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Multidisciplinary Research Week (17-22nd March 2013)
‘Integrated solutions for multiple global problems through applying the Sustainomics transdisciplinary framework’,
by Professor Mohan Munasinghe, Chairman, Munasinghe Institute for Development (MIND), Colombo; Professor of Sustainable Development, University of
Manchester.
M I N D Munasinghe Institute for Development Sustainable Consumption Institute SCIUniversity of Manchester
Integrated solutions for multiple global problems by applying the Sustainomics
transdisciplinary framework
Professor Mohan Munasinghewww.mohanmunasinghe.com
Chairman, Munasinghe Institute for Development (MIND), Colombo Professor of Sustainable Development, SCI, Univ. of Manchester
Distinguished Guest Professor, Peking University, ChinaVisiting Professor, Vale Sustainable Dev. Inst., Fed. Univ. of Para, Belem, Brazil
Shared the 2007 Nobel Prize for Peace (Vice Chair, IPCC-AR4)
Keynote Speech delivered at Multidisciplinary Research Week
University of Southampton, 18 March 2013
M I N D Munasinghe Institute for Development
Warm congratulations to the organisers for putting together
this unique event on MULTIDISCIPLINARY
RESEARCH. Complex global problems of sustainable
development need integrated, transdisciplinary approaches.
M I N D Munasinghe Institute for Development
Multi-disciplinary specialist teams from different disciplines coordinate efforts to apply various concepts and methods to complex problems
Inter-disciplinarymulti-disciplinary team seeks to break down the barriers among various disciplines and achieve a synthesis, usually at the results stage.
Trans-disciplinary(approach promoted in Sustainomics) Inter-disciplinary team seeks to combine knowledge from various disciplines to synthesize new concepts and methods - before applying them to a complex problem.
Cross-Disciplinary Terminology
M I N D Munasinghe Institute for Development
WHAT ? are the challenges Multiple global threats undermine sustainable development efforts & need integrated solutions
M I N D
Growing Risks of Global Breakdown due to Multiple Heavy Shocks
Multiple threats are inter-related and synergistic.Integrated & comprehensive solutions needed. Stakeholder interests divergent. Responses are uncoordinated & piecemeal – lack of political will
• Financial-economic crisis: Asset bubble• Persistent poverty and growing inequity• Resource shortages: water, food, energy • Environmental harm, extreme events, conflict
mass migrations, pandemics• Climate change: the ultimate threat amplifier
Munasinghe Institute for Development
M I N D Munasinghe Institute for Development
POVERTY: Poor living on < $1 per day
M I N D Munasinghe Institute for Development
Unfair World Consumption Pattern 2000 Champagne Glass
The richest fifth of the World’s Population receives 83% of the Worlds Income
One fifth of the Worlds Population
The poorest fifth of the Worlds Population receives 1.4% of total World Income
Ratio is 60:1 between highest and lowest 20% !
83%
M I N D
Nu
mb
er
of
Ea
rth
s
Sustainable
BAU
Ecological Footprint of Human Consumption In 2012 we need 1.5 earths; by 2035 almost 2 Earths
Unsustainable
oneearth
2012 2030
Existing nuclear weapons can wipe out life on entire planet !
M I N D
Climate Change – IPCC AR4 Main Findings• Global warming in unequivocal. Total radiative forcing of the climate
now is unprecedented in several thousand years, due to rising concentrations of GHG (CO2, CH4 & NO2).
• Humans activities since the 18th century are very likely to have caused net warming of Earth’s climate, dominating over the last 50 years. More temp. and sea level rise is inevitable, even with existing GHG concentrations.
• Long term unmitigated climate change would likely exceed the capacity to adapt, of natural managed and human systems.
• Adaptation measures are available, but must be systematically developed • Mitigation technologies are also available, but better policies and
measures (PAM) are needed to realize their potential. • Poor countries & poor groups are most vulnerable to warming, sea level rise, precipitation changes and extreme events. Most socio-economic sectors, ecological systems and human health will suffer.
• Making development more sustainable (MDMS) is the most effective solution - by integrating climate change policy into sustainable development strategy.
M I N D
Uncoordinated responses complicate mattersExample: 2007-2008 food scarcity - 1
Human actions• Oil crisis Corn for ethanol
M I N D
Uncoordinated responses complicate mattersExample: 2007-2008 food scarcity - 2
Human actions• Oil crisis Corn for ethanol
• Drought Grain shortageNature
RESULTFood Scarcity
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WHAT ARE OUR VALUES AND HOW WELL DO WE
ESTABLISH PRIORITIES ?
Dealing with the Triple Bubble Crisis
M I N D
Financial Markets
Productive Economic Assets
Bio-geo-physical Resources
Econ. Growth
Sound financial markets and economic growth should be based on the true value of the productive economic asset base. In turn the value and use of economic assets should closely reflect the state of natural (bio-geo-physical) resources
Head in the clouds?
Feet firmly on the ground?
Three Levels of Reality
M I N D
Financial Markets
Productive Economic Assets
Asset Bubbles
Triple crisis bubbles driven by greed – enjoy now & pay later 2A few get rich quickly, many innocents pay a heavy price afterwards
2008 crisis
M I N D
Financial Markets
Productive Economic Assets
Asset Bubbles
Triple crisis bubbles driven by greed – enjoy now & pay later 2A few get rich quickly, many innocents pay a heavy price afterwards
Econ. Growth
2008 crisis Poverty-Inequity
M I N D
Financial Markets
Productive Economic Assets
Asset Bubbles
Bio-geo-physical Resources
Triple crisis bubbles driven by greed – enjoy now & pay later 3A few get rich quickly, many innocents pay a heavy price afterwards
Econ. Growth
2008 crisis Poverty-Inequity
ExternalitiesClimate change
M I N D
Financial Markets
Productive Economic Assets
Asset Bubbles
Bio-geo-physical Resources
Triple crisis bubbles driven by greed – enjoy now & pay later 4A few get rich quickly, many innocents pay a heavy price afterwards
Hu
man
Val
ues
/Ch
oic
es
Econ. GrowthGovt. Bailout >$5 trillion Aid/yr ~$100 billion
2008 crisis Poverty-Inequity
Asset bubble >$100 trillion (1012), Global GDP >$60 trillion
World Military Expenditures: almost $2 trillion in 2012
ExternalitiesClimate change
Few billion $
M I N D
Focus on CLIMATE CHANGE:
Threat Multiplier
M I N D Munasinghe Institute for Development
M I N D Munasinghe Institute for Development
MAIN DRIVERChanges in CO2 from ice core and modern data
(methane and nitrous oxide also cause global warming)
-10,000 -5,000 TODAY (years)
275Pre-ind:
400Now: near
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RESULT: Mean temp, sea level and ice coverSea Level (16 cm in 100yrs.)
Arctic Sea Ice Extent (min.)
Mean Temp. (0.75C in 100 yrs.)
150 yr. 100 yr.50 yr.
25 yr.
Glacier Mass Balance
M I N D Munasinghe Institute for Development
Examples include:• non-polar glacier retreat• reduction in Arctic sea ice extent and thickness in
summer• earlier flowering and longer growing and breeding
season for plants and animals in N. Hemisphere • poleward and upward (altitudinal) migration of
plants, birds, fish and insects; earlier spring migration and later departure of birds in N. Hem.
• increased incidence of coral bleaching
Observed regional changes in climate, and in physical and biological systems
M I N D Munasinghe Institute for Development
IPCC-AR4: Predicting the Global Climate of 2100GHG conc. 2-3 times pre-ind. level (280 ppmv)
Temp. rise ~3C (1.1 to 6.4) Sea level rise ~40cm (20 to 60)
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Global Impacts of Climate ChangeAt 2C, Food & Water impacts are severe. Ecosystem
impacts, extreme events and catastrophic changes worsen
Source: IPCC AR-4
M I N D
Large Scale, Long Term Risks: Tipping Elements
Lenton et al, 2008
Even 2ºC imposes risks of catastrophic, irreversible impacts
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Rad
iati
veF
orci
ng
Climate
System
Feedbacks
Human and
Natural Systems
(V&A Areas)
Human Actions Causing GHG Emissions
Climate DomainSustainable Development
Domain
Feedbacks
Different
Socio-economic
Development
Paths
(SD Goals & Policies)
AtmosphericGHG Emission
and Concentration
Scenarios
Climate Change Stresses (temp., sea level, precip. etc.)
Dri
vers
Non
-clim
ate
Stre
sses
Feed
back
s
Global Level Two Way CC-SD Links 1
M I N D Munasinghe Institute for Development
Rad
iati
veF
orci
ng
Climate
System
Feedbacks
Human and
Natural Systems
(V&A Areas)
Human Actions Causing GHG Emissions
Climate DomainSustainable Development
Domain
Feedbacks
Different
Socio-economic
Development
Paths
(SD Goals & Policies)
Mit
igat
i on
AtmosphericGHG Emission
and Concentration
Scenarios
Climate Change Stresses (temp., sea level, precip. etc.)
Ada
ptat
ion
AdaptiveCapacity
MitigativeCapacity
Econ. Soc. Envir.
