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Beyond Rio’s disappointment, finding a path to the future

The Rio+20 Summit produced a largely meaningless document that failed to address the daunting environmental challenges the world faces. But many at the conference looked to an alternative approach they called “green economics” — using market forces to help nations achieve sustainable development.

There were no histrionics, no last-minute deals or walkouts. In fact, no anything really. The Rio+20 Earth Summit last week ended with barely a whimper. Many of the halls emptied by early afternoon on the final day. With the concluding text agreed three days earlier, the journalists had little to report, unplugged their laptops, and headed for the beaches.

And yet, behind the scenes, something really interesting just may have happened in Rio.

The summit was never going to be like its illustrious predecessor in Rio de Janeiro 20 years earlier. At the original event, virtually all the world’s leaders (including a reluctant George H.W. Bush) signed two groundbreaking treaties, on climate change and protecting biodiversity. Neither has turned out to be as effective as hoped back then. But the ambition was clear: saving the planet and achieving “sustainable development” for all.

Two decades on, the planet’s ecosystems are still degrading fast. Any green gains have been wiped out by soaring consumption. Humanity’s annual requirement for natural resources is about double what it was then. The rate of species extinctions is undiminished. Carbon dioxide emissions are up 40 percent, and the concentration of the heat-trapping gas this year for the first time hit 400 parts per million (ppm) in the Arctic air — up about 40 ppm from 1992.

But the former will among politicians to address the challenge has dissipated. Where in Rio this time, were Obama, Merkel, and Cameron? Even Hillary Clinton only showed in Rio for a few hours. Where were the new treaties to sign? Europeans in particular had hoped to get agreement on drawing up a convention to protect the high seas, which are currently not covered by either national jurisdiction or international environmental law. But an unlikely alliance of the U.S. and Venezuela, backed by Japan, Russia, and Canada, vetoed the plan at the last.

The text of the Rio+20 Outcomes Document, the conference’s main formal declaration, is lame even by the standards of international diplomacy. Beside a high-seas commitment, other proposals omitted from the declaration included an outright condemnation of subsidies for fossil fuels, support for mandatory environmental and sustainability reporting by large corporations, and a green light for green taxes. The conference did agree to start talks on setting sustainable development goals to augment the world’s existing millennium development goals, but could not agree on what topics they might cover. Even a planned upgrade of the UN Environment Programme fizzled.

The process for drafting the Rio+20 declaration was as flawed as the outcome. The Brazilian hosts decreed that all text had to be agreed before the arrival of government ministers for the final three days. As the deadline approached, they simply deleted those sections causing controversy and replaced them with weak compromise text.

At most such conferences, ministers do deals to improve on the work of their civil servants. That often produces the late-night drama. Here, they were presented with a lowest-common-denominator fait accompli. There wasn’t even a slot on the conference agenda for them to discuss the text they were signing. Any semblance of democratic accountability was lost.

The diplomats professed to be happy. The UN official in charge of the conference, Sha Zukang, declared a “successful” outcome. But environmentalists, scientists and social activists saw only that nobody had been committed to anything. Even conference veterans well versed in how to extract a smidgeon of success in grievous compromise could find nothing to cheer. WWF International lambasted a “colossal failure of leadership and vision”; Care International called it a “charade.”

The recriminations began even before the conference closed. British Deputy Prime Minister Nick Clegg blamed developing countries for being “antagonistic to our European ideas on the green economy.” Brazilian delegate and senator Eduardo Braga said, “Europe is too absorbed by its economic problems.”

Both were right. But so too was the director of the UN Environment Programme Achim Steiner, when he said in mid-conference that it revealed “a world at a loss what to do.” On the final day, he concluded: “We can’t legislate sustainable development in the current state of international relations.”

If not legislation, then what?

In part, the absence of ambition derives from a new realism about what international agreements alone can achieve. The World Bank’s vice president of sustainable development, Rachel Kyte, remembered how 20 years before, governments appeared to believe that the planet could be put on a green path with some environmental laws to curb Western profligacy and some overseas aid for the developing countries. Nobody believes that anymore.

But there is optimism that a new way can be found. “We have failed to turn things round in the past 20 years,” said Steiner, “but underneath that failure there is an extraordinary array of activity and innovation.” The heart of that was a beguiling phrase: green economics. Rather than fighting the power of capital, or trying to legislate away its environmental downsides, the idea is to harness market forces to turn economies onto a green track. More carrot and less stick.

Green economics, though only briefly mentioned in the final declaration, was on everyone’s lips in the corridors at Rio. Kyte insisted it was the answer. “Twenty years ago, we agreed what to do; now we have the tools to do it.” Steiner chastised environmentalists who feared it. “If we do not go into the heart of economic policy, we will meet here at Rio+40 even more culpable. Markets are social constructs. They are not a force like gravity. They can be governed.”

Green economics, as represented in Rio, meant primarily introducing metrics about the use and abuse of nature and natural resources into corporate and national accounting. This would, as Steiner put it, bring the environment within the “visible spectrum” of economic activity.

The theory goes that once natural capital turns up on balance sheets in the same way as man-made capital, then CEOs and policy makers will adopt greener ways. Natural capital accounting should mean environmental protection is seen as an investment, rather than a cost, said economist Sam Fankhauser of the London School of Economics. Corporations will husband resources better, while governments will switch taxation onto resource use and pollution rather than economic activity itself.

Faced with national governments reluctant to engage in its grand plans, the UN is increasingly turning to corporations to make a difference. This too is seen as part of the brave new world of green economics. Tim Wirth, the former U.S. senator who now heads the UN Foundation, which fosters UN links with business, told journalists that “magic” public-private partnerships were more important that any conference declaration.

Leading the charge to grab some of the action is Chad Holliday, former president of DuPont and now chairman of the Bank of America. UN Secretary General Ban Ki-moon has recruited him to co-chair his ambitious program to bring electricity and clean cooking fuel to the billions still without them by 2030. Holliday called the energy scheme “the greatest public-private partnership of all time” and said it would become the prototype for how to implement the planned UN sustainable development goals.

Many other CEOs have picked up the scent that there is plenty of business to be done. The UN claimed there were 1,500 corporate leaders in town for the conference, compared with only a handful in 1992.

The public-private partnerships will involve public funding, from governments and bodies such as the World Bank, leveraging further investment from the profit-seeking private sector. Ban’s energy plan, dubbed “sustainable energy for all,” has brought a commitment of $2.4 billion from the Brazilian government to connect its remaining citizens to the national grid by 2014. With such inducements, corporations have pledged $50 billon in further investment round the world.

And that is just the start. In another sign of how public-private partnerships might deliver, the Asian Development Bank announced here that it had launched a consortium of banks and corporations aiming to spend $175 billion over the next decade on “sustainable” transportation systems across the developing world, including rapid-transit bus networks, railways, and fuel-efficient vehicles.

Is this the salvation of the world, or a headlong rush into an unsustainable future under a green logo? NGOs warned in Rio that if nature had a dollar sign attached, corporations would soon take it over. They see the trading of carbon rights to forests, proposed under future climate change agreements, as just the start.

Meanwhile, ecologists pointed out that ecosystems do not function like warehouse inventories and that equating natural man-made capital could be both bad economics and bad ecology. Green economies "need to be embedded in ecological principles and not simply focused on economic growth based on new, greener production systems,” wrote Georgina Mace of Imperial College London in a paper in PLoS Biology, published to coincide with the conference.

But whatever the drawbacks of commodifying nature, something has to be done. The state of the host country today, 20 years after the first Earth Summit, underlines the failed resolve of the intervening years.

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