Transitioning to a Green Economy - Building on Nature - IUCN

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Mar 22, 2012 - Building on Nature. Rio+20 United Nations Conference on Sustainable Development,. Rio de Janeiro, Brazil
IUCN’S POSITION PAPER ON GREEN ECONOMY

Transitioning to a Green Economy Building on Nature Rio+20 United Nations Conference on Sustainable Development, Rio de Janeiro, Brazil 20-22 June 2012 Summary of main recommendations IUCN urges all governments meeting at the Rio+20 Conference to engage in a global transition towards a green economy, by: 

recognizing ecosystem resilience, social equity, and natural capital as three fundamental features to be accounted for in the transition to a green economy;



promoting the development and deployment of nature-based solutions to global development challenges, keeping the importance of nature high on the agenda of policy and management decisions;



taking concrete measures to honour their commitment to implementing the Strategic Plan for Biodiversity 2011-2020, and in particular targets 2 (integration of biodiversity values in policy processes) and 3 (elimination of harmful subsidies), which are key objectives of the transition and transformation to a green economy;



re-examining their economic indicators to identify those which can more faithfully and rigorously reflect the status of human wellbeing, and to make sure that the full value of biodiversity and ecosystem services is reflected in national accounts and associated fiscal and planning policies;



supporting the nature based solutions approach by investing and enabling investment in natural infrastructure in order to achieve resilient and productive food, water and energy systems; and



providing for the enabling conditions, including regulatory frameworks, within which private sector leadership and innovation can flourish and which provide strong signals that support nature-based solutions to economic development challenges, create decent and sustainable jobs, provide equitable access and opportunities for people.

INTERNATIONAL UNION FOR CONSERVATION OF NATURE

For more information, please contact : Andrew Seidl Head Global Economics Programme IUCN 28 rue Mauverney, CH-1196 Gland (Switzerland) tel. +41 22 999 0228 [email protected] Cyriaque N. Sendashonga Global Director Policy and Programme Group IUCN 28 rue Mauverney CH-1196 Gland, Switzerland Tel: +41 22 999 0317 Cyriaque.sendashonga@iucn .org Constanza Martinez Senior Policy Officer Global Policy Unit IUCN 28 rue Mauverney, CH-1196 Gland, Switzerland Tel. +41 22 999 0254 [email protected] g Igor Cardellini Policy Trainee IUCN 28 rue Mauverney, CH-1196 Gland, Switzerland [email protected] IUCN World Headquarters Rue Mauverney 28 1196 Gland Switzerland Tel: +41 22 999 0000 Fax: +41 22 999 0002 [email protected] www.iucn.org

Introduction The global economy has grown and changed considerably since the 1992 Earth Summit. Although many aggregate measures of development (e.g., income, education, life expectancy) have improved over the past two decades, the benefits of global economic growth have been uneven and have come with significant costs to the potential well being of future generations. Since Rio 1992, global economic growth has also seen a drastic rise in social inequalities and environmental degradation, as a direct result of the continued pursuit of unsustainable management of the Earth’s natural wealth and a disregard for governance systems that embrace equitable access and opportunity for all people. The International Union for Conservation of Nature (IUCN) believes that it is high time for countries to act collectively on the widely shared objective of reforming the economy so that it supports – and does not undermine – efforts to eliminate poverty, protect biodiversity and ecosystem services, and promote sustainable development. It follows that the transition to a “green economy in the context of sustainable development and poverty eradication” (hereafter referred to as “green economy” for the sake of simplicity) must be underpinned by an ethical framework of shared values and principles that extend our thinking beyond technical matters and merely tinkering with the economic system as it stands. The international community has endeavoured to articulate the elements of such a framework in various declarations over the last 30 years including the Stockholm Declaration, the Rio Declaration, and the Johannesburg Declaration, along with civil society contributions such as the 1 Earth Charter . The transition to a green economy also demands recognition of the role biodiversity and ecosystems play in human economic affairs. As expressed in the Preamble to the Earth Charter 1

The Earth Charter is a civil society ethical framework. It has been widely endorsed and used by communities, organisations, businesses, and governments at all levels, including UNESCO and the IUCN. The Charter comprises a Preamble, 77 principles organised under four themes, and a concluding statement entitled The Way Forward. Each principle can be viewed as an ethical imperative, a policy guide, or a para‐legal principle, depending on the context and application. The Charter is widely used in education for sustainable development, as a framework for sustainability planning and reporting, and as a source of para-legal principles. See generally Bosselmann K. and Engel R. (eds)., The Earth Charter: A framework for global governance (Amsterdam: KIT Publ., 2010)