Non
-clim
ate
Stre
sses
Feedbacks
Feedbacks
Feed
back
s
Global Level Two Way CC-SD Links 2
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MOST DESIRABLE:
CC Policies that Harmonise both Adaptation and Mitigation (Win-Win) while also Making Development More
Sustainable (MDMS)
Examples: growing forests, energy saving
Many trade-offs also arise and need to be reconciled
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Global Adaptation
Response Options
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Global Impacts and Vulnerability WE CAN PROTECT THE MOST VULNERABLE
• People: Poor, Children, Elderly.
• Regions: Small Islands, Arctic, Asian megadeltas, Sub-saharan Africa.
• Sectors & Ecosystems: Coral reefs, sea-ice regions, tundra, boreal forests, mountain and Mediterranean regions, low-lying coasts, mangroves & salt marshes;
Water resources in mid-latitudes & dry tropics; Low-latitude agriculture; Human health where adaptive capacity is low.
M I N D Munasinghe Institute for Development
A temperature increase of 1.5°C - 2.5°Cover present, would put 20% - 30% of higher plants and animals at high risk of extinction
Ecosystems Vulnerability
Loss of Critical Ecosystem Services
M I N D Munasinghe Institute for Development
Adaptation Example: People flooded in coastal areas 2080Constant protection = spending maintained at 1990 levels.
M I N D Munasinghe Institute for Development
Adaptation Example: People flooded in coastal areas 2080Constant protection = spending maintained at 1990 levels.Evolving protection = spending increases at same rate as GDP.
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Global Mitigation
Response Options
M I N D Munasinghe Institute for Development
Global emissions must peak & decline by 2015-2020 (latest)
Copenhagen Accord recognises danger limit of 2°C rise and stabilisation level of ~450 ppmv by 2100 (currently 392 ppmv, safe level 280 ppmv).
CO2 stabili-zation
CO2-Equivalent Stabili-zation level
Year CO2 needs to peak
GDP reduction in 2030
Reduction in 2050 relative to 2000
Global Mean temp. incr. at equilib.
Global average sea level rise from thermal expansion
ppm ppm Year % Percent °C metres
350 – 400 445 – 490 2000–2015 < 3 -85 to -50 2.0 – 2.4 0.4 – 1.4
400 – 440 490 – 535 2000–2020 < 2 -60 to -30 2.4 – 2.8 0.5 – 1.7
440 – 485 535 – 590 2010 – 2030 0.6 -30 to +5 2.8 – 3.2 0.6 – 1.9
485 – 570 590 – 710 2020 – 2060 0.2 +10 to +60 3.2 – 4.0 0.6 – 2.4
570 – 660 710 – 855 2050 – 2080 +25 to +85 4.0 – 4.9 0.8 – 2.9
660 – 790 855 – 1130 2060 – 2090 +90 to +140 4.9 – 6.1 1.0 – 3.7
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Failing the Challenge of MitigationUNFCCC 1992 – good start. Article 2 specifies stabilization of atmospheric concentrations of GHG concentrations at a level that does not harm the climate system (food security, ecological systems and sustainable economic development).
Kyoto Protocol 1997 – modest target. By 2012 Annex I nations to reduce emissions 5% relative to 1990. Compliance weak. Came into force without USA (largest emitter). Even after Kyoto 1997, emissions continue to increase
Post-Kyoto Agreement 2013? Bali (COP13) & Poznan (COP14) made a start, but Parties repeatedly postponed the issues until 2015-20 , at Copenhagen (COP15), Cancun (COP16), Durban (COP17) and Qatar (COP18-Dec.2012) ! World is now facing 3-4 °C temp. rise by 2100.
M I N D Munasinghe Institute for Development
Short-term (2010-2020) GHG emissions reduction are possible with existing technologies and policies
at an affordable cost
• Energy: significant technical progress has been made in the last 10 years and at a faster rate than expected (wind power, solar, elimination of industrial by-products, hybrid engine cars, fuel cell technology, carbon capture and storage, etc.)
• Land Use: good potential for carbon sinks and reduced GHG emissions from both better management of existing land cover, and transformation of land use
M I N D Munasinghe Institute for Development
All sectors and regions can contribute to mitigation
Note: estimates do not include non-technical options, such as lifestyle changes.
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• Policies for “carbon price”- can create incentives for producers and consumers to significantly invest in low-GHG products, technologies and processes. Higher carbon prices could impose significant burdens on the poor, unless targetted relief policies are implemented to ensure basic energy needs are met.
• Technology Policies - Deployment of low-GHG emission technologies and RD&D would be required for achieving stabilization targets and cost reduction
• International Agreements - achieving the UNFCCC/Kyoto Protocol targets may stimulate a global response to the climate problem, an array of national policies, the creation of an international carbon market and new institutional mechanisms. Future agreements will help reduce global costs of mitigation( eg: emission trading, Joint Implementation and CDM) and improve environmental effectiveness
Key Policy Elements
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Policies are available to governments to realise mitigation of climate change
• Effectiveness of policies depends on national circumstances, their design, interaction, stringency and implementation
– Integrating climate policies in broader development policies – Regulations and standards – Taxes and charges – Tradable permits – Financial incentives– Voluntary agreements – Information instruments – Research and development
M I N D Munasinghe Institute for Development
Sustainability & Resource Use: Historical LessonsDURABLE USE OF RESOURCES• Nile Basin (Egypt)
Pharaonic system lasted over 4000 years, with sustainable resource use and reasonable quality of life
• Yellow River Basin (China)Imperial system was stable for many millenia, and supported flourishing society
• Saraswati River (India)Hosted a flourishing civilisation for 4000 years. River eventually dried up due to tectonic activity, climate change and desertification, and water piracy.
OVEREXPLOITATION OF RESOURCES• Sahara Desert
Once green with many animals and hunters. Over-exploitation led to a drier habitat which could no longer sustain these populations
M I N D Munasinghe Institute for Development
Recent lesson of late 19th century holocausts - relevance to Globalization & Climate Change
• 18th century – Brazil, China and India had quality of life comparable with Europe.
• 19 century – Colonial rule trapped developing country small farmers were into exporting cash crops at ever decreasing terms of trade. Growing trade led to falling grain output and rising food insecurity.
• Late 19th century – Two El Nino draughts 1876-78 & 1898-1901 killed tens of millions due to food vulnerability and famine. The developing world is still unable to catch up after this setback.
• Future globalization and climate change could interact like colonial trade expansion and El Nino, BUT on a worldwide scale – Potential for future starvation and death on global scale due to vulnerability of the poor, unless a new vision based on SD emerges.
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Poverty, Inequity, PandemicsEnvironmental degradationResource Shortage, Conflict Social polarization, Terrorism
Climate Change
Unrestrained market forces increase risk of conflict (erosion of
ethical & moral values underpinning civilization)
Chaos, Break-downConflict, rivalry and competition for resources overwhelm all efforts to impose order
Fortress WorldLocal, regional & global groups protect their interests within enclavesHow will we cope with such a world, especially the poor?
Barbarization: One Risky Future Scenario
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WHAT ?
HOW ?
are the challenges Multiple global threats undermine sustainable development efforts & need integrated solutions
can we move forward to transform risky current trends into a safer and better futureApply the SUSTAINOMICS framework to start making development more sustainable (MDMS)
M I N D
Asset crisis: have we learnt from experience? Are we not returning to business as usual?
2008-10
Financial Sector
Jobless Poor ~100 million
2011-13
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Global Economic Balance Shifting Towards Emerging Economies
The global balance of economic momentum has shifted. For the past decade, emerging and developing economies have grown over 5% faster than advanced economies. US, Europe and Japan are still struggling to come out of the financial crisis, and facing major issues including low growth and high debts.The SOUTH led by the BRICS emerging economies (Brazil, Russia, India, China & S. Africa) are forging ahead after only a minor initial downturn in growth – both GNP and HDI have improved.
M I N D
LOST OPPORTUNITY: Economic Stimulus Packages were not used to also solve longer
term issues of Poverty, Resources & CC1.Support productive long term investments (e.g.,
infrastructure, renewable energy, forestry, agriculture) and social development (e.g., health, education, sustainable livelihoods, safety nets), NOT subsidies for rich banks, companies & consumption expenses.
2.Boost poverty reduction and job creation efforts (e.g., more access to assets for the poor, promote exports of IT and manufactures).
3.Better governance, manage markets, reform prices
Fraction of stimulus funds spent on green investments:Korea – 80%; China – 35%; Others mainly 10-15% or less
M I N D
Better Use of the Momentum for Change
1.Build for long term. Make Development More Sustainable -- with balanced consideration of sustainable development triangle (economic, social and environmental elements). Transcend conventional boundaries using innovative, holistic, integrative approaches.
2.Transform global governance structure. Reform market regulation. Make UN system more effective & responsive. Make IMF/World Bank more inclusive. Give more weight to G20 (with advice from B20, C20, etc.)
