Interview: An occasion for innovation

Pascal Lamy was the director general of the World Trade Organization from 2005 to 2013, and currently serves as a president emeritus of the Notre Europe – Jacques Delors Institute. On 28 and 29 August he is taking part in a meeting of the Alpbach-Laxenburg Group, focused on new models for sustainable business development.

Pascal Lamy ©The Jacques Delors Institute

Pascal Lamy ©The Jacques Delors Institute

As the former director general of the WTO, you have extensive experience in global trade and economic development. How does this background inform your perspective on the issues of the sustainable development?
To put it very simply, there is a very well-understood interaction between trade and growth, starting in the 18th century until now. The understanding of the relationship between global trade and sustainable development, i.e. including the environment dimension, is much more recent, understandably because environmental issues only came into the picture much more recently than the 18th century.

The reality is today that the communities working on trade and environmental issues are rather poorly connected. You belong either to one or to the other. There are not that many people who have feet on both sides, which does not help because the issue  is complex.

In theory it’s very simple. Take climate change for instance: If you put the carbon price at the proper level, i.e. the one that takes into account the externalities of climate change and CO2 emissions, all you have to do is price CO2 properly, and problem is solved: markets will reallocate production factors accordingly.  That’s what theory tells us. The little problem is actually agreeing on a set price for the entire planet. And this triggers a lot of suboptimal propositions, solutions.

I think that the overall stance now is that that trade is not an end. Trade is a means to improve growth in climate, welfare, sustainability, including environment sustainability. This was in fact part of the WTO charter from 1994. When I was DG of the WTO we did quite a lot of work in collaboration with environmental international organizations such as UNEP for instance. We looked into the big question on this topic: Is the expansion of trade good or bad for the environment? There are arguments on both sides, and it is a vast set of issues. But overall I think there are ways and means to reconcile, to synergize the benefits of trade opening for a more environmentally sustainable world.

What do you see as the biggest challenge in achieving the Sustainable Development Goals?
It’s a very long and vast set of issues. So it’s not a single thing—what you have to address issues on inequality, on education,  on oceans, on poverty—it’s a lot of different things.

But overall, I think the biggest challenge—and this is why a number of us are working on that—is to properly organize the accountability of these SDGs. That means providing proper metrics, proper review, proper debate, and proper public accountability. Now that the goals have been agreed by the UN, the issue is whether or not they can be achieved, and whether we can properly organize public pressure on sovereign nation states, through civil society, involvement of businesses. So in my view the main issue is building and agreeing on a proper follow up transparency system.

Pascal Lamy talks with other members of the Alpbach-Laxenburg Group at a retreat on 29 August. ©Matthias Silveri | IIASA

How do you think that the private sector could help in achieving the SDGs?
In doing what private businesses have been doing increasingly, which is integrating this sustainable development focus into their global strategies. Most big businesses now have a set of principles, a set of values that include sustainability.

What’s happening for instance around the push towards green finance, notably since the COP21 in Paris, is a good example of how some businesses can be on the front line of a larger coalition. We need coalitions like this to bind public authorities at the national, regional, and city levels, to civil society organizations focused on sustainability, climate, environment, biodiversity, and development, and businesses, whether big or small.

So from your perspective it sounds like business is already on the right track. What further changes would be needed in the private sector in order to fully embrace the SDG agenda?
It will happen if and when businesses realize that it matters to their consumers, to their staff, and to their shareholders, or their finance providers more generally. This is the frame within which they have to optimize what they do—clients, consumers, their people, and where they get their financial resources from. And if these various sides of the triangle push in that direction, inevitably businesses will push in this direction. They’ll have to.

The Alpbach-Laxenburg Group brings together leaders from business, and young entrepreneurs, along with government leaders and science experts. What do you think can be gained from a meeting of this type?
What’s unusual is that it links you with people whom you may not meet every day, so it’s an occasion of diversity connecting on a topic. Plus, there is something which tends to come out of this sort of environment, which is innovation. People exchanging ideas, not just theoretically, “What should we do?” “Where are we?” “Where are we going?” but, “This is what I suggest to do,” “This is what I tried and it worked,” and “This is what I tried and it didn’t work.” It’s  more about experiences on the ground, which may then inspire more general conclusions.

Further reading
Pascal Lamy (2016). “Négociations climatiques et négociations commerciales : antinomie évidente ?“. Speech delivered at the 24th Meeting about Risk Management, AMRAE, at Lille, France, February 5th 2016. Download speech (PDF)

Pascal Lamy (2013). The Geneva Consensus: Making trade work for all. Cambridge University Press  http://www.cambridge.org/ao/academic/subjects/law/international-trade-law/geneva-consensus-making-trade-work-all

Interview conducted and edited by Katherine Leitzell, IIASA science writer and press officer

Note: This article gives the views of the interviewee, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Why education should top the development agenda

By Wolfgang Lutz, IIASA World Population Program Director and Founding Director of the Wittgenstein Centre for Demography and Global Human Capital (Originally published on the World Economic Forum Agenda Blog.)

