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Volume 15, No.1 - January 2011
Reviving the Rio Spirit
The Earth Summit, the first UN Conference on Sustainable Development held in Rio de Janeiro in 1992, shifted paradigms. For the first time, during this unprecedented UN meeting, governments and leaders from across the globe re-thought economic development and fully recognized the integral and interdependent nature of our home, the Earth. The summit’s shared message was to ensure a healthy planet by drastically changing our attitudes and behaviours. State leaders acknowledged the urgency of a deep change in consumption and production patterns.
During the Rio Summit, Agenda 21, a programme of action for sustainable development, was adopted. The document, which contains the Rio Declaration, further reaffirmed that sustainable development was delimited by the integration of the economic, social and environmental pillars.
Since the adoption of the Rio Declaration, progress has been made. In 2002, during the Johannesburg World Summit on Sustainable Development (WSSD), leaders met to renew the global commitment. Today, the concept of sustainable development has been incorporated in the agendas of every government and the private sector, and it has also been included in many UN declarations. More and more green jobs are being created, alternative sources of energy are being developed and used, and production and consumption patterns have being modified.
However, efforts have fallen short of what was expected two decades ago, and the consequences are evident. Five million infants still die every year of preventable diseases. Two billion people live in poverty, many lacking access to basic services like health and primary education. Small island states are at high risk of environmental catastrophes, and even their own survival is a stake. Climate change and food and energy insecurity are threatening the world’s stability. The weakened economic situation experienced since 2008 has drastically affected growth, and thus, nations have had to respond to new emerging challenges.
Today, more than ever before, there is a need to revive the enthusiasm and spirit experienced in 1992, and Rio+20, the 2012 UN Conference on Sustainable Development, will be the perfect place to renew commitments and prepare for new and emerging challenges.
Recognizing the need to revitalize the discussions on sustainable development and to effectively prepare for emerging challenges, the UN General Assembly adopted a resolution in 2009 agreeing to hold the United Nations Conference on Sustainable Development (UNCSD) in 2012 in Brazil.
The summit’s three objectives are to secure renewed political commitment to sustainable development, assess progress and gaps in the implementation of agreed commitments, and address new and emerging challenges.
In order to focus the discussion and successfully reach the goals, the conference will consider two themes: “A green economy within the context of sustainable development and poverty eradication,” and “the institutional framework for sustainable development.”
It is expected that during the preparatory process and at the conference all sectors will bring innovative ideas and solutions focusing on the advancement of a green economy, which is the key for rapid progress on sustainable development.
In his statement to the Expert Meeting on the Green Economy in Geneva in October 2010, Mr. Sha Zukang, in his capacity as Secretary-General of the UN Conference on Sustainable Development said: “A green economy provides the missing entry point to accelerated progress, it offers new avenues and opportunities for pursuing the integration of the social, economic and environmental pillars of sustainable development.”
Focusing on green economy also ensures that the discussion moves forward from just a low carbon economy. In fact, green economy is characterized by low inputs, low emission, low wastes, higher efficiency in resource uses and better product designs, as well as creating jobs that can lift people out of poverty.
In that sense, Rio+20 is expected to become the new historic UN meeting where solutions to the emerging challenges of the last 20 years will be explored. However, to meet the summit’s expectations and to reach its goal, the preparatory process becomes one of the most vital elements of the conference.
On the Road to Rio+20
To make Rio+20 an unprecedented success, it is crucial to facilitate the broadest possible participation from all the key stakeholders. As a result, the Rio+20 Secretariat has invited formal contributions from national delegations, UN system entities, and thousands of registered civil society organizations from all over the world.
The preparatory process will also include three meetings of the Preparatory Committee where procedural and substantive matters will be discussed and agreed upon. The first meeting was held in New York from 16-18 May 2010. The second one is intended to take place from 7-8 March 2011. The last meeting will be held in Brazil in 2012 to discuss the outcome of the Conference, immediately preceding UNCSD 2012.