M I N D
Post-2015 Process• Mandates
– Defined at MDG Summit 2010 (High Level Panel)– Rio+20 Conference 2012 (OWG)
• Leadership– Member States: prerogative to deliver framework– UN Secretary-General: to present vision to General
Assembly in September 2013 building upon UN system’s work and consultation processes
M I N D Munasinghe Institute for Development
Way Forward - A Long Term Vision of SD: 1Levels
Main Issues (surface)
IndicatorsPoverty, Inequity, Exclusion,
Resource Conflicts, Harm to
Environment (including CC)
Human InterventionsHigh risk from unrestrained, myopic market forces (“Washington consensus”, globalisation etc.) – Reactive: piecemeal - mainly govt.
Source: Munasinghe (2007), IPCC, MA, GTI
Now
Time
Business-as-usual poses unacceptable risks for the future
M I N D Munasinghe Institute for Development
Way Forward - A Long Term Vision of SD: 2Levels
Main Issues (surface)
ImmediateDrivers(sub-surface)
IndicatorsPoverty, Inequity, Exclusion,
Resource Conflicts, Harm to
Environment (including CC)
Consumption Patterns
Production/Technology
Population
Governance
Human InterventionsHigh risk from unrestrained, myopic market forces (“Washington consensus”, globalisation etc.) – Reactive: piecemeal - mainly govt.
Making development more sustainable (MDMS) with systematic policy reform to manage market forces (Sustainomics) – Proactive: integrated, harmonious approach - govt., business, civil soc.
Source: Munasinghe (2007), IPCC, MA, GTI
Now
Transition
Time
The SD transition requires multiple threats to be addressed with CC and other policies integrated within SD strategy
M I N D Munasinghe Institute for Development
Way Forward - A Long Term Vision of SD: 3Levels
Main Issues (surface)
ImmediateDrivers(sub-surface)
UnderlyingPressures(deep)
IndicatorsPoverty, Inequity, Exclusion,
Resource Conflicts, Harm to
Environment (including CC)
Consumption Patterns
Production/Technology
Population
Governance
Basic Needs
Social Power Structure
Values, Perceptions, Choices
Knowledge Base
Human InterventionsHigh risk from unrestrained, myopic market forces (“Washington consensus”, globalisation etc.) – Reactive: piecemeal - mainly govt.
Making development more sustainable (MDMS) with systematic policy reform to manage market forces (Sustainomics) – Proactive: integrated, harmonious approach - govt., business, civil soc.
Fundamental global sustainable dev. transition catalysed by grass roots citizens movements, & driven by social justice, ethics and equity, innovative leadership, policies, info. flows, tech. (new SD paradigm) – Proactive: civil soc., business, govt.
Source: Munasinghe (2007), IPCC, MA, GTI
Now
Transition
Long Term
Time
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HOW DO WE GET THERE ?
Addressing Complex, Multiple, Interlinked Sustainable Development
issues within the Integrated SUSTAINOMICS Framework
M I N D Munasinghe Institute for Development
SUSTAINOMICSCore concepts and elements
1. Making development more sustainable (MDMS)EMPOWERMENT, ACTION & FORESIGHT
M I N D
Making Development More Sustainable through EMPOWERMENT, ACTION & FORESIGHT
There are many definitions of sustainable development starting with Bruntland (1987), and its precise meaning still remains elusive. Parallel track strategy: 1. Short to medium term – make development more sustainable (apply best practice).2. Long term - aim for ideal goal of sustainable development (identify next practice). Making development more sustainable (MDMS) is a less ambitious incremental strategy that is more practical to implement because many unsustainable activities are easier to recognize and eliminate.
PRACTICAL TEST FOR PUBLIC POLICIES:Does the policy make development more (or less) sustainable?
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Lets move forward NOW!! If we climb uphill, we will reach
the peak eventually
We cannot see the peak!! Let’s stop to discuss &
analyze how to reach it.
Sustainable Development Peak – including climate change (covered by clouds)
Many obviously unsustainable practices exist today. MDMS encourages us to eliminate them NOW! Examples include energy wastage and deforestation.
EMPOWERED to Make Development More Sustainable (MDMS) – BEST PRACTICE
ANALYSING SD and CC – NEXT PRACTICE
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Making Development More Sustainable: Personal Lifestyle Changes
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MDMS: SCP, Corporate Social Responsibility, Sustainability Accounting & Reporting, Shared Value
•SCP provides major opportunities to improve resource efficiency.•Corporate Social Responsibility (CSR) is a concept whereby organizations consider the wider interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and the environment in all aspects of their operations. •Sustainability Accounting & Reporting includes the generation, analysis, use and reporting of economic, environmental and social information (monetised wherever possible) to improve corporate management and performance in those areas. This approach recognizes that the social and environmental consequences of corporate actions are as important as monetary profits, and seeks to measure and report on those outcomes, via the Triple Bottom Line.•Shared Value seeks to make profits while benefiting society & environment by finding shared sources of value common to the enterprise and to society.
M I N D Munasinghe Institute for Development
Development- Sectors (Agriculture, Energy, Industry,
Transport, Health, etc.)- Systems (Environmental, ecological, etc.)
- Communities (Poor, Vulnerable, etc.)
Su
stainab
le Dev.
(So
cial, Eco
no
mic,
En
viron
men
tal)
En
viron
men
t(n
atural variab
ility)
CC
ImpactsAdaptationMitigation
MDMS: National Level CC-SD IntegrationMake decision makers see sustainability and climate
change as key elements of national development strategy
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Ecosystem
EcologicalServices
SolarEnergy Radiated
Energy
The capacity of the ecosystem may become overloaded by the growing socio-economic subsystem (broken lines).
Nat. Res.Energy
Waste
s
Pollutio
n
Socioeconomic Subsystem
MDMS: Global restructuring (not reduction) of development and growth - 1
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MDMS: Global restructuring (not downsizing) of development and growth - 2
(rounding the rectangle)
Socioeconomic Subsystem
Socioeconomic Subsystem
Unsustainable Sustainable
Ecosystem Ecosystem
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SUSTAINOMICSCore concepts and elements
1. Making development more sustainable (MDMS)EMPOWERMENT, ACTION & FORESIGHT
2. Harmonising the sustainable development triangleBALANCE, INTEGRATION
M I N D Munasinghe Institute for Development
Economic
Social•
empowerment/governance
• inclusion/consultation• institutions/values
Environmental• resilience/biodiversity• natural resources• pollution
Sustainable Development Triangle – harmonising key elements and interconnections (corners, sides and centre) Source: Munasinghe [1992], Rio Earth Summit
• growth• efficienc
y• stability
M I N D Munasinghe Institute for Development
Economic
Social•
empowerment/governance
• inclusion/consultation• institutions/values
Environmental• resilience/biodiversity• natural resources• pollution
• in
tra-
gene
ratio
nal
equi
ty
• b
asic
nee
ds/li
velih
oods
• inter-generational equity
• values/culture
• valuation/internalisation
• incidence of im
pacts
PovertyEquity
Sustainability Climate Change
Sustainable Development Triangle – harmonising key elements and interconnections (corners, sides and centre) Source: Munasinghe [1992], Rio Earth Summit
• growth• efficienc
y• stability
M I N D Munasinghe Institute for Development
Economic
Social•
empowerment/governance
• inclusion/consultation• institutions/values
Environmental• resilience/biodiversity• natural resources• pollution
• in
tra-
gene
ratio
nal
equi
ty
• b
asic
nee
ds/li
velih
oods
• inter-generational equity
• values/culture
• valuation/internalisation
• incidence of im
pacts
PovertyEquity
Sustainability Climate Change
Sustainable Development Triangle – harmonising key elements and interconnections (corners, sides and centre) Source: Munasinghe [1992], Rio Earth Summit
• growth• efficienc
y• stability G
REEN
ECONOMY
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Building Assets for Sustainable Development
SocialCapital
ManufacturedCapital
Natural Capital
Social Capital• Human• Cultural
Source: Munasinghe (1992), Rio Earth Summit
Southampton Univ.
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Key role played by Social Capital embedded in Civil Society: ignored, undervalued, invisible
• At individual level: is built on personal networks that help us enormously in our private and professional lives.
• At community and national levels: is the invisible glue that binds society together – involving values- ethics, culture, behaviour, and social linkages.
M I N D Munasinghe Institute for Development
Social Capital – Civil Society & ValuesExamples of Civil Society Response: 2004 Tsunami - Sri
Lanka versus 2005 Hurricane Katrina - New Orleans, USA
2004 Tsunami – Sri Lanka
~35,000(1 in every 570 people)
~ USD 1,000
2005 Hurricane Katrina - USA
~1850(1 in every 200,000 people)
~ USD 35,000
Event Deaths GNP/capita
Recent examples: China earthquake, Japan Fukushima Nuclear Disaster
M I N D Munasinghe Institute for Development
SUSTAINOMICSCore concepts and elements
1. Making development more sustainable (MDMS)EMPOWERMENT, ACTION & FORESIGHT
2. Harmonising the sustainable development triangleBALANCE, INTEGRATION
3. Transcending boundariesINNOVATION
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Innovation can help us Transcend Boundaries for Sustainable Development
• Values – replacing unsustainable values • Disciplinary – complex issues need all disciplines • Space – spans local to global scales• Time – spans days to centuries • Stakeholder – need to include all stakeholders• Operational – full cycle from data to application
M I N D Munasinghe Institute for Development
Source: New Yorker
Innovation helps transcend mental barriers Status-Quo
Vested Interests
Innovators
Never, ever think outside the box!
