Poverty, demography, economics and Sustainable Development: perspectives from the developing worlds

What are the realistic prospects for Sustainable Development in the first decade of the new millennium?

The Rio Summit of 1992 was a conference on Environment and Development. That too was the subject matter of the Rio Declaration. The focus was on meeting the developmental and environmental needs of present and future generations. Significantly, the programme of action detailed as Agenda 21 was laid out in two sections: the social and economic dimensions, and the conservation and management of resources for development. There was the human sphere, encompassing economic and social questions, and the biophysical sphere.

It was concern for the relationship between the two that led, on the one hand, to a series of environmental conventions and initiatives; and, on the other, to endorsement of the need to get serious about development through poverty eradication and "a supportive and open international economic system that would lead to economic growth and sustainable development in all countries." That was the global ‘deal’ at the time. Developed countries worried about the globalisation of environmental risks were forced to confront the fact that they could not expect developing countries to engage if, in doing so, they were signing away their own development rights.

Without even opening the cover of Agenda 21 (surely one of the most prolix documents ever generated by an inter-governmental process), a reading of the 27 principles of the Rio Declaration discloses a breathtakingly ambitious policy terrain.(1). But it is still tractable. It adheres to the environment and development dimensions that drove the Brundtland Commission (2). And, albeit at a high level of generality, most of the principles to this day are principles that can be made sense of and implemented – either in domestic policy or international negotiations – by governments regardless of their political persuasion.

Certainly, there are some areas that lie in the realm of pious hopes (such as Principle 23’s avowal that "the environment and natural resources of people under oppression, domination and occupation shall be protected." And others that, in the absence of definition (what is an ‘unsustainable pattern or production and consumption’ or an ‘appropriate demographic policy’?) beg the question of what should be done. But the bulk of the principles provide useful guidance for those who would seek to align their policies with improving environmental protection and enabling development particularly in the least advantaged countries.

The Rio Declaration is a useful working guide. But there are growing doubts about the emergence of an agenda, which has been grafted onto it since Rio. This agenda risks skewing the focus and weakening the utility of the concept of sustainability. Specifically, it is about the so-called ‘three pillars’ definition of sustainable development that has gained currency in recent years. It appears that the division between the socio-economic and the biophysical sphere did not go far enough for some. The socio-economic sphere has now been divided into two separate social and the economic ‘pillars’ of sustainable development. Efforts to establish precisely when and where this characterisation of sustainable development emerged have been unsuccessful. It is certainly not part of the Rio outcomes or the subsequent CSD process(3). But it finds itself firmly embedded now in European Union and OECD literature.

Perhaps the most carefully elaborated account of the three pillars or ‘dimensions’ approach to sustainable development can be found in the OECD’s Sustainable Development: Critical Issues report published last year(4). In essence, the idea is that the pursuit of economic, social and environmental well-being should lead to mutually supporting policies. Policy settings in any one field should not undermine future outcomes in any other and will, hopefully, enhance them. This approach has been taken up outside the public policy setting by companies that have started to engage in so-called triple bottom line accounting (5).

The European Commission has artfully described the relationship between the pillars as "economic growth [that] supports social progress and respects the environment, social policy [that] underpins economic performance, and environmental policy [that] is cost-effective." The notion is of a virtuous triangle of reinforcing policies that advance "a society that is more prosperous and more just, and which promises a cleaner, safer, healthier environment"(6) not just in the near term but the long term.

This is, unquestionably, an elegant formulation. But it cannot provide any definitive boundaries for the trade-offs that inevitably occur between, for instance, seeking improvement in material living standards and maintaining ecosystems in their natural states or between high levels of investment in businesses and redistribution through taxes and the regulated delivery of social benefits. At the end of the day there are only policy trade-offs with which we have been familiar long before sustainable development entered the lexicon.

There are two dangers. The first is that in the search for ‘balance’ between the three pillars, we end up in a world where everything is tradable for everything else: where there are, for instance, no environmental bottom lines. The second is that it is hard to see what considerations might be excluded from the shelter of these three all-encompassing pillars. In short, we risk emptying sustainable development of content by seeking to extend it to everything.

Now it might be objected that this is harmless enough; that sustainable development embraces a broad church of disciplines and that anyone worth their salt would know where the live issues are – a sort of ‘thousand blooms’ approach to policy analysis. What is troubling, however, is the implication that there never was a hard core to what the Rio conference was about; and further, that if there is no minimum content to sustainable development as a policy paradigm, then there is in effect nothing that can be measured should we wish to gauge whether or not the ability of human kind to sustain itself on this planet is becoming more or less precarious.

