, at Id., at As suggested for example in the submissions by Switzerland and the EU, available at: 35 UNCSD Drat Outcome Text, at For an overview, see Cutter, A. Briefing Note Green Economy Roadmaps, (2011). 37 Earth Negotiations Bulletin, Summary of the United Nations Conference on Sustainable Development: June 2012, (ENB Summary) at 21. 4

6 some elements of the ambitious agenda that had been laid out in preparation for the Rio+20 conference. The outcome document affirms that green economy is considered as one of different approaches, visions, models and tools available to each country to achieve sustainable development. 38 The text asserts that while the green economy could provide options for policymaking, it should not be regarded as a rigid set of rules. 39 Green economy policies should instead be guided by the Rio Principles, Agenda 21, the Johannesburg Plan of Implementation and contribute to the achievement of internationally agreed development goals. 40 Green economy policies should also promote sustained and inclusive economic growth and strengthen international cooperation. The concerns of the G77/China are mirrored in the assertion that the green economy should avoid unwarranted conditionalities on ODA and finance and should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade. 41 The text furthermore asserts that the green economy should avoid unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country, and ensure that environmental measures addressing transboundary or global environmental problems, as far as possible, are based on an international consensus. 42 The latter caveat may be read as an indirect reference to recent controversies triggered by the inclusion of emissions from aviation in the European Emissions Trading System. 43 The document furthermore affirms that the green economy should promote sustainable consumption and production patterns, but all references to the fact that developed countries take the lead in this connection have been deleted. 44 The principle of common but differentiated responsibilities is evoked in the text, but not in connection to the green economy. 45 Implementation of green economy policies by countries that seek to apply them for the transition towards sustainable development is viewed as a common undertaking. 46 Each country is however left to choose an appropriate approach in accordance with national sustainable development plans, strategies and priorities and no reference to roadmaps is made. 47 All countries are encouraged to consider the implementation of the green economy in a manner that endeavours to drive sustained, inclusive and equitable economic growth and job creation. 48 The integration of the evaluation of social, environmental and economic factors into decision-making is merely encouraged where national circumstances and conditions allow. 49 The UN Statistical Commission is requested to launch a programme of work for the development of measures to complement GDP to better inform policy decisions. 50 The UN system is invited to coordinate and provide information on green economy policies when requested to do so, thus marking a significant relapse compared with suggestions concerning the establishment of a specialized body to the purpose. 51 Nevertheless, in Rio a coalition of willing countries upgraded the existing Global Green Growth Institute to the status of an international organization with the mandate to promote the green growth paradigm globally. References to the role of business and industry in the development of the green economy are greatly understated compared with earlier versions of the outcome document. 52 The text however acknowledges the importance of corporate sustainability reporting and encourages companies to 38 UNCSD The Future We Want UN Doc A/CONF.216/L.1, (22 June 2012), at Ibid. 40 Id., at Ibid. 42 Id., at For an overview, see Hartmann, J. The European Emissions Trading System and Extraterritorial Jurisdiction, EJIL Talk, (April 2012). 44 UNCSD The Future We Want, at Id., at 15 and Id., at Id., at Id., at Id., at Id., at Id., at Id., at 69. 5

7 consider integrating sustainability information into their reporting cycle. 53 With regard to technology transfer, the text makes reference to the Johannesburg Plan of Implementation s call to promote, facilitate and finance, access to and the development, transfer and diffusion of environmentally sound technologies and corresponding know-how on favourable terms. 54 The text also asserts that the efforts of developing countries that choose to implement green economy policies should be supported through technical and technological assistance. 55 There are no specific provisions for such assistance, although in Rio some countries reportedly pledged funding for clean energy projects and sustainable development activities. 56 When compared with expectations that the conference may establish concrete targets and a roadmap for the green economy, the Conference outcome document is rather modest. Given, however, the stakes and divisions at negotiations, the text may be regarded as the minimum common denominator upon which States could agree rebus sic stantibus. The evolving notion of a green economy. A preliminary conclusion The notions of green economy and green growth have engendered largely similar policy discourses that are based upon the rationale to seize the opportunity to simultaneously tackle the economic and the environmental crises, by proverbially killing two birds with one stone. Seducing as they may sound, in the context of the Rio+20 Conference these propositions have failed to turn into a ground for consensus and stumbled upon the usual fault lines that have characterised the debate on sustainable development ever since the first Rio Conference in Negotiations on the outcome document have resulted in an apparently unbridgeable divide on how (and whether) to pursue a global shift to a green economy. The core suggestion on the green economy agenda is that all States reform their economies in light of sounder environmental policies. This idea has however failed to be widely endorsed and has instead been hijacked by disagreement over a common vision for sustainable development. 57 Diverging views on these issues have exemplarily emerged in the context of negotiations on the future of the climate regime. 58 Parties to the UNFCCC have progressively moved away from the differentiation between developed and developing countries embedded in the convention and the Kyoto Protocol, to embrace a minimum common denominator approach. Such shift seemingly reflects a widening gap between developed and emerging economies on the one hand, and poorer developing countries on the other. Discussions on Rio+20 outcome document have followed suit, based upon concerns that the green economy may be used to water down the distinction between developed and developing countries with regard to policy instruments and international obligations. In Rio some delegates commented that the concept of green economy had finally been reappropriated by developing countries. 59 It is indeed puzzling that the green economy paradigm struggled to garner consensus, while a green growth agenda was adopted in the context of UNESCAP already in This contradiction may be regarded as the result of controversies over States historical responsibilities and present liabilities associated with the environmental crisis. Discussions on the green economy in Rio were arguably a pale reflection of extant research for a new political economy for sustainable development 60 Time will tell whether the tenuous commitment to the green economy expressed at the Rio+20 Conference will evolve in a more robust agenda to operationalize sustainable development. 53 Id., at Id., at Id., at ENB Summary, at 6 and Love, P. Rio+20=0, OECD Insights, (22 June 2012), available at 58 For an overview, see L. Rajamani, The changing fortunes of differential treatment in the evolution of international environmental law, 88:3 International Affairs, Earth Negotiations Bulletin, UNCSD Informal Consultations, Tuesday 19 June 2012, at Id., at 25. See also The Economist, Green Business, (22 June 2012). 6