Globalization: In the Era of Environmental Crisis

Our world is unsustainable right now in the way it operates. Our incipient macroeconomic recovery is very fragile and will be unsustainable unless we have what we promised we would have but do not yet have - a green recovery. We will not even be able to manage a short-term macroeconomic recovery unless we integrate strategies for climate change mitigation and adaptation into our macroeconomic policies.

Humanity faces a dire and growing crisis. Sustainable development is truly the fundamental challenge of today's world: how to combine economic growth with environmental sustainability, including the mitigation of human-induced climate change.

Technological advances in the past - such as the mobilization of fossil fuels and the spectacular increases in food production flowing from improved plant breeding techniques - have both raised our living standards and imposed unanticipated and unwanted side effects on the environment. All technological solutions are imperfect. We must be agile in adjusting to the unanticipated consequences, rather than giving up on the benefits of advanced technologies.

Nobel laureate Paul Crutzen, one of the three atmospheric scientists who discovered the ozone-depletion effect of chlorofluorocarbons (CFCs), has coined the phrase "anthropocene" for the current period of the Earth's history. By this new term, which is Greek for "human-made epoch", Crutzen means that humanity has seriously disturbed many critical Earth systems. Crutzen should know, since he helped to discover how humanity had accidently overtaken the natural process of ozone creation in the stratosphere through the use of CFCs. Ironically, the ozone-depletion effect was not even suspected at the beginning of the 1970s, at a time that it was already quite far advanced.

There are no doubt many more such surprises to be uncovered, or learned the hard way, because we are likely unaware of some of the serious damage that humanity is inflicting on the planet. The size of the human population - 6.8 billion people - and the scale of economic activity - US$ 10,000 output per person - is now so vast that anthropogenic (human-made) interference in the Earth's natural systems is vast and still poorly understood.

Humanity is now demanding so much food, including feed grain for livestock, that humanity as a whole is now directly or indirectly appropriating around 40 per cent of all the photosynthesis occurring on the planet. We're commandeering the photosynthesis in our croplands and in our pasturelands, and we've eliminated the photosynthesis in the places now under our buildings, streets and other human-built structures.

With so much photosynthesis being commandeered by humanity, it is no surprise that much less food and habitat is available for other species. Our huge appetites are therefore inducing dramatic population declines and even the extinction of the flora and fauna on which we depend. The pollinators are disappearing, whole classes of amphibians are disappearing, fisheries around the world are disappearing.

We're also fundamentally interfering in the hydrologic cycle through the extensive damming of rivers, preventing many of the largest rivers from even reaching the sea. A significant part of the groundwater used for irrigation around the world is being discharged faster than it's being recharged. The water table is falling sharply in India, China and parts of the United States.

Our glaciers are retreating. Some precipitation in the mountains never turns to snow anymore because of the warming, and that means we get winter run-off of the water, rather than snowpack which melts in the spring and summer. As a result, the run-off is occurring before the crops can develop.

To produce food, humans are now putting more nitrogen on the land in the form of chemical fertilizer than is naturally fixed by normal biological and physical processes. This heavy deposition of nitrogen is contributing to the emission of nitrous oxide into the atmosphere, a greenhouse gas, and to the massive discharge of nitrogen into rivers. The result is that nitrogen accumulates as a nutrient in the mouths of the great rivers, causing eutrophication and then hypoxia - dead zones - in more than 100 estuaries around the world. We are killing off one of the most important and productive of the Earth's ecosystems.

We have, of course, also raised by one-third the carbon concentration in the atmosphere from about 280 parts per million of CO2 in the pre-industrial era, to about 389 parts per million now. And carbon dioxide, of course, is the main greenhouse gas, the main anthropogenic cause of climate change, and also the main cause of the acidification of the oceans. Dr James Hansen, my colleague at Columbia University and the American Government's leading climate scientist, says that we've already passed into the danger zone, what is called "dangerous anthropogenic interference in the climate system", in the UN Framework Convention on Climate Change.

Much of the CO2 emitted into the atmosphere today will remain there for centuries, causing climate change that will affect future generations for centuries as well, unless we learn to reverse the rise in CO2 through some deliberate processes. Moreover, as we clean up air pollution, it is likely that we will remove particulate pollution which is currently masking some of the greenhouse gas effect. Ironically, lower pollution - which we need for human health - could thereby expose us to a burst of further climate change.

Climate change will mean more droughts, more floods, loss of irrigation water, more intense rainfall, more extreme hurricanes and much more, of course with a high degree of variation around the globe. Higher temperatures will also likely mean the decline of crop yields in many places, notably in the tropics, because of temperature stress.

What I have described would be true even if we stopped further economic growth, and stabilized the magnitude of the anthropogenic effects. Yet economic growth is bound to continue, because of both higher incomes in the developing countries and a rising population.

Suppose that the rich world stayed where it is right now in terms of GNP [gross national product] per person and the developing world catches up over time (as the emerging markets are now doing). What would that mean for total output in the world? With the rich world at US$ 40,000 per capita and the world average income at US$ 10,000 per capita, full catching up would mean a four-fold increase in world GNP, assuming no growth of population.

