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Photo: UNCCD

“How have we got to the point where our economic models have largely under-estimated or ignored the good stewardship of our environmental and natural resources?” Club of Rome Secretary General speaks at the United Nations Convention to Combat Desertification (UNCCD).

I would like to thank the conference organizers and in particular Luc for inviting me to provide an opening contribution to this conference. I have long believed that this Treaty is important to the future of our planet: not only because of the substantive issue it represents but also because of the people who are most likely to suffer its consequences.

It is now over four years since I left the World Bank and the CGIAR: time to reflect on many issues and many matters both personal and professional. Most of the intervening time I have spent either on matters of local interest in the part of the world where I live in or on climate change, either on carbon markets or on broader issues of climate and energy strategy. More recently in my role as Advisor to GLOBE: the International Parliamentarians Organization I have assumed responsibility as Chairman of its Commission on Land Use Change and Ecosystems. Last month I was appointed Secretary General of the Club of Rome: an organization perceived as heretical 30 years ago and now seen as prescient and contemporary today.

Since today you will no doubt be exploring the detailed relationships between climate change and desertification I thought that I might simply provide some broader thoughts and views on the interconnection between the issues you will discuss and a set of broader global concerns. I will draw upon some of the Club’s work as well as the work underway with the GLOBE Commission that has worked specifically on forestry, fisheries and measurement of ecological wealth.

I believe that we are at an inflection point in the world today. There is a convergence of themes — seemingly disconnected — that is now being understood to be integral and urgent to our very survival. The world is headed into a perfect storm of an interconnected financial, ecological and social crisis. Almost all forward-looking assessments of emerging issues and threats demonstrate that business as usual and incremental improvements will not be sufficient to take us to a world blessed by equitable prosperity, safety, security and contentment. And time is not on our side.

We are just completing a decade in this millennium yet we have witnessed four crises (one every two years or so): crises of global and worldwide proportions, each requiring coordinated political and operational action. Two have been financial. Two have been ecological. All have been human. Each distinct yet each sharing common features, common heritages and each requiring comparable actions.

One: we have witnessed the moral crisis of a planet with plenty and shared by so few. It remains indefensible that more than one third of our fellow humans remain in dire poverty. At the turn of the Century world leaders pledged to half world poverty through the Millennium Development Goals (MDGs). Even the modest goals set by our leaders at the turn of will not be met.

Two: We remain in the midst of a global financial crisis: one that has affected millions of people throughout the world. What started as a series of largely containable national and regional banking and financial crises from the 1970s onwards has now transformed itself into a global crisis in the real economies of the world. The restoration of financial capital and its management has become a priority although actions to date seem sporadic and insufficient.

Three: we have witnessed a food crisis as a result of the rapid growth in commodity prices, especially food, and their impact on poor countries. The food crisis was due to many reasons: historic low prices that couldn’t continue; technological plateaus in productivity; competition for land for both food and non-food crops; and the rising costs of inputs including water and fertilizer. Agriculture and land use and ecosystems management cannot be separated. As the global demand for food rises agriculture will need to step up again to a major challenge. The recent slow-down in commodity prices must not lull us into complacency.

Four: We have witnessed a global ecological crisis. It affects us now and well into the future; and the consequences of not repairing and reversing the damage we have done to our planet and its natural capital will have dire consequences for us and for the sustainability of our planet. Fortunately climate change has moved to centre stage, so much so that it is easy to fall into the trap of believing that the only environmental crisis we face is climate change. It is not: our forests are being lost; our biodiversity is depleting; our natural fisheries decimated: all at historic and unprecedented rates. To be sure, climate change will make matters worse and hopefully it provides us with a greater sense of urgency than ever before.

As we reflect upon the crises of today it is also worth thinking for a moment about tomorrow’s world: let’s say by 2050: a time frame most of us can appreciate, and one that most of our children will live through. We can reasonably postulate that:

• Population will likely grow from close to 7 billion to perhaps 9 .5 billion.
• With modest economic growth to address basic income needs and hopefully eradicate the poverty that the MDGs so heroically set out to do we can envisage a planetary GDP growth that could easily triple or quadruple from say 50 to 60 trillion dollars today to close to 200 trillion dollars by the middle of the century. Three new worlds of goods and services grafted on to our present one but with our natural capital base largely fixed (and possibly even declining).
• Demand for food double from today, partly driven by extra mouths to feed and partly by the very changes in income we hope to achieve in developing countries.
• Energy needs will increase at least as fast as GDP with electricity infrastructure rising even faster, and the price of harnessing our water resources will increase dramatically as we begin to see discontinuities in costs.
• And climate change, even under heroic assumptions of potential actions, will increase costs; pose threats to planetary stability; and affect the aspirations of those hoping to climb out of poverty.Is it little wonder that the Club of Rome’s former flagship report “The Limits to Growth” is now seen in a largely positive and contemporary light. Is it any wonder that we need to reflect on our common future.So lets me turn to some thoughts as we think about today and tomorrow’s world and their relationship to the issues you will debate today.The search for prosperity for all has to easily become a search for economic growth on the assumption that growth alone would solve our problems. The economic models we have slavishly followed have supported a specific type of growth and the unleashing of uncontrolled markets has produced a specific type of avarice. We need to take stock.
• Economic growth has increased (more than a real doubling since 1960) but at what cost? In truth economic growth has pulled many out of poverty but it has also left too many behind. It has made 20% of the world well off and a small number rich beyond our comprehension. Growth has largely been unconcerned about its impact on our natural systems and their social consequences.
• Economic growth and measurements of economic performance has been built upon false assumptions; incorrect metrics and an illusion that growth, wealth and well being meant the same thing.
• Economic Growth has been built ostensibly on Financial and Physical capital: depleted and accounted for. However, our growth has also been built on the Natural Capital of our planet. Yet, we have treated natural capital with disdain and social capital with blindness. We need to reformulate our economics that at a minimum embraces real values for natural capital, and measures the real impact of resource depletion. We currently deplete our natural capital, account for it as zero, and do not replace it: surely this must count as the worst business practice in history! We also need to be more mindful of social and cultural capital.

We must again ask whether there are indeed “Limits to Growth”. Whether there are “Limits of Growth”; and whether growth is even necessary in some parts of our planet to meet the needs, aspirations and a decent quantity and quality of life. However, growth in needed urgently in the “South” if we are to bring people out of poverty. However, such growth must also respect the value of natural capital.

The massive depletion of natural resources and its interaction with our ability to dramatically change our climate is now raising serious intellectual debate about sustainability, overshoot and limits. Few would now disagree that we have or are close to reaching or at least some limits or that we must take drastic and urgent action to shift those limits, irrespective of whether our concern over limits may be less to do with resource depletion and more to do with our capacity to absorb waste. Concerns over peak oil, depletion of our fisheries stocks, and the accumulation of greenhouse gases all suggest to me that we are well into the “overshoot” of unsustainability.

So how have we got to the point where our economic models have largely under-estimated or ignored the good stewardship of our environmental and natural resources. How is it that we allow the overfishing of our rivers and seas; the chopping down of our forests and the reckless damage to our natural environment to be counted as a positive increase in our wealth? The current accounting system as Herman Daly once wryly noted “treats the earth as a business in liquidation” (Daly). Why has growth under-provided the goods and services need to give everyone of us a decent life? Why have we not “connected the dots” between ecology, economics and social well being? How could this happen?:

1. By measuring wealth incorrectly and by ignoring the real value of natural resources and natural capital and its ability to contribute to prosperity. By undervaluing natural resources and accounting for their depreciation at no cost we have encouraged the loss of much of our natural planet. When values appear low it results in increased use: we are overusing the biological resources of the planet each year by around 30%, which is clearly unsustainable. Ecological systems, both terrestrial and oceans, constitute vital carbon sinks, absorbing more than 40% of GHG emissions. As our ecological systems degrade through rising temperature and water stress, they absorb less carbon aggravating global warming. A 0.1 C rise in one decade puts 15% of the established ecosystems at risk
2. By distributing wealth so unevenly. Despite the great progress and long periods of economic development we now find ourselves in a more unequal world than ever. The poorest 40% of the world’s population accounts for only 5% of global income. 80% of the world’s population live in countries where the disparity gap is widening. Global financial assets of the wealthy have multiplied exponentially, from $ 12 trillion in 1980 to almost $170 trillion in 2006. (Giarini). To this we can add the disparate costs and asymmetric benefits of climate change and other natural resource destruction.
3. By ignoring long term consequences and constantly focusing on the short term; the time it takes to get elected and re-elected. The high discount rates that drove economic decisions towards the short term. The focus on bottom line short term profitability and not contributions to long term financial sustainability. Sustainability requires us to think beyond the immediate return.
4. By ignoring systems and systems effects we encourage partial solutions to integrated problems. Broad systemic crisis do not respond to partial or ad hoc measures as we have seen so clearly in the evolving response to the financial crisis.
5. By having faith in an unfettered market place when we have now discovered that the public good element of the crisis of this decade have all required prudent, sensible and enlightened public policy guidance. The “prices” provided to the market were more often wrong than right for they ignored any sense of the common good; the needs of people; nor the impact on the future ecological stock.
6. By ignoring externalities and factors that did not conveniently have a market price we distorted our markets and our understanding of the value of concerted public action.
7. By not focusing on underlying causes we followed inappropriate policies often addressing the wrong thing at the wrong time and in the wrong place. We must have a deep understanding of the drivers of change if we are to effect change.
8. By assuming that linearity and gradualism will provide us space and time to act. The global financial crisis took us by surprise and its impacts were felt immediately. We need to recognize that climate change may not be a gradual, linear process: sudden and dramatic changes are probable and have occurred in the past. Land degradation can move in fast and unpredictable ways. Catastrophic risk whether from the natural or human made world is now very much part of our lives today.
9. And by focusing on outmoded economic models and theories that justify principles to support the success of the few over the many; the measured over the un-measured; and the “internality” over the “externality”. There is a need for a new theory that achieves maximum economic security, wealth and welfare for all ( Giarini, Stiglitz, New Economics Foundation et al)

