Towards Sustainable Development: New Challenges and Opportunities, University Lecture by Rebeca Grynspan, UN Under-Secretary-General and UNDP Associate Administrator Peking University, Friday 16 September 2011

16 Sep 2011

Peking University, Friday 16 September 2011

 

I am pleased to join you today on this, my first visit to China as Associate Administrator of the UN Development Programme.

Over the last three days, I’ve had the chance to meet with officials and Chinese people, from farmers to women leaders; to travel around Beijing and Tianjin, attend the World Economic Forum in Dalian; and witness some of the extensive development progress being made here in China.

It is now a privilege to join you here at Peking University – a university that is renowned not only in China but also throughout the world for its high standards of teaching and learning. I am especially gratified to have the opportunity to meet with talented young people from across China to talk about one of the most critical issues of our time – sustainable development.

I chose to focus my remarks on inclusive and sustainable development because it allows us to discuss some of the biggest challenges that both China and the world face – poverty and inequality, climate change, food and energy security– in an integrated manner. This is important because, in practice, reducing poverty and inequality, generating growth, advancing social development and sustainability are interconnected: in pursuing one, we can advance, slow, or stall progress in the other. To get all of them moving in the same direction, we need to understand and harness the connections between them.

Doing so offers the potential of delivering multiple dividends by reducing environmental degradation, creating jobs, and alleviating poverty.

In my remarks, I draw out some of the connections between these objectives, discuss progress towards them both in China and around the world, and suggest an integrated way forward.

I will say upfront, however, that there are not necessarily easy answers to our most profound questions, including

  • How can we best expand the benefits of growth while limiting carbon emissions and protecting our natural resources?
  • How do we avoid climate catastrophes that set back development prospects, particularly for the poorest?

What we do know, however, is that economic progress and poverty reduction cannot be sustained if the ecosystems on which we depend are irreparably damaged. We have no alternative but to pursue our objectives jointly through an integrated and renewed agenda for sustainable development.

Progress toward inclusive growth

The world has experienced enormous economic progress: in the past three decades, per capita income worldwide has almost doubled1. Poverty reduction, particularly in Asia, has been similarly impressive. The absolute number of poor people living on $1.25 a day in Asia declined from 1.7 billion in 1981 to 753 million in 20082.

This means Asia lifted over 900 million people out of poverty in the last 27 years.3This is mainly due to the remarkable success of China which alone lifted over 500 million people out of poverty in the same period, and has made one of the fastest increases in human development in the last 40 years.

Yet, there is no automatic link between economic growth and poverty reduction. Even in the fastest growing economies, economic benefits have not been consistently translated into poverty reduction. Recent studies also show that in the past two decades the poverty-reducing impact of economic growth has slowed, especially in Asia.4

Asia's dynamic economic performance has benefited many hundreds of millions of people, but it has also brought challenges – including inequality, environmental destruction, and geographic, ethnic, and gender disparities. We know inequality can grow while poverty decreases, so we need to put attention to both.

The Asian experience, in particular, has been marked by rising income inequality. During the last two decades, inequality in terms of Gini coefficient increased in 11 countries in the region, including China.5

Progress worldwide has also been uneven, between and within countries. China's dramatic progress in poverty reduction means that globally, the world is on track to reduce poverty by half by 2015. But of the 84 countries with available data on Millennium Development Goals, only 45 are on track to meet the target.6

To overcome such challenges and advance human development, the quality of growth matters. That was a major finding of a review conducted last year by UNDP. In examining forty years of human development progress around the world, the review reinforced the results of earlier studies, finding that growth in per capita income is not strongly correlated to improvements in health and education 7. Positive synergies, on the other hand, were identified between equity-promoting policies and human development. The review concluded that, to contribute to human development, it was important for growth to be both inclusive and sustainable. To take this lesson forward, UNDP works with its government partners to design policies and interventions which can advance growth which is both inclusive and sustainable.

Through inclusive growth, countries expand the number of people who participate productively in the economy as well as the number who benefit from its growth. To promote inclusive growth, countries can stimulate the sectors where the poor work, generate employment and expand infrastructure in the areas where the poor live, and increase access to safe water, sanitation, and reliable energy. Services also need to reach remote areas and be made available to those who are too often excluded. Attention to the vulnerable non-poor working group is also a concern, specially youth and women unemployment and economic opportunities.