Of course the world's population is growing as well - to about 9.2 billion people by 2050, or another 40 per cent, according to the UN's "medium" forecast. If we combine a population increase of 40 per cent and a four-fold increase in per capita income in the world, we would experience a nearly six-fold increase in world output! Yet today's economic production is already environmentally unsustainable. How could the world ever succeed in raising world income six times?

One possibility is that the world economy stops growing. The results could be calamitous if various regions suffered a sharp fall of living standards. We notice that no politician is winning office in the US or Europe promising to cut living standards sharply!

The other way to combine economic growth and sustainability is through technological change. Consider the famous IPAT equation: I = P x A x T. In this equation, I signifies the total impact of humans on the environment; P is world population; A is the level of economic activity; and T is a measure of the average environmental impact of technology. If population (P) and per capita income (A) are both rising, then the environmental impact will also rise unless T goes down, meaning that we reduce the environmental impact of our technology systems.

We should of course redouble our efforts to stabilize the population. Countries with rapidly growing populations can achieve rapid voluntary reductions of fertility. The level of fertility (five or six children per woman in much of rural Africa) could push sub-Saharan Africa's population from 800 million to around 1.7 billion by 2050. Africa would suffer enormously. Neither the economy nor the environment could support that size of population. The key path to lower fertility is well known. Family planning and contraception should be available to all households. Girls should be enabled to stay in school, rather than being forced to marry at a young age. Women should be empowered to choose to have smaller families. And child mortality should be reduced, so that families know with very high likelihood that their children will survive, so that they thereby have the confidence to stick with smaller families.

Yet population stabilization will not be enough. We need also to reduce T. We simply cannot go on with the internal combustion engine, coal-fired power plants and the current ways that we grow and eat our food. The planet will not accept a big increase in world incomes with today's technologies.

What new technologies are needed? When we look at greenhouse gas emissions, the biggest single emitting sector is agriculture (plus changes in land use related to agriculture). We need to slow and then to reverse deforestation, use fertilizer more precisely and take other measures to reduce the greenhouse gases in agriculture (e.g., conservation agriculture). The other major emitting sectors are power generation, transport, industry and buildings (commercial and residential). We will need new technologies in all of these sectors.

We will need a variety of low-carbon methods to produce electricity. One promising category is renewable energy: wind, solar and geothermal. Another is nuclear power, though we will need stringent safeguards to ensure that nuclear fuels are well protected.

Another promising approach is carbon capture and sequestration: using fossil fuels safely by collecting the carbon dioxide from combustion and putting it safely into geologic storage under the ground.

The decisions to pursue such alternative methods are societal rather than merely commercial. Markets and society have to make choices together. We need cooperation to achieve major changes in technology.

Talking about the problem does not solve it. In the whole world we don't yet have one full-scale coal-fired power plant that is capturing and sequestering its carbon dioxide, even though the engineers and scientists have been advocating the testing of this approach for more than a decade.

One way to speed the adoption of low-carbon alternative energy sources is to tax carbon emissions or to subsidize low-carbon energy, or both. Straightforward carbon taxes are much more manageable than complicated cap-and-trade systems.

A massive technological changeover requires a complex set of policies: research and development [R&D], demonstration projects, regulations, feed-in tariffs, subsidies for consumers for low-emission technologies, carbon taxes and other tools. We need a systems approach to technological change, not simply one or two policy tools.

The way we structure the global climate negotiations is currently not helpful. Climate change should not be viewed as a poker game where each country holds its cards close to the vest and bargains with the other countries.

The climate change challenge is the most complex engineering, economic and social problem that humanity has ever had to face together. We should be problem-solving together. All cards should be on the table. We should be discussing what to do - and how to do it - for solar energy, nuclear energy, electric vehicles, sustainable agriculture and more. We should be designing global demonstration projects and major international R&D efforts. We should be addressing the solutions sector by sector. Then we'd start getting somewhere.

We need a process that includes not only diplomats but also engineers, scientists and hydrologists. We need a new kind of process. Among other things, the UN Framework Convention on Climate Change secretariat needs a standing technical body presenting options and estimated costs of alternative strategies.

Finally, let me emphasize again: we need to make progress fast. The Earth is under unprecedented stress. We have no time to lose. And when we act, we need always to keep the needs of the poorest of the poor paramount. They are dying each year by the millions, of chronic under-nutrition, preventable and treatable diseases, unsafe drinking water and natural hazards without proper infrastructure. In short, millions are dying each year because of their poverty - and our neglect - and climate change (caused disproportionately by the rich world) will make it worse, until we act decisively.

In the end, we need global cooperation. We need to remember the common stakes of all humanity. We need to heed the eloquent and historic words of John F. Kennedy, as he called on his countrymen to be brave in the pursuit of peace:

"So let us not be blind to our differences, but let us direct attention to our common interests and to the means by which those differences can be resolved. And if we cannot end now our differences, at least we can help make the world safe for diversity. For in the final analysis, our most basic common link is that we all inhabit this small planet. We all breathe the same air. We all cherish our children's future. And we are all mortal."

This is an edited version of the 14th Raúl Prebisch Lecture. Presented at the Fifty-sixth session of the UNCTAD Trade and Development Board, Geneva, 15 September 2009.