M I N D Munasinghe Institute for Development Sustainable Consumption Institute SCIUniversity of Manchester
Build essential ethical and moral values especially among YOUTH
Greed, selfishness and violence are unsustainable
Selflessness, altruism, enlightened self-interest, and respect for other humans and nature will make development more sustainable
Transcending Unsustainable Values
Ethical Dimensions of Climate Change 2006
Interfaith Declaration on Climate Change 2009
M I N DMunasinghe Institute for Development
Wrong Values Drive Unsustainable Development: 1
SocialCapital
EnvironmentalDebt
Unsustainable cons. & prod.
depleting NR
UnethicalSocial Values
Greed, Selfishness, Corruption, Inequity,
Violence, Injustice, Elitism
Source: Adapted from Munasinghe (1992), Rio Earth Summit
M I N DMunasinghe Institute for Development
Wrong Values Drive Unsustainable Development: 2
SocialCapital
Economic Mal-development
growth based on unsustainable debt, waste & inequitable
consumption by the elites
EnvironmentalDebt
Unsustainable cons. & prod.
depleting NR
UnethicalSocial Values
Greed, Selfishness, Corruption, Inequity,
Violence, Injustice, Elitism
Source: Adapted from Munasinghe (1992), Rio Earth Summit
M I N DMunasinghe Institute for Development
Wrong Values Drive Unsustainable Development: 3
SocialCapital
Economic Mal-development
growth based on unsustainable debt, waste & inequitable
consumption by the elites
EnvironmentalDebt
Unsustainable cons. & prod.depleting NR
UnethicalSocial Values
Greed, Selfishness, Corruption, Inequity,
Violence, Injustice, Elitism
Source: Adapted from Munasinghe (1992), Rio Earth Summit
EnvironmentalDebt
Unsustainable Pollution &
Depleting Natural
Resources
Drivers of Unsustainable Development
M I N DMunasinghe Institute for Development
Wrong Values Drive Unsustainable Development: 4
SocialCapital
Economic Mal-development
growth based on unsustainable debt, waste & inequitable
consumption by the elites
EnvironmentalDebt
Unsustainable cons. & prod.depleting NR
UnethicalSocial Values
Greed, Selfishness, Corruption, Inequity,
Violence, Injustice, Elitism
Source: Adapted from Munasinghe (1992), Rio Earth Summit
EnvironmentalDebt
Unsustainable Pollution &
Depleting Natural
Resources
Drivers of Unsustainable Development
(with feedback)
M I N D
Transcending disciplines to address SD issues
SD Issues
• social justice, equity, values and culture
• institutions and governance
• markets and prices
• technologies and management
• biological and physical resource base
Engineering Ecology
Natural Sciences
PhilosophySociology
AnthropologyLaw
PoliticsEconomics
FinanceManagement
Disciplines
Source: Munasinghe (2002), Int. J. of Sust. Dev.
M I N D Munasinghe Institute for Development
Transcending Stakeholder Boundaries to Ensure Cooperation for Sustainable Development
SocialCapital
Business
Govern-ment
CivilSociety
GCI can catalyse interactions among government, civil society and business to strengthen local, national and global governance
Source: Munasinghe (1992), Rio Earth Summit
Southampton Univ.
M I N D Munasinghe Institute for Development
(sustainable) System
Transcending spatial and temporal scales Panarchy of Systems Concepts: 1
Big
ger
& L
onge
r L
ived
Source: Gunderson and Holling (2002)
Human being
M I N D Munasinghe Institute for Development
(sustainable) System
Sub-Systems
Innovation and Adaptation from below(Faster Changes)
Transcending spatial and temporal scales Panarchy of Systems Concepts: 2
Big
ger
& L
onge
r L
ived
Source: Gunderson and Holling (2002)
Human being
Cells
M I N D Munasinghe Institute for Development
(sustainable) System
Super-System
Sub-Systems
Innovation and Adaptation from below(Faster Changes)
(Slower Changes)Conservation and Continuity from above
Transcending spatial and temporal scales Panarchy of Systems Concepts: 3
Big
ger
& L
onge
r L
ived
Source: Gunderson and Holling (2002)
Society
Human being
Cells
M I N D
Transcending Operational Barriers Needs Better Stakeholder Cooperation
• Global• Regional• National• Local• Community• Individual
Pragmatic balance between subsidiarity and integration is essential: eg., CC or river-basin
Inte
grat
ion
Su
bsi
dia
rity
Top Down
Bottom upSpecific Projects
Strategy-Policy
M I N D Munasinghe Institute for Development
SUSTAINOMICSCore concepts and elements
1. Making development more sustainable (MDMS)EMPOWERMENT, ACTION & FORESIGHT
2. Harmonising the sustainable development triangleBALANCE, INTEGRATION
3. Transcending boundariesINNOVATION
4. Full cycle application of integrative tools – from data gathering to practical policy implementation
IMPLEMENTATION
M I N D Munasinghe Institute for Development
There are many practical analytical tools and policy options to integrate CC responses into SD strategy (from global to local levels)
There are many available case studies and best practice examples involving sustainomics applications
Core Concept 4: Full cycle application of integrative tools: from data gathering to practical policy IMPLEMENTATION
M I N D Munasinghe Institute for Development
Full Cycle - OperationsACTION
Observations and Data
Concepts and Ideas
Models & Analyses
Interpretation of Results
Plans & Policies
Practical Applications
Impacts (SD triangle)
ACTOR
Observers
Thinkers & Philosophers
Scientists & Analysts
Translators & Communicators
Decision Makers
Implementing Agents
Assessment Experts
Each stage of activity has a tendency to become compartmentalised
Sea
mle
ss C
ycle
Source: Munasinghe (2002), Int. J. of Sust. Dev.
M I N D Munasinghe Institute for Development
Choosing Appropriate SD Indicators - Social - Environmental - Economic- Institutional
many indicators are available; thus correct choice is critical for specific
task at hand
M I N D Munasinghe Institute for DevelopmentMunasinghe Institute for DevelopmentM I N D
Integrative Analytical Tools
1. Restructuring Growth to Make Development More Sustainable (MDMS)
2. Optimisation and Durability3. SD Analysis (Macro Level)4. Action Impact Matrix (AIM)5. Green Accounting (SEEA-SNA)6. Integrated Models (IAM, CGE, etc.)7. SD Analysis (Micro Level) 8. Multi-Criteria Analysis (MCA), Cost-Benefit
Analysis (CBA) and Economic Valuation9. SD Indicators
Application LevelsA. Global- transnational
B. National-macroeconomic
C. Subnational-sectoral
D. Local-project
Integrative analytical tools and practical applications(linking across global, national and local levels)
Lin
kages Across
Levels
M I N D Munasinghe Institute for Development
Main Types of Assets for Sustainable Development
SocialCapital
ManufacturedCapital
NaturalCapital
Social Capital• Human• Cultural
Sustainable Development
Integrating across the three dimensions of SD
Economic approach focuses on optimality - maximise growthEnvironmental & social approaches use durability – overall system health
M I N D Munasinghe Institute for Development
Integrating Diverse Definitions of SustainabilityEconomic approach focuses on optimality - maximise growthEnvironmental & social approaches use durability – overall system health
Economic: Maximum flow of income that could be sustained indefinitely, without reducing stocks of productive assets. Economic efficiency ensures both efficient resource allocation in production and efficient consumption that maximises utility.
Ecological: Preserving the viability and normal functioning of natural systems, including system health ability to adapt to shocks across a range of spatial and temporal scales. Defined by a comprehensive, multiscale, hierarchical, dynamic measure describing system resilience, vigour and organization.
Social: Maintaining the resilience of social systems and limiting their vulnerability to sudden shocks. Involves building social capital to strengthen cohesion, protecting cultural diversity and values, and improving inclusion and participation - especially of disadvantaged groups.
M I N D
Munasinghe Institute for Development
Optimality and Durability: Simple Example Two modes complementary - tradeoff depends on situation
Optimal ModeOlympic 100m sprinter – willing to take high risk and make extreme effort to minimise running time (single indicator) for one special event
Durable ModeMiddle aged walker – undertakes regular, low risk exercise for overall health (multiple indicators), over many decades
Max. yieldHighest riskExamples: Iskill (Voldemart) 2B+ loss at JP Morgan. Leeson - Bearings
Mod. yieldLower risk
Yie
ld
Risk
M I N D Munasinghe Institute for Development
WHAT ?
WHICH?