Lutz2

Wolfgang Lutz

Few people would dispute the importance of education in our lives and those of our children. For good reasons, in virtually all industrialized countries, education is compulsory for everybody for at least 10 years.

In developing countries, however, 780 million women and men remain illiterate. Moreover, about 60 million children of school age are not at school.

Yet instead of making a concerted global effort to bring all children to school, less than 4% of official development assistance funds basic education. Over the past seven years, UNESCO and UNICEF report a decline in basic education.

Many think education is an aspect of social development that comes as a by-product of economic growth. This is wrong. Education is an absolutely necessary precondition of economic development.

Bill Clinton’s famous mantra, “It’s the economy, stupid!”, may be a useful slogan for an election campaign, but it is misleading in setting the priorities for sustainable development. It’s not primarily the economy, nor money, that makes the world go round and determines progress in human well-being. Much more important than the content of people’s wallets is the content in their heads. And what is in our heads is formed and enhanced by education which, in turn, helps fill the wallets, improves health, improves society and the quality of institutions, strengthens resilience at all levels and even makes people happier.

I could discuss the ample scientific statistical analysis to prove the transformative role of education in development. But more convincing may be historical success stories.

Finland was one of the poorest corners of Europe in the late 19th century. In 1868-1869 it suffered the last great famine in Europe not induced by political events. Almost half of the children died in this hopelessly underdeveloped and poorly educated economy based on subsistence agriculture.

After that tragedy, the Lutheran Church, supported by the government, launched a radical education campaign: young people could marry only after they passed a literacy test. The number of elementary school teachers increased by a factor of 10 over just three decades and by the beginning of the 20th century all young men and women in Finland had basic education. In 1906 Finland was the first country in Europe to grant women the right to vote and the subsequent economic development, based primarily on human capital, made Finland one of the world’s leaders in technology, innovation and, as a result, competitiveness.

In the early 1960s, Mauritius was a textbook case of a country stuck in the vicious circle of high-population growth, poverty and environmental destruction. Following the advice of scientists such as James Meade, the government launched a (strictly voluntary) family planning programme together with a huge push on female education. This led to rapid fertility decline plus economic growth, first through the textile industry based on semi-skilled female workers, then in upmarket tourism and more recently in banking and high-tech information technology. Mauritius is the only such success story in sub-Saharan Africa. The country managed to escape the vicious circle of poverty and underdevelopment through investment in human capital.

© Nafise Motlaq / World Bank

University students in Malaysia. © Nafise Motlaq / World Bank

Japan, Singapore, South Korea and finally China have similar stories but the timing is different. The Chinese experience shows that such success is not confined to remote and tiny island or city states. The highly elitist appreciation of education in Confucian tradition became transformative for the country once it was combined with the (originally) protestant approach of a broad-based education. Again, these countries built their stunning success stories primarily on improvements in human capital and without significant raw materials or international assistance. Economic growth followed the education expansion.

There is little doubt about the cause and effect between education and human well-being. Neurological research shows that every learning experience builds new synapses making our brains physiologically different for the rest of our lives. Education expands the personal planning horizon and leads to more rational decisions and less fatalism. It clearly empowers people to access more information, contextualize it and make conclusions that are more conducive to personal and societal well-being.

Well educated people are better at adopting good habits such as physical exercise, safe sex or quitting smoking. Education has many other effects on health from lowering child mortality to postponing disability and cognitive decline in old age, besides the commonly cited effects on income and employment. There is even the surprising finding that education makes people happier despite the fact of making them more aware of potential problems. Unsurprisingly, universal education reduces vulnerability to natural disasters and helps people adapt to climate change.

About a decade ago, I discussed some of this evidence with the Nobel laureate Gary Becker. He said: “Well, when I think about it, I cannot think of anything for which I rather would be less educated than more educated.”

Now we need to educate the economists and policy-makers to make it a much higher priority in the development agenda.

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Envisioning a better global future: Reporting back from the World in 2050 launch meeting

By Joost Vervoort, Environmental Change Institute, University of Oxford

“Vision is the most vital step in the policy process. If we don’t know where we want to go, it makes little difference that we make great progress. Yet vision is not only missing almost entirely from policy discussions; it is missing from our whole culture.” Donella Meadows 

In the face of increasing human pressures on the planet, in a time that is now described as the Anthropocene, the need to finding pathways toward a sustainable and just global future is critical. In 2015, the world’s nations agree on a set of Sustainable Development Goals (SDGs) – aiming to subscribe to a global narrative on a desired future of human development in all its dimensions.