Such a conclusion would indeed be a break with what Rio set in motion, since considerable store was placed on the need to develop robust indicators that can inform decision-making. But a decade on from Rio it is difficult to discern that we have made much progress at all – and the extension of sustainable development to a new ‘three pillars’ approach could mean that we never get there. Indicative of the extent of the problem are the difficulties both the European Union and the OECD have got into in developing their own sets of indicators. The European Commission, in its Strategy for Sustainable Development published last year, referred to the need to bridge high-level ambitious visions with practical political action by focussing on "a small number of problems which pose severe or irreversible threats to the future well-being of European society". It identified a set of 36 structural indicators to monitor progress on the political commitments made by Heads of State along the themes of: general economic background; employment; innovation and research; economic reform; social cohesion and the environment(7). Indicators proposed under these themes included:

• Unemployment rate (economic background)
• Life-long learning (employment)
• Level of internet access (innovation and research)
• Prices in the network industries (economic reform)
• Early school leavers not in further education or training (social cohesion)
• Energy intensity of the economy (environment)

• Potential output (economic background)
• Childcare facilities (employment)
• E-government (innovation and research)
• Business demography (economic reform)
• Biodiversity (environment)

In short, no fewer than 53 different indicators were envisaged that would enable it to chart members’ progress across a broad, but by no means exhaustive, front. Significantly, many of the proposed indicators (such as those dealing with childcare facilities or employment rates of older workers) had a uniquely developed country feel to them.

The OECD’s approach has been even more disarmingly eclectic. An initial proposal for a limited set of headline indicators to measure both resources and outcomes has led nowhere(8). Instead, it has decided to generate indicators which will illuminate a ‘menu’ of policy issues involving trade-offs between the different dimensions of sustainable development. These indicators will be included in the 2003 Reviews of member economies thereby placing them alongside long familiar economic indicators such as price and wage inflation, GDP growth, foreign trade and so on. Unsurprisingly, the initial list (it is to be extended in due course) embraces a clutch of traditional environmental indicators covering things like water quality, air pollution and CO2 emissions. But for the time being there is just one social indicator – sustainable retirement income policies(9).

It is not so much the orphan state of this indicator that is remarkable (that will no doubt be cured when other indicators of ‘social’ sustainability are proposed). Rather, it is the question of what might be excluded as indicators of sustainability if retirement income is a relevant and illuminating subject? Why would access to adult education or cultural facilities such as museums be any less important elements of a social pillar?

What is worrying about all of this is that there is one sure way to render any concept innocuous and that is to expand its meaning to include everything. The notion of sustainable development has such cachet at present that absolutely everything it seems has to be sustainable. There is a real risk that the relatively clear concept of the environmental sustainability of economic activity is in danger of being buried under supposedly helpful extensions such as ‘social sustainability.’(10)

This isn’t altogether surprising. After all, it is hard to be against sustainability. So why not jump aboard the bandwagon? In fact, the less you know about sustainable development, the better it sounds and the greater its range of applications. Indeed, any day now we can expect to hear a Minister intone the words, sustainable sustainability! This is all good fun but it comes at a price of increasing complexity and incoherence.

It is not necessary to go as far as Esty has done in claiming that sustainable development has become "a buzzword largely devoid of content".(11) But it is interesting to see what questions and complexities are raised by the inclusion (as the OECD plans) of something as socially ‘mainstream’ as the sustainability of pension schemes. Start with the consequences of settling on an indicator that simply couldn’t apply in, for instance sub-Saharan Africa because the average life expectancy is 49, one year lower than it was ten years earlier and, needless to say, well below the retirement age in developed countries.(12)

If the argument were that the retirement income element of the social pillar had some universal validity, would we be arguing that very poor countries lacking retirement pension schemes were ‘unsustainable’ on account of their absence? Or would it be necessary to amend the indicator by generalising it to measure some level of access to subsistence (that could be based on simple transfers within families)?

Or would the appropriate conclusion be that indicators are not universal but country specific, relating to the level of development. If this approach were adopted, could every country pronounce itself sustainable in terms of the local state of the pillars – sustainability of cash payments related to lifetime earnings for some countries through to well-rooted social acceptance of inter-generational, intra-family support systems?

This seems closer to the logic of the European Commission/OECD approach. ‘Unsustainable’ elements of the social pillar would be those that, on account of some flaw, would be vulnerable to collapse in a way that would threaten social stability and cohesion, thereby leading to economic malaise (and, one assumes downstream, environmental degradation). So we might have bankrupt pension funds in a rich northern country and the breakdown of social ties in a southern country. Interesting though this all may be, it is hard to see quite where it leads to in making an overall assessment of ‘sustainability’ in this more expansive version.

