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New direction to global governance

Updated: 2012-06-28 09:49
By Mukul Sanwal (

The significance of the Rio+20 conference, unlike 1992, does not lie in any document but in the new direction provided to global governance. The global consensus signals the emergence of a new multilateralism with Brazil, China and India beginning to shape the global agenda.

Not surprisingly, heads of state from these countries, rather than those from the major G7 countries, are participating in the conference.

The sequel to the 1992 Earth Summit, also in Brazil, with around 100 heads of state participating, has been characterized by serious differences over what constitutes economic growth and human well-being, and the outcome represents a set of compromises by all.

What do the outcomes of the Rio+20 conference mean for future international cooperation, global governance and sustainable development?

First, the issue is intensely political because the way the global concern is defined will have differentiated implications for countries. The United States and EU sought to define the "green economy" in terms of changes that governments, largely in developing countries, will need to convince investors that aligning asset allocation with the green economy will provide superior risk-adjusted returns for long-term investments in new technology.

Developing countries were focused on human well-being seeking agreement to modify longer-term trends in consumption and production patterns, largely in developed countries, and link ecosystem scarcity to the sharing of new technology as a global good in the common interest. The compromise arrived at strikes a balance between four key elements of these opposing perspectives.

The developing countries have been able to characterize the green economy as a "common undertaking" while "recognizing that each country can choose its appropriate approach", as it is "one of the tools" to achieve sustainable development and "not a rigid set of rules".

Moreover, the Sustainable Development Goals that will provide guidance for the collective efforts are to be developed recognizing "national realities, capacities and levels of development", will be "coherent" with the post-2015 development agenda and will be developed through an intergovernmental process under the General Assembly, with the Secretary-General of the UN providing an "initial input".

In return, developing countries have agreed to a dilution of a strong provision in the Rio Declaration against unilateral trade measures, settling for the much weaker statement where states are "strongly urged" to refrain from promulgating and applying any unilateral measures.

Even though the "central role of the UN is recognized", the agreement now also recognizes" exchange of information" with the WTO with "trade distorting subsidies and trade in environment goods and services" as important issues. Moreover, unsustainable patterns of production and consumption need to be changed "where they occur" and the "voluntary nature of the programs" is highlighted.

Second, the way the principle of common but differentiated responsibilities has now been redefined. Developing countries cited the historic responsibility industrialized nations have to clean up the planet, while developed countries argued that a rapidly changing economic order and the rise of nations such as China, Brazil and India means that all nations must work together in protecting the environment.

The agreed text does not recognize historical responsibility and makes no mention of the need for developed countries to take the lead but recognizes that eradicating poverty is the greatest global challenge and "people are at the center of sustainable development". It is in many ways the best balance that could be achieved in a multipolar world.

Consequently, international cooperation on the environment will no longer require the provision of "new and additional" financial resources, and the ODA commitment "target of 0.7 percent of GNP" is now "in accordance with respective budget allocations" on request, the changed "aid architecture’ is recognized with South-South Cooperation, mobilization of resources from "all sources" as well as "new partnerships and innovative sources of financing", and a new process will develop options on a financing strategy.

Technology transfer will also now be "as mutually agreed" and in the form of "technical and technological assistance", and not on concessional terms. Implementation will depend on "active engagement of both the public and private sectors" and the "requested support" will be provided "taking into account the needs and the capacity to mobilize domestic resources".

A new "facilitation mechanism" will be limited to considering information — "needs assessment, options and capacity building".

Third, what is also new is that all the powerful countries shaping deliberations see their underlying national interest in terms of trade, and competitiveness concerns, as the best way of economic growth.

The differences lie in which trade rules are to be amended. Industrialized countries were seeking to shift implementation and reporting to the private sector through a global policy framework for large private companies to integrate sustainability within their reporting cycles, and develop green economy roadmaps.

The objective of the annual reviews would be to provide information for investments in cleaner products and services and the elimination of market distorting subsidies. Mainstreaming environmental concerns in the trade regime would lead to global policy coherence.

Poor countries see this amendment to global trade rules to consider production processes as enabling the WTO to open markets in support of resource efficiency. They would like to amend global rules related to intellectual property rights. Their focus is to review national actions on shifts in consumption and production patterns, share experiences and monitor progress in the joint research, development and deployment of innovative technologies, to remain within global ecological limits.

While developed countries have secured an opening for a new policy framework with a reference to "sustainability reporting" by large companies, developing counties have been able to include provisions for country level rather than international level "monitoring and assessments" for the balance sheets. They have also incorporated the understanding that "adequate energy services" including for production, will be needed by all, and that "economic growth in developing countries is a key requirement for eradicating poverty and hunger’.

Fourth, the related question is which United Nations body, environment or sustainable development, should provide oversight of the policies and measures has also resulted in a compromise.

A high-level political forum will replace the CSD, with some relationship to the ECOSOC, while the UNEP has been strengthened with universal membership but has not been upgraded to the status of an International Agency. The resolution of outstanding issues will depend on the way criteria are developed to keep GPD as a measure of economic activity while developing a new measure for human well-being, and the political body that oversees the technical work, as it will shape the global goals and the strategic direction for international cooperation.

Fifth, a new category of "middle income countries" has come into being. This development recognizes the role of the BRICS in sharing global authority, responsibility and prosperity but also effectively replaces the G77 with groupings based on levels of vulnerability.

This is both because of differing priorities and the agreement to dilute the agreed consensus on the provision of finance and technology. "Facilitation" cannot be an effective glue to keep the G77 together. The agreement is also one more illustration of the marginalization of the EU in global governance.

Sixth, urbanization, manufacturing and rising standards of living in developing countries, that is half of humanity, will also involve a population shift that is more than five times larger than what happened in developed countries, entailing huge pressure on scarce global ecosystem services, in the form of energy and infrastructure, essential for human well-being. The optimum pathway of keeping within global ecological limits will continue to be under discussion. Whether this should be left to national governments and markets as in the past, or new global values for redistribution are needed to change unsustainable consumption patterns through regulation, has been left unresolved.

The unresolved issues will continue to be debated in various forums, in particular climate change, because with the ecosystem limits to growth, security and prosperity can no longer be guaranteed by military strength or economic wealth alone, but by the ability to shape collective action through a rule based approach. We will have to wait to get the "Future we want".

The author has served in various policy positions in the Indian government and represented India as a principal negotiator at the UNCED, Agenda 21, Rio Declaration and the Climate Change Treaty.