Pavan Sukhdev

"We still have a lot to learn about the nature of value and the value of nature"

Thoughts from a Beach : The Private Sector and Rio+20

Fortune’s “Brainstorm Green” meeting, at a sunny beach resort in California this week, could not have been better timed. It is exactly two months to Rio+20. So much intellectual energy was present here, so many great ideas, that the question begs to be asked : will those 193 government delegations at Rio+20, gathering in Rio in June to debate ‘Green Economy’ and global environmental governance deliver even a fraction of this energy, this thinking ?

We all know planetary boundaries are being approached or breached across several critical axes – including GHG emissions, nitrogen, biodiversity. Significant changes are urgently needed in the way we deal with earth’s resources.
Inter-governmental efforts so far have failed miserably. Founded at the first Rio summit, UNFCCC has failed to get governments to arrest GHG emissions. Its unequal twin UNCBD has been unable to get governments to slow down the rate of loss of biodiversity. These failures point to the need to recognize the vital role of the private sector in determining economic direction and hence resource use globally. The corporate world has to be brought to the table as responsible stewards of shared planetary resources, and not as value-neutral, self-interested exploiters of common wealth.

The private sector today produces almost everything we consume, generating 60% of global GDP and employment. Their advertising drives all consumer demand. Their production feeds this demand, and drives economic growth. Their growing profits and assets are the main magnets for global investment. We have become a ‘corporate’ world in more ways than one. Yet these are the good side of today’s corporation – there are also the bad. Corporate externalities, the unaccounted costs to society of “business as usual”, are an estimated US$ 4 Trillion, or 7% of GDP, every year.

Corporate lobbying often influences national policies to the detriment of the public good. Advertising often converts human insecurities into consumer demand. And excessive demand has already made our ecological footprint exceed the planet’s bio-capacity by 35%. We are now consuming nature’s capital, not its interest.

There is leadership for change (we saw great examples from CEO’s at the Fortune meeting) but it is too little, too late. I believe the “rules of the game” must be changed so that corporations are able to compete on the basis of innovation, resource conservation, and satisfaction of stakeholder demands – and not on the basis of who can best influence government regulations, avoid taxes, obtain subsidies. CSR will never suffice to lead us to tomorrow’s “Green Economy”: we need a new Corporate model .Corporations that discover, measure, and manage down their negative externalities. Corporations that work in a business environment free of perverse subsidies, and work for stakeholders, not just shareholders.

However, that new model will not just happen, it needs to be fed by investment, it needs a level playing field, and it needs new regulation in place. That means eliminating a trillion dollars per year of perverse subsidies for fossil fuels & unsustainable agriculture & fisheries. It means investing in a green economy. And it means making it mandatory to disclose corporate externalities. But who is to eliminate subsidies, seed investments, change corporate reporting ? Why, it is those same 193 governments who will meet at Rio+20 in two months! So, I do hope that the only thing in common between these two meetings will not just be two beautiful, sunny beaches.

April 21st, 2012 Posted by | Uncategorized | 5 comments

5 Comments »

  1. We talk of a “Green Economy” but we fail to understand that is the “Economy” that needs to change. It is not just the elephant in the room, it is the Room. If the economic structure contains positive and negative externalities, we will always have the problems associated with not receiving enough of the positive and too much of the negative. It is a simple analysis. One must embrace this simple analysis prior to launching toward complex solutions. Take a breath and imagine “Symbiotic Demand”; an economic demand that allows the price for positive ecological externalities to be reduced as the number of demanders increase. It is paradigm shifts at this plateau that create an economic greening. And while governments are important, I can only imagine 193 government representatives tweaking a few portions of the economic system one their best, cooperative day. Symbiotic Demand as illustrated by a practitioner:https://prezi.com/tpfaewgz1jie/apportioning-ecological-values-and-costs-through-symbiotic-demand/

  2. We talk of a “Green Economy” but we fail to understand that is the “Economy” that needs to change. It is not just the elephant in the room, it is the Room. If the economic structure contains positive and negative externalities, we will always have the problems associated with not receiving enough of the positive and too much of the negative. It is a simple analysis. One must embrace this simple analysis prior to launching toward complex solutions. Take a breath and imagine “Symbiotic Demand”; an economic demand that allows the price for positive ecological externalities to be reduced as the number of demanders increase. It is paradigm shifts at this plateau that create an economic greening. And while governments are important, I can only imagine 193 government representatives tweaking a few portions of the economic system on their best, cooperative day. Practitioners must be the catalysts to generate this change. Symbiotic Demand as illustrated by a practitioner:https://prezi.com/tpfaewgz1jie/apportioning-ecological-values-and-costs-through-symbiotic-demand/

  3. Pavan, Thank you for this description of where humanity’s challenges lie. There are a number of ‘fractal’ points by which humanity can gain ascendency in this process between both present forms of corporations and governments. These organizational forms are fragments of a once integrated ‘indigenous’ (Latin = ‘self-generating’) heritage. Humanity is torn emotionally as part of this long heritage based in nature and our institutional formation which alienates us from our roots called ‘primitive’ = ‘of the primary’, ‘savage’ from ‘sylva’ = ‘tree’, ‘witches’ = ‘wise-women’, etc. Our indigenous ancestors worldwide strategically lived in multihome dwellings such as the Longhouse (apartment-like) and Pueblo (townhouse-like) thus grouping together critical mass of 50, 100 to 150 individuals to interact economically, inter-generationally & inter-disciplines together. Today 50% of the earth’s populations live in multihome dwellings. 100 people living in 30 – 35 dwellings is the average of multihome dwellings and represents an annual earning and spending of 2,000,000$ (Canadian funds) which is equivalent to a small-medium business ‘corporation’ (L ‘corps’ = ‘body’). With multihome organization, the contributions of women and other domestic and community labourers were grouped according to Production Society functions (medicine, food growing, preparation, clothes making, repair, fibre spinning, child-elder-handicapped animation etc. With accounting recognition women and men providing these services become visible in the economic and political system. This multi-stakeholder human-resource accounting in the Production Societies was time-based into a system of progressive ownership over the course of a lifetime from youth apprentice to elder-master. The string-shell used on all continents and in all seas of the world integrated ‘capital’ (L ‘cap’ = ‘head’ or ‘wisdom’), currency, condolence social-security, diplomatic-conveyance for shared resource harvesting, collegial education, costume and other values. The key in this accounting integration is the recognition of the relationship between time, devotion, contribution, experience, knowledge, expertise and decision-making acumen. Indigene Community has developed four stakeholder Founder, Worker, Supplier and Consumer contribution accounting modules for time, expertise, resources, finance, property, labour, goods, services and patronage. Economic Democracy practiced worldwide was the foundation upon which Political Democracy (a subset including multihome, village, nation, confederate and continental councils) was founded. These accounting modules as well form the foundation for a participatory stakeholder profit or non-profit incorporation model. We’d love to share our self-generating approaches with you and others who are doing this work for our time. https://sites.google.com/site/indigenecommunity/relational-economy

  4. Aren’t you overlooking the UNGC as a participant and a driver of corporate sustainable innovation at Rio+20?

  5. I agree that the consumption future lies with the corporations. Hopefully your interest and motivation is shared by the many governments in attendance at Rio+20. The combined energy of government, corporate, NGO and practitioners is needed to see through this economic wall in front of us.

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