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.
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.
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)
Tarja Halonen was the 11th President of the Republic of Finland and Finland’s first female head of state from 2000 to 2012. She currently serves as the Co-Chair of the UN High-level Panel on Global Sustainability, and the Chair of the Council of Women World Leaders. She is also a member of the high-level reflection group, the Alpbach-Laxenburg Group.
“Being poor does not mean that you are stupid; it sometimes demands a lot of intelligence to survive if you are poor. It is very important to take these issues seriously and our primary focus should be the empowerment of people.” – Tarja Halonen at the 2014 Alpbach Forum
IIASA: How have you been involved in the formation of the Sustainable Development Goals? Why is this process important? TH: I have been involved in this process since the development of the Millennium Development Goals, and I consider that it is very important that we continue to work for these principles after the implementation of the millennium goals has ended in 2015.
In spite of all of their weaknesses the Millennium Development Goals were important goals, informing the knowledge and expectations that we have regarding sustainable development and a global climate agreement or commitment. To me, the post-2015 Agenda and the Sustainable Development Goals, are perhaps the most important guarantee for the future of the world.
What is different about the approach of the Alpbach-Laxenburg Group? We have said many times—and many world leaders agreed at Rio+20—that it is time to stop working in silos. We need a multidimensional approach, where academia, politicians, business, civil society, and also NGOs are involved. This is where the Alpbach-Laxenburg Group is so important. I think that this group is an effort to address that need, and I hope that by bringing together the various areas of society we can address the great social injustices in the world. It is not only the business of scientists what happens in the world. It is not just someone else’s problem: everyone needs to be involved in the process.
How do you hope to see the issues of gender inequality reflected in the group? In 2012 I was co-chair of a report entitled “Resilient People, Resilient Planet: A Future Worth Choosing” for the UN Secretary General, as part of my role on the High-level Panel on Global Sustainability. While compiling this report we noticed that there are a lot of resources that are overused and which cause problems. However, what is underused is human capital.
There are three categories we should focus on: the poor, youth and women. Of course all of these groups are very important to include. But for women, inequality is a lifelong story that you cannot get rid of.
It is very important to take these issues seriously and implement measures to change the status quo. I have already tried in many ways, and of course the Council of Women World Leaders has already done a lot of work which I am very thankful for. I am also very proud of Michelle Bachelet, current President of Chile, and the first Under-Secretary General and Executive Director of UN Women, who has led work on the empowerment of women at all levels. We need to make an effort to strengthen gender and women’s rights as part of the post-2015 goals. There are many similar attempts to raise this issue but I hope this group can make it a stronger voice.
Jeffrey D. Sachs, Director of the Earth Institute at Columbia University and Director of the UN Sustainable Development Solutions Network is an expert on economics, development, and sustainability, and a founding member of IIASA and European Forum Alpbach’s Global Think Tank, which is holding its first meeting in Laxenburg this week.
On Wednesday, 12 March Sachs will give a public lecture on the topic at the Austrian Academy of Sciences in Vienna.
Jeff Sachs speaks at the Alpbach Forum in 2013. Photo Credit: European Forum Alpbach
IIASA: Your work spans a large area of research: from economics, to Earth science, to sustainable development. What is the common thread that ties all this together? JS: The common thread is the challenge that we face on the planet. We can no longer separate economic, environment, and social challenges because we find that if we try to pursue any one of those alone, we end up jeopardizing the others.
For too long, economists have focused simply on economic growth, and clearly that strategy by now has put Earth and humanity at great peril. There’s no shortcut anymore. We have to be able to combine a vision that includes all the major dimensions of the complicated global reality that we face. Economics, divided societies, environmental crises, and rapidly changing geopolitics. It’s not simple to integrate all of these different areas. Our traditional intellectual disciplines do not accomplish that.
IIASA has been one of the world’s leading champions of this kind of integrated vision. Systems thinking applied to massive human problems, bringing together very diverse areas of natural science, social science, and I would say ethical considerations as well. This kind of holistic approach is central to IIASA’s whole strategy. That’s one of the reasons I’m so proud of my connection to the Institute.
What do you see as the biggest problems facing our planet? We have become an enormously crowded and interconnected global society overnight, because of the technological reach of our economies and because of the remarkable growth of the world’s population during the last century. With 7.2 billion people on the planet now, we are putting vast parts of the biosphere and human well-being at dire risk. We are only slowly waking up to this reality.