Ethnic and linguistic minorities, for example, fare worse in most indicators of the world's Millennium Development Goals. Taken together, these groups make up a sizable proportion of the world's poor. Gender equality across the MDGs is also a matter deserving attention, so we need to be wary of focusing on averages as they can lead countries to miss the very divergences – in gender, ethnicity, sub-region etc –that we seek to overcome.

China’s leaders understand the importance of inclusive growth. The 12th Five-Year Plan spells out a detailed plan to advance inclusive growth. Importantly, it gives strong emphasis to increasing the wealth of the people as the wealth of the country. Indeed, President Hu Jintao’s call for a “harmonious society” recognises the risks of growing inequalities. 

UNDP is working closely with China, sharing good practices and experiences around the world which have expanded opportunities and reduce inequalities.  For example, UNDP works with Chinese Ministries in promoting social inclusion for migrant workers and their families, to seek to make sure they can access social services in China’s urban areas. We are also working with China to enhance women’s inclusion in the labour market. As the recent Asia-Pacific Human Development Report indicated, the ‘lost GDP’ in the region as a result of female exclusion from the labour market amounts to $89 billion. So including women is not only the right thing to do but also the SMART thing to do.

Progress towards sustainable growth

It is also important that growth is made sustainable, in order to increase resilience to external shocks and protect development gains. Social protection systems are an important investment in sustainability, as they shield the most vulnerable from the worst effects of shocks and can help prevent irreversible development setbacks.

Home grown social protection systems, if designed well, expand opportunities, build domestic demand, and spur human development.

Recent food, financial, and economic crises have made their value clear. Studies suggest that pre-existing social protection regimes had a measurable impact in helping the poor cope with the impact of the global economic crisis, for example, finding in particular that social protection systems enabled families to keep their children in school8, avoiding long term welfare losses.

Basic protection programs are also affordable. The estimates of a social protection floor range around 2 per cent of GDP.  Despite this, only about 20 per cent of the world’s working age population – mostly in middle- and upper- income countries -have effective access to comprehensive social protection systems.9As China’s leaders have acknowledged, China’s own social protection schemes do not provide quality coverage to all China’s citizens. China has however set ambitious targets for universal social protection coverage by 2020 and is increasingly expanding healthcare insurance provision.

Environmental protection is also critical. Depleted or polluted natural resources, increasingly volatile weather patterns, and more frequent natural disasters can impede development progress and even cause reversals, particularly for the poorest people.

For many developing countries, the annual economic burden from poor environment-related health outcomes amounts to 2–4 percent of GDP.

According to the World Health Organization, 24 percent of the overall burden of disease worldwide, and 23 percent of all deaths, can be prevented through environmental interventions, especially improvements in water, sanitation, hygiene and indoor and urban air quality. Today, environment related health problems such as diarrhea, malaria, and acute respiratory infections remain the top killers of children under five in developing countries.

Every year, two million deaths—mostly women and children—die as a result of indoor air pollution from household use of traditional biomass fuels and coal. Malnutrition, an important contributor to child mortality, is often due as much or more to unsafe water, bad sanitation and disease than to insufficient food production.

Unfortunately progress worldwide is mixed, at best. The data shows that we are depleting the planet's natural assets at an unsustainable rate: deserts are spreading; water scarcity is increasing; tropical forests are shrinking; and the list is growing.

Looming above these threats, and exacerbating them, is climate change, spurred on by the relentless increase in global consumption of fossil fuels, which began with the Industrial Revolution.

More than two-thirds of global greenhouse gas emissions are due to human use of energy. Investing in energy efficiency and renewable energy yields significant returns with multiple beneficial impacts – not just on carbon emissions but for the economy as a whole.

It is possible to cut energy consumption in cities by 20–30 percent without sacrificing growth. In fact “green investment” can create many jobs and thus stimulate growth and poverty reduction. China is now the second largest producer of wind power in the world and the biggest exporter of photo-voltaic solar panels. China’s renewable energy sector employs 1.5 million people alone – 1.5 million people who were not working in this sector a decade ago.10

China has shown leadership in establishing national policies that incentivize green growth, setting rigorous targets for energy efficiency and energy conservation, and making significant and growing investments in renewable energy.