HOW ?
practical analytical tools and policies are availableMany best practice examples and case studies of integrated solutions exist, worldwide.
are the challenges Multiple global threats undermine sustainable development efforts & need integrated solutions
can we move forward to transform risky current trends into a safer and better futureApply the SUSTAINOMICS framework to start making development more sustainable (MDMS)
M I N D Munasinghe Institute for Development
Global Application of Sustainomics: Climate Change Challenge
Making Development More Sustainable via “Tunneling”:
Potential Post-Kyoto Framework for Jointly Managing Climate Risk &
Right to Develop
M I N D
Climate Justice – Equitable Allocation of Per Capita Carbon Emissions
M I N D Munasinghe Institute for Development
Adaptation Burden & Equity: CC SDAdaptation is the first priority of developing countries that are most vulnerable to climate change. Help is also crucial.• Climate change is likely to impact disproportionately
upon the poorest countries and the poorest persons within all countries, exacerbating inequities in health status and access to adequate food, clean water and other resources.
• Net economic effects will be negative in most developing countries
• Impacts will be worse - many areas are already flood and drought prone, and economic sectors are climate sensitive
• Lower capacity to adapt because of a lack of financial, institutional and technological capacity, and access to knowledge
M I N D Munasinghe Institute for Development
Per capita GHG emissions and population 2004Mitigation Responsibility & Equity: SD CCMitigation leadership is the main responsibility of industrial
countries with high per capita GHG emissions
Annex 1 avg.
Non-Annex I avg.
M I N D Munasinghe Institute for Development
MOST DESIRABLE:
CC Policies that Harmonise both Adaptation and Mitigation (Win-Win) while also Making Development More
Sustainable (MDMS)
Examples: growing forests, energy saving
Many trade-offs also arise and need to be reconciled
M I N D Munasinghe Institute for Development
Clim
ate
Ris
k(e
.g. p
er c
apit
a G
HG
em
issi
ons)
Development Level (e.g. per capita income)
MDMS via “Tunneling”: global cooperation to manage Climate Risk & Right to Develop - Step 1
Source: M. Munasinghe (1995) "Making Growth More Sustainable," Ecological Economics, 15:121-4.
Poor
Middle Income
Rich Today
M I N D Munasinghe Institute for Development
Clim
ate
Ris
k(e
.g. p
er c
apit
a G
HG
em
issi
ons)
Development Level (e.g. per capita income)
MDMS via “Tunneling”: global cooperation to manage Climate Risk & Right to Develop - Step 2
Source: M. Munasinghe (1995) "Making Growth More Sustainable," Ecological Economics, 15:121-4.
Poor
Middle Income
Rich
Incentives/resources for developing countries1. Adaptation fund (safety net) for poorest and
most vulnerable.
Transform - Decarbonise
M I N D Munasinghe Institute for DevelopmentMunasinghe Institute for Development
Clim
ate
Ris
k(e
.g. p
er c
apit
a G
HG
em
issi
ons)
Development Level (e.g. per capita income)
MDMS via “Tunneling”: global cooperation to manage Climate Risk & Right to Develop - Step 3
Source: M. Munasinghe (1995) "Making Growth More Sustainable," Ecological Economics, 15:121-4.
Poor
Middle Income
Rich
Incentives/resources for developing countries1. Adaptation fund (safety net) for poorest and
most vulnerable.2. Technology cooperation/support to leapfrog
Leapfrog(CHINA,)
Transform - Decarbonise
M I N D Munasinghe Institute for Development
Country Level Actions
Integrating Climate Change Policies into National Sustainable
Development Strategy
M I N D
Development- Sectors (Agriculture, Energy, Industry,
Transport, Education, Health, etc.)- Systems (Environmental, ecological, etc.)
- Communities (Poor, Vulnerable, etc.)
Su
stainab
le Dev.
(So
cial, Eco
no
mic,
En
viron
men
tal)
En
viron
men
t(n
atural variab
ility)
CC
ImpactsAdaptationMitigation
Integrating CC Policies into National SD Strategy Make decision makers see sustainability & climate change
as key elements of the national development strategy
M I N D Munasinghe Institute for Development
Integration via SD Analysis at the Macroeconomic/Sectoral Level (general
equilibrium analysis)
1. Macroeconomic/Sectoral Modeling
2. Environmental and Macroeconomic Analysis
3. Poverty/Income Distributional Analysis
M I N D Munasinghe Institute for Development
Basic
Input-Output
Table
Distribution of Income
Satellite
Environmental
Accounts
Envir.-Social LinksDistribution of Environmental
Impacts
Economic LinksEnvironmental- Economic Links
Economic-Social Links
Expanded Green National Income Accounts for SDS
ocia
l A
ccou
nti
ng
Mat
rix
(SA
M)
Source: Munasinghe (2001), Macroeconomics and Environment
M I N D Munasinghe Institute for Development
Example
Analysing Water and Climate Change Impacts on Agriculture
in Sri Lanka Source: M. Munasinghe and S. Perera (2006)
M I N D Munasinghe Institute for Development
National SD strategy & plans (NSSD, PRSP,
NEAP etc.)
Action Impact Matrix (AIM)
applied to SED
Macro- and SectoralModels and Analyses
Implement Energy & CC Policies & Proj.
interacti ons of national SD strateg y with energy & CC policies
{Identify Links, Screen, Prioritize Issues, Select Remedies
Analysing SD-CC Links using the Action Impact Matrix (AIM)
M I N D Munasinghe Institute for Development
The AIM methodology may be used to better understand interactions among three key elements, at the country-specific level:(a) national development policies and goals; (b) key SD issues and indicators; and(c) climate change adaptation (and mitigation). First, the two-way linkages between elements (a) and (b) are explored, in the context of natural climate variability. Then, we impose the additional impacts of element (c) on the interactions between elements (a) and (b).The AIM approach analyses key economic-environmental-social interactions to identify potential barriers to making development more sustainable (MDMS) - including climate change. It also helps to determine the priority macro policies and strategies in economic, environmental and social spheres, that facilitate implementation of climate change adaptation and mitigation to overcome the effects of climate change. Thus, the AIM helps to integrate CC within SD. It has been used since the early 1990s to link macroeconomic policies and environment.
Action Impact Matrix (AIM) Methodology
M I N D Munasinghe Institute for Development
The AIM methodology relies on a fully participative stakeholder exercise to generate the AIM itself. Up to 50 experts are drawn from government, academia, civil society and the private sector, who represent various disciplines and sectors relevant to both sustainable development and climate change. In the initial exercise, they usually interact intensively over a period of about two days, to build a preliminary AIM. This participative process is as important as the product (i.e., the AIM), since important synergies and cooperative team-building activities emerge. The collaboration helps participants to better understand opposing viewpoints, resolves conflicts, and ultimately facilitates implementation of agreed policy remedies. On subsequent occasions, the updating or fine-tuning of the initial AIM can be done within a few hours by the same group, since they are already conversant with the methodology.
AIM Process
M I N D Munasinghe Institute for Development
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
Agric. Output
Hydro Power
Deforestation
Bio-div. (flora
& fauna)
Wet-lands
& coastl ecosystems
Water resour
ces
Poor communities
Human health
Infra-struct.
Industries & Tour-ism
(S0) Status (Nat. Variability) -1 0 -2 -1 -1 -2 -1 0 2 2
(S1) Status (+CC Impacts =>) -2 -1 -2 -2 -2 -3 -2 -1 -1 -1
Dev. Goals/Policies (+CC Impacts)
(A) Growth -1 -1 -1 -1 -1 -2 -2 -1 -1 -1
(B) Poverty alleviation -2 0 -1 -1 -1 -2 -2 -2 -1 -1
(C) Food Security -3 0 -1 -1 -1 -3 -1 -1 0 0
(D) Employment -1 0 -1 0 -1 -2 -1 -2 -1 -2
(E) Trade & Globalisation -2 -1 0 0 0 -1 -1 0 -2 -1
(F) Budget Deficit Reduction -1 -1 0 0 0 0 0 -2 0 -1
(G) Privatisation 0 1 1 0 0 1 0 0 -1 -1
Adaptation Effects on Development (VED-AIM) in Sri Lanka – CC Impacts and Effects of VA on Development Goals/Policies
Key Vulnerabilities, Impacts and Adaptation (VIA)Notation+ Beneficial- Harmful3 High2 Moderate1 Low
M I N D Munasinghe Institute for Development
Downscaled GCM Results: Range of Climate Change Predictions for Sri Lanka in 2050
Global Scenario
Period Rainfall Temperature
B1 NEM Increase by 50 mm over the baseline
Max. temperature: increase by 0.80 C Min. temperature : increase by 1.00 C
B1 SWM
Increase by 350 mm over the baseline, especially over the Western slopes of the central hills
Max. temperature: increase by 0.80 C Min. temperature : increase by 0.80 C
A1F1 NEM
Increase by 70 mm over the baseline, especially over the Eastern slopes of the central hills
Max. temperature: increase by 1.10 C Min. temperature : increase by 1.40 C
A1F1 SWM
Increase by 520 mm over the baseline, especially over the Western slopes of the central hills
Max. temperature: increase by 1.10 C Min. temperature : increase by 1.20 C
M I N D Munasinghe Institute for Development
MACROECONOMY (Multisectoral CGE)
TRANSPORT
AGRIC-ULTURE & LAND USE
URBAN-IND
ROAD RAIL
OTHER
TREE CROPS RICE
FORESTRY
REGIONI
REGIONIII
REGIONII
Multi-sector Computable General Equilibrium Model linked to sectoral and project level models
ENERGY
M I N D Munasinghe Institute for Development
Impact on Sri Lanka national economy in 2050* - GDP effect small BUT equity effect
largerCrop Change of Total
GDP in 2050 (%) Change Agriculture GDP in 2050 (%)
Rice (dry zone – poorer)
-0.36 -2.46
Plantation Crops (wet zone – richer)
+0.10 +0.70
Rice + Plantation Crops
-0.26 - 1.76
*Note: Assuming the same economic structure in 2050
M I N D Munasinghe Institute for Development
Sri Lanka CC Impacts: Spatial Distribution
M I N D Munasinghe Institute for Development
Some Key Policy Implications
1. Moderate overall impact on agricultural output and national economy, but some effects will emerge within next two decades
2. Significant potential risk to food security (rice)
3. High poverty impact on small farmers
4. Equity impact (small rice farms versus large tree crop plantations)
5. Demographic impact (potential migration from dry to wet zone)
M I N D Munasinghe Institute for Development
Similar Procedure can be used to Integrate Mitigation into SD
Strategy using the AIM
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Subnational-Sectoral and Local-Project
Level Analysis
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Sustainable Development Assessment Tools (partial equilibrium analysis at sector/project level )
1. Economic/Financial Assessment (CBA)
2. Environmental Assessment (EA)
3. Social Assessment (SA)
4. Multi-Criteria Analysis (MCA)
5. Poverty Assessment (PA)
6. Technical Assessment (TA)
Choice of appropriate SD indicators is vital for SD Assessment
M I N D
Economic valuation of environmental (and social) impacts and assets is an important (and often neglected) aspect of cost-benefit analysis (CBA)
When valuation is not possible, other techniques like multi-criteria analysis (MCA) can be useful for decision making
Cost-Benefit Analysis (CBA) and Multicriteria Analysis (MCA)
M I N D
Inserting Environmental (& Social) Concerns Into Conventional Economic Decisionmaking 1
Air
Water
Land
Natural Habitats
Global Transnational
NationalMacroecon.
