Director General's Speech

Green Economy and Environmental Governance from Mountain and Asian Perspectives

115th Graduation Ceremony, AIT, Bangkok

26 May 2011


Andreas Schild, PhD

Director General, ICIMOD


Presented by Madhav Karki, PhD

Deputy Director General, ICIMOD


President of AIT, your Excellencies, dignitaries, distinguished faculty members, graduates of the year 2011, students, ladies and gentlemen. I particularly acknowledge the presence of honoured guests in the dais.

On behalf of the designated keynote speaker Dr Andreas Schild, DG and all of us in my organization, ICIMOD, the International Centre for Integrated Mountain Development, I bring warm greetings and felicitation to all of you. I feel honoured and privileged to be speaking to this special gathering.

Dear Master’s and Ph.D. graduates of this year, first, a warm congratulation for completing your studies and getting your hard-earned degrees. We are here to celebrate your success with you. With today’s degree award, you are recognized as professionals. Many of you will be entering professional life for the first time; others will be re-entering their professional life with new knowledge, new skills, new energy, and of course new enthusiasm. But with the AIT degree you are all ready to face challenges and grab opportunities in the world that is waiting for you. In the US, graduation day is also called Commencement Day. There is a good reason for saying this. With the graduate degree, you are also commencing your new professional life. You have completed one difficulty journey of passing the AIT examinations and are commencing another difficult journey of passing through many professional and personal challenges. But I am sure you have been well prepared by the learned professors of AIT to face your new life. The degree you are receiving today will qualify as well as empower you for new functions, new challenges, and new responsibilities. This will be a day you will proudly remember and reflect upon in your future life with your family, your children and grandchildren, and your colleagues. 

You will be considered an AIT degree holder. Those with Ph.D.s will be welcomed to the club by your peers; your family, your friends and your governments will treat you with more respect and recognition. This respect also comes with a lot of expectations in terms of your attitude and outputs from your performance. As a degree holder, you should not just be an implementer of others’ ideas and missions, but you are supposed to innovate and develop your own ideas and innovations. Some of you will be part of the management team of your organization, and some will play the role of decision makers and planners. You all will have the chance to perform and contribute in different aspects of what we call research, development, resource management, and knowledge management. I share with you two new emerging topics for your professional pursuits: first, the green economy; and second, environmental governance.

Perhaps you all know that in June 2012, to commemorate the first United Nations Conference on Environment and Development (UNCED) held in 1992 (also known as the Earth Summit or Rio Summit), global leaders will meet for another Earth Summit at Rio de Janeiro. This is now called the Rio+20 Conference. The first Rio Conference was highly relevant because it gave birth to three UN conventions, on climate change (UNFCCC), on biodiversity conservation (CBD), and on combating desertification (UNCCD). Agenda 21, adopted by more than 190 governments, laid the foundation for sustainable development with three pillars of development – social soundness, environmental sustainability and economic feasibility. It also declared in Chapter 13, for the first time, that mountains need special consideration as essential ecosystems for the sustainable development of humankind and conservation of the earth’s environment. We at ICIMOD work on mountains, and I will share some thoughts focusing on this ecosystem, but I hope that what I am saying will be relevant for other ecosystems as well. 


What are the key concerns of Rio+20 and what will be the relevant agenda for you?

For us definitely the key questions are: How can the lives of the millions of poor and vulnerable people be made better through the skills of young graduates like you? What can the older generations like us, working in older development paradigms, share with young professionals like you which would be appealing to you? 

We feel that while Rio+20 presents an excellent opportunity for taking stock on achievements, experiences, and lessons learnt in sustainable development (and for us in ICIMOD, sustainable mountain development), more importantly it also provides an excellent opportunity for identifying new development pathways and opportunities, for example, to address the multiple global challenges, particularly climate change and poverty. We feel that the main objective of the Rio+20 Conference should be to secure renewed global commitment for sustainable development; to redefine sustainable development in mountainous, rural and coastal areas; and to promote mutually rewarding partnerships. 

