Making growth sustainable

1. Introduction

Protection of the natural environment within the framework of sustainable development has become of increasing urgency. Over the last thirty years or so, public interest in the environment has waxed and waned. The talk has always exceeded the action. But everywhere the fundamental requirement is to think differently. Today I want to suggest how our thoughts are evolving, particularly in Britain and China, and what should now follow.

We are all conscious of the upside of the industrial revolution, which began only 250 years ago. Whatever we mean by it, 'development' has now become an almost global human ambition. Economic wealth on the normal - and highly misleading - definition has risen at an almost incredible rate. Even if this has been uneven, and getting more so, it can be argued that living standards are rising, and with them expectations of a better quality of life for humanity as a whole. Expectations of life have everywhere risen.

But we should not forget the downside: degradation of the environment. All change has been at a price. We have created what future generations will surely find a peculiar society, hooked like a fish on use of fossil fuels, and pulled by a rampant consumerist philosophy out of synchrony with the natural world, both animate and inanimate. While we have been increasing output of good of all kinds, we have been running down, despoiling and often wasting the resources from which they are derived.

If there is any reconciliation between the upside and the downside, it lies in the elusive notion of sustainable development. For many the phrase sounds good, but the meaning is left in a kind of fog.

2. Sustainable Development

What does sustainable development actually mean? There have been many attempts at definition. Most people go for that used by the Brundtland Commission on Sustainable Development (1987):

"Development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

But that begs almost as many questions as it answers. My own suggestion is simpler:

"Durable change for the better while protecting the earth we inherit and the earth we bequeath."

Or a sound bite from Rob Gray:

"Treating the earth as if we intended to stay"

3. Planetary Health

If we and future generations are indeed to stay, we need an Earth in good environmental health. That health is now endangered. A periodical visitor from space would find more change in its surface in the last 200 years than in the preceding 2,000, and more change in the last 20 years than in the preceding 200. As was suggested in the title of a recent book, there is something new under the sun.

What has been going on? I suppose there are five main factors.

First we have been multiplying our numbers at a giddy rate. At the time of Thomas Malthus the population was 1 billion. Now there are 6.3 billion, while according to the latest report from the United Nations population is set to top 9 billion by the year 2050. Indeed since the Rio Conference of 1992, more than 500 million people have joined the population. The scale of the problem goes well beyond these staggering figures. Most of the 70 million or so extra people added each year are born in the world's poorest countries in Africa and Asia. Half of humanity now lives in cities, many of which are unsustainable by any standards. China was one of the first countries to recognize and act on population issues.

Next is deterioration of land quality and accumulation of wastes. We have been damaging the soils which sustain all terrestrial creatures. Soil degradation is estimated to affect over 2 billion hectares worldwide. According to the United Nations Environment Programme, 65 percent of all arable land may have already lost some biological and physical functions. Most countries still lack coherent policies on minimalization and disposal of wastes.

Next comes pollution of both salt and fresh water. Oceanic pollution is worst offshore. In the oceans as a whole, fish stocks are a useful test. Recent estimates by the UN Food and Agriculture Organization indicate that at least 60 percent of world fisheries are fully exploited or over-fished.

Most biological activity in the oceans is found in the coastal zone. In terms of productivity and species richness coral reefs are equivalent to marine rainforests. An estimated 27 percent are thought already to have been lost. A further 32 percent may be destroyed during the next 30 years.

Meanwhile demand for fresh water has doubled every 21 years. Over the next two decades water use by humans seems likely to increase by 40 percent while 17 percent more water will be needed to grow food for growing populations particularly in poor countries. Water shortages are not a new phenomenon and are predicted to get worse. Yet the amount of fresh water available remains the same as it was at the time of the Han and Roman Empires when the human population was 450 million. The number of people who will face severe water problems could be almost three billion by 2050.

Next is our continuing destruction of other living species at rates comparable to those caused by extraterrestrial impacts in the long past. Current rates of extinction could be many times what they would be under natural conditions. The number of endangered or threatened species listed by International Union for the Conservation of Nature has dramatically increased. One in four mammal species, which are key indicators of eco-system health, are facing a high risk of extinction in the near future.