Although DESA is in charge of organizing the 2012 conference, it has been recognized that to achieve the anticipated results, it is necessary to engage the entire UN family.
According to Mr. Sha, DESA needs the broad engagement from other secretariat departments, regional commissions, funds and programmes and specialized agencies – in other words, the entire UN family – in order to provide effective, efficient and coordinated support for the preparation and organization of UNCSD 2012.
So far there are clear signs of collaboration for the preparatory process among members of the UN family. For example, DESA, the United Nations Environment Programme (UNEP), and the United Nations Conference on Trade and Development (UNCTAD) have organized a series of expert meetings in green economy.
It has also been realized that the only way to achieve comparable engagement to the Earth Summit from civil society is through outreach efforts. Consequently, at the Headquarters in New York, DESA and the Department of Public Information (DPI), jointly with other UN system entities and agencies, are creating communications campaigns for Rio+20.
To revive the Rio spirit there is a need to unite efforts across the board. Member States, the UN family, and civil society must actively participate in the preparatory process and at the conference. Without joint efforts, rekindling the Earth’s Summit enthusiasm will be a significant challenge.
During his statement to the Executive Committee of Economic and Social Affairs (ECESA) Plus meeting, on 12 November Mr. Sha said, “We had gotten off to a good start and we will continue along the path of collaboration. It is no exaggeration to say that it takes the whole UN family to support a successful UN Conference on Sustainable Development.”
For more information: http://www.uncsd2012.org/
Global economic outlook is marked by risks and uncertainties
World economic recovery will be uneven in the coming years. Prospects for advanced economies are marred by persistent high unemployment, withdrawal of stimulus measures, and continued financial fragility. Sovereign debt distress and tensions over exchange rates risk affecting global stability, which could also affect the till now much more robust performance of most developing countries.
According to the UN report the “World Economic Situation and Prospects (WESP) 2011”, to be released worldwide on 18 January, the expected economic expansion will be 3.1 per cent in 2011 and 3.5 per cent in 2012, which is far from optimal to enable economic revitalization.
The economy of the United States is expected to grow by 2.2 per cent in 2011; a slowdown from the 2.6 per cent growth in 2010. Economic recovery in the Euro area is forecasted to come to a virtual halt, with output expanding at a mere 1.3 per cent in 2011 and 1.9 per cent in 2012. In a more pessimistic scenario, the UN report predicts that Europe could well see a double-dip recessionn, while the economies of the United States and Japan might virtually stagnate and possibly also fall back into recession during 2011.
The global economy is being held up by robust recovery in developing countries since the third quarter of 2009. But the weakening economic landscape of developed nations is expected to moderate growth in developing countries from 7.0 per cent in 2010 to 6.0 per cent on average during 2011-2012.
Risks and Uncertainties
Rob Vos, Director of the Development Policy and Analysis Division of DESA emphasized that “We are not out of the woods yet and greater risks are looming."
Factors affecting the economic recovery include the diminished cooperative spirit among major economies, reflected in uncoordinated monetary responses leading to turbulence and uncertainty in financial markets. At the same time, fiscal stimulus is being withdrawn in many economies, which in the present context threatens to keep unemployment high and drag the recovery in the near outlook.
Between 2007 and 2009 at least 30 million jobs were lost, and this number could even be greater, as it does not consider increases in precarious employment in the informal sector and rates of underemployment. Unemployment rates in most developed economies, except a few such as Germany and Australia, have stayed high and hardly come down.
In the Unites States, for instance, the unemployment rate may increase to 10 per cent at the beginning of 2011, up from 9.6 percent in the third quarter of 2010. Some European countries are facing even more daunting prospects, such as in Spain where the rate jumped to 20.5 per cent in 2010 and where more than 40 per cent of the youth are without a job. The report predicts that unemployment rate will come down in the Euro zone at a snail’s pace. With many without a job, household consumption will remain sluggish and drag output growth down. Vice versa, weak output growth will limit the creation of jobs.