“The forces of nature make existence a demanding and uncertain adventure, but Earth has provided the conditions essential to life's evolution. The resilience of the community of life and the well-being of humanity depend upon preserving a healthy biosphere with all its ecological systems, a rich variety of plants and animals, fertile soils, pure waters, and clean air.” In the face of climate change, growing water scarcities, rising prices for food and energy, accompanied by an increasingly unstable and risk-laden global economy, the notion of transitioning to a green economy has become increasingly relevant. Transformative actions need to be ambitious and far-reaching, and should be elaborated in consultation with the civil society and private sector, through platforms such as IUCN’s World Conservation 2 Congress.

Resilience, Solutions

Equity,

and

Natural

To advance progress toward sustainability, IUCN believes that urgent action is needed to make societies more resilient to the impacts of economic, social and environmental changes. In today’s rapidly changing world, resilience stands out as a particularly essential condition for sustainable development. Resilience can be increased by enhancing long term strategic thinking, diversity, and adaptive capacity. As noted in the Earth Charter, maintaining ecological integrity requires we ensure that decision making addresses the cumulative, long-term, indirect, long distance, and global 3 consequences of human activities . The transition to a green economy needs to ensure that our economic systems are not only striving for efficiency, but that they also aim to build greater resilience into the social and ecological systems that support their sustainability. In other words, a green economy should have the following features as its goals: broad-based economic growth, social equity, ensuring continuous provision of ecosystem services. A more resilient global economy needs to complement competitiveness with inclusiveness and diversity. The growing inequalities and power imbalances of our economic systems are 2

The next World Conservation Congress will be held in Jeju, Republic of Korea, September 6-15, 2012 3 Earth Charter, Section II, Principle 6c

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not only unjust, but inherently unsustainable. Equity must be a corner stone of a green economy. As articulated in the Earth Charter, eradicating poverty is an ethical, social, and environmental imperative and a prerequisite to 4 achieving social and economic justice . Resilience also highlights the socio-economic significance of sustainable ecosystem management by underlining the strong dependency that humans have on natural resources and ecosystem services. A truly resilient economy preserves and enhances its natural capital and invests in the restoration of landscapes to support local as well as global livelihoods. Resilient economies seek out nature-based solutions that enhance the quality of life, and optimize the delivery of ‘regulating’ ecosystem services (e.g. water filtration, carbon and nutrient cycling, storm mitigation). A naturebased economy is one which thrives on these ecosystem services by empowering those communities who depend directly on natural resources and processes. Indigenous communities and women often play a central, but less formally recognized, role in the management of natural resources. A green economy needs to recognize, value, and reward their roles as stewards of our precious natural capital and biophysical systems. Hence, green economy policy frameworks must strengthen local-level capacities, skills, and institutions and should support participatory governance systems based on multistakeholder engagement, and particularly the engagement of women and vulnerable groups, as stated in IUCN’s position paper on institutional framework for sustainable development. To quote again from the Earth Charter, a fundamental principle of sustainability is to “Strengthen local communities, enabling them to care for their environments, and assign environmental responsibilities to the levels of government where they can be carried out most 5 effectively” . 

IUCN urges governments to recognize ecosystem resilience, social equity, and natural capital as three fundamental features to be accounted for in the transition to a green economy.

Placing Nature at the Centre of a Green Economy

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Earth Charter, Section III, Principle 9 Earth Charter, Section IV, Principle 13f

Part of building resilience thinking into governance and management systems is to recognize there is no one-size-fits-all model for designing an effective green economy. In today’s globalized and highly interdependent economy, solutions require systems-based approaches to reach sustainability. This means going beyond a sectoral approach and singlemindset solutions, but rather developing solutions that embrace the complexity and interconnectedness of the global economic system. Current international discussions on sustainability have become dominated by the imperative of the climate change problem to reduce our collective carbon footprint. While the focus on low-carbon development and resource efficiency is critical, and ongoing efforts to develop low-carbon action plans are a major step forward, they are in themselves insufficient. Most importantly, they do not address more underlying root causes. One fundamental problem is the unsustainable way in which our natural resources are valued, used and managed. Water scarcity, food insecurity, energy dependency, biodiversity loss, and climate change are all manifestations of the urgent need to improve society’s appreciation of the value of our planet’s precious natural systems and the need to operate within the “planetary boundaries” 6. 