One central pillar of our concerns for long term sustainability _ perhaps even survivability – must be to return to the central importance of our natural capital base as providing a cornerstone for our future prosperity and a new pathway to future economic and social progress. The purpose of your Convention (UNCCD) and your efforts today is to consider how best to guide us towards more enlightened land (and water) use and how best to protect and improve the livelihoods of those who depend so much on fragile lands.

So, to return more directly to the theme of today’s meeting I would like to suggest a few issues for consideration that have arisen from my own work with the Club of Rome and with the GLOBE Commission on Land Use and Ecosystems:

• We need to place land degradation, land use and desertification in the wider context of systems thinking that aligns issues of ecological effects including climate change, water use, agricultural policies at the national and global level, biodiversity management and conservation; as well employment and economic and financial change.
• We need to start measuring natural capital correctly and ensure that all decisions regarding its use are made on the basis of its real value to society. In this regard, we need to insist that Ministries of Finance reflect financial decisions on the basis of real costs and values. We can make a start at understanding the real value of water and investing in technologies that dramatically improve water efficiency in the agricultural sector, where over 75% of water is currently used.
• We need to eliminate as a matter of urgency all harmful and wasteful subsidies in all sectors that directly affect the quality and productivity of land in the long term.
• We need to restore, replenish and improve the existing degraded land and natural capital and return it to a state where it can provide higher and longer returns at low or no ecological cost. Funding on a massive scale is required. A little over sixty years ago the Marshall Plan set out to restore and rehabilitate the Physical Capital that had been destroyed by mankind. We need a Marshall Plan that takes the same assertive stand for our Natural Capital and its restoration. If only a fraction of the funds that went to restore Europe’s physical capital or that of the funds that have helped more recently to restore our financial capital were targeted to restore the world’s natural capital we would likely provide as strong an impact on real wealth and long term sustainability. A recent report to the Club of Rome by Professor Ernst Ulrich von Weissäcker suggests that it is possible to achieve a five fold increase in efficiency from our existing agricultural, energy and water management practices (von Weissäcker). The recent upsurge of interest in REDD is a positive signal that attitudes may be changing.
• We need to invest in Research and Development to pave the way for a new agricultural revolution. New and higher levels of productivity gains are essential. New and lower levels of efficiency are needed. New crops, strains, technologies and supportive policies are essential. We need to build upon the potential for multi-functional farming where farmers are managers producing crops, ecological and climate benefits: and we need to develop means to reward them for their contribution to long term sustainability and not just through short term commodity prices.
• We need to more firmly understand the relationship between land and jobs. New greener technologies need to be deployed that provide both ecological as well as employment gains. If we do not find jobs for the over 200 million currently without jobs we will fail in securing a stable and content planet. The rural sector still accounts for 40% of workers in developing countries and probably a much higher percentage of the unemployed. Livelihoods are at stake.
• We need to encourage land use advocates to become climate advocates in calling for robust targets and timetables on emissions as well as large scale action on adaptation. This is not the place to specify the appropriate targets although I simply take note of the increasing scientific and expert opinion which suggest that returning to a target of no more than 350ppm would give us some assurance that catastrophic climate change can be averted. It is the land use space, the agricultural sector, and the water sector could be so hard hit that land depletion and desertification could easily become a non-linear event. We already know that small changes in climate can result in abrupt and large changes in land quality.
• We need to elevate the issues of land management, land degradation and desertification to parliamentarians, ministers of finance and others. Our advocacy must be based on sound reasoning and real impact: restoration of our natural capital base represents a “best in class” investment for today and for future generations.

You are an important Convention with an important message. Land degradation is intensifying and increasing in severity in more than 20 per cent of all cultivated areas, 30 per cent of forests, and 10 per cent of grasslands. A quarter of the world’s population depend on those very lands that are now under degradation.

In my twin roles in GLOBE and the Club of Rome you can be assured that we will do our best to place the issue on the agendas of parliamentarians from around the world and to our Club members and 30 or more Club of Rome national associations around the world. We live in a complacent world, one drawn from old and easier times and one not used to non-linear events. The challenges are great but so are the opportunities to take action: done in time and at scale we can reverse the depletion of our natural capital and we can make progress on the issues you will discuss today. But time is not on our side and the long term seems to get shorter every day.

I wish you all the very best in your important discussions and again I thank you for the invitation to speak at your meeting.

Thank you. Ian Johnson

Summary conclusions: Sustainable land management as part of the climate change policy framework: Who benefits? www.unccd.int [2]