Simon Maxwell

The search is on for Rio and Los Cabos deliverables: how about a ‘green growth guarantee’?

Nothing concentrates the mind of civil servants and their bosses so much as the prospect of an international summit with no concrete deliverables. Never mind being sent ‘naked into the conference chamber’, the real risk is being sent naked into the post-summit press conference. ‘How did it go, Madam President?’. ‘Well, thank you for asking. We had a nice chat. Now, you must forgive me, it’s time to leave.’. I think not. That’s why attention really turns in the weeks before a summit to what the British Government often describes as the ‘we wills’ in outcome documents.

I don’t know how much progress has been made with the ‘we wills’ for the outcome document for the G20, to be held in Los Cabos, Mexico, on 18 and 19 June. However, in the case of the Rio+20 Summit, to be held in Rio de Janeiro from 20-22 June, we know that the original outcome document, a mere 19 pages long, has swelled to a ‘compilation document’ of 137 pages. There have been 677 comments on the original draft, of which 100 from Governments, 74 from UN organisations, and a startling 493 from NGOs, business groups, trades unions and researchers.

Despite this level of enthusiasm, expectations with regard to outcomes are modest, for both Los Cabos and Rio. The Rio process, in particular, has left it pretty late to make serious progress on one obvious priority, a set of sustainable development goals. It will probably do no more than endorse the principle of SDGs, and establish a process which will merge discussion into that dealing with post-2015 MDGs. A missed opportunity. If only they had listened to me on the potential of Rio, a year ago, they could have had post-2015 MDGsMillennium Development Goals and SDGs ready by now. Sigh.

There may, however, be one opportunity, linking Los Cabos and Rio, around the topic of green growth. This is not straightforward. The Mexican Chair of the G20 has identified green growth as a priority, and the topic has certainly been on the agenda of the G20 Development Working Group. On the other hand, many developing countries are said to be hostile to the nomenclature, because they fear being constrained on their development path. The term does not appear in the zero draft of the outcome document, for example. However, the terms ‘growth’ and ‘green economy’ are frequently used in the zero draft, quite often in the same paragraph, so it does look as though it might be possible to finesse the vocabulary.

More seriously, the question is what Los Cabos and Rio might together be able to deliver on green growth – or the green economy. As an opening bid, the ‘we wills’ might include information-sharing and better coordination. So far, this seems to have been the focus. I attended a G20 technical workshop on green growth in Seoul at the end of February, which more or less landed in this territory. The DWP itself reported as follows from its meeting in Mexico on 20 March:

‘The DWG recognized that green growth is a key element of sustainable development and, in preparation for the upcoming summit in Los Cabos, agreed to focus on: recommendations on best practices to assist countries that want to design policies on inclusive green growth, and financing, both to make developing countries more able to access all of the resources available for this purpose and to boost the participation of the private sector and increase the resources available for green growth.

At the same time, the Mexican organisers clearly had greater ambition. Thus:

In order to reach an agreement on inclusive green growth, Ambassador Granguillhome asked the participants and international organizations to continue working to reach an understanding on what will be presented to the leaders at the Los Cabos summit, taking into account the positive impact they can have, especially on low-income countries and those most vulnerable to climate change.

In that spirit, I suggested in Seoul that the G20 could pledge a ‘green growth guarantee’, which it could then take forward to Rio. This would support developing countries wishing to commit to green growth, both in the planning itself and implementation. The guarantee would be backed up by commitments by the G20 themselves, with the development of indicators (based on OECD green growth measures, but also the green economy index), and a process of peer review. Tongue (somewhat) in cheek, I drafted and circulated a post-Los Cabos press release, which read in part:

‘Speaking at the conclusion of the G20 Summit in Los Cabos, Mexico, President Calderon announced agreement to a new G20 Green Growth guarantee. ‘All of us in the G20’, he said, ‘recognise that humanity’s future requires that our economies grow in a sustainable and inclusive manner. That is why we have today agreed to guarantee support to countries which set out on this path. No country which shows true commitment to green growth will be denied the opportunity to fix measurable targets and milestones; and no country that asks for help in leveraging the necessary resources will be turned away. The G20 does not on its own determine what actions the international community will take. However, we will lead ourselves, holding each other accountable for our actions through peer review and regular reporting, both with regard to our own societies, and the support we provide to others. We will share knowledge and resources with all other countries. Make no mistake. Today we mark a break with the past, and take the first steps on a new path of inclusive and sustainable growth.’

Of course, the G20 communiqué would need to be a little more measured than this, but the elements would include indicators, support to planning, financial engagement, and peer review. There could even be an infrastructure of learning platforms and tool-kits. If the G20 could champion an initiative like this, then it could easily be carried over to the Rio outcome document.

It goes without saying that there is work to do on each of the elements – but also that many organisations stand ready to contribute, including CDKN, which recently co-hosted a major international gathering of the Low Emissions Development Strategies Global Partnership.