Photo Credit: E. van de Grift

Vervoort, center, speaks with Tanzanian policy makers at a workshop organized as part of CCAFS’ PACCA project (Policy Action for Climate Change Adaptation). The scenarios used in this workshop were developed with regional stakeholders and quantified by IIASA’s GLOBIOM model and IFPRI’s IMPACT model. Photo Credit: E. van de Grift

The World in 2050 project aims to support the vision of the SDGs by quantifying it and assessing its feasibility through model simulations covering a range of development and environmental dimensions. The goal is to use top science to show that a better world is possible, and explore what transformations and trade-offs are needed to achieve that future. The world’s top modelling groups on population, energy, food, water, technology and other sectors have been invited to join forces for this project.

At a first meeting at IIASA in Laxenburg from 10 to 12 March 2015, the project organizers brought together world-leading modelling teams as well as representatives of global organizations like the OECD, the IMF, the Global Environment Facility and the World Energy Council. A number of us also had experience with using future scenarios for policy and strategy development.

The meeting had two purposes: to outline a way forward for the project, and to allow modelling teams to update each other on their most recent work. Excellent presentations on many dimensions of global change led many to believe that the combination of these modelling efforts would be able to provide a strong exploration of the feasibility of the SDGs. Recommendations were also made to find ways to integrate highly relevant, but not easily quantifiable, dimensions of human development, such as conflict, governance, cultural and value changes and issues of gender inequality. Other challenges that were highlighted had to do with the fact that the future is fundamentally uncertain, and systems models can have difficulty anticipating the impacts of future drivers that are not part of the current scope of concern. The solution to such challenges can be a reflexive approach to integrating model simulation and qualitative information, such as stories about future pathways, that can try to take such dimensions and uncertainties into account and also make clear what they don’t capture.

The launch workshop for the World in 2050 project involved researchers from a number of key institutions. Credit: Matthias Silveri / IIASA

The launch workshop for the World in 2050 project involved researchers from a number of key institutions. Credit: Matthias Silveri / IIASA

What I saw as perhaps the key conversation in the meeting, however, is one that characterizes many discussions about how to productively engage with the challenges of the future. Is it better to build one unifying vision, or to develop many different future scenarios from the perspectives of a wide range of actors? In the context of the World in 2050 project, developing a single, quantified vision for the SDGs has the benefit of harnessing the power of the best global change research to create a powerful, deeply examined notion that a better world is possible, supported by the voices of global-level organizations. An alternative approach that we discussed was to engage regional and national decision-makers first and build and quantify a diversity of visions and pathways from the perspectives of these actors. The benefit of this approach is that national and regional decision makers may be more likely to perceive this quantitative visioning  as useful, and that there is space for and ownership of diverse notions of a better future based on different sets of values.

The leaders of the World in 2050 project took these considerations into account and proposed a way forward: focus on a single global, quantified vision first, to kick-start dialogues about the feasibility of a transformative future at the global level by providing top-level science. Jeffrey Sachs, as one of the project leaders, argued that the SDGs will already involve many interactive processes that allow for a diversity of ideas and conversations at national and regional levels on how to achieve these goals; and that rather than trying to support all SDG-related work, the World in 2050 project would have the most complementary value if it provided its clear, quantified global vision first. Then, a next phase of the project will be to connect to global regions and to national-level processes and find out how the insights from the project can be used. Many of us in the meeting indicated that we have strong networks at regional and national levels that can support this phase. From the beginning of the global modelling project, Sachs and colleagues already envision a strong need to have regional diversity in the analysis, to make sure its results are relevant at that level.

”Also clear from the discussions was that this vision should not just be aimed at policy makers, but that it should speak powerfully to people in all walks of life. Widespread public support for such a vision could be a strong contributor to political momentum. Several speakers referred to the impact of the 1972 “Limits to Growth” study, which, though controversial, stimulated thinking and action around environmental change and sustainability worldwide. Innovative communication approaches that powerfully engage people with the vision will be crucial – if future visions can be made real in an experiential sense, they have a much stronger chance of changing behavior and decisions.

Collaborations across international networks
The World in 2050 project plans to build on the excellent simulation-based work on transformation pathways toward SDGs done by the Dutch Environment Assessment Agency.

It will be very interesting to see the global vision take shape and to help connect it to regional and national action and strategy. With IIASA colleagues from the GLOBIOM team, the CGIAR’s Climate Change, Agriculture and Food Security program is helping decision makers in Africa, Asia and Latin America develop better policies using socio-economic and climate scenarios, and from our experience, working with future pathways that are inspiring as well as feasible is very attractive to governments and other actors.

Other interactions with complementary projects can be explored – for instance, the “Bright Spots – Seeds of a Good Anthropocene”  project takes an  opposite, bottom-up approach to future visioning – collecting local “seed” practices with global, transformative potential and combining them to foster dialogues about a better Anthropocene. A similar process for bottom-up transformation pathways on the future of food in Europe also involves IIASA researchers.

References
Meadows, Donella, J. Randers and D. Meadows. Limits to Growth. New York: Universe Books, 1972.

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.