Development Financing
Jeffrey Sachs

Jeffrey D. Sachs ... Financing Sustainable Development ... Addis Ababa Summit 2015

Burgess COMMENTARY

Peter Burgess

NEW YORK – The year 2015 will be our generation’s greatest opportunity to move the world toward sustainable development. Three high-level negotiations between July and December can reshape the global development agenda, and give an important push to vital changes in the workings of the global economy. With United Nations Secretary-General Ban Ki-moon’s call to action in his report “The Road to Dignity,” the Year of Sustainable Development has begun.

In July 2015, world leaders will meet in Addis Ababa, Ethiopia, to chart reforms of the global financial system. In September 2015, they will meet again to approve Sustainable Development Goals (SDGs) to guide national and global policies to 2030. And in December 2015, leaders will assemble in Paris to adopt a global agreement to head off the growing dangers of human-induced climate change.

The fundamental goal of these summits is to put the world on a course toward sustainable development, or inclusive and sustainable growth. This means growth that raises average living standards; benefits society across the income distribution, rather than just the rich; and protects, rather than wrecks, the natural environment.

The world economy is reasonably good at achieving economic growth, but it fails to ensure that prosperity is equitably shared and environmentally sustainable. The reason is simple: The world’s largest companies relentlessly – and rather successfully – pursue their own profits, all too often at the expense of economic fairness and the environment.

Profit maximization does not guarantee a reasonable distribution of income or a safe planet. On the contrary, the global economy is leaving vast numbers of people behind, including in the richest countries, while planet Earth itself is under unprecedented threat, owing to human-caused climate change, pollution, water depletion, and the extinction of countless species.

The SDGs are premised on the need for rapid far-reaching change. As John F. Kennedy put it a half-century ago: “By defining our goal more clearly, by making it seem more manageable and less remote, we can help all people to see it, to draw hope from it, and to move irresistibly toward it.” This is, in essence, Ban’s message to the UN member states: Let us define the SDGs clearly, and thereby inspire citizens, businesses, governments, scientists, and civil society around the world to move toward them.

The main objectives of the SDGs have already been agreed. A committee of the UN General Assembly identified 17 target areas, including the eradication of extreme poverty, ensuring education and health for all, and fighting human-induced climate change. The General Assembly as a whole has spoken in favor of these priorities. The key remaining step is to turn them into a workable set of goals. When the SDGs were first proposed in 2012, the UN’s member said that they “should be action-oriented,” “easy to communicate,” and “limited in number,” with many governments favoring a total of perhaps 10-12 goals encompassing the 17 priority areas.

Achieving the SDGs will require deep reform of the global financial system, the key purpose of July’s Conference on Financing for Development. Resources need to be channeled away from armed conflict, tax loopholes for the rich, and wasteful outlays on new oil, gas, and coal development toward priorities such as health, education, and low-carbon energy, as well as stronger efforts to combat corruption and capital flight.

The July summit will seek to elicit from the world’s governments a commitment to allocate more funds to social needs. It will also identify better ways to ensure that development aid reaches the poor, taking lessons from successful programs such as the Global Fund to Fight AIDS, Tuberculosis, and Malaria. One such innovation should be a new Global Fund for Education, to ensure that children everywhere can afford to attend school at least through the secondary level. We also need better ways to channel private money toward sustainable infrastructure, such as wind and solar power.

These goals are within reach. Indeed, they are the only way for us to stop wasting trillions of dollars on financial bubbles, useless wars, and environmentally destructive forms of energy.

Success in July and September will give momentum to the decisive climate-change negotiations in Paris next December. Debate over human-induced global warming has been seemingly endless. In the 22 years since the world signed the UN Framework Convention on Climate Change at the Rio Earth Summit, there has been far too little progress toward real action. As a result, 2014 is now likely to be the warmest year in recorded history, a year that has also brought devastating droughts, floods, high-impact storms, and heat waves.

Back in 2009 and 2010, the world’s governments agreed to keep the rise in global temperature to below 2° Celsius relative to the pre-industrial era. Yet warming is currently on course to reach 4-6 degrees by the end of the century – high enough to devastate global food production and dramatically increase the frequency of extreme weather events.

To stay below the two-degree limit, the world’s governments must embrace a core concept: “deep decarbonization” of the world’s energy system. That means a decisive shift from carbon-emitting energy sources like coal, oil, and gas, toward wind, solar, nuclear, and hydroelectric power, as well as the adoption of carbon capture and storage technologies when fossil fuels continue to be used. Dirty high-carbon energy must give way to clean low- and zero-carbon energy, and all energy must be used much more efficiently.

