Joseluis Samaniego, Director of the Sustainable Development and Human Settlements Division, ECLAC:

Outlook towards Rio+20

Photo: Lorenzo Moscia/ECLAC

Latin America and the Caribbean are currently in a significantly better situation that in the past for dealing with the approaches to be agreed to at the United Nations Conference on Sustainable Development, known as Rio+20, which will be held in June 2012 in Brazil, and for adopting economic measures which facilitate the transition towards sustainable development.

The Earth Summit 1992 in Rio de Janeiro transformed the notion of development into a comprehensive concept, with sustainability as the comprehensive objective and new paradigm. It gave rise to a work agenda with 26 principles and 3 far-reaching environmental-economic conventions, such as the agreement on climate change to deal with global warming.

This event culminated a very difficult decade for Latin America and the Caribbean, which was that of the 1980s, known as the "lost decade", marked by growth volatility, capital flight, currency and wage devaluation, attempts to control double-digit inflation rates, and the burden of foreign debt.

During the 1990s, the economies in the region made significant achievements in macroeconomic management for stabilizing and controlling debt, privatizing many public assets and opening up economies to international competition in practically all sectors. In this context, due to the slow growth of formal employment and social protection, the global wage competition and the greater social vulnerability to external shocks, significant progress was made in the social pillar via conditional transfers.

The Summit of 1992 encouraged the strengthening of regulatory frameworks for environmental protection, and of environmental management organizations, without the support of other development areas such as energy, infrastructure, agriculture and finances, but also revealed the significant growth of environmental concerns relating to national development.

The economic policy pillar was not modernized and aimed towards sustainable development over the last 20 years in Latin America and the Caribbean.

We note the abandonment of environmental accounts incorporated into national accounting systems, the absence of fiscal instruments for taxing environmental "bads", the lack of fixing prices to the negative externalities of investment projects, the slow incorporation of environmental criteria in public procurement, the increase in regressive and adverse subsidies to fossil fuels, the disinvestment in mass transportation systems (without exceptions) and in adequate solid waste management systems, the distribution of environmental responsibilities between urban and national areas, the significant growth in private transport and incentives towards the carbonization of the energy generation matrix and the expansion of agricultural borders, among others.

The Rio+20 Summit has been organized in the midst of a global financial crisis and has been significantly affected by it. Due to the depth of the crisis, in 2008, a social-economic effort similar to that of the crisis of 1929 was considered necessary, that is to say, a new deal (A Green New Deal, UNEP). In other words, a pact based on investment in low environmental impact sectors, which are low in carbon and high in employment and therefore drivers of recovery. It was applied in developed countries, particularly in Europe, and in some developing countries, such as China and Korea, provided there were fiscal resources available to finance counter-cyclical policies.

In this context, it was suggested that the proposals for Rio+20 focus on two points: economy for sustainable development and the reform of the United Nations system and Bretton Woods to provide a greater level of coherence to economic organizations in relation to development organizations, a problem which originates in the very countries.

For many developing countries, there are precedents for the preparatory process, including the negotiation of the World Trade Organization (WTO), which aims to liberalize the markets for trading goods and environmental services produced mainly in developed countries; the attempt to modify commitments made by developing countries as part of the Kyoto Protocol in Copenhagen; and the emergence of the carbon footprint and other international trade aspects which are potential barriers to trade. All of these aspects generate distrust towards the term green economy as it is feared that it would move away from the concept of sustainable development. These ideas need, without a doubt, to be clarified.

Unfortunately, the previous point overshadowed the huge discussion within countries regarding the possible improvement of economic and social inclusion policies, and policies on access to information and education for sustainable development. For this reason, it is important to take advantage of the opportunity to examine possible improvements.

The regional balance prepared by ECLAC and other agencies and programmes of the United Nations, shows progress and social, economic and environmental gaps, including international cooperation gaps, of which the official development assistance was 0.35%, compared with the agreed percentage of 0.7%. In the report entitled "Sustainable development in Latin America and the Caribbean 20 years on from the Earth Summit: progress, gaps and strategic guidelines", some guidelines for more sustainable development are proposed.

The proposals relating to the economy include, in particular, the need to conduct a better account and assessment of the real costs of economic activity on the environment and health, and including not only the aggregate value but also the state of economic, social and environmental heritage in national accounts. Another key step is to favour social inclusion investments and investments with lower environmental impact such as in public transport.

Latin America and the Caribbean will meet at Rio+20 with several years of sustainable growth, low macroprice volatility and progress in dealing with poverty and inequality. The external sector has a favourable outlook in the medium term. For this reason, it would be appropriate for the countries in the region to take the opportunity to look within their borders and renew economic management, aiming investments, public procurement, discount rates, tax revenues and expenditures and other economic instruments towards greater sustainability of their own development.