UN sustainability panel says put a price on the environment



A recent cartoon (below) extrapolates the use of the word “sustainable”. It predicts that in 50 years each sentence will on average contain the word at least once.

The cartoon is clever, and “sustainable” is indeed overused. But there is a good reason why we hear about sustainability so much these days. It is important.

Despite the odd hiccup, and ongoing deprivation in some regions, we seem to have by and large worked out how to get richer. But can the planet handle the strain on its resources?

The United Nations Secretary-General’s High-Level Panel on Global Sustainability released its report, “Resilient People, Resilient Planet: A Future Worth Choosing”, last week.


The panel is composed mostly of political leaders, and has global representation. One of the members is Australia’s Foreign Minister, Kevin Rudd.

A broad vision

Despite the panel’s name, its recommendations really relate to sustainable development rather than the narrower concept of sustainability (the ability to endure).

The report includes 56 recommendations. While it is unlikely that the panel’s goals will all be reached (“universal broadband by 2025”), its ambition is commendable.

The panel makes a number of quite standard, but important, points about sustainable development. It calls for more research and development in agriculture and energy to reduce these sectors’ environmental impacts and alleviate food and energy poverty.

It also notes that helping poor families to access health and education services improves their lives, and can relieve pressure on the environment from population growth.

Getting prices right

The report’s primary message is that we need to do much more to get prices right. Markets work well when goods and services are properly priced. But no price will naturally emerge for carbon dioxide emissions or many of the benefits provided by natural ecosystems.


The playing field is heavily biased against the natural environment.

The panel recommends emissions pricing as the most sensible way to slow climate change and address other environmental issues.

The report also takes up the case against fossil fuel subsidies, which are in effect a negative carbon price. These subsidies are also a large drain on government budgets in many countries.

Environmental challenges are vast. But until we allow prices to properly mobilise the power of the private sector to confront them, it is too early to give up hope.

Reforming economics

The panel has a dig at mainstream economics, which it suggests needs to open its eyes more fully to sustainability.

But economics should not be seen as the bad guy. The report’s principle philosophy of getting prices and rules right and then letting the market work is straight from Microeconomics 1.

Inspiring, but diplomatic

The panel’s report is designed to inspire. Its release is part of the lead-up to the Rio+20 United Nations Conference on Sustainable Development, which will be held in June 2012.

As a United Nations document, it is no surprise that the report is diplomatic in tone. It does not berate any individual countries for their current policies. It instead highlights positive initiatives under way around the world.

The report also sidesteps discussion of just how challenging sustainability reforms can be. As our experience with moving to carbon pricing here in Australia has shown, vested interests can put up a strong fight.
Addressing a key global injustice

The report talks a lot about poverty reduction, but mentions the Doha Round of trade negotiations only once. This is not enough.

Removing agricultural subsidies and trade barriers in developed countries is one of the most powerful options available to advance the development agenda in Africa and elsewhere.

Yet progress toward reducing agricultural distortions has stalled, in Europe and elsewhere.

Until trade-protecting developed countries improve the fairness of global agricultural markets, these countries’ professed support for plans for global poverty reduction should be called what it is: a bit rich.