Challenges and solutions for a sustainable future

Sustainable development has been the overarching goal of the international community ever since the United Nations Conference on Environment and Development (UNCED) in Rio in 1992. However, two decades on, the world is far from realizing the bold vision set forth in Rio. Today, we continue to struggle with the grave challenges of climate change, food and energy security for a growing population, high levels of poverty and deprivation in the developing countries, and rising global inequalities.

So, what are the underlying factors behind our less than satisfactory progress on sustainable development? And what steps can we take now to make truly sustainable development a reality?

The Obstacles

Extreme poverty and inequality have stalled progress: Despite the vast amounts of wealth currently being produced, about 22.4%  of the world’s population lives on less than $1.25 a day.Out of 84 countries with available data on Millennium Development Goals, 40 countries are not on track to meet the poverty reduction target (World Bank, 2009). On the remaining targets as well, sub-Saharan Africa shows very little progress. According to the Report on the World Social Situation 2010, 963 million people or about 14.6% of the estimated world population of 6.6 billion are undernourished. This extreme poverty and inequality is a key factor in the failure of sustainable development because poverty eradication, food security, universal access to modern energy services, public health and employment generation are the overriding concerns of developing countries. Therefore, for future success, poverty alleviation and equity should be placed at the centre of sustainable development efforts at Rio+20.

International discussions on sustainable development have failed: The international discussions on sustainable development are beset by a lack of trust between developed and developing countries. This lack of trust reflects a lack of appreciation of the domestic political commitments and constraints on both sides and makes implementation of global commitments on sustainable development impossible. The problem of trust stems from the huge gap in finance and technology between the developed and developing worlds. Agenda 21, an outcome of the UNCED in Rio in 1992, argued that financing for sustainable development and technology transfer are the two key means of implementing sustainable development, along with education, training, public awareness, science and informed decision making. Official development assistance can be a vital source of external finance for many developing countries for implementing renewable energy projects and providing energy access to the poor people.

However, inadequate financing remains the biggest obstacle to sustainable development in poor countries. Without financing from developed nations, developing countries will not be able to mobilize the resources for the additional investment needed to promote sustainable development. In addition, most developing countries have poorly developed markets for long-term domestic financing for development projects and a weak fiscal basis, which further limits the scope for substantial increases in domestic funding. So, provision by the wealthy nations of new, stable, predictable financial resources to support implementation activities in developing countries is essential for the achievement of tangible outcomes. Unfortunately the developed countries have failed to meet their commitments to help developing countries meet the sustainable development goals set forth in Rio. Most of the developed countries have not allocated 0.7 per cent of GDP to aid for developing countries which was first pledged in a United Nations General Assembly Resolution in 1970. Since then the target has been affirmed in many international agreements including the March 2002 International Conference on Financing for Development in Monterrey, Mexico and at the World Summit on Sustainable Development held in Johannesburg.

Moreover, a huge technological gap exists between developed and developing countries. Although a few large developing countries such as China, Brazil and India possess the ability to undertake technological efforts on their own, the majority of the developing countries are not in the same situation. Therefore, for the world to move onto a path of sustainable development, developing countries would require access to technology at affordable prices. However, there has been little technology transfer from developed to developing countries. The focus of implementation has generally been on creating conditions in developing countries conducive to foreign investment and building capabilities to absorb and utilize imported technologies. Currently a large body of technological information is held by the private sector which is in turn, dependent on intellectual property income. Therefore, the intellectual property regime is a decisive determinant of technology diffusion. Available evidence points to a centre-periphery character in technological evolution where firms from developed countries are the main holders of intellectual property rights and developing countries are technology followers. Existing IPR laws are not able to distinguish between countries at different stages of development in ways that might help IPRs to fully contribute to development objectives.

We reward the wrong activity – Another major cause of concern is that governments all over the world continue to spend huge amounts of resources to subsidize environmentally unsound practices in agriculture, energy, water and transportation. The subsidy system is now deeply entrenched in political systems worldwide. According to IEA (2011), fossil fuel consumption subsidies amounted to $409 billion in 2010. However, only 8% of the $409 billion spent on fossil-fuel subsidies was distributed to the poorest 20% of the population. A major shift in subsidies is needed in which governments work to reduce the initial costs and risks associated with implementation of sustainable practices such as solar and wind energy.