The problems compound if one were to try to introduce normative concepts like social equity under the SD umbrella. What metric of fairness would one select in seeking to make a judgement about the fairness of social security systems? And if one were to try, doesn’t that become an order of magnitude more complicated when we try to make comparisons across the North South divide? How can they be avoided? The difficulty with introducing a normative concept like ‘just distribution of incomes’ between countries is that it raises profound but unanswerable questions about where the boundaries of normative debate lie.

Sustainable Development as Rio launched it sought to tackle, at the global level, the relationship between development ambitions (in all countries) and environmental sustainability – a big enough task in itself. If a normative premise about distributional justice is injected into the equation at the global level, it calls into question how anyone could be seeking to debate the equity of social arrangements in rich countries when the divergence of incomes between citizens in rich and poor countries is orders of magnitude greater.

Quite aside from the negative optics of selecting indicators (from a developing country perspective) that leave such questions unanswered, they underline the point that a ‘three pillars’ approach risks becoming vacuous. Furthermore, by entering into issues related not to absolute poverty and morbidity (the solid stuff of the UNDP’s Millennium Goals)(13) but relative concerns about social equity and distributive justice, such a definition of sustainable development will rapidly dissolve any consensus in developed countries about whether we even have a useful paradigm here.

There is an important political point to be made here. If support for sustainable development is dependent on the ideological persuasion of whom for the time being holds office in the very countries being looked to to take the lead on the issues raised at Rio, then it has over-extended itself as a useful organising principle. It has to be remembered that distributional issues go to the very heart of many ideological debates within developed countries – debates that are unresolved and possibly unresolvable.

It is worth reiterating at this point that, the concern here is not to debunk the notion that social factors are important in the development of economies and societies. There is a strong moral dimension to the case for relieving abject poverty and sickness – it would be absurd to deny that motivation in making the case for tackling the soluble health challenges detailed in the Report of the Commission on Macroeconomics & Health for instance. But there are also good instrumental reasons of an economic and environmental nature and they will command support where more ambitious, all embracing notions about ‘equity’ will founder.

In this regard, a more useful frame of reference on the social aspect may be the UN’s Human Development Index (HDI).(14) This indicator set, which is not without controversy, uses indicators of ‘health, wealth and wisdom’. An emphasis on a core set of health, education and income indices comprising the socio-economic component of sustainable development may be one way to think meaningfully about how to bring the social dimension into the sustainability debate. This way the focus is on a very hard core of issues that have analytical relevance as well as resonance between developed and developing countries.

Such an approach also leaves one in a more analytically tractable world. Rather than pretend that some magical balancing trick is possible between the three pillars, we are engaged in considering a human sphere of economic and social development that can be managed for better or worse, and a biophysical (or environmental) sphere subject to some real, scientifically demonstrable thresholds. The focus of policy attention is then directed to development trajectories, which remain within those thresholds if we are not to destabilise economic and social progress through a degraded environment.

It is important to return to first principles and, in particular to the concept of the ‘deal’ outlined (if never formally struck) at Rio. That context, we can seek to develop the tools to establish whether we are or are not making progress. Concrete information and data is critically important as a means of changing minds and winning debates. Without hard information erected on uncontentious premises, sustainable development risks being at best a fad, and at worst a cover for justifying any policy outcome one seeks to nominate.

This brings one to the issue of the sort of information gaps we need to close. In short, improving our scientific understanding of a short list of environmental problems that have trans-boundary effects is vital. This needs to be done with a view to establishing whether there are global thresholds within which humanity must stay if it is to avoid significant disruption to the planet’s life support systems. That involves trying to be clearer about the Achilles heels of planetary level biophysical systems. This is the sort of terrain covered by the International Geosphere-Biosphere Programme.

The key areas to focus on are likely to include:(15)

• A more comprehensive model of atmospheric chemistry to identify any other weak links such as were discovered in relate to ozone depleting substances.
• A more comprehensive, data-rich understanding of ocean circulation and the extent to which anthropogenic forcing could trigger major changes.
• An understanding of the relationship between biological diversity and ecosystem resilience (this appears to be a particularly under-defined area).

A country’s emission levels may appear to be set artificially low because it imports significant quantities of carbon embedded in non-energy products. A national-level indicator, which fails to take into account trade flows, can easily mask this kind of ‘carbon leakage’. In this context, global emissions might not be reduced as much as expected or might even increase. The magnitude of this problem is underlined by the rapid expansion of international trade.(16) Linking data on economic consumption in an accurate way with biophysical thresholds could be helpful in focussing back on the implicit ‘deal’(17) embodied in the Rio outcome.