Globally, at the recent Vienna Energy Forum held in June this year, the UN system advocated for a package of three simultaneous global energy goals by 2030: universal energy access, 40% energy intensity reduction and 30% renewable energy in the global energy mix.  Pursued together, they can truly make energy a means for sustainable development.

Moving to low-carbon development

There are many ways countries can transition to cleaner, low -carbon, and climate-resilient economies, which also generate inclusive growth and reduce poverty. But achieving them often requires bold steps and a willingness to turn old development models on their head.

For example, gone are the days when clearing the world’s great forests for other land uses can be regarded as synonymous with development.

Far sighted governments, including in Indonesia, Brazil are working to put the United Nations Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (REDD+) into action. This innovative scheme links development gains to forest preservation, not to forest clearance. Already we have seen the success of this approach in Brazil, where deforestation rates have fallen sharply.

Business can and must also be a part of the solution. The proliferation of green certification systems indicates that future markets will demand greater compliance with environmentally and socially responsible standards. UNDP helps connect communities and businesses contributing to environmentally responsible development. In Ghana, for example, UNDP facilitated a partnership between the government and Kraft-Cadbury which helps local farmers adopt sustainable agricultural practices and increase their incomes. And in China, UNDP worked with Government to transform the market for environmental technologies, from solar water heaters to eco-friendly refrigerators, to energy-efficient light bulbs.

sustainable agricultural practices and increase their incomes. And in China, UNDP worked with Government to transform the market for environmental technologies, from solar water heaters to eco-friendly refrigerators, to energy-efficient light bulbs.

But to scale up, new climate financing, incentivized through a carbon market, will be needed to channel sufficient levels of investment into low-emissions infrastructure and technology. It will be critical that developed countries honour their commitments made in Copenhagen and Cancun to mobilize $100 billion per year by 2020 to support climate change mitigation and adaptation in developing countries.

So let me turn now to the adaptation to climate change challenge.

Adapting to climate change

Extreme weather events associated with climate change are occurring with increased frequency and are disproportionately affecting the poor.

China has certainly had its share of those extreme weather events:

  • Already this year in China floods have affected 36 million people and killed over 200.
  • Yet, elsewhere in China drought has left fourteen million residents short of drinking water.

The longer term impacts of climate change are adding to existing vulnerabilities around the world.

It has been estimated that if we do not change our ways, by 2080 an additional 600 million people worldwide may face malnutrition and an additional 1.8 billion people - more than the current population of China and the USA together - may face water shortages.

Developed countries see the importance of adapting to climate change and have the capacity and resources to invest heavily in infrastructure. According to the Global Human Development Report (2007/2008), the UK spends US$ 1.2 billion annually on flood defence.  In contrast,  funding for adaptation in Least Developed Countries amounted to US$26 million, equivalent to one week’s worth of spending in the UK flood defence programme.

This illustrates why it’s important to consider energy and climate change, environmental protection and food security in an integrated fashion.

China is doing just this by planting the seeds of a climate resilient, low carbon emitting agricultural sector. Through large-scale erosion control, agro-forestry and other agricultural innovations, farmers can increase their productivity, restore ecosystems, and make the landscape more resilient to floods and drought.

Bringing the local and global together 

Twenty years ago in 1992, at the UN Conference on Environment and Development, held in Rio de Janeiro in Brazil, world leaders acknowledged the extent of environmental destruction caused by humans and set forth an agenda for change. It was a significant milestone on the road to sustainable development.

Eight months from now, in June 2012, world leaders will gather again in Rio for the UN Conference on Sustainable Development – to review progress over the last 20 years and determine what is needed to ensure a sustainable future going forward. It is critical that the world use the ‘Rio+20’ conference to renew its commitment to sustainable development, addressing not only carbon emissions but the broader issues of sustainable development, many of which we have touched on here. I commend the example set by China just last week, in hosting over 30 countries for an exchange of views on priorities for Rio plus 20; we will need more such opportunities for dialogue in the months ahead.

