Negotiators have started the final talks before the full UN Conference on Sustainable Development in Rio de Janeiro (20-22 June). As we highlighted at the beginning of the year, the event could provide a useful underpinning for shifting capital in favour of green growth. But to do this, governments will need to deliver a set of robust ‘investment-grade’ outcomes that make sustainability pay (see Delivering an investment-grade outcome at Rio+20, 19 January 2012). What began as a mixed bag of proposals has, however, ballooned into a baggy and fractious document that mostly ‘reaffirms’ past commitments and ‘acknowledges’ problems, but marks precious little forward movement. The age-old splits between industrialised and developing countries are well-rehearsed – with some of the more promising ideas risking getting watered down or omitted entirely.
Many factors might explain this uninspiring prospect (see Table 1). First, UN summits rarely produce breakthroughs – so expecting a transformational outcome is perhaps unwise. Second, the economic backdrop does not encourage long-term thinking. But the 1992 Summit also took place in a downturn – with a global GDP growth rate of 2.1%, the same as our HSBC economists forecast for 2012. Third, we’re in a US election year, which could militate against financial or regulatory commitments by the world’s largest economy. But 1992 was an election year also – and that did not stop the Bush Administration signing the new climate and biodiversity conventions. Fourth, and more revealingly, there is a distinct slackening of public pressure (see Chart 1). And finally, this year’s event lacks a focus on hard outcomes. Paradoxically, this may be a sign that sustainability is becoming a routine issue. But, as we show in Charts 2-13, what progress has been made over the past 20 years has generally been overwhelmed by growing pressure on global ecosystems. Rio+20 can still make a mark – and we highlight four priorities: SDGs, perverse subsidies, natural capital and corporate reporting (Table 2).
Taking stock of (the lack of) progress since 1992
Charts 2 – 13 indicate progress in key areas since 1992. Improvements have been achieved in access to water and sanitation, but with 20 per cent of the rural population without access to clean water needs qualification, there is more to do. Similarly, while sanitation levels have improved, universal access is a way off. As well as the humanitarian angle, a recent study by Frontier Economics demonstrated that the economic benefit of sanitation investment was in the region of USD5 for every dollar spent, because of improvements in health resulting in higher levels of education and productivity. In addition, poverty alleviation has been a relative success story, with the Millennium Development Goal of halving the people living in extreme poverty (<USD 1/day) reached in 2008 (Chart 5). However, there is still more to do.
The rate of deforestation has slowed as shown in charts 6 and 7. Globally, deforestation slowed from a -0.2% reduction in forest area from 1990-2008 to an annual rate of -0.13% from 2000-2010. Despite the improvements however, 52mn hectares of forest area were deforested from 2000 to 2010, an area almost
There is lack of progress on pollution control and ecosystem depletion. Chart 9 shows that while renewables deployment has increased, fossil fuel as a share of energy has been stable at around 80% of use in the past 20 years, which means that emissions continue to rise (Chart 10). Global emissions increased by 3.2% in 2011 compared with global economic growth of 2.5%.
Non-fossil-fuel emissions are also increasing, some paradoxically as a result of the effectiveness of the Montreal Protocol on eliminating ozone depleting gases. Reduction in the primary ozone-depleting substances has led to a substitution to the use of other gases such as HFC’s. While some HCFCs are covered by the Montreal protocol, other HFC’s are non-ozone depleting but have higher global warming potential than other greenhouse gases, and their global concentrations have increased.
Nick Robins is a senior climate change analyst at HSBC. This report is HSBC’s latest Global Research report on Climate Change. Reproduced with permission.