The Rio+20 Conference will focus on two key themes: 1) Green Economy in the Context of Poverty Eradication and Sustainable Development, and 2) the Institutional Framework for Sustainable Development. I therefore wanted to share some of my thoughts on the green economy and the institutional framework for good environmental governance.

A green economy aims at making our economy greener. It makes the economy grow through green growth pathways: reducing the carbon footprint in all the economic processes and actions. A low-carbon economy or low-carbon-intensity economy means our industries have to change their production systems and we, especially those living in Western society, will have to change our consumption habits and life styles. According to UNEP, a green economy will “result in improved human wellbeing and social equity, while significantly reducing environmental risks and ecological scarcities”. A green economy is low carbon, resource efficient and socially inclusive. But the question is how to realize this for Asian economies, especially mountain and rural economies. Here is the first professional challenge for you.

For Asian countries, the green economy should be achieved in the context of sustainable development and poverty eradication. In other words, the principles approved by the Rio Conference in 1992 and the Millennium Development Goals (MDGs) should be respected.

The second topic of Rio+20 is good environmental governance. The hypothesis is that at the international, national, and local levels, governance issues are addressed in order to achieve the goals of sustainable development meeting the criteria of socioeconomic equity, good governance, and efficiency. The social equity aspect is crucial for us, at different levels from local to global. But for us it is crucial that at the local level, we create, nurture and strengthen institutions that share applicable knowledge, build capacity, transfer necessary skills, and promote equitable development. 

Dear graduates, the question you may ask is: what is the relevance and importance of topics like the green economy and environmental governance to you? What is the meaning of sustainable development in your context? What will determine your future professional life? I have tried to simplify some key issues for your understanding. 

First, I would stress that you as new professionals have to understand the global debate. The world is facing serious environmental risks and scarcity of natural resources which threaten our countries’ development. And multiple crises concerning food, energy, finance and human security are hurting poor and disadvantaged people most. So while deciding where to focus in your career, initially I suppose you have to make a very subjective judgment, since at first glance development, environment and social change topics do not seem related. 

But when you dive in further, you can see that all the global and national agenda are interlinked, as you can see in these related topics of economic growth, natural resource management and social change. Here the key questions one has to answer are: What will be the impact of these global drivers in the future development path? What will be the nature of economic growth in the new era of global development? And how will you ensure that the disadvantaged groups, regions and countries do not become more vulnerable and marginalized as a result of approaches such as the green economy?

I think that economic growth is going to remain a central topic for all of us, and ‘green growth pathways’ will be a new development mantra. As you all know, a growing economy creates new job opportunities for new graduates like you. So this will certainly be your concern, as well as a positive framework condition for you to plan your professional work. This will also be the goal for almost all the countries of the region. But the challenge is how to maintain economic growth in a sustainable environment with a low-carbon output and sustainable use of environmental natural resources. 

Today most of the Asia-Pacific countries see economic growth as a determining factor in national development. This is no longer the case in Europe, Japan, and North America, which are fighting with 1 or 2 per cent annual growth and are trying to prevent recession. In the Asian environment, we are talking of 5 to 10 per cent growth! Somehow Western countries had similar starting conditions. It is noteworthy that the wave of economic growth, with all its consequences, has travelled from West to East. This certainly is good news for all of you, with all its challenges and opportunities.

But the changing mindset is even more important than the growth figures. In Europe in the 1970s and 1980s, young graduates of your age, when they were ready to take jobs and to perform, found unlimited opportunities. Today we observe similar trends in Asia and the young graduates have the same attitude: You are self confident, you are ready to take risks. You seem to know that the future is yours. Not so in Europe today. Maybe we can best illustrate this by the latest experience of one of the most successful industrialists of Asia, Mr Rattan Tata. He dismissed 1,500 employees in his recently acquired motor companies in the UK, Landrover and Jaguar. The reason given for this drastic decision was: “Why do I travel from India to talk to the staff of my companies who are leaving the workplace at five because they have to catch the train?”. The press was quick to say: “Tata dismissed the lazy Britons”. I do not think that we should generalize too much; Western society and economies remain highly competitive, but Eastern economies are showing new paths and directions. The difference in attitudes, however, is remarkable.