Business as usual, which leads to broken ecosystems and a warming climate, as well as to growing inequality, will increase poverty and hardship. It will destabilize economies, breed insecurity in many countries and undermine our goals for sustainable development.

We must, therefore grow green. China is well placed to show this in words and deeds. As the largest developing country in the world, offering its own sizeable support to other developing countries, China is in a unique position to inspire and promote sustainable development not only at home, but abroad.

In recognition of this, the Government of China and UNDP recently signed an agreement to strengthen our cooperation to share China’s experience and knowledge with other developing countries. China’s experience and its ongoing innovations can save other developing countries much needed time and expense in designing their own low-emission, climate-resilient paths. UNDP stands ready to use its global network to help facilitate and support all such efforts.

If current generations fail to address our urgent challenges, future generations will suffer the consequences. It’s important that in tackling our challenges we hear the voices of young people, such as yourselves, on whom the responsibility for future decisions will fall - and by whom the impact of today’s decisions will be felt. 
Our individual initiatives will only add up to collective progress if the right technologies, institutions and incentives are in place. This requires visionary leadership willing to defend longer term goals and invest in green growth. Such leadership, political will and commitment are not created in a vacuum – they are propelled by public opinion and collective support.  

The decades and generations in the future will look back to us and at this time now as a turning point.  It is now more critical than ever for us to understand the connections between poverty reduction, generating growth, advancing social development, and achieving sustainability. If we wish to avoid undermining the gains we have made in reducing poverty in the last few decades, we must focus on the quality of growth to ensure it results in human development. We must ensure progress does not create the inequalities or divergences we are seeking to overcome. We must have the vision and the will to transform old development models and invest in social and environmental protection schemes to build resilience and shield the most vulnerable from external shocks. We are cognizant of this tremendous responsibility and of our individual and collective role in making the most of the enormous opportunity for change that it provides. We need to do more than simply understand the connections, we must act on them.  As students now and as future leaders in whichever field you choose – I hope you are able to take this vision of sustainable development, and incorporate it in your actions, choices and decisions – wherever you find yourselves.  Remembering the wise words of an old proverb, “We do not inherit the Earth from our ancestors; we borrow it from our children”.

1World Development Indicators (2011). Note: These are in real terms. GDP is measured in constant 2000 USD, and per capita GDP is measured  in PPP, (constant 2005 international $s).  The actual numbers are: for GDP (2.3 fold), and for per capita GDP 1.7 fold.
2UNDESA (2010), Rethinking Poverty: Report on the World Social Situation 2010.
3 ibid
4Chakrangi Lenagala, Rati Ram, (2010) "Growth elasticity of poverty: estimates from new data", International Journal of Social Economics, Vol. 37 Iss: 12, pp.923 - 932
5Palanivel and Unal (2011), Op. Cit.
6World Bank, Global Monitoring Report 2009: A Developing Emergency (Washington, D.C., 2009), see annex, Monitoring the MDGs: selected indicators, Eradicate extreme poverty and hunger, figure 2.
7HDR 2010 page 49 ‘what our results mean’
8http://www.ids.ac.uk/files/dmfile/SocialImpactsofCrisisreport5.pdf
9ILO (2010) World Social Security Report 2010-2011: Providing coverage in times of crisis and beyond
10United Nations Environment Programme Report released in September 2010 showed that green economy investments are paying multiple dividends by reducing harm to the environment, creating jobs and alleviating poverty. Examples cited from the report include China's energy policy for the five-year plan period from 2006 to 2010 which spurred a rapid rise in renewable energy manufacturing and installation.

 

Appendix 1: Table of Climate Finance Channels and Value

Climate Finance Channels

Value

UNFCCC Copenhagen Accord and Cancun Agreement

Committed developed countries to jointly mobilizing $100 billion per year by 2020 to support climate change mitigation and adaptation activities in developing countries

Bilateral finance institutions and funds

European Investment Bank, French Development Agency, Japanese International Development Agency and German Development Bank disbursed a total of $13 billion climate change-related finance in 2008

Carbon Market

Market capitalization of the global carbon market in 2009: $144 billion.

Reducing Emissions from Deforestation and Forest Degradation (REDD)

Emission reduced from conservation and restoration of forest worth around $100 million as of 2009, but could reach $17.2-37.5 billion per year by 2030.