On a global scale, damage to ecosystems is already extensive and the future course of evolution will be substantially changed by current human activity. Nowhere is this more true than in the micro-world of bacteria and viruses, which learn how to react to almost any drug we may throw at them. Humans take 20 years to reproduce. Bacteria do the job in 20 minutes. Nor can we yet assess the effects of introduction of genetically modified organisms.

Last we have been changing the chemistry of the atmosphere. Acid precipitation can be dealt with when there is sufficient political will. There is an array of international agreements to manage and eventually reverse depletion of the ozone layer. Climate change is more difficult. It relates directly to the ways in which we produce and use energy. Since the industrial revolution we have been using the sky as a waste unit. As a result carbon dioxide in the atmosphere has now reached its highest level in 400,000 years, and is at a third higher than in pre-industrial times. Methane, a less abundant but far more effective greenhouse gas has seen its concentration more than double since pre-industrial times. The science of the carbon cycle is imperfectly understood, but there is a clear relationship between atmospheric carbon and global surface temperature. China will be much affected by climate change as shown in recent models produced by the Chinese National Academy of Sciences.

The only real controversy is about the degree of change we are bringing about. The Third Assessment of the Intergovernmental Panel on Climate Change published last year suggests rises in average global surface temperature of between 1.40ºC and 5.80ºC by the end of this century, an increase on its previous Assessment of 1996. Sea levels are predicted to rise world wide between 90 and 880 mm between 1990 and 2100, but could be more if current melting in the Arctic and Antarctic continues.

As has been well brought out in UNEP's Millennium report on the Environment known as GEO 2000, almost all environmental problems are getting worse and in many cases the long term effects have yet to be seen.

Since then, there was a specific warning from over a thousand scientists involved in the four global research programmes. In the Amsterdam Declaration of July 2001 the sheer scale of the problem was outlined in two central propositions:

"Human activities have the potential to switch the Earth's System to alternative modes of operation that may prove irreversible and less hospitable to humans and other life… the Earth's System has moved well outside the range of the natural variability exhibited over the last half million years at least. The nature of changes now occurring simultaneously in the Earth's system, their magnitudes and rates of change are unprecedented. The Earth is currently operating in a no-analogue state".

"The accelerating human transformation of the Earth's environment is not sustainable. Therefore the business-as-usual way of dealing with the Earth's System is not an option. It has to be replaced - as soon as possible - by deliberate strategies of management that sustain the Earth's environment while meeting social and economic development objectives".

This was the background to the decision to hold the World Summit on Sustainable Development at Johannesburg between 26 August and 5 September 2002. It was the third in line in summit meetings after Stockholm (1972) and Rio de Janeiro (1992). Like them it was carefully prepared. The United Nations set up six regional Round Tables of so-called Eminent Persons to consider what should be on the agenda. I chaired the one for Europe and North America. Our group included non-governmental organizations, academics, trader-unionists, industrialists, business people and others.

Two fundamental messages emerged. First we underlined that action was necessary at all levels. At a time when governments were losing a lot of their authority upwards to international institutions, downwards to regions and local communities, and sideways as individuals world wide made direct contact with each other, the need to involve civil society as a whole was vital.

In the words of our report, we recognized that the present generation might be among the last that could correct the current course of change before it reached a point of no return. We had the knowledge and technological ability to achieve this. What was still lacking was political will, commitment to action and public awareness of the consequences of inaction.

Our second message was that a fundamental rethink was needed. Citizens and governments alike had to reconsider what they really meant by 'development', that the consumerism of the industrial world, and increasingly elsewhere, was unsustainable; that measures to cope with climate change should be given higher priority; and that new international institutions were needed to coordinate work on the whole range of issues.

Overall I am afraid that very little happened as a result of our labours and those of other Round Tables, whose conclusions corresponded broadly with our own.

So what happened - or did not happen - at Johannesburg? The UN Secretary-General had set out a good 5-point agenda: issues surrounding fresh water and sanitation, generation of energy in all its forms, human health, the future of agriculture, and not least the conservation of the diversity of life on which we, like other animals, depend. Apart from governments, a vast array of non-governmental organizations and special interest groups attended the conference. In formal terms the results of the conference were a political declaration, a plan of implementation running to more than fifty pages, and an assembly of one hundred or so partnerships between business, NGOs and government bodies.