Ladies and gentlemen, dear new graduates, your being available and flexible to perform in different professional and public lives is a key factor for success. I see here in Asia, especially in China, India, Japan, and South Korea, the readiness to work in challenging fields, and this readiness gives the feeling that workers even share the pain of the company they work for. We do not see the same attitude in Europe anymore. 

So my message to you is: Have the courage to take risks and experiment in your young professional lives. 


Growth has to be achieved by conserving resources for future generations

Referring to natural resource management, I think the starting point of both the West and East could not have differed much. The West in the 1960s and 1970s did not care so much about resources, human or natural. They imported what they needed – foreign labour as well as energy – and they conserved and developed their natural resources such as forests, protected areas, and even mines in order to sustain their growth. Of course there were some critical voices cautioning the danger of limits to growth. Here I am referring to the Club of Rome. However, natural resources were not widely perceived to be a limiting factor for economic growth. Today most economies in the West feel the crunch at least in the form of higher prices (e.g., for fossil fuels, timber, even carbon neutralization). However, it is still not hurting enough to induce them to enforce legislation for saving or reducing the unsustainable consumption of natural resources.

Dear young professionals, your efforts, your ingenuity, your knowledge in this new era of development will have to focus on creating energy-saving devices, low-carbon technologies and resource-economizing production procedures. The potential for growth will be confronted by scarce resources, which will make your profession a bit more complicated, but I am convinced also more rewarding. This will relate to ecosystem goods and services, agriculture, and urban development, where the amount of water used to produce of a ton of food will have to be reduced substantially (e.g., see the comparative figures in India and China). This also holds true for household water consumption and food processing. Your tasks will be to raise the standard of living of the urban and rural populations without indulging in the water-wasting behaviour of certain industrialized societies.

Water is given here as an example of one of the most scarce goods. But the same holds true for petrochemical products and other non-renewable resources. It may also apply for precious metals such as lithium. Therefore, sustainable resource management and conservation will accompany all of you during your professional careers, and you should be prepared for them.


Social change as a dynamic process

The most significant social change we have experienced since the 1950s has been the continued process of urbanization. The rural population has continuously decreased. In Asia, depending on the country, 10 to 40 per cent of the population is now urban. Government spending in agriculture has been continuously decreasing. While the agriculture sector accounted for an average of 15 per cent of government spending in 1972, its share has gone down to less than 10 percent in 2010. In the same way the contribution of agriculture has also been continuously decreasing: Within 40 years its share of the gross domestic product (GDP) has gone down from over 40 per cent to less than 20 per cent (with the exception of Laos and Nepal, where the percentage is still substantially higher than 20 per cent). At the same time the share of the service sector in GDP has gone from about 15 per cent to more than 50 per cent.

Besides the figures, social change has non-quantifiable, non-material effects which are increasingly penetrating both rural and urban behaviour and values. Rural youth is becoming more and more urban. We observe another trend: While the traditional assets of rural areas are losing importance and rural areas become synonymous with stagnation, we realize that ecosystem services, particularly of mountains, are gaining in importance. I mentioned water, biodiversity (in particular agro-biodiversity), the landscape, and clean air (including space for leisure and relaxation). What does this mean if you become managers and specialists in natural resource management? 


Low-carbon economy, resource management efficiency, and social inclusion

I mentioned above that in the future, the emphasis has to be on a low-carbon path. What does this mean to you? Let me try to combine three elements and construct a relationship that I hope will influence your professional activity henceforward. You will agree that economic activities and growth have to be combined with minimal use of natural resources, including production of carbon. 