Many developing countries are understandably nervous about any proposal for indicators which is likely to shed a rather grim light on the developing world’s levels of sustainability as measured by developed-country criteria. Many would not relish, for instance, measurement against many of the social indicators under discussion in the Commission or the OECD. Nor would many enjoy the application of the proposed indicators of air or water quality, which are unable to account for the reasons for such changes (i.e. as the consequences of rapid economic development, not least through the production of goods for export to the developed world.)

A particular anxiety about trying to put sustainability on a firmer base through the use of indicators is that a nationally based indicator set may lead to critical comparisons being made among developing countries with the logical extension being perhaps some form of conditionality in which the future delivery of development assistance might be linked to positive progress on sustainability.

Measuring consumption in a way that took into account trade effects would illuminate the point that the consumption patterns of the developed world have a significant impact on global sustainability. Further, it would underline the essentially integrated and global nature of economic activity that is making inter-country comparisons in this sphere less and less meaningful particularly when the environmental pressures are being measured at the global level.

In the same way that many environmental externalities do not stay behind national borders, neither do many 'policy externalities' caused by government policies. An authoritative measure of the net benefit/loss of a number of key policies that commonly impact on sustainable development at the global level would be a powerful tool. A synthetic indicator that weighted and then bundled, for instance, the aggregated impact of development assistance flows on the one hand, and the market destroying and distorting consequences of trade barriers and subsidies would provide an additional level of richness to data linking consumption to biophysical pressure points.

Another interesting candidate for indicator development, which could contribute to a more nuanced picture of the relationship between developed, and developing countries is the nature of human capital flows. Measuring inflows and outflows of people could, for instance, seek to identify flows of developing country migrants to OECD countries compared with, for instance, internal cross-border EU migration or intra-NAFTA flows. Such an indicator would highlight the point that movement of labour is quite limited especially when flows between OECD economies are eliminated. It would also usefully emphasise the point that some developed economies already absorb large numbers of developing country immigrants who send home sizeable sums in remittances. This is a not insignificant contribution to developing economies.(18) These remittances lend themselves to comparison with, for instance, levels of development assistance, or the scale of losses to developing countries caused by rich world trade barriers. All of this is intensely relevant to the human development aspect of sustainable development.

Finally, if one were to rely on hard information based on uncontentious premises as a way of focusing our efforts, then any global set of indicators would, to be meaningful, need to possess the following characteristics:

• They would need to be backed by solid scientific understanding. That is, we must be able to measure them at regular intervals, and we must have sufficient scientific understanding to interpret them, particularly when they change.

• They would need to be able to distinguish human interference from natural variability. This is absolutely crucial, as it would be counterproductive to ask societies to make major changes in response to a natural variation in an indicator. This suggests that the palaeo-sciences must play a strong role in the development of indicators and their interpretation.

• They would need to deliver timely information; that is, they must be able to give societies enough time to act to avoid crossing a critical threshold. Indicators, which only show change after a critical threshold is passed, will be of little value. This criterion is actually very difficult in practise, as there is likely considerable momentum built into much Earth System functioning and it may be very difficult to detect a significant change before it is too late. This suggests that decision-making on the basis of the precautionary principle and risk analysis may still be required, even if a set of indicators is in place.

• Finally, they would need to be flexible. Science is never static, and it is always improving our understanding of the Earth System. There must be an ongoing dialogue between science and the policy sector so that we can improve the indicator set and their interpretation as scientific understanding advances.

Notes

1. Agenda 21 and the Rio Declaration can be downloaded from http://www.un.org/esa/sustdev/agenda21.htm and http://www.un.org/documents/ga/conf151/aconf15126-1annex1.htm.

2. The World Commission on Environment and Development (1987) Our Common Future, Oxford University Press, Oxford.

3. The full reports of the CSD and the Rio outcomes can be accessed via http://www.un.org/esa/sustdev/csdpast.htm.

4. OECD (2001) Sustainable Development: The Critical Issues, OECD, Paris.

5. More detail on triple bottom line accounting may be found at, inter alia, http://www.wbcsd.org.

7. European Commission, (2001) Measuring Progress Towards a More Sustainable Europe: Proposed. . Indicators for Sustainable Development, European Commission, Brussels. This is being continually updated and the work can be followed at http://europa.eu.int/comm/eurostat/Public/datashop/print-product/EN?catalogue=Eurostat&product=1-structur-EN&mode=download.