SectoralRegional
Inter-National
SubsectoralProject
EnvironmentalSystems Analytical Tools and Methods
DecisionmakingStructure
M I N D
Inserting Environmental (& Social) Concerns Into Conventional Economic Decisionmaking 2
Phy
sica
l, B
iolo
gica
l and
Soc
ial I
mpa
cts
Urban, Indust. and Air
Water
Land
Natural Habitats
Global Transnational
NationalMacroecon.
SectoralRegional
Inter-National
SubsectoralProject
CO
NV
EN
TIO
NA
L E
CO
NO
MIC
AN
AL
YS
IS
Pro
j. E
val.
Cos
t -B
en.
Ana
l.
Sec
tora
l&
Sub
-na
tion
al A
nal.
Nat
iona
lM
acro
econ
.A
nal.
Int.
Eco
n.A
naly
sis
EN
VIR
ON
ME
NT
AL
AS
SE
SS
ME
NT
TE
CH
NO
-EN
GIN
EE
RIN
Gan
d F
INA
NC
IAL
AN
AL
YS
IS
EnvironmentalSystems Analytical Tools and Methods
DecisionmakingStructure
M I N D
Inserting Environmental (& Social) Concerns Into Conventional Economic Decisionmaking 3
Phy
sica
l, B
iolo
gica
l and
Soc
ial I
mpa
cts
Urban, Indust. and Air
Water
Land
Natural Habitats
Global Transnational
NationalMacroecon.
SectoralRegional
Inter-National
SubsectoralProject
SU
ST
AIN
OM
ICS
EN
VIR
ON
ME
NT
-EC
ON
OM
Y I
NT
ER
FAC
E
Impa
ct V
alua
tion
Inte
grat
ed
Res
ourc
e M
gmt.
Mac
ro. E
con.
A
nal.
& E
nv.
Acc
ount
.
Glo
bal
Env
. Eco
n.
Ana
lysi
s
CO
NV
EN
TIO
NA
L E
CO
NO
MIC
AN
AL
YS
IS
Pro
j. E
val.
Cos
t -B
en.
Ana
l.
Sec
tora
l&
Sub
-na
tion
al A
nal.
Nat
iona
lM
acro
econ
.A
nal.
Int.
Eco
n.A
naly
sis
EN
VIR
ON
ME
NT
AL
AS
SE
SS
ME
NT
TE
CH
NO
-EN
GIN
EE
RIN
Gan
d F
INA
NC
IAL
AN
AL
YS
IS
EnvironmentalSystems Analytical Tools and Methods
DecisionmakingStructure
M I N D
Social concerns may be incorporated into conventional decisionmaking using a similar approach, but with more difficulty!
M I N D
Categories of Economic Value of Environmental Assets (examples from a tropical rain forest)
Use Value Non-use Value
Total Economic Value
Direct use values Indirect use values Option values Existence values Other non-use values
Outputs that can be consumed directly
Functional benefits
Future direct and indirect use values
Value from knowledge of continued existence
-Food-Biomass-Recreation-Health
-Ecological functions-Flood control-Storm protection
-Biodiversity-Conserved habitats
-HabitatsEndangered species
Decreasing tangibility of value to individuals
M I N D
Sustainomics Application – Forest Sector
SD Assessment of a Tropical
Rainforest in MadagascarFocus on economic valuation of costs and
benefits of establishing a new national park
Source: Munasinghe (2007)
M I N D
Background and ObjectivesMadagascar is economically poor, but ecologically rich (e.g., lemurs). It has been designated a mega-diversity area, whose ecosystems are also at great risk. The government is seeking to control forest degradation and protect biodiversity. This study was the first stage analysis to facilitate a decision on creating a new national park.
The proposed national park would generate both indirect and direct costs and benefits. Costs arise from acquisition of private land, hiring of park personnel, and development of roads, visitors' facilities, and other infrastructure. Other important costs (often ignored) are the opportunity costs from foregone uses of park land. Use-value benefits from tourism can generate considerable national revenues from both entrance fees and travel expenditures. Non-use benefits include existence and option values. Indirect benefits may include reduced deforestation, watershed protection and climate regulation. This study seeks to measure important but difficult to measure economic impacts, i.e., costs to local villagers and benefits to foreign tourists.
M I N D
SD Goals
Economic - maximise net benefits
Social - balance (competing) interest of stakeholders (especially the poor): Villagers on-site, Tourists (foreign and local), People of Madagascar (Government)
Environmental – safeguard and maintain nationa park and ecosystems
M I N D
Valuation Techniques Used in Study
• Opportunity Cost Analysis• Travel Cost Analysis• Contingent Valuation Analysis
Evaluate Support Benefits of Forests (from MA):
Provisioning, Regulation, Cultural
M I N D
Activity No. of Observ-ations
Total annual value for all
villages (US$)
Mean annual value per
household (US$)Rice 351 $44,928 $128
Fuelwood 316 $13,289 $38
Crayfish 19 $220 $12
Crab 110 $402 $3.7
Tenreck 21 $125 $6
Frog 11 $71 $6.5
Value of Local Household Activities
M I N D
Economic Costs and Benefits of Establishing New National Park (using different methods)
Annual mean value Aggregate NPV
Welfare losses to local villages (US$) Method Used per householdOpportunity Cost 91 566,070
CVM 108 673,078
Welfare gains to foreign tourists (US$) Method Used per tripTravel Cost 1 (random utility) 24 936,000
Travel Cost 2 (typical trip) 45 1,750,000
CVM (use & non-use value) 65 2,530,000
M I N D
Madagascar Study - Key ConclusionsPolicy Implications: Can help in investment decisions, resource
mobilization, project design and management, including how to (a) allocate scarce capital resources among competing land use activities;(b) choose and implement investments for natural resource conservation
and development; (c) determine pricing, land use, and incentive policies; (d) set compensation for local villagers for foregone access to forest areas; (e) show value of park as a global environmental asset to foreigners (e.g.,
obtain external funds for conservation) Issues: WTP is fundamental to the economic approach, but over-
emphasizes value ascribed to richer foreign visitors. If conflicting claims to park access were determined purely on this basis, poor local villagers are more likely to be excluded. However, social aspects of sustainable development (like equity and distributional concerns) will help to protect the basic rights of local residents – e.g., "safe minimum" degree of access to park facilities, “buffer zone”, etc.
M I N D Munasinghe Institute for Development
Sustainomics application: project level
Multicriteria SD Assessment of small hydro schemes using economic, social and
ecological indicatorsPrimary Source: Morimoto R., and Munasinghe M. (2005) “Small hydropower projects and sustainable energy development in Sri Lanka”, Int. Journal of Global Environmental Issues, Vol.4.
Summary: Munasinghe, M. (2002) “The sustainomics trans-disciplinary meta-framework for making development more sustainable: applications to energy issues”, Int. J. of Sustainable Dev.,Vol.4, No.2, pp.6-54.
M I N D Munasinghe Institute for Development
Overview of study• Energy affects all three dimensions of sustainable development. • Reviews linkages between potential impacts of energy
production and consumption on sustainable development,. • Multi-criteria analysis used to assess the role of small
hydroelectric power projects in sustainable energy development.