Low-carbon economy and green economy are the buzzwords of today. They are at the centre of the global discussion and will be the main topic of the upcoming Earth or Rio+20 Conference. The world is currently negotiating on several fronts – climate, sustainable development, trade, and biodiversity conservation. Whether or not these negotiations will be successful remains to be seen. The important point to make here is that your future professional activities and endeavours have to factor in higher commodity prices and higher costs for natural resources, and pressure to remain green in your approaches.

A low-carbon economy is essential for sustainable mountain development. Many developing Asian economies, especially those of mountain ecosystems like where I come from, are asking: Is the rural and mountain economy not low carbon already? This is where we also see that the ecosystem services of mountain areas are becoming more important. At the same time we observe that poverty continues to be an important factor in the mountains and high-biodiversity areas of Southeast Asia. 


Low-carbon economy in developing countries

The low-carbon economy is well argued in the context of industrialized countries. It refers to industrial processes, public and private transport, and private consumption. However what it means for developing economies like ours is not clear. Have we got the technologies and mechanisms in place that can help developing countries access new technologies? Is there not a danger that products from developing countries will face international discrimination because they do not fulfil the criteria of the green economy, and that developing countries will turn into consumers of these goods?

We wonder whether the debate on the green economy is not too much dominated by the modern industrialized world or the private sector. We think if ‘green economy’ will have a meaning for rural and mountain areas, then we will have to consider the specific conditions of these areas: For example, they lack infrastructure, are isolated, and are ecologically fragile. They have problems of structural poverty. Contrary to urban areas, in rural areas people react rather slowly to economic growth. If we implement the green economy without developing a suitable strategy, then there is a risk that poverty will remain rampant and the environment will be further degraded. From the point of view of mountain areas – and this is largely true for rural areas – we have two options: either oppose the green economy or further develop the concept to suit our situation. 

I choose to go for the latter. The mountain and rural economies in Asia are largely green. Considering the principles of sustainable development and the MDGs, which set concrete targets for the reduction of poverty and environmental conservation, we have to ask ourselves: What does it cost to keep the economy in rural and mountain areas green? 

We can put it positively: the mountains are the providers of strategic ecosystem services like water and rich biodiversity, which correspond largely to the criteria of the low-carbon economy.


Energy efficiency

Energy efficiency can be perceived as a technical issue: We have to increase the fuel efficiency of our means of transport and use cleaner or low-polluting energy in production processes. We can also perceive it as a political and economic challenge: The current use of our natural resources is too cheap. Considering their rarity, is it not justified to increase their price or to introduce energy taxes?

The Himalayan mountains provide vital goods such as water. They are the water towers of the world and provide more than 1.3 billion people with fresh water which is essential for agriculture and other production systems that feed human consumption. The mountains are hot spots for biodiversity including agro-biodiversity which is the source of the gene pool for our future food crops. We need this biodiversity for the future development of new crop varieties that are drought tolerant and resistant to pests and diseases. Mountain biodiversity is also important for the production of healthy natural or organic products, which are more and more in demand among urban populations. Mountains are also unique landscape areas providing scenic natural beauty and solitude and are becoming more and more popular as zones for rest and recreation. 

So my message is that mountain areas and rural areas are the main absorbers of the carbon produced in industrial processes. Under the new development paradigm of the green economy, they should not be further victimized; rather they should be compensated for sequestering carbon. We should further develop rural and mountain ecosystem services and assess their true value as a global public good. 

Ladies and gentlemen, the green economy concept has to include valuation of the ecosystem goods and services of rural and mountain areas as a priority, and this is a new area for your professional development. This field, which has been debated in the past, sounds difficult and theoretical, but it is necessary: Again, I take the example of water which is considered as a public good. Biodiversity is given by nature and has no market. As a matter of fact, most ecosystem services have no price tag, and nobody is ready to pay their real price because they are considered public goods. 