IUCN calls on Governments to support the development and deployment of 7 nature-based solutions, keeping nature at the centre of policy and management decisions.

Valuing and Investing in Naturebased Solutions The contribution of ecosystems to human wellbeing represents a fundamental building block for strengthening socio-economic resilience. IUCN firmly believes that any transition to a 6

Rockström, J.; Steffen, W.; Noone, K.; Persson, Å.; Chapin, F. S.; Lambin, E. F.; Lenton, T. M.; Scheffer, M.; Folke, C. (24 September 2009), "A safe operating space for humanity", Nature 461 (7263): 472–475 7 IUCN considers that an intervention is a nature-based solution if it features the following principles: i) the intervention delivers an effective solution to a major global challenge using nature; ii) it provides biodiversity benefits in terms of diverse, well-managed ecosystems; iii) it is cost effective relative to other solutions; iv) the rationale behind the intervention can be easily and compellingly communicated; v) it can be measured, verified and replicated; vi) it respects and reinforces communities’ rights over natural resources; and vii) it harnesses both public and private sources of funding.

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green economy must be squarely centered on maintaining the biophysical processes that societies depend upon for their livelihoods. IUCN therefore urges governments to apply nature-based solutions to their fiscal and regulatory policies, public procurement, and other actions through two main areas of intervention: 1) Mainstreaming environmental values into the economy, and 2) Investing in ecosystem services as natural forms of infrastructure.

Mainstreaming Environmental Values IUCN joins those who recognize GDP as an inadequate and insufficient indicator of human wellbeing, and expresses its support of governments, and others, in the development of alternative measures of economic prosperity, 8 building notably on efforts to go ‘beyond GDP’ . The recognition of the inherent value of vital public goods, such as biodiversity and the ecosystem services it provides, and the incorporation of these values into decision making, is absolutely essential to building a green economy. Although there has been significant progress in strengthening the economic case of natural capital, notably through the global study on The Economics of Ecosystems and Biodiversity (TEEB), more work is needed in order to make sure that the main lessons learned are adequately integrated into policy and practice. An important forthcoming challenge will be to effectively integrate ecosystem values in economic accounting systems. This is a commitment that several governments have already taken through Agenda 21 (Chapter 8, section D) “Establishing Systems for Integrated Environmental Accounting”) and through the Strategic Plan for Biodiversity with its twenty ‘Aichi Targets’ adopted in 2010 in Nagoya by the tenth meeting of the Conference of the Parties to the Convention on Biological Diversity. IUCN believes that, by meeting Target 2 of the Biodiversity Strategic Plan, i.e. “By 2020, at the latest, biodiversity values have been integrated into national and local development and poverty reduction strategies and planning processes and are being incorporated into national accounting, as appropriate, and reporting systems”; governments will make a considerable step 8

Drawn from the work of the Stiglitz-Sen-Fitoussi Commission. For more information, please visit: http://www.stiglitz-senfitoussi.fr/documents/Survey_of_Existing_Approaches_to_ Measuring_Socio-Economic_Progress.pdf

towards measuring the transition towards a green economy. The Global Partnership for Wealth Accounting and Valuation of Ecosystem 9 Services (WAVES) and the revisions of the National Biodiversity Strategy and Action Plans by all signatories to the CBD offer a strong foundation for further strengthening this important area of work. In order to go further in correcting markets and implementing the deep changes needed for an effective transition to a green economy, governments must also comply with Target 3 of the Biodiversity Strategic Plan, i.e. “By 2020, at the latest, incentives, including subsidies, harmful to biodiversity are eliminated, phased out or reformed in order to minimize or avoid negative impacts…” Government support of unsustainable practices through subsidies and other incentives must end. In the current system, we are paying to make markets less efficient (more wasteful) and to damage the (undervalued) environment on which we depend for our wellbeing. Taxpayers are subsidizing our collective dependence on fossil fuels, deforestation, decimation of global fish stocks, and inefficient environmentally damaging agricultural practices at a scale of approximately US$1 trillion per year according to the TEEB report. Removal of such policies and incentives has a double dividend. It improves the efficiency of existing markets and reduces the tax burden on people, the benefits of which could be reinvested in policies that better reflect environmental values and, thereby, further improve the efficiency of resource management decisions, including, but not exclusively those transacted in markets. 