• 3 key variables (measured per unit of GHG avoided per year): Economic - electricity supply costs, Social - numbers of people displaced (resettled), Environmental - biodiversity loss
• Analysis helps policy-makers compare and rank project alternatives more easily and effectively.
• The multi-criteria analysis, which includes environmental and social variables, supplements and balances cost benefit analysis which is based on economic values alone.
M I N D Munasinghe Institute for Development
Average generation costs (AVC), biodiversity index (BDI), and number of resettled people (RE) by hydroelectric project. All indices are per tonne CO2 avoided per year. Numbers of people resettled and the biodiversity index are scaled for convenience (by multipliers 10-5 and 10-9 respectively). The values at the top of the graph indicate the annual energy generation in gigawatt hours (GWh).
28 11 159 210 209 20 149 114 390 512 22 78 161 34 50 83 42 18 123 79 113 143
0
2
4
6
8
10
12
14
16
18
20
project
AVC (US cents/kWhyr)
BDI/kWhyr
RE/kWhyr
Project Level: Economic, social and ecological indicators for small hydro in Sri Lanka
M I N D Munasinghe Institute for Development
Figure 5. Three dimensional MCA of sustainable development indicators for various hydropower options. Source: Morimoto, Munasinghe and Meier [2000]
Ave
rage
gen
erat
ion
cos
t (U
S c
ents
/kW
hyr
)
Number of resettled people / kWhyr
Biodiversity index / kWhyr
Three dimensional MCA of SD indicators of small hydro
Tonne CO2/ Tonne CO2
M I N D Munasinghe Institute for Development
WHAT ?
WHICH?
HOW ?
practical analytical tools and policies are availableMany best practice examples and case studies of integrated solutions exist, worldwide.
are the challenges Multiple global threats undermine sustainable development efforts & need integrated solutions
can we move forward to transform risky current trends into a safer and better futureApply the SUSTAINOMICS framework to start making development more sustainable (MDMS)
WHO ? must act now and how Sustainable consumers and producers can play a key role in the UK & globally.
M I N D
THE SUSTAINABILITY AGENDA – ACT NOW
Partnership of Sustainable Consumers and Producers
M I N D
Economic
Social• fairness/
empowerment• inclusion/consultation• institutions/
governance
Environmental• natural resources• resilience/
biodiversity• pollution
• in
tra-
gene
ratio
nal
equi
ty
• b
asic
ne
eds/
livel
ihoo
ds• inter-generational
equity• values/culture
•
valuation/internalisati
on
• incidence of im
pacts
SD based on Happiness &
Well-Being (GNH)
• efficiency
• growth• stabilit
y
21st Century Global Eco-Civilization
Vision: Global Eco-Civilization of the 21st Century will focus on Happiness & Well-Being (GNH)
determined not only by material consumption (GNP)
China: Hu Jintao, 18th Party Congress
M I N D Munasinghe Institute for Development
Vision for 2030: Targets
Social: meet basic needs of all human beings especially the poor & vulnerable, ensuring peace, harmony, social justice & security.Environmental: respect nature & reduce humanity’s global ecological footprint to less than one planet earth. Economic: build a sustainable economy that is prosperous and resource-efficient, but respects critical environmental and social sustainability constraints.
M I N D
Sustainable Consumption & Production Pathway (SCP) to
Sustainable Development (SD) & Global Eco-Civilization:
Millennium Consumption Goals (MCGs) are an important tool
M I N D
Nu
mb
er
of
Ea
rth
s
Sustainable
BAU
Ecological Footprint of Human Consumption In 2012 we need 1.5 earths; by 2035 almost 2 Earths
Unsustainable
oneearth
2012 2030
M I N D Munasinghe Institute for Development
Unfair World Income Distribution 2000 Champagne Glass
The richest fifth of the World’s Population receives 83% of the Worlds Income
One fifth of the Worlds Population
The poorest fifth of the Worlds Population receives 1.4% of total World Income
Ratio of 60:1 between highest and lowest 20% !!
83% 1.4 billion
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Millennium Development Goals (MDG)United Nations Millennium Declaration, 2000
•Eradicate extreme poverty and hunger•Achieve universal primary education•Promote gender equality and empowerment•Reduce child mortality•Improve maternal health•Combat HIV/AIDS, malaria and other diseases•Ensure environmental sustainability•Develop a global partnership for developmentCommendable targets for 2 billion poor, but in the post-2015 agenda, where are the resources to meet them, especially with the onset of climate change
M I N D Munasinghe Institute for DevelopmentMunasinghe Institute for Development
Clim
ate
Ris
k(e
.g. p
er c
apit
a G
HG
em
issi
ons)
Development Level (e.g. per capita income)
Resource-based Model for Making Consumption and Production More Sustainable
Source: M. Munasinghe (1995) "Making Growth More Sustainable," Ecological Economics, 15:121-4.
Poor
Middle Income
Rich
Incentives/resources for developing countries1. Adaptation fund (safety net) for poorest and
most vulnerable.2. Technology cooperation/support to leapfrog
Leapfrog
Transform Decarbonise
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Food for a Week: Affluent FamilyUnsustainable – must transform/decarbonize towards sustainablity: Millennium Consumption Goals
Source: Menzel, 2005
Food for a Week: Poor FamilyUnsustainable/Unethical – must leapfrog/tunnel to prosperity: Millennium Development Goals
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The consumption of the rich is crowding out the development prospects of the poor.
As resources (like energy, water and food) become scarce, the “market” solution is for
prices to rise – but this will simply ration those resources in favour of the rich and
deprive the poor of even their basic needs. Recent events in many countries show that
deprivation leads to violence
We can enhance poverty eradication and protect nature by complementing the MDGs with Millennium Consumption Goals that will
help make the rich consume more sustainably
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SocialCapital
Economic Goal (Growth of Material
Output and Consumption by the Rich)
Environmental Goal (Protect
Nature)
Social Goal(Protect the Poor
and Weakest)
Source: Munasinghe (1992), Rio Earth Summit
Economic Goal in the SD Triangle is Crowding Out Social and Environmental Goals – Unsustainable!
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Key MCGs
Address under-consumption of the poor: - Ensure basic human needs (food, water, energy, health, etc)
Address unsustainable consumption of the rich: - GHG emissions - Energy use - Water use - Land use and Biodiversity - Pollution & Waste (air, water, solid and toxic waste)
Other MCGsFood, diet and health, lifestyles, livelihoods and work,
financial system, military spending
Millennium Consumption Goals – Basic Concepts
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Millennium Consumption Goals (MCG): Advantages of New Pathway to Sustainability
1. Targeted: 20% of richest percentile (1.4 billion people) account for >80% of consumption. Small changes towards sustainable consumption can reduce burden on environment
2. Complements MDGs: Builds MCG-MDG links & protects consumption of poor3. Soft Multilevel Strategy – Bottom Up & Top Down: Seeks to influence
voluntary behaviour of many people at individual, community, city, enterprise, regional, and country levels. Complements top-down policy, global targets (UN, govt.)
4. Complements MDG: Frees resources to build consumption safety net for poor 5. Fractal and Subsidiary: Basic concept unchanged (like snowflake) and effective
implementation possible at finer levels of detail.6. Faster Response: Provides quicker results compared to top down government
policies and long term industrial investments. Momentum build up over time.7. Transnational: Cuts across national boundaries and avoids self-interest based
approach of governments and interest groups8. Motivation: Rich are key stakeholders acting with enlightened self-interest,
better education, more influence and resources9. Integrates Sustainable Consumption and Production: Links with producers and
global supply/value chains
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MCG
Sust. Cons. & Prod.
Green Econ.
Sust. Dev.
Agreed & Voluntary MCG
Building Blocks
Rooms Castle
MCG Path to SCP and SD
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The Millennium Consumption Goals Initiative (MCGI) was launched to move this idea forward. It is being pursued by a broad coalition of stakeholders - the MCG Network (MCGN). It is action-oriented, multi-level, pluralistic and transnational. The MCGI seeks to be as inclusive as possible, and follows aflexible, multi-track approach. It is moving forward in the UN. Meanwhile, action is being taken NOW by individuals, families, communities, enterprises, cities, regions and countries. These pioneers are already developing their own specific versions of MCG, implementing them, and monitoring and reporting progress - there is no need to wait for broad multilateral agreements at the UN-global level!Thus, MCG is being pursued by the willing, at whatever level they choose, and focusing on the goals they prefer — carbon emissions is the favourite, but energy and water are also attractive. A broader enabling framework of goals and policies will emerge gradually from discussions at UN/govt. level. Support MCGI, Set Voluntary MCG !
Millennium Consumption Goals Initiative (MCGI) & Network (MCGN)
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Pioneering Voluntary MCGCities and Communities Climate Alliance (~2000 european cities) – endorse MCGsCity of Munich, Germany 1. By 2030, to halve per capita CO2 emissions in relation to 1990. 2. By 2025, to meet all Munich’s electricity demand from renewable energy.Naestved Community, Denmark By 2030, reduce carbon emissions by 50%.