The Seoul meeting provided a useful round-up on the substantive issues. I reported as follows:

  1. Andrew Steer presented the forthcoming World Bank report on green growth and distributed paper copies of the Executive Summary. He argued that green policies on their own will not deliver, and that the overall growth context needs to be right (exactly the point I made in my ‘ten propositions’ paper last year, the subject of an e-discussion on the CDKN website): in South Africa, for example, the Bank had argued that the main beneficiary of green growth policies on their own would be China, whose exports to South Africa would expand because the country’s policies were no good. He argued that green growth was affordable because of the number of win-wins, using McKinsey data to illustrate the cost-savings associated with most green technologies. He said that the most difficult aspect of green growth was the political and social acceptability – their paper has a whole chapter on psychology, apparently. And he ended with a 2x2 matrix, with ‘urgency’ on one axis and ‘synergies’ on the other, arguing that the priority should be to focus on areas where there were high synergies and urgency, defining urgency as lock-in if decisions were difficult to reverse.
  2. Sheng Fulani from UNEPUnited Nations Environment Programme had an excellent presentation on the new engines of green growth, which will help the poor. Green growth itself will increase resource efficiency, release scarcities, create new opportunities and reduce poverty. The engines of growth include natural capital, clean technology and environmental improvements, including investments in human capital, like sanitation. An interesting statistic to illustrate the last point: increasing life expectancy by one year (reflecting a healthier labour force) leads to an increase of foreign direct investment by 9%.
  3. Shardul Agrwala from the OECDOrganisation for Economic Cooperation and Development spoke about why natural capital matters and about the policy framework for green growth. He made good use of material on valuing countries’ wealth (building on the WB’s work on the Wealth of Nations). He also explored the question of whether environmental revenues should be earmarked for environmental purposes (answer: up to a point). NB the OECDOrganisation for Economic Cooperation and Development has interesting work on green growth indicators. See here.
  4. Wondwossen Sintayehu spoke about Ethiopia’s green growth strategy, supported by GGGI and McKinsey.
  5. I spoke next, combining material on the G20 with material on green growth, and ending up with specific recommendations for the DWP. Anyone who wants background on the G20 and the nine pillars of the DWP will find it on my website, here, here and here. I also seemed to be one of the few people in the room who had read the report of the High Level Panel on Sustainability. See my piece here on the CDKN website, focusing on the green growth aspects.
  6. Reyaz Ahmad from IFC, Duarte da Silva from AsDB and Dominic Waughray from the WEF all spoke about new funds which are leveraging private sector investment: the IFCs Climate Catalyst Fund, the AsDB’s Climate Public-Private Partnership Fund (CP3), and other examples cited by Dominic. These are potentially very large, in the case of the WBWorld Bank and the AsDB more than $1bn each.
  7. Sheng Fulani introduced the Green Growth Knowledge Platform, summarising the proposed annual conference, the web platform and the outreach. UNEPUnited Nations Environment Programme and GGGI are acting as the joint secretariat.
  8. Veere Vanderweerd spoke for UNDP, emphasising the inclusive part of ‘inclusive green growth’ and the need for more attention to poverty reduction and participation. She said that from UNDP’s long experience, the key was to invest heavily in capacity-building.
  9. Finally, Andrew Flores Montalvo presented Mexico’s adaptation strategy, arguing that it needed to be linked to green growth.

This was a good way to catch up with where the agencies are on green growth. Intellectually, I don’t know that there were many surprises, but that’s partly because the presentations did not get into sufficient detail about what policies work where. That seems to me the issue that everyone urgently needs to master. As a community, we have too many tool-kits, not enough solutions. CDKN’s success stories Briefing Papers are especially useful in that respect.

The most remarkable feature of the presentations was the speed with which catalyst funds of various kinds are growing, using public money to leverage much larger amounts of private money, e.g. from pension funds or venture capital funds: these are likely to change the finance conversation.

It was surprising that not more people picked up on the disruptive innovation/creative destruction issues associated with the forthcoming new industrial revolution, and the implications for national strategies. Also that there was not more discussion of global as opposed to local policy frameworks. What assumptions should a developing country make, for example, about the future price of carbon and the implications of green growth policies in competitor countries for its own competitive advantage?

One other issue is the relationship between ‘green growth’ and ‘climate compatible development’. These are not the same. One the one hand, CCD pays more attention to adaptation and resilience. On the other hand, it might – but might not - be the case that GG pays more attention to non-climate aspects of ‘green’, including e.g. biodiversity, water, and soil quality. There are many other potential overlaps and confusions, e.g. with ‘low emissions development’ or ‘sustainable development’. What is obviously the case is that developing countries do not want to be producing six different plans to satisfy six different funding agencies or international processes. It may well be that ‘sustainable development’ plans will provide an overarching rubric.

The LEDS meeting covered many of these issues. It had a particular focus on tools and methods, as Mairi Dupar has reported. In addition, however, there were discussions in the margins about underwriting Governments that want to undertake low emissions (or green growth, or climate compatible, or sustainable development) planning: a fund of up to $1 bn was being discussed. A true green growth guarantee would require much more than this, especially to support implementation. Some combination of existing funds, like the Climate Investment Funds, and the new Green Climate Fund would need to be mobilised, along with the catalyst funds discussed in Seoul. More detailed planning could be handed on to the next UNFCCC negotiation, in the context of arrangements for when fast start funding runs out at the end of 2012.

Technical meetings are fine, but Los Cabos and Rio will both be political. In that context, we need to return to the communiqués and the press conferences, to the deliverables and the ‘we wills’. Leaders need to be energised and excited. They will want to offer both vision and roadmaps -  outcomes as well as processes. A green growth guarantee seems to me to meet these needs.

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