The Way forward

We must redefine the concept of development. The priority given by political leaders to GDP growth tends to crowd out sustainable development concerns. The predominant economic growth agenda has increased material wealth of a small section of society at the expense of growing ecological scarcities and social disparities. For instance, a major weakness in India’s growth story is that it has not been sufficiently inclusive and has come at the cost of overexploitation of the country’s resources. India’s performance in poverty eradication is very disappointing. According to UNDP’s Multidimensional Poverty Index (MPI) 53.7% of India’s population is poor (UNDP, 2011). Nations all over the world need to intensify their efforts to improve the lives of the poor and provide for basic needs such as education, nutrition, health care services, adequate shelter and a clean environment. Thus, the political goal must shift from maximizing growth rates to improving the lives of the people. This shift necessitates alternative indicators of development, such as the UNDP’s Human Development Index (HDI), the UN system of Integrated Environmental-Economic Accounting (SEEA) and the OECD’s initiative on Measuring the Progress of Societies, which complement GDP and integrate economic, social and environmental dimensions of well-being.

The examples of Sri Lanka, Cuba, Costa Rica and the Indian state of Kerala show that high human development is possible without fast growth. Moreover, countries such as Nepal and Tunisia have also been successful in improving the human development index by following different pathways. Despite modest economic growth, Nepal and Tunisia have made impressive progress in health and education with the help of massive public policy efforts (UNDP, 2010). India’s Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA), a wage employment programme that guarantees hundred days of wage employment in a financial year to a rural household, is also an important step towards sustainability and equity in India. It promotes inclusive growth and empowers the poor and marginalized groups by financing rural works that address causes of drought, deforestation and soil erosion restores the natural capital base on which rural livelihoods depend.

We must bridge the trust gap. To build trust between developed and developing countries, we need more effective dialogue and co-operation that is not reflected in today’s multilateral regimes. Given that the overall required investment for sustainable development is very high and that the greatest need is in developing nations, stronger commitments and concrete actions from developed countries are the need of the hour along with innovative sources of financing. A currency transaction tax could be an innovative new source to meet the financing gap. The tax can be a simple proportional levy on individual foreign exchange transactions assessed on foreign exchange dealers and collected through existing financial clearing systems. Moreover, developed countries should also stimulate private sector innovation with a combination of tax and regulatory policies. Innovative financing schemes canbridge the financing gaps in some sectors like water and sanitation in developing countries which are regarded as high risk, low-return investment. For instance, in Niger the Coca-Cola Companyand the United States Agency for International Development (USAID) sponsoredthe installation of locally made rope pumps.

The issue of technology in poor nations needs to be addressed at various stages in terms of facilitation, development, deployment and technology transfer. In the context of developing countries, lack of awareness about clean technologies is a key barrier for small scale units. Thus, collaborative research with the necessary arrangements for building capacity in developing countries will go a long way in reducing the technology gap.For instance, with the support of the Swiss Agency for Development and Co-operation (SDC), The Energy and Resources Institute (TERI) has helped the Firozabad Glass industry cluster switch over to energy-efficient and environment friendly technologies based on natural gas. The energy efficiency of coal-fired muffle furnace was very low and a major source of pollution in Firozabad, India. The higher pollution from these coal-fired systems affected the health of the workers and the local population in Firozabad. Joint efforts of TERI and SDC improved the lives of the workers and reduced the level of environmental pollution in Firozabad at the grass roots level in addition to lowering the fuel cost of glass units on account of reduced energy consumption. Thus, fostering partnerships between developing country institutes, which have a better understanding of local problems, and international organisations which have the requisite resources and technologies, is the key to finding solutions to the environmental problems and to contribute to the improvement of the lives of the poor people in developing countries.

There are high expectations on the Rio+20 summit for renewed momentum for global sustainable development. Therefore at Rio+20, world leaders must build upon and scale up theachievements, best practices and lessons of theMDGs, and lay strong foundations for the post2015 development agenda.In order to make significant progress towards sustainable development, the summit should come up with a concrete roadmap for future and define aspirational goals for the international community in the areas of food security, sound water management, universal access to modern energy services etc.