8. See, for instance, the detailed outline of an indicator set contained in OECD (2001, p. 72). This has since been set to one side in favour of an approach elaborated in OECD (2002) Sustainable Development: A Framework for Peer Reviews and Related Indicators (SG/SD(2002)2) and (OECD (2002) Indicators to Measure Decoupling of Environmental Pressure from Economic Growth, Paris (SG/SD(2002)1

9. OECD (2001) The Concept of Socially-Sustainable Development: Review of Literature and Preliminary Conclusions, (SG/SD(2001)13) Paris and OECD (2001c) The Concept of Socially-Sustainable Development: A Survey, (SG/SD(2001)13/ANN), Paris, 22 October provide a review of the literature.

10. H E Daly ((1996) Beyond Growth, Beacon Press), Boston reviews some of the difficulties inherent in a ‘broad church approach to the concept of sustainable development. An interesting take on the "faddism" surrounding sustainable development is provided by B E Aguirre (2002) Sustainable Development as Collective Surge, Social Science Quarterly, vol 83, number 1, March 2002

11. D. Esty., (2001) A Term’s Limits, Foreign Policy, September/October, pp. 74-75.

12. United Nations (2001) World Population Prospects The 2000 Revision, United Nations, New York, p. 5. The full report (with updates) can also be accessed via http://www.un.org/esa/population/unpop.htm.

13. A full copy of the Millennium Development Goals is contained in OECD (2001) The DAC Guidelines: Poverty Reduction, Paris, OECD, pp. 127-9

14.United Nations Development Programme (1999) Human Development Report, New York.

15. The following is an abridged version of the main issues which were first presented in S. Upton and V. Vitalis, (2001) Measuring What? OECD Round Table, Paris, OECD. We are indebted to Dr Will Steffen Executive Director, IGBP for his assistance. Needless to say, as with the original text, all errors and omissions are solely the responsibility of the authors.

16. This problem has already been the subject of considerable analysis, as have ways of measuring it. One set of estimates based on six of the G7 economies (excluding Italy)) indicates that the embodiment of carbon in imported goods is rather significant. The weighted average for these six was 13% of the total carbon generated by these countries - a figure, which varied considerably from one country to another. Thus, the figure for France exceeded 40%, while both Canada and the UK exceeded 20% (A. W. Wyckoff and J. M. Roop (1994) The Embodiment of Carbon in Imports of Manufactured Products: Implications for International Agreements on Greenhouse Gas Emissions. Energy Policy, March 1994, pp. 187-194). Other analysts have reported similar results (eg R. Sturgiss., (1995) Greenhouse Gas Emissions: The Impact of International Trade, International Trade Papers 1995, AGPS, Canberra). Not surprisingly, the carbon embodied in a country’s imports of manufactured products tended to reflect patterns of trade. Calculating the carbon embodied in every single imported product is complicated and difficult, though there has been considerable progress in improving the mathematical basis for this work (see, for instance, V Vitalis, Modelling Embedded Flows: A New Perspective and Some Improvements to Techniques, Econometrica, forthcoming).

17. The issue of a ‘global deal’ or ‘global partnership’ has been revived in the run-up to WSSD, most recently by the European Commission in its recent paper (European Commission (2002) Towards a Global Partnership for Sustainable Development, Brussels, European Commission.

18. The total value of global remittances to developing countries has risen from less than US$2 billion in 1970 to almost US$100 billion in 1999 (for further details on this see S. Upton (2002) What Should World Leaders Focus on At Johannesburg? OECD Round Table, OECD. The importance of remittances varies but for a number of developing countries they are a critically important source of income and foreign exchange. Egypt, for instance, received US$5.1 billion in remittances – not far short of the US$6.9 billion income received from the Suez Canal, oil exports and tourism combined. According to the Central Bank of the Philippines, that country’s economy has benefited by upwards of US$7 billion in the form of remittances, easily dwarfing ODA and FDI flows over the same period (Far Eastern Economic Review, 1994) Filipinos: First or Last? 13 January). Jamaica has benefited from a steep increase in remittances, with an increase over a ten-year period from 4% of GDP to nearly 10%. For further details on this, see also Thomas-Hope, E., (1998) Releasing the Development Potential of Return Migration: The Case of Jamaica, Paper prepared for the Technical Symposium on International Migration and Development, United Nations, ACC Task Force on Basic Social Services for All, The Hague. The multiplier effects of migrant remittances have been analysed by Durand, J., Parrado, E., ad Massey, D., (1996) Migradollars and Development: A Reconsideration of the Mexican Case, International Migration Review 30, no. 2