A successful climate agreement next December should reaffirm the two-degree cap on warming; include national “decarbonization” commitments up to 2030 and deep-decarbonization “pathways” (or plans) up to 2050; launch a massive global effort by both governments and businesses to improve the operating performance of low-carbon energy technologies; and provide large-scale and reliable financial help to poorer countries as they face climate challenges. The United States, China, the European Union’s members, and other countries are already signaling their intention to move in the right direction.

The SDGs can create a path toward economic development that is technologically advanced, socially fair, and environmentally sustainable. Agreements at next year’s three summits will not guarantee the success of sustainable development, but they can certainly orient the global economy in the right direction. The chance will not come along again in our generation.

Jeffrey D. Sachs, Professor of Sustainable Development, Professor of Health Policy and Management, and Director of the Earth Institute at Columbia University, is also Special Adviser to the United Nations Secretary-General on the Millennium Development Goals. His books include The End of Poverty, Co… read more

Comment Commented

Alberto Saavedra MAR 2, 2015 When consumers in developed countries can easily get information about the environmental and social footprint of products, a sustainable economy will be achievable. Consumers represent the largest stakeholder group. Sustainability will happen when the 4 perspectives push in the same direction; corporate, community and consumer sustainability and governments. Reply Comment Commented

Triumph Tx FEB 25, 2015 Even single individual citizens Can effect change in great ways not for the future but the present and what has gone before also can be scaled for common good, I am poised for Echoing green fellowship and my problem is called stewardship and common good, and there are roadmaps, but perhaps the biggest ones are roadblock created when someone small as me feels so alone, no matter, Its my problem and I have something that though not a potential solution could uplift our nation. Reply Comment Commented

Per Kurowski DEC 31, 2014 Then let us ask for capital requirements for banks based on sustainable development ratings, and not based on silly purposeless credit ratings. http://www.ourpiedaterre.blogspot.com/2013/10/if-regulators-absolutely-must-distort.html Reply Comment Commented

Jose Maria Bobillo DEC 18, 2014 Prof Sachs what is your opinion about B Corporation? Here in Latinamerica this movement is beginning to burst Reply Comment Commented

Avraam Dectis DEC 14, 2014 . A large contributor to inequality is the obsolete economic system that still has vestiges of the gold standard. We still require most governmental spending to be funded by taxes, which has not been necessary since we used precious metal as a currency. The inequality reducing alternative is Bond Funded Government. A BFG mostly funds the government through floated bonds and restrains inflation through economic activity reducing measures such as bank reserve requirements, interest rates and perhaps sales and real estate taxes. No income taxes at all. We know that interest rates can squelch inflation so there is no controversy to this assertion. BFG reduces inequality because federal spending is constrained only by inflation. As long as inflation is low, the economic activity suppressing measures will be low as well, when inflation rises, interest rates, reserve requirements and the rest will rise. The net effect is a country that can spend enough to boost the lower classes into a civilized lifestyle with more opportunity. With BFG, no income taxes means both corporations and individuals will have more to spend, thus boosting demand and minimizing tax avoiding economic activity. The simplicity and performance enhancing aspects of the approach would produce a revelation of improved economic performance. Our current system is like an obsolete internal combustion engine with obsolete mechanisms. With a proper redesign we will see that we are capable of much more growth and a better standard of living with essentially the same inputs. . Read less Comment Commented

Avraam Dectis DEC 14, 2014 . Forgot to add, the bonds that fund a Bond Funded Government would be paid off with QE types of operations, essentially monetized - which is what most people with the existing monetary mindset would object to. . Reply Comment Commented

