Sustainable Economies

Peoples Sustainability Treaty on Sustainable Economies (draft for Rio+20) (pdf)

Contact: Dr. Ashwani Vasishth

PEOPLES’ SUSTAINABILITY TREATY ON

SUSTAINABLE ECONOMIES 

1.  PREAMBLE

The world is in search of an alternative economic system, one that can address the conflicts inherent in the prevalent overly globalized corporate-capitalist economy: immense wealth for a fortunate few and crippling destitution for far too many, amazing technological prowess on the one hand and a compromised planet on the other.  The much-needed transition to a new economic system envisions profound transformations in the fundamental values and organizing principles of society; new values and development paradigms that emphasize quality of life and material sufficiency for all, human solidarity and greatly enhanced global equity, affinity with nature, and ecological sustainability.

At the root of the flaws in the current economic model lies an implicit, dominant theory of single-minded economic purpose: namely to achieve continuous economic growth, as measured principally by GDP, by relying on “free markets” without strong enough instruments to deal with their negative impact on human and ecological well being.  Similarly, the current discourse on the Green Economy runs the risk of being little more than an effort to “green-wash” the existing “brown” economy.  It is imperative that this be avoided!  The ancillary goals of poverty alleviation and sustainable human and ecological development should, instead, be brought front and centre, and the notion of a “green economy” should be recast into a robust mechanism for attaining a multiplicity of development goals.

The purpose of an economic system is to organize human activities in ways that support healthy and resilient human communities and ecosystems for both present and future generations.  To achieve this profound purpose, deep system-wide change to existing economic institutions is urgently needed to reverse conditions typical of contemporary global, regional, national and local economies that are unsustainable, unfair, unstable, and undemocratic.

Not Just a Single Global Economy! Sustainable Economies!

The world comprises many economies, at many levels—not just the global economy, or the national economy, but a plethora of regional and local economies as well.  Any alternative economic system should promote all these economies, and not just the current capitalistic-corporate mode of globalization.  Even a so-called “green” economy that continues to focus on a singular growth-driven, high technology, free-market, intellectual property rights-dominated system, is no green economy at all.

What is also needed is a vision of a nested system of community, sub-regional, and regional sustainable economies, in a diversity of settings, which stands on a foundation of integrity, accountability and a much more equitable distribution of benefits.  Such a nested system of sustainable economies should be structured on the basis of the principle of subsidiarity, such that decisions and activities that can feasibly be undertaken locally, should be.  Only when decisions are required that cannot be made at a given level of society will decision-making move to the next higher level – from the community to the sub-region to the region to the world.   The core idea is that all these economies are made sustainable, not just a drive to maintain a singular monopolistic and dominant global economy.

Equity within Planetary Limits as the Foundation of a System of Sustainable Economies

The foundation for a system of sustainable economies must rest firmly on a much more equitable world order.  The fundamental objective of the system must be the promotion of well-being for all within the biogeochemical limits set by our physical planet.  Building upon the ideas of Sustainable Consumption and Production, we need an economic system that moves beyond the notion of mere economic efficiency to the broader objective of economic sufficiency, based on achieving social, environmental and economic integrity.  Such a system would transcend the notion of a growth-based “trickle-down” economy, to one that seeks to alleviate poverty by implementing policies that more directly help people to break the poverty-trap to assure the redistribution of wealth, both globally and regionally, on a much more equitable basis.

Changing How We Measure Success for the World’s Diverse Economies

The time has come to transcend growth-based metrics such as the Gross Domestic Product (GDP), which do not distinguish between “good” and “bad” ways of spending money, and move toward a more sophisticated set of indicators that more realistically take account of genuine progress towards human wellbeing, the restoration of natural capital, and the protection of other forms of life.  This will allow us to transition to a planetary system of resource and wealth management, one that better nurtures and restores the global commons to sustainability in the long-run.  What we need is a system of economic control that is sophisticated enough to allow the implementation of concepts of justice such as Contraction and Convergence—in which nations across the board commit themselves to addressing and dismantling the acutely increasing levels of economic disparity and deprivation, while the richer nations necessarily contract their consumption, while poorer nations continue to develop in a manner that allows all nations to converge toward a fairly equitable future state of development.