Business Novozymes, Denmark By 2015, reduce CO2 emissions by 75 million tonnes through customers’ application of Novozymes’ products relating to bioenergy, agriculture, household care and industrial processes
Academic and Research
Munasinghe Institute for Development, Sri Lanka From 2011 onwards, became 100% carbon neutral
Civil Society A number of individuals have declared their personal MCG targets.
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Sustainable Consumption empowers householdsInfluence people’s behaviour to promote sustainable change
• Empower and motivate – using prices, labels information, psychology and advertising.
• Change values, habits and socio-cultural contexts to shift to low-carbon products and behaviour. Eg., public attitude to smoking
• Adapt material and physical elements of production - goods and infrastructures are inter-connectedSocial capital embedded within individuals and communities, can
be better mobilized, organized, and empowered to work synergistically with business and influence government, to make development more sustainable (MDMS)!
Individual
Community
Producer
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“Take charge of your life! You must define your
meaningful consumption! Do not let meaningless
consumption define you!“
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EXAMPLE: Food Spoilage is a Major Cause of World Hunger
3.9 billion tons (approx.) of food is currently produced annually for human consumption
1.3 billion tons of food spoiled annually
1/3 rd of world food production is lost or wasted(in homes: USA-50% & Europe-30%)The poor waste very little food, but the growing numbers of affluent people in developing countries are imitating the wasteful behaviour of the industrialised countries
FAO ,2011
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% of Population Undernourished
About 1 billion hungry: 1 in every 7 persons, mainly in Africa and Asia!
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Changing Consumer Behaviour: Example - Basic Principles of Sustainable Energy Pricing
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Sustainable Energy Pricing: to incorporate Economic, Environmental and Social Goals
1. Economic efficiency: prices based on long-run marginal cost to reflect scarcitye.g., rising oil prices
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Sustainable Energy Pricing: to incorporate Economic, Environmental and Social Goals
1. Economic efficiency: prices based on long-run marginal cost to reflect scarcitye.g., rising oil prices
2. Environmental protection: prices incorporate (internalise) externalitiese.g., add air pollution taxes, carbon taxes, etc.
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Sustainable Energy Pricing: to incorporate Economic, Environmental and Social Goals
1. Economic efficiency: prices based on long-run marginal cost to reflect scarcitye.g., rising oil prices
2. Environmental protection: prices incorporate (internalise) externalitiese.g., add air pollution taxes, carbon taxes, etc.
3. Social equity: subsidised prices to meet basic energy needs of the poore.g., targeted low prices for minimum use by poor
High energy prices meets economic & environmental goals. The social equity goal offsets high prices that favour the rich & deprive the poor of basic energy needs. Integration across energy sub-sectors to avoid cross-pricing conflicts.
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Sustainable Pricing of Energy Summary• Eliminate Economic subsidies (marginal cost pricing
for economic efficiency)
• Internalise Environmental externalities
• Satisfy Social concerns (affordable basic energy needs)
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Launched at Rio+20SustainoMusica is an international consortium of musicians and music lovers who believe that music and song constitute an universal language that can be used effectively to communicate the message of sustainability to everyone on the planet. We are confident that our new music of sustainability will appeal to the heart, especially to empower and motivate young people. We feel that this complementary approach will have greater appeal than the messages of science and policy, which are aimed mainly at the mind. Music and song will help to make sustainability a practical and living reality, by harmonising people and planet, to achieve prosperity, peace and happiness - that is what our logo shows.
Changing Values by Appealing to the Heart – Focusing on Young People
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Sustainable Production: Insights from Workshops & Seminars on Business & Sustainability for Senior Managers of Leading Multinationals
Recent Examples:• BASF, Germany (Chemicals)• TESCO, UK (Supermarkets)• Unilever, Coca Cola, Reckit-Benkeiser, Johnson SC,
Danone, Nestle (Retail)• Petrobras, Brazil (Energy, Oil and Gas)• OPEC (energy, oil and gas)• Sime Darby, Malaysia (Plantations Conglomerate)• Novozymes, Denmark (Biotechnology)• Vale, Brazil (Mining)• Siemens, Shanghai Electric Group (Heavy Industry)
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Global resource use versus income (175 countries in the year 2000)
Less SustainableSome countries have high resource use per unit of GDP
More SustainableOther countries have low resource use per unit of GDP
Res. Use per capita
GDP per capita
Source: UNEP,Res. Eff. For Dev. (2011)
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Global resource use versus income (175 countries in the year 2000)
Less SustainableSome countries have high resource use per unit of GDP
More SustainableOther countries have low resource use per unit of GDP
Res. Use per capita
GDP per capita
Source: UNEP,Res. Eff. For Dev. (2011)
Future growth trajectory is key to sustainability
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Business Community - Evolution of Attitudes “Few trends could so thoroughly undermine the very foundations of our free society than the acceptance by corporate officials of a social responsibility other
than to make as much money as possible for stockholders.”
Milton Friedman (1962), Econ. Nobel Prize, Capitalism & History
”The crisis has led many in the UK, France and the USA to demand the right of inventory. Should the only questions that Managers be asking be: how to maximize shareholder’s value? Or, what is the importance of values?
What are our values?Stephen Green (2009), CEO of HSBC, "Good Value: Reflections on Money, Morality and an Uncertain World”
“Over the past decade, sustainability has moved from the fringes of the business world to the top of the shareholders' agenda….” PriceWaterHouseCooper (2009)
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Suggestions for Enterprises1. Sustainability reporting: declaring bold sustainability
goals and reporting on performance, transparently.2. Sustainability accounting: identifying economic,
environmental and social indicators (both internal and external), and using them to evaluate performance.
3. Undertaking research and studies to improve performance and implementing the results.
4. Training management and staff on sustainability and bringing about value change.
5. Disseminating relevant information on sustainable development to the community, country and world.
6. Working with govt. and civil society to make development more sustainable.
M I N DSource: Adapted from Munasinghe et al. (2009)
Raw material production
Manufacture & processing
Logistics distribution transport
Retail Consumer use
Recycling &
disposal
Light bulb (UK 11W)
2% 1% 1% 95% 1%
Sustainable Production - life cycle analysis of CO2 emission hot spots along the supply/value chain: 1
M I N DSource: Adapted from Munasinghe et al. (2009)
Raw material production
Manufacture & processing
Logistics distribution transport
Retail Consumer use
Recycling &
disposal
Light bulb (UK 11W)
2% 1% 1% 95% 1%
Orange Juice (Brazil freshly squeezed 1L)
28% 19% 47% 5% 1% 0%
Sustainable Production - life cycle analysis of CO2 emission hot spots along the supply/value chain: 2
M I N DSource: Adapted from Munasinghe et al. (2009)
Raw material production
Manufacture & processing
Logistics distribution transport
Retail Consumer use
Recycling &
disposal
Light bulb (UK 11W)
2% 1% 1% 95% 1%
Orange Juice (Brazil freshly squeezed 1L)
28% 19% 47% 5% 1% 0%
Milk (UK, National Tesco)
76% 5% 4% 10% 3% 1%
Sustainable Production - life cycle analysis of CO2 emission hot spots along the supply/value chain: 3
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Sustainable Consumers
Sustainable Producers
Civil Society
Busi-ness
Bringing Sustainable Consumers & Producers Together: 1 Sustainability Culture - Making Development More Sustainable (MDMS)Sustainability leadership by a few consumers and producers
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Other Sustainable Consumers
Sustainable Consumers
Sustainable Producers
Other Sustainable ProducersMCG
Govt.
Civil Society
Busi-ness
Bringing Sustainable Consumers & Producers Together: 2 Sustainability Culture - Making Development More Sustainable (MDMS)
Sustainable behaviour spreads throughout the country
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Building assets for SD
SocialCapital
EconomicCapital
Natural Capital
Social Capital• Human• Cultural
Source: Munasinghe (1992), Rio Earth Summit
Universities
Social capital is as important as other types
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Working with Responsible Media in Making Development More Sustainable
SocialCapital
Business
Govern-ment
CivilSociety
Ethical Media help build
coalition for SD
Media must play greater role in disseminating correct information to strengthen civil society and business in supporting and influencing
government to move towards a more sustainable development path.
Source: Munasinghe (1992), Rio Earth Summit
M I N D Munasinghe Institute for Development
WHAT ?
WHICH?
HOW ?
practical analytical tools and policies are availableMany best practice examples and case studies of integrated solutions exist, worldwide.
are the challenges Multiple global threats undermine sustainable development efforts & need integrated solutions
can we move forward to transform risky current trends into a safer and better futureApply the SUSTAINOMICS framework to start making development more sustainable (MDMS)
WHO ? must act now and how Sustainable consumers and producers can play a key role in the UK & globally.
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Hopeful final message for the World• Multiple global problems pose a serious challenge to us all –
poverty, energy, water, hunger, climate change, economic crises, resource scarcities, ecosystem harm, etc. are interlinked.
• There is hope that there are integrated, holistic solutions to these problems, provided we begin now - we should not despair although the issues are complex and serious.
• Using the Sustainomics framework, we know enough already to take the first steps towards making development more sustainable (MDMS), that will transform our risky “business-as-usual” scenario into a safer & better future.
• Governance systems (at all levels) must be transformed to deal comprehensively