Yet we have concrete examples around us where people are paying high prices. The urban drinking-water market in many South Asian cities is flourishing. At the local level, a municipality compensates a rural community for protecting a water spring for a sustained supply of clean water. Many such cases are documented in the literature. In the Conference of the Parties of the United Nations Convention on Biodiversity, the representatives of global organizations, among them the World Bank, have proposed that the use of natural resources should be included in national accounts – that GDP should be redefined and should include the cost or value of natural resources used. How far and how quickly this will be implemented is not known. The World Bank wants to test this approach in four pilot countries, including at least one in Asia. The message is that a precondition for making the green economy meaningful for rural and mountain areas is evaluation of the ecosystem goods and services they provide to the nation and the globe.


Social inclusion and sustainable development

Social inclusion, which has come into the debate, has much to do with good governance, having multiple dimensions at the international, national, and local levels. To promote an appropriate governance structure we need a conducive legal and political framework at the national level. At the local level we need thriving communities and institutions trained and empowered to participate in decision making. Local communities should learn how to measure carbon sequestration, for example in their forest or agricultural areas, so that they are aware about the costs and benefits. We think they should also participate in the management of compensation funds such as those for reducing emissions from deforestation and forest degradation (REDD and REDD+). 


What is the consequence for your profession?

I am sure that as you leave AIT, your key concern will be to look for a job that builds your career and professional satisfaction. However, I urge you all to think also of your relevance to your society – current and future. And this is where I see the relevance of understanding these issues as you are ready to ‘commence’ as new graduates. 

We can safely assume that in most of the Asian economies, in the countries where you are going to be working, economic growth will remain the prevailing preoccupation and priority. But your first argument should be that growth cannot be sustained unless it reduces our carbon footprint. Resource efficiency will be imposed by the force of higher prices owing to increased scarcity of commodities, especially ecosystem-based ones. Social inclusion will be a basis for achieving the goals of sustainability and equity.

Ladies and gentlemen, we will have to take these statements not only as criteria for successful work, but also as a new framework for development. You new graduates of this prestigious institution will have to be the planners and managers who have to further develop the concepts lined up before you. You have to help create smart solutions and develop simple methodologies for evaluating environmental services, and you will have to introduce production and management systems that allow us to introduce customized or tailor-made principles and criteria for implementing the green economy in the interest of the disadvantaged, the poor, and the most vulnerable. 


Conclusions 

Let me conclude by saying, new graduates, your professional environment will be challenging but exciting and full of new avenues to explore. It will be very much influenced by the potential of economic growth and the imperative of a low-carbon economy. This is so evident that it will influence your decisions from the very first day of your professional life. Depending on your function and your position, I think you will have to contribute to the global debate on combating the negative impacts of climate change, globalization, and high energy costs to our poor communities. For critical ecosystems such as mountains, valuation of ecosystem services is critical. I am sure many of you will be considering the green economy as a field in which to explore your career prospects. This is profoundly important for the rural and mountain areas where we focus our work. I think this is a topic that will accompany you in your career for quite some time. 

In closing, I wish you all a very rewarding and successful professional life. I congratulate you for your success. I hope that you all realise your dreams. But please do not forget your responsibility to the society and environment you live in. Consider improving the lives of millions of poor and vulnerable people who need your help, who have not benefited from traditional economic growth – who rather have faced the brunt of the impact of rapid changes brought about by economic growth. Many of you have graduated in environmental science. But environment touches upon every discipline. Please do contribute to rekindling appreciation of the role of vital ecosystem services in our development. I am sure you will demonstrate foresight and vision, and at the same time you might develop a kind of social contract which will help to secure not only your own future but also that of your children. You will sometimes fail in your pursuits, but remember what Winston Churchill said, and I quote, “Success is the ability to go from one failure to another with no loss of enthusiasm”. 

Thank you for your kind attention.