At the same time, we need to move toward a system of economics that takes better account of externalities, such that the prices of goods and services begin to accurately reflect their actual and true costs to society.

2.    PRINCIPLES

A Planetary System of Sustainable Economies, networked across spatial and temporal scales and interconnected in ways that enhance democratic representation and collaboration, must be entirely consistent with the dynamic behaviour of the ecosphere within which it is embedded so that the ecosystem is sufficiently resilient in its abilities to absorb external shocks.   The System of Sustainable Economies, by virtue of its anchoring in localism, must remain committed to equity and to fairness and structured in such a way as to minimize the incidence of distortive externalities.  This is especially important in this time of growing volatility and rapid social, political, technological, and ecological change.

1: The Earth Integrity and Planetary Boundaries Principle

The Earth, her natural communities and ecosystems, possess the inalienable right to exist, regenerate, flourish and evolve in a way that supports its vital cycles, structures, processes and functions that sustain all living beings.  We each have a duty to protect the integrity of the Earth.  Our own wellbeing depends upon it.

The Planetary Boundaries Principle clearly establishes that human development is dependent on re-establishing robust ecosystems and that social development pathways need to acknowledge that there are limits to economic growth.  Sustainable economic systems must respect such limits and governments need to set clear long-term targets to maintain a safe and equitable operating space for the entire planetary social and ecological system.

2: The Resilience-by-Localization Principle

The Resilience-by-Localization Principle emphasises that diversity and diversification are preconditions for sustainability and quality of life.  A System of Sustainable Economies enhances resilience by supporting a model of many green economies, each relevant to some different cultural, social and environmental contexts.  Such a system builds economic, social and environmental resilience, in part, by promoting long-term decision making above the short term, by regulating the finance sector and by constraining speculation, and by consciously building safety nets in the form of local, self-reliant economies.  A diversity of organisational models and governance levels needs to be cultivated, along with diversified economic activity that minimizes commodity dependence.

A System of Sustainable Economies must ensure that the public, private and non-profit sectors all work together to support the nurturing of diverse regional and local economies.  It must work to build local skills and capacities, while giving respect to indigenous local knowledge and while promoting the diffusion of “best practice” thinking across the various domains of knowledge.

3: The Equity, Dignity and Justice Principle

A System of Sustainable Economies must deliver much higher levels of equity, dignity and justice, both within and across countries, and within and across generations.

The Equity Principle mandates that such a system respect human rights and cultural diversity, while promoting equality based on gender, class, ethnicity and age.  It must support the right of all people to a sufficient level of development, by respecting indigenous peoples’ rights to their own lands and territories, as well as to resources deriving from these lands.

Poverty eradication, and a more equitable distribution of wealth, should be the main priority of governance, and its success should be measured in those terms.  Economic development must create genuine prosperity and well-being for all by transforming traditional jobs, and by actively helping build capacity and skills and developing new, decent “green” jobs.

The Dignity Principle upholds that every human being, now and in the future, has the right and the opportunity to build a robust livelihood. It delivers a just transition by providing universal access to health, education, water, sanitation, food, energy and other essential services, while respecting the rights of workers and trade unions.  It supports sustainable, diverse economies and local livelihoods.

The Justice Principle upholds fair sharing of all benefits and burdens within and across nations.  This includes the use of natural resources, access to goods and services, and the responsibility to avoid and compensate for damages.  Under such a system, all institutions, corporations and decision-makers need to be subject to equal standards of accountability and personal responsibility for their decisions.

4: The Inclusive Governance Principle

The Inclusive Governance Principle states that subsidiarity in democracy must be upheld and revitalised–that is to say, making national government subsidiary to local government—so giving widespread consultation, representation and active participation to all stakeholders to engage in the practices of governance from the grass-roots upward.  In particular, room must be made for youth, women, the poor and low-skilled workers, indigenous peoples, local communities and the poorest and most marginalised in society.

Structural transformation should be driven by appropriate public investments that guarantee benefit sharing based on transparent and participatory negotiations that include all affected people.  Such transformations would move us closer toward a world in which more and more businesses would be worker-owned and controlled.