Some progress was made on broad issues: for example on fishing, sanitation, renewable energy, protection of biodiversity, reduction in use of harmful chemicals. and respect for certain principles (the polluter pays, the precautionary principle, the principle of differentiated responsibility, the need to bring the environmental dimension into all decision making). Some good, even unlikely things emerged, among them partnerships between non-governmental organizations, business and industry, universities and the rest.

But looked at as a whole, Johannesburg was a big disappointment. Almost no specific commitments were made. When the fog of rhetoric cleared, and people went home, most seem rapidly to have forgotten the whole thing, and re-embraced the simple axiom of 'business as usual' as if it had never been challenged.

3. Values

Clearly we have more of a crisis than most people and their leaders have grasped. The environment has to be seen as a kind of endowment of natural capital which we have inherited and will pass on to our descendants. I do not think that anyone could disagree with the statement by a well-known economist that "the economy is a wholly owned subsidiary of the environment". In short without a healthy environment, there can be no healthy economy.

But there is a real difficulty on how to assess health. The ideologues of ever freer trade like to suggest the price mechanism. But as another distinguished economist once remarked: "Markets are superb at setting prices, but incapable of recognizing costs". Prices are indicators. But we have to make sure that they tell the truth about costs. A pricing system should include not only the traditional costs, but also the costs involved in replacing the resource, and those of the damage that use of that resource may do.

Recently efforts have increased to bring greater compatibility between classical economics and sustainability. Within the World Bank new methods of environmental accounting have been used to take account of the depreciation of natural capital. On this reckoning any losses must be offset by gains elsewhere, for example in the stock of such human resources as services, knowledge and social capital. As this is similar to normal business accounting, it fits well with current economic thinking.

But our ability to substitute human capital for environmental capital must be limited. Technology can create as many problems as it solves. Who could have predicted that seemingly inert chlorofluorocarbons would become such a threat to the ozone layer? Not everything can be given monetary or economic values. How can we value the loss of a species, or of such ecological services as the air we breathe?

4. Responses in Britain and China

What so far has been the response among ordinary people? It tends to follow a regular pattern. First there is a widespread sense of unease, even helplessness. It seems just too much to understand, let alone cope with. Then people try and patch up things as they are with diminishing results. Then they see the need for something more radical. There are many stops, starts and backsliding. Finally they begin to think differently, and what was difficult before looks easier if not almost inescapable. I leave it to you to judge where each of us now is in this process. In some areas we are well ahead, and in others far behind.

Civic society must be fully involved, but governments carry much responsibility. They must display leadership, while respecting and to some extent guiding public opinion. The government I know best is my own. For the rest of this talk I thought it would be helpful first to speak about the British experience, and then about the Chinese experience as seen through the eyes of a member of the China Council for International Cooperation on Environment and Development from its very beginning.

Many environmental issues now included within the framework of sustainable development arose in the 1970s and 1980s, but it was not until the world summit on the subject at Rio in 1992 that sustainable development as such took centre stage. After Rio the previous British government published a paper entitled Strategy for Sustainable Development. The following government followed this up in 1999 with a paper entitled A Better Quality of Life. Here it set out four main objectives:

• social progress which recognizes everybody's needs;
• effective protection of the environment;
• prudent use of natural resources;
• and maintenance of high and stable levels of economic growth and employment.

Of more practical value, it also set out 150 indicators covering a wide range of social, economic and environmental targets.

Both the previous and present British governments felt the need to get impartial and independent advice on sustainable development, and so set up a number of advisory bodies. I have been involved in nearly all of them, and chaired a 6-person Panel on Sustainable Development between 1994 and 2000.

It may be worth a little of detail about how this panel worked. The chairman had direct access to the Prime Minister and other Ministers. The panel chose between four and five themes a year, and published its recommendations in an annual report to which the government had to give a published reply within six months. Among the subjects we chose were:

• environmental accounting and pricing;
• government procurement policy; transport policy;
• sequestration of carbon dioxide;
• housing and land-use planning;
• and the impact of agriculture on biodiversity.