IUCN urges governments to take concrete measures to honour their commitment to implementing the Strategic Plan for Biodiversity 20112020, and in particular targets 2 and 3, which are key objectives of the transition and transformation to a green economy.



IUCN urges governments to re-examine their economic indicators to identify those which can more faithfully and rigorously reflect the status of human wellbeing, and to make sure that the full value of biodiversity and ecosystem services is reflected in national

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For more information, please visit: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EN VIRONMENT/0,,contentMDK:22877286~pagePK:210058~piP K:210062~theSitePK:244381,00.html

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accounts and associated fiscal and planning policies.

Investing in Biodiversity and Ecosystem Services The transition to a green economy needs to be built on a stronger appreciation of the role of healthy ecosystems in supporting local livelihoods as well as providing investment opportunities for business. Although their economic significance is commonly underappreciated, ecosystems are essential for achieving resilient and productive food, water and energy systems. Biodiversity and the ecosystems it encompasses generate the ecosystem goods and services that result in direct and indirect benefits to human wellbeing , such as the pollination of plants, the cycling of nutrients, and the regulation of water flows. Relative to built infrastructure, maintaining and enhancing the natural capacity that environment provides generates ecosystem services that are particularly important for those communities and societies that are most vulnerable to risks, such as those heavily affected by a changing climate (e.g. flooding, droughts, sea-level rise, storm damage, etc.). Natural infrastructure can be defined as the stock of ecosystems providing services needed for the operation of the economy and society that complement, augment or replace the services provided by engineered infrastructure. The traditional and cumulative practices of building hard engineering structures to support failing slopes, prevent beach erosion or contain river systems, are not necessarily improving the integrity of the ecosystem. In fact, they might be impairing the ability of ecosystems to deliver critically needed services. Addressing the tragedy of hunger and malnutrition, which affects close to one billion people worldwide, will require the deployment of economic systems based on productive and resilient food systems. Improving agricultural support services for women, who in many societies play a central role in ensuring food security, is one example of the type of investment needed to strengthen the resilience of our socio-economic systems. Biodiversity and ecosystems play a particularly critical role in supporting water infrastructure. Conventional water investments, however, too often ignore the economic importance of water basins and ecosystems as natural infrastructure. In relation to energy, many of the solutions towards a lowcarbon economy depend on coastal, river, and

forest ecosystems as sources of energy. IUCN urges governments to not only reduce the impact of energy production on the environment, but also ensure to maintain nature’s ability to provide sustainable and renewable sources of energy, for instance by conserving and restoring upstream forest ecosystems that regulate water flows used for hydroelectric power. Overall, investments in strengthening food, water, energy and human security need to recognize the importance of using innovative solutions thinking to find the right balance between natural and built infrastructure and to recognize constraints where they are binding, requiring tradeoffs. Given the right policy frameworks, investments made in building resilience through natural infrastructure can be highly cost-effective, due notably to the multiple benefits (low maintenance costs, alternate and diverse livelihood sources, carbon sequestration), its multi-functionality (ecosystems respond to many needs, e.g.water and energy supply, food security as well as touristic/leisure-related activities, etc.) and the opportunity it provides for poverty reduction. 

IUCN urges governments to support the nature based solutions approach by investing and enabling investment in natural infrastructure in order to achieve resilient and productive food, water and energy systems.

The role of the private sector in achieving a green economy Business has a central role in building a green economy. It has the capital and incentive to be innovative and has the potential to generate decent and sustainable jobs. It is in their interest to invest in practical solutions to the environmental challenges. Regulatory frameworks need to be put in place to enable innovation in nature based solutions as well generating green jobs. Efforts by business to integrate forms of footprint accounting to reduce waste in their production processes and supply chains should be rewarded as good for society as well as good business practice. Furthermore, efforts by business to move from mitigating the negative to exploring the potential for positive effect of business practices on nature (e.g., biomimicry, certified agricultural products and eco-tourism) should be strongly welcomed and encouraged through enabling public policy.

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IUCN urges governments to provide for the enabling conditions, including regulatory frameworks, within which private sector leadership and innovation can flourish and which provide strong signals that support nature-based

solutions to economic development challenges, create decent and sustainable jobs, provide equitable access and opportunities for people.

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