Monday, November 24, 2014

Rio’s Unsustainable Nonsense

NEW YORK – If George Orwell were alive today, he would be irritated, and then shocked, by the cynical way in which every lobby with an axe to grind and money to burn has hitched its wagon to the alluring phrase “sustainable development.” In fact, the United Nations’ Rio+20 Conference on Sustainable Development is about pet projects of all and sundry – many of them tangential to the major environmental issues, such as climate change, that were the principal legacy of the original Rio Earth Summit.

Thus, the International Labor Organization and trade-union lobbies have managed to insert “Decent Jobs” into the seven priority areas at the Rio conference. I would love for everyone, everywhere, to have a decent job. But what does that have to do with either the environment or “sustainability?”

No one should pretend that we can magically offer decent jobs to the huge numbers of impoverished but aspiring workers in the informal sector. Such jobs can only be created by adopting appropriate economic policies. Indeed, the really pressing task facing many developing economies is to pursue policies that promote economic opportunities by accelerating growth.

The flavor of the week in Rio is “sustainability indexing” for corporations, by way of corporate social responsibility (CSR). Such indexing is being compared to accounting standards. But the latter are “technical” and gain from standardization; the former are not and must reflect variety instead.

Corporations can, of course, be asked to conform to a “don’t” list – don’t dump mercury into rivers, don’t employ children for hazardous tasks, etc. But what they practice as “do’s” by way of altruism is surely a matter of what they consider virtuous to spend their money on.

The notion that a self-appointed set of activists, in conjunction with some governments and international agencies, can determine what a corporation should do by way of CSR contradicts the liberal notion that we should ask for virtue to be pursued, but not in a particular way. At a time when the world is emphasizing the importance of diversity and tolerance, it is effrontery to suggest that corporations should standardize their notion of how they wish to promote good in the world.

Even when the Rio+20 agenda includes something more properly “environmental” – say, the supply of water – platitudes predominate. Thus, the availability of safe drinking water is now to be enshrined as a “right.” We have traditionally distinguished in human-rights conventions between (mandatory) civil and political rights, such as the right to habeas corpus, from (aspirational) economic rights, because the latter require resources. Blurring that distinction – thereby disregarding the problem of scarcity – is no solution.

After all, “availability” can be interpreted according to many criteria and thus in myriad ways: How much water? At what distance from different households (or by pipe into each house)? At what cost? These decisions have different implications for the availability of water, and they must compete, in any event, against other “rights” and resource uses.

In the end, therefore, water availability cannot properly be called a “right.” Rather, it is a “priority,” and countries will inevitably differ in the sequence with which they pursue it relative to others.

While these are “sins of commission,” the “sins of omission” at Rio+20 are even more glaring. For a conference that is supposedly addressing “sustainability,” it is worth lamenting the absence of a heroic effort to agree on a successor treaty to the Kyoto Accord. If the cataclysmic scenarios implied by neglect of climate change are valid – and extreme estimates, it must be said, could backfire politically by looking implausible or, worse, by producing a “Nero effect” (if Rome is burning, let’s party) – Rio+20’s lack of action should be regarded as an historic failure.

But a matching omission is that prompted by our societies’ increasing political unsustainability, not because of the immediate financial problems like those afflicting Europe and threatening the world, but because the modern media have made visible to all the disparities in the fortunes of the rich and the poor. The rich should be urged not to flaunt their wealth: extravagance amid much poverty arouses wrath.

The poor, meanwhile, need a fair shot at raising their incomes. That can only come through access to education and economic opportunity, both in poor and rich countries.

“Less Excess and More Access”: only a policy mix based on this credo will guarantee that our societies remain viable and achieve genuine “sustainability.”

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    1. CommentedAdrian Sym

      the author should have looked at the corporate Sustainability Forum, organized by the UN Global Compact, as a barometer for corporate action on sustainable development. In short, amongst many "leading" corporates CSR has long since evolved into the notion of "corporate sustainability", i.e. recognizing that the viability of the business depends on the viability of the external environment (people and nature). this also highlights the value of including "decent jobs" in a holistic approach to sustainable development, rather than the "all about the environment" approach that used to be prevalent.
      In a very challenging political environment I was more encouraged by the leadership shown at the Corporate Sustainability Forum than anything I witnessed at the intergovernmental summit. Overall, Rio (and the G20 just before) emphasized the accelerating and parallel shifts from US/Europe to BRICS and from governments to private sectors as we look for long term and, yes, sustainable solutions.