Nirmalan Dhas DEC 14, 2014 The problem that the species Homo sapiens faces is not one of global climate change. The problem that it faces is that of having to “Move out from the Dominant Dualistic Perceptual Paradigm” (DDPP) that makes the world appear to be a collection of discrete objects and events and autonomous entities all created and coming to an end within time and space and enter the “Emergent Unitive Perceptual Paradigm” (EUPP) that allows the species to perceive the world as an eternal, infinite and stochastic process which perception permits the Civilizational Transformation and Conscious Evolution that leads from the hierarchical pyramid with its authoritarianism, iniquities and gender bias to the network with its facilitation of the evolution of life and its spread throughout the universe. Homo sapiens must respond to the problems of the increasing incredibility of the Growth Model of Development (GMD) and its consequent Pollution and Global Climate Change (P&GCC), Rapid Resource Depletion (RRD) and Global Monetary Collapse (GMC) not with attempts at conservation and reversal but with a creative upsurge that generates “New Ways to Live”, “New Lives and Livelihoods (through environmental regeneration and technological transformation amongst others)” for each individual Homo sapien and a “New World for All”. The species Homo sapiens must not delay this massive transformation because its growing population of over seven billion individuals consumes resources at an increasing pace and all available resources must therefore deployed in this task of Civilizational Transformation while they are still available. This transformation can be accelerated through the generation of the following Resilient Species Support and Survival Systems and Supply Chains (RS5C) that may permit the survival of as many individuals as are required to preserve and develop the knowledge, technologies and culture that have been accessed over centuries and which make the species “human”: 1.Power Generation Systems 2.Communication Systems, 3.Food & Agricultural Systems 4.Waste Recycling Systems 5.Manufacturing and Transport systems, 6.Social Support Systems, 7.Training, Education and Research Systems, 8.Health Systems, 9.Surgical and Medical Systems 10.Planetary Guidance Systems.

This creative upsurge cannot be generated by “aidflows”. It requires carefully targeted “global quantitative easing” that will generate a massive wave of employment and strengthen and revitalize the global economy. The vision that can drive this change lies not within the DDPP described above but within the EUPP that has its sources on the opposite side of the planet. The two must shed their pride and arrogance and reach out to each other – embracing their very different cultural content - if the species Homo sapiens is to realize its inherent potential. Read less Reply Comment Commented

Stephen Pain DEC 13, 2014

I have one important thing to say here. Read my lips. Raise taxation to the the levels of the Scandinavian model. Then earmark huge chunks for education, social welfare and health and sustainable housing. Use the funds to deplan unsustainable farming, demilitarize. Forget the carbon credit initiatives - go for targetting pollution of all types. Reshape consumerism through education so consumers will keep the same product. Modularise electronic products so that updating is available (hardware/software) with existing products. Reconfigure transportation. Go for cycle motorways. Grass roads. Etc etc. All of this would improve the quality of life worldwide. But I guess we will have more of the same in 2015 - meetings about meetings and discussion of future meetings - all paid for by taxpayers with nothing to show. The United States could pave the way by changing its taxation system - currently it s predicated upon unadulterated selfishness. Read less Reply Comment Commented

Zsolt Hermann DEC 11, 2014

I think going deeper into the following sentences might offer the key for any future resolutions:

'...The world economy is reasonably good at achieving economic growth, but it fails to ensure that prosperity is equitably shared and environmentally sustainable. The reason is simple: The world’s largest companies relentlessly – and rather successfully – pursue their own profits, all too often at the expense of economic fairness and the environment. Profit maximization does not guarantee a reasonable distribution of income or a safe planet. On the contrary, the global economy is leaving vast numbers of people behind, including in the richest countries, while planet Earth itself is under unprecedented threat, owing to human-caused climate change, pollution, water depletion, and the extinction of countless species...'

This is all true but is it this happening?

Are those companies, the people those companies evil? Can we replace them and then we get different outcomes?

What is the American Dream? The non-stop, egocentric fulfillment of ever growing self-serving desires regardless of the consequences.

So are the Americans evil for pursuing it?

No. We are all the same, we are simply blindly, instinctively obeying our inherently selfish desires. Simply America and the modern Western lifestyle shows us the maximum development of our uninhibited, uncorrected 'self'.

These selfish, egoistic desires fueled all our beautiful progress, inventions, explorations, breakthrough and the same desires drove us to corrupt it all using all of them for weapons, profit, for exploiting everything and everybody around us.

And the tragedy of our time is that this maximally developed human ego is directly opposite to and destructive in the global, integral world we evolved into. We have become cancer in the system threatening to destroy everything including ourselves.

We cannot change the world, we cannot build a better human society without changing ourselves first. And this is something only human beings are capable of. Only we can perform a critical self-assessment, revealing our own faulty operating software, and we can - by using the right method - correct ourselves and adapt to the evolutionary conditions around us.

So it is time we find this right method, education system, the right value system for our societies because without them all the beautiful plans, initiatives, organization will take us to the same dead ends, crisis situations we have reached before.