All of history, humans have faced local challenges, but we have never faced such a confluence of massive global challenges at the same time. We don’t yet have the institutions, the insight, or the moral outlook to handle this set of challenges, and yet they are bearing down on us very fast.
In your lecture you’ll argue that it is realistic to think we could solve many of these challenges, for example, ending extreme poverty. What would need to be done to accomplish that goal, and why do you think it can be done? When one thinks about the challenge of ending poverty you quickly realize that while the challenge is great, we also have unique positive opportunities. With the revolutions in communications technology, communities that until five years ago were isolated, impoverished, and with little prospect of escaping from poverty are now connected to global information, as well as to local markets and health clinics. Schoolchildren can get access to the world of information online. Finance has come to rural areas through mobile banking. All of these are examples of the kinds of breakthroughs that are now possible in addressing what have been extraordinarily tough problems of poverty.
We also see the poverty rate coming down now at an unprecedented speed, even in some of the poorest places on the planet. Major advances have been achieved in East Asia during the past quarter century, and increasingly, Africa too is now finally turning the corner on extreme poverty. I have argued that we could mobilize technologies and use directed investments in public health, education, infrastructure, and agriculture to make a decisive breakthrough within our generation.
In my book, “The End of Poverty,” I said that by 2025 we could end extreme poverty. I am afraid that the date is slipping a little because of the lack of concerted effort, but it’s notable for me and gratifying that the World Bank this past year adopted formally the goal of ending extreme poverty by the year 2030. And I believe that the United Nations member states will also adopt such a goal next year when they create the new Sustainable Development Goals or SDGs.
There are two huge risks that could absolutely defeat this possibility. One is the still greatly excessive population growth in some of the world’s poorest countries. The second is climate change, which left out of control will devastate large parts of the world including regions where many of the world’s poorest people live, for instance the arid regions of the world.
What about climate change? Do you think it’s really possible, at this point, to limit climate change to the internationally agreed target of 2 degrees? I believe that we are at the very last chance to reach that goal. We have cliff ahead of us, with a sign that says, “Do not go beyond this point.” This point is the 2 degrees centigrade limit. We know from all the physical evidence and all the economic trends that we’re just within a hair’s width of exhausting the possibility of meeting that goal. And I worry that if we fail to achieve that goal we are going to slide very far and very fast down the mountainside, as it were. The world is negotiating a climate agreement in Paris in December 2015, and I believe that’s the very last chance to achieve the 2 degree centigrade goal.
I am not especially optimistic, but I don’t think that all is lost yet. Much depends on a much greater seriousness in the next year and ten months than we have shown in the last 22 years since the climate treaty was adopted.
Your lecture is entitled “The Age of Sustainable Development” what do you mean by that term? Why is now the time to be thinking about these topics? I argue that we have entered an era when the concept of sustainable development has become the necessary concept for our time. When I say sustainable development, I mean on the analytical side the integrated vision of economic, social, and environmental dynamics; and on the normative side the shared goals of economic prosperity, social inclusion, and environmental sustainability. I believe that we have a reasonable chance that this will be formally recognized by the UN member states in 2015, when they formally adopt the new Sustainable Development Goals.
My talk in Vienna is about why the concept of sustainable development is so important, and what it means. It’s not a household phrase, and I think there is a tremendous amount of public education that will be needed to understand what the opportunities are and what the threats that we face in this generation are. My basic point is that every generation faces its distinct challenges and sustainable development is our distinct challenge.
What do you see as the role for researchers and for institutions like IIASA in solving these global challenges? I believe that these problems are inherently complex because they are about managing interconnected complex systems. There’s nothing simple about the world economy, nothing simple about global social dynamics, and nothing simple about interconnected Earth systems. And yet we have to master the risks that attend to each of those and the interconnections among them. It’s quite obvious in that regard that IIASA has a unique role to play. IIASA has been in the forefront of climate modeling, demographic modeling, and agricultural modeling for many years. I’ve been a huge admirer of the Institute’s work, and I look forward to working more closely with IIASA in the future.
I’ve been tasked by UN Secretary General Ban Ki-moon with helping to organize a global network of problem solving on sustainable development. This initiative is called the Sustainable Development Solutions Network (SDSN). IIASA will be a very important member and I would say leader of that effort, and IIASA’s Director General, Pavel Kabat, is a member of the leadership council of the SDSN. We have already begun to strategize on this with Pavel Kabat, IIASA Deputy Director General Nebojsa Nakicenovic, and many of IIASA’s world class researchers. There’s a tremendous timely opportunity to work with governments around the world and work with the United Nations to help identify safe pathways ahead.