Sometimes the government took the advice of the panel and sometimes it did not. But in both cases the Panel acted not only as a ginger group to the government but also as a device for educating public opinion on the essential issues.

The Panel was succeeded by a much larger Commission on Sustainable Development in 2000. This Commission has just published a review of the government's performance on sustainable development over the past five years. It commended the government for the progress made on agriculture, energy and some aspects of economic policy, and recognized that the government had done better than most other governments.

At the same time it said that the picture was "not brilliant" and that there were major disappointments. Those it singled out included road and air transport; whose growth was, the Commission said, effectively undoing the modest progress on reducing greenhouse gas emissions elsewhere. It particularly criticized the continuing emphasis on economic growth as an end in itself.

"Building economic growth on policies or projects that involve substantial increased in greenhouse gases should be regarded as being as undesirable as building them on crime or pornography."

It also said that taxation for environmental purposes was too low, and that there were too many small politically expedient initiatives on sustainable development which amounted to very little in substance or scope.

So sustainable development is alive and well in Britain, but it clearly has a long way to go. Let me now turn to the Chinese experience. The work of the China Council, as recorded in its annual sets of recommendations, is a good illustration of how attitudes and policies have changed over the last 13 years. Each year they have become both clearer and more practical as the work of the various expert groups or task forces has enlarged our knowledge of conditions in China.

The last set of recommendations, relating to the Second Meeting of the Third Phase of the Council, was perhaps the most telling yet. In my view the essential elements in the success of the Council have been:

• regular access to the Chinese leadership;
• growth of genuine and uninhibited dialogue between Chinese and foreign participants;
• the existence of expert groundwork by the contributing task forces;
• visible progress in dealing with certain problems such as air and water pollution;
• and above all the sense that the leadership was listening to the Council, and ready, within the usual political limitations, to take the necessary actions.

Work is, I know, proceeding in the Lead Expert Group on the agenda for the next meeting of the Council in October. We must all wish it well.

Obviously success has not come all at once. Some issues like pricing of water, effective measures for conservation of biodiversity, the wide range of energy issues, particularly in cities, and the sustainability of land conversion, particularly in Western China, have raised substantial difficulties. China is not alone in this respect. Perhaps the single biggest problem, as the leadership has always acknowledged, is local and even regional implementation of policies which look well on paper but require painful efforts to enforce.

At the same time China has been foremost in some of the theoretical aspects of sustainable development. The Task Force on Environmental Economics, in which I take a special interest, is now engaged on work of possibly world-wide significance in seeking to define what Wen Jiabao has called "green, clean growth" as a contribution to the overriding objective of xiaokang.

I have been asked if I have any points to which I think China should pay particular attention in working towards sustainable development in the future. There are some obvious points: the problems of rapid urbanization; the effects of increased meat-eating on Chinese food security; new technologies for making cleaner use of Chinese coal resources; and future transport policies. At present China seems to be moving towards greater use of cars, whereas in Europe we are back to trains, bicycles and even rickshaws.

A recent edition of Nature magazine contained a series of articles about the development of science in China. It called for more money for research (China contributed only 1.1 percent of GDP in 2001 compared with 3 percent from Japan, 2.8 percent from the United States, and 2.7 percent from South Korea). Good science is fundamental to sustainable development which requires good coordination of research within China and beyond, and its careful application in the many different environments across China.

On subjects for the future, I cannot help thinking that as the most heavily and variously populated country in the world, China could make a unique contribution in the field of bio-medicine and bio-technology generally. The same goes for conservation of the unique spread of biodiversity in China.

I have three main recommendations for you:

• First is to applaud and encourage your current work on environmental and natural resource pricing. This calls for a need to move from a 'standard of living' approach to a 'quality of life' approach.
• Second is to persuade you that models of development and accountability elsewhere are not necessarily appropriate in China. You have the opportunity to leap-frog over the mistakes made elsewhere. What happens in one part of China is not necessarily applicable in other parts. Each region has its own character and potentialities.
• Third is to educate the next and future generations in ways consistent with the great traditions of Chinese civilization in knowledge of natural processes, connectedness with the natural world, and a broad sense of responsibility for the good health of the earth.