Operating entirely in an accountable and transparent manner, a System of Sustainable Economies would work to manage all markets in a manner that keeps the benefit of all in mind.  It must foster diverse cultural values as it builds societal awareness and informed participation by diffusing education and skills development amongst all citizens, thus empowering them to promote full and effective participation at all levels, from global to local.

5: Beyond-GDP and the Sufficiency Principle

The Beyond-GDP Principle recognises the inherent limits and distorting effects of using GDP as an exclusive or even a primary measure of progress and welfare.  Policy goals and monitoring need to be guided by integrated measures of environmental, social, human and economic wellbeing, while taking into account diverse interpretations of human welfare.

Efficiency must be promoted to minimise waste and maximise productivity in the production processes leading towards sustainable production. Efficiency alone, however, does not ensure equitable access to resources and does not prevent over-exploitation of the resources.

While efficiency is important in a transition towards a system of sustainable consumption and production, sufficiency needs to be the broader goal.

The Sufficiency Principle can guide nations and communities towards self-reliance and contentment in their wellbeing.  A System of Sustainable Economies would deliver on the promise of the Sustainable Consumption and Production Model, while decoupling production and consumption from negative social and environmental impact.

7: Internalizing Externalities and the Precautionary-Polluter-Pays Principle

A key flaw in the currently dominant corporate-capitalistic system is that true costs and market prices too often do not match up.  Many of the costs of economic activity are not included in the market price of those activities.  The more we can work toward internalizing externalities, the closer we come to a “true cost” accounting, and the closer we come to an authentic free-market system—one in which supply and demand can actually work to adjust prices in a way that reflects the true state of the world.

The Precautionary Principle should be applied to ensure that new products and technologies do not have destructive or unexpected effects on environmental, social, or human wellbeing. The ‘burden of proof’ lies with the developer or initiator and problem shifting needs to be avoided.

Such a system must implement the Polluter Pays Principle as well, while at the same time moving toward a system of prices that internalize externalities.  It must ensure that market prices reflect to true societal and environmental costs of goods and services, incorporating social and environmental externalities

8: The Restitution of Natural Capital and Human Capital Principle

At the start of the Industrial Revolution, Man-made Capital was scarce, and Natural and Human Capital was abundant.  This was when the world was less dominated by human technology and infrastructure and abundant with local cultures and nature.  Today we live in a much fuller world where Man-made Capital is abundant, while Natural and Human Capital is relatively more constrained.  We need to move in such a way that we begin to systematically invest Man-made Capital toward the restitution of Natural and Human Capital.  We should use our vast accumulated wealth to restore natural systems and to support the development of social capital.

3.    COMMITMENTS

We urge that Governments make clear commitments to:

4      Keep Equity front and centre in economic decision-making, and achieve rapid progress towards reducing inequality.

4      Move beyond GDP to a more holistic suite of indicators—one that takes account of the full range of benefits that actually accrue to us, while discounting the disbenefits that emerge from human enterprise.

4      Retract all fossil fuel subsidies and other subsidies that harm the environment, distort markets and create barriers to sustainable development. Where needed, and particularly in developing countries, safeguards must be established to protect vulnerable sectors of society. And as harmful subsidies are reformed, support should be focused on transitioning to clean, renewable energy technologies, as well as green industries and technologies, especially those in their infancy. Take serious global action to promote sustainable consumption and production.

4      Move to ensure that the full cost of resource extraction from the planetary commons (coal mining, oil and gas drilling, fracking) is borne by those profiting from the extraction, and not externalized onto the public domain.

4      Set up systems for decentralised and democratic planning of sustainable infrastructure.

4      Focus on Green Jobs and Decent Work, while phasing out “brown” jobs.

4      Give priority to Small and Medium-sized Enterprises in national planning, and move toward supporting businesses that become worker-owned and controlled.

4      Establish a global framework for corporate accountability.

4      Establish a Planetary Global Commons Management System that regulates the use of natural resources and waste

4      Implement the Contraction and Convergence model of growth, in which all countries shift their ecological footprint to sustainable levels. This implies that the richer countries shrink their ecological footprint, while developing nations stabilize theirs on a per capita basis, until all countries converge to an equitable footprint that is suitable for One Planet Living.