    2. CommentedTenzin Namdhak

      Sustainable development is the way forward for all the countries irrespective of its GDP percentage. How we come to the conclusion where all the nations abide by the law of clean environment is the question of when? sooner or later it has to come because we have already paid heavy price for the pollution caused by the industrial development. The next question is whether economist can come with the idea of growth as well as clean environment model for the nation in future. We have huge moral incentive to work for clean environment for future generation and i dont think the idea of trade off can't be applied here bewteen clean environment and growth.

    3. CommentedMatthew Guenther

      Interesting commentary on the Rio+20 Summit. His argument that corporates should follow only a virtuous path of their choice is ideal, but by aligning a company's CSR agenda with sustainable development goals (i.e. MDG) and its corporate strategy adds credence to their endeavours. Company's that do not see a link to their corporate strategy and the sustainable development agenda are probably not looking hard enough.

    4. CommentedJoão Tiago Barriga Negra Ascensão

      As I see it, sustainable practices, along with other forms of social responsability, are an obligation instead of some kind of favor or virtue or whatever you may call it. Don't agree at all with Professor Bhagwati because such arguments are totally deprived of any notion of moral commitment, equity or social good.

      In a sense, environmental standards are no different from accounting standards: a set of requirements conductive to the implementation of sustainable business practices, favoring the construction of more resilient economic systems.

      I do believe auto-regulation may be the way to go but some kind of indexing is desirable, in my opinion. Sooner or later, companies will have to include sustainability in their governance structures.


    5. CommentedMoctar Aboubacar

      The problem is that corporation doing CSR experience all the problems of a for-profit enterprise trying to be less so, and only for a specific project. Leaving aside the issue of corporations' intent, there are many cases where CSR enterprises fail for lack of proper development know-how. So while I don't know about Rio's specific agenda with regards to this, to argue under the banner of tolerance that corporations should engage in development work/self promotion in whichever way they see fit seems irresponsible.

    6. CommentedKeshav Prasad Bhattarai

      I really agree with many issues raised by the author. Undoubtedly the world has made some progress since 1992 Rio Summit. Individually many countries have made some progress especially in research and development in sustainable energy use, reducing CO2 emissions and combating climate change. Lots of researches have been made in Europe and America. World bodies like United Nations and World Bank have done tremendous work and research on environmental problems and solutions on it. Enriched reserves of knowledge on environment have been made available for people around the world and greater consciousnesses among them have pushed their governments follow effective environmental protection measures.
      But on the part of political leaders less has been achieved. For example U.S. President, German Chancellor and British Prime Minister could not find their way to Rio and address worldwide concerns of billions of people on their environment and their future. Chinese and Indian Prime Ministers visited there but they have already mentioned that they are not prepared to sacrifice their developmental needs for environment.
      Expectations and plights of billions of people were again betrayed in Rio. The world leaders disappointingly repeated their failures to produce a negotiated action programs for sustainable development as in the Climate Change Conference in Copenhagen in 2009.
      But In a leader less world, politicians as well as those 50 thousands activists assembled in Rio as mentioned by the author succeeded in burning millions of dollar in the name of sustainability in a quite unsustainable way - leaving a question unanswered – was the huge crowd really needed and honest to their purpose? And does such crowd can produce any good framework for sustainable development? Have they gone there to as a tourist or as persons committed to the sustainability of development? They should come with answer to these questions.

    7. CommentedHamish Harding

      If our "leaders" can't lead us them I fail to see the point of this exercise. If we're now in a situation where our political elite can't tackle serious threats, then the future looks grim indeed.

      Hamish Harding

    8. CommentedFrank O'Callaghan

      Ignoring the problem of distribution or "thereby disregarding the problem of scarcity" is certainly no solution. The monetization of natural resources formerly held in common is happening quickly across the world.

      If a resource is truly scarce there is a simple choice: pricing or rationing. The rich generally favour the former and the poor the latter.