from the foreign press
Returning to 'normal' is no longer an option
By Dominic WAUGHRAY
We know that last year would go down in history as a bad year for the
world economy. In the first half of the year, volatile commodity prices,
especially for food and oil, hit the world's poorest people hard. In the
second half was the global financial catastrophe.
Yet, could the crises of food, fuel and finance that we experienced
last year simply be three canaries in the coal mine? What if these are
just the early warning signals that our current economic system is not
sustainable at a much deeper level? The World Economic Forum convened
over 700 international experts in Dubai, last November to discuss the
world agenda for this year. Among them were over 120 leading experts in
environment, sustainability and human security.
Their conclusions were startling.
We actually face an environmental security problem that is deeper,
more fundamental, more complex and much more systemic than the financial
crisis.
Last year could merely be the precursor to a perfect economic storm,
the like of which we have never seen before.
For the past 50 years we have amassed unprecedented financial wealth,
but we have also chronically underpriced risk in terms of our natural
resource base.
We have financed our extraordinary growth in aggregate living
standards by systematically under-pricing the goods and services we
derive from our planet's natural resources, the negative externalities
we create by polluting them, and the future risks we face from our
cumulative depletion and degradation of them.
Those of us in middle age today in richer countries are the third
successive generation to benefit from the natural resource bubble that
our first world economy has exploited since the mid-20th century.
It is highly unlikely - unless we make some deep, structural changes
to how we manage our economy - that our children and their children will
experience the same sense of progress and wealth.
Here are just a few chilling observations from the experts who met in
Dubai, which link the natural resource challenge to the future security
of our economy and global society: If present trends continue, nearly 4
billion people will live in areas of high water stress by 2030. As we
try to feed and fuel a growing and a more affluent world, the water
situation shows every sign of getting much worse.Simply augmenting water
supply is no longer possible in most places - historical approaches to
water use will not work in the future.
The International Energy Agency (IEA) predicts an expansion in world
energy demand of 45 percent by 2030, with coal accounting for more than
a third of this overall rise, 87 percent of this increase will come from
countries outside the Organization for Economic Cooperation and
Development where energy poverty is currently highest.
The IEA say these energy trends are "patently unsustainable,
economically, environmentally and socially". A new energy paradigm for
both developed and developing countries is urgently required.
The world will need to double food production in the next 40 years to
meet projected demand. Among the poorest today, over 1 billion people -
one-sixth of the world's population - do not have access to adequate
food and nutrition.
Our ability to meet current and future production needs is seriously
challenged by increasing water scarcity, climate change, and volatile
energy costs and supplies. Unless we change how we do it, we will not be
able to supply our future food needs.
Humanitarian assistance will increase to unprecedented scale if, as
commentators foresee, large-scale migration results from climate change
and water scarcity.
The International Red Cross estimates that there are 25-50 million
climate change refugees already, compared to the official refugee
population of 28 million. The Intergovernmental Panel on Climate Change
suggests that 150 million environmental refugees could exist by 2020.
Currently in international law there is no such thing as an
environmental refugee.
The Global Risks 2009 report from the World Economic Forum reinforces
the scale of this challenge.
Economic build-back strategies that follow the same industrial
trajectory as before will not bring the resilience that is needed for
long-term job creation, wealth generation and sustained economic growth
into the future.
Oil prices will rise, commodity prices will become more volatile and
energy, food and water security issues will grow.
We will breach the emissions limits scientists tell us that we must
keep within if we are to avoid dangerous climate change, with dramatic
economic - and humanitarian - consequences for us all.
It seems that the world can ill afford to "return to normal". The
financial crisis gives a stark warning of what can happen if known
economic risks are left to fester. These fundamental environmental risks
need to be addressed if we are to survive and thrive.
We should not see this as the same old environmental story of
conservation or protection. We want economic growth. But we need a new
and progressive risk management agenda to help improve the lives of
everyone who participates in tomorrow's global economy. Managed smartly,
and private sector innovation and entrepreneurialism in the global
interest will turn these risks into opportunities for new wealth and
value creation.
In this context, arguably the most serious World Economic Forum
Annual Meeting in years will be held in Davos, Switzerland, late
January. More political, business and civil society leaders than ever
before are due to take part.
The demand for a fundamental conversation about the future of the
global economy, among those who shape the world agenda, is clear. The
Dubai meeting of experts ensured that discussions at Davos must address
how the world system should be reshaped, not only for recovery in the
short run, but also to mitigate fundamental sustainability risks and
promote new sustainable growth opportunities in the longer run.
This is a very pertinent discussion for this year. In December, a
follow-on treaty to the Kyoto Protocol on climate change is scheduled
for negotiation. Can the plans for world economic recovery be linked to
the jobs, skills, investment and technology opportunities that a global
low carbon economy requires, if climate change is to be managed
successfully? In these unprecedented times can government and business
leaders forge a new coalition to develop a set of practical global
actions, which can stimulate economic growth in the short run and create
the foundations of a more sustainable, low carbon economy for the longer
run? Last year gave us the stern warning that current trends cannot be
continued. We must read these warnings. We face a perfect economic storm
if hidden sustainability challenges catch up with our so called real
economy challenges.
Can this year be the year when we find innovative new collaborations
to help shape the postcrisis world? We must, as returning to "normal" is
not an option.
The author is head of Environmental Initiatives, World Economic Forum
(Courtesy: China Daily)
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