Besides the lack of job creation, volatility in currency markets resulting from uncoordinated monetary expansions has increased tensions over currencies. This is adding more uncertainty to the already unstable macroeconomic landscape. The report explains that the strong quantitative easing (in simple terms, printing more dollars) in the United States, is putting downward pressure on the value of the world’s reserve currency, causing ripples in currency markets worldwide. The UN warns that heightened tensions over currency and trade could potentially trigger renewed turmoil in financial markets.
Key challenges ahead
Providing more fiscal stimulus in the short run is the first of five key challenges that needs to be addressed according to the report. It provides evidence that most developed countries still have ample fiscal space and hence could provide such stimulus to regain the momentum of the recovery. Such action should be adequately coordinated among the major economies to ensure a reinvigoration of global growth that will also provide external demand for those economies which have exhausted their fiscal space. Absent of a new net fiscal stimulus and a faster recovery of bank lending to the private sector, growth is likely to remain anaemic in many countries in the foreseeable future.
The report sees a redesign of the fiscal stimulus as the second challenge. Thus far, stimulus packages in developed countries have focused mostly on income support measures, with tax-related measures accounting for more than half of the stimulus package. Expanding public investing on renewable clean energy is a measure that the report cites as an adequate vehicle to aid economic recovery as this type of stimulus provides significantly greater employment effects. Monitoring closely the way in which income growth and productivity gains are shared in society, providing job-search training, and enhancing social protection policies are some of the other ways in which nations can redesign their fiscal spending.
As indicated, uncoordinated monetary expansion has been a cause of damaging exchange rate instability. The third challenge, therefore, is to avoid damaging international spillover effects, reaching cross-border agreements about the magnitude, speed and timing of quantitative easing policies will reduce the likelihood of increased global imbalances.
The fourth challenge is to ensure that there is sufficient financing for achieving the MDG’s and also to increase investments for sustainable development in low-income countries. The report highlights that these countries have reduced fiscal space while facing large development deficits. Apart from delivering on existing aid commitments, donor countries should consider mechanisms to delink aid flows from their business cycles so as to prevent delivery shortfalls in times of crisis, when the need for development aid is most urgent.
Governments in major economies have become more focused on domestic policy challenges than on the spillover effects of their actions. Consequently, the fifth challenge will be to find effective ways to strengthen international policy coordination. According to the report, the focus in recent policy debates on exchange-rate realignment is too narrow and bilaterally focused.
In this regard, there is some urgency in making the G20 framework for sustainable global rebalancing more specific and operational. The report suggests that establishing concrete “current-account target zones” might be a meaningful way forward. Having clear and verifiable targets for desired policy outcomes would help make parties accountable, while the possible loss of reputation through non-compliance would be an incentive to live up to policy agreements.
Such target zones would also highlight the need for both surplus and deficit countries to contribute to sustaining global effective demand. The target zones should not, however, be seen as an end in themselves, but rather as a guide towards a sustainable growth path for the world, which should encompass the proposed actions to address all five key challenges.
As stated by Mr. Vos, “The road to recovery will be long and bumpy.” However, if a cooperative spirit among developed economies is revived, economic responses are coordinated, and fiscal stimulus is resigned, a more optimistic scenario for the world economy could become within range.
For more information: http://www.un.org/esa/policy/wess/wesp.html
UN climate change talks pave way for new gains
The United Nations climate change talks in Cancún concluded on 11 December with a package of decisions to help countries advance towards a low-emissions future, delivering a victory in the battle against one of today's biggest challenges.
The outcome is an “important success for a world much in need of it,” Secretary-General Ban Ki-moon said, following the conclusion of the two-week meeting. “Governments came together in common cause, for the common good, and agreed on a way forward to meet the defining challenge of our time.”