We urge that Business and Industry make clear commitments to:

4      Phase out unsustainable consumption and production practices.

4      Give priority to establishing “green” jobs and decent work.

4      Ensure full reporting on environmental and social issues.

4      Ensure the implementation of fair labour standards.

4      Phase in worker ownership and control.

We urge that Civil Society Organizations make clear commitments to:

  1. Identify living examples of sustainable economies, create linkages across them to share experiences and increase learning, and campaign for removing political and economic barriers and creating enabling conditions for sustainable economies.
  2. Work with knowledge institutions to develop coherent proposals for indicator systems capturing social and environmental wellbeing, and campaign to get governments to replace the GDP tyranny with these indicator systems.
  3. Develop a shared understanding of harmful subsidies that is non-neo-liberal and that incorporates the perspective of necessary safeguards for the poor and for environmental protection, and campaign for removal of harmful subsidies on this basis.
  4. Campaign for a global system of corporate accountability.
  5. Work closely with communities to strengthen their indigenous sustainable economies and to move toward improving wellbeing and prosperity for all.

4      SIGNATORIES

(Note: those who are endorsing and joining the treaty are listed below with a pledge.)

We, civil society organizations, pledge to honour the agreed principles, commitments and action plans:

  1. Uchita de Zoysa, Centre for Environment and Development, Sri Lanka
  2. Ashwani Vasishth, Center for Sustainability, Ramapo College of New Jersey, USA
  3. Leida Rijnhout, The Northern Alliance for Sustainability (ANPED), Belgium
  4. Kim Carstensen, Fair Green Solutions, Denmark
  5. Tara Rao, Fair Green Solutions, India
  6. Leanne Denby
  7. Dirk-Jan Verdonk, World Society for the Protection of Animals, The Netherlands
  8. Richard Rosen, Tellus Institute, USA
  9. Leonard Sonnenschein, World Aquarium and Conservation for the Oceans Foundation, USA
  10. Veronica Kiss, CEEweb for Biodiversity, Central and Eastern Europe

5      ANNEXURES

1. Action Plan

The following actions are proposed to further the principles stated above and to engage civil society and people across the world towards transforming the current global economic model and creating sustainable economies.

Short Term (2012-2015)

Action 1:  Formulating a Blueprint for Sustainable Economies

The transition to sustainable economies will require a blueprint that governments, organizations and communities can work with. Such a blueprint is currently missing and it is critically important to formulate one. Such a blueprint will serve to offer diverse communities some guidelines that they can adopt according to their local conditions and needs.  A forum of groups drawn from all continents will be convened under the banner of the Peoples’ Sustainability Treaty on Sustainable Economies to dialogue this concept and to evolve a global consensus.  A working committee will be established over this period, and the draft blueprint will be distributed to worldwide audiences for response.  A final blueprint will be presented at the Millennium Summit in 2015.

Action #2:  Getting Beyond GDP

Convene a set of round-tables or working groups to better express and explain the limits of simplistic economic measures such as GDP, which do not take account of either human or ecological well-being.

Action #3:  Toward Contraction & Convergence

Convene a set of round-tables or working groups to understand and explain the applications of the Contraction and Convergence model proposed originally by the Global Commons Institute, and explore the implications of this model for an equitable and sustainable set of economies.

Medium Term (2016-2025)

Action #1:  Implementing Program for the Transition to Sustainable Economies

The Blueprint for Sustainable Economies will be used to induce a series of national to local sustainable economies transition plans. These will serve as operation level programs to commence pilot activities. The network built for the blueprint will serve as focal points to initiate action across the world.

Action #2:  Implementing A Strategy to Deploy the Genuine Progress Indicator World-wide

Work toward the deployment of some indicator such as the Genuine Progress Indicator (GPI), for every nation and for all regions.  Once such indicators are made public, then we can move toward a world in which strictly economic measures are seen to be clearly insufficient for the assessment of human and ecological well-being.

Action #3: Implementing A Contraction & Convergence Model

Support the implementation of this model at the global level, and track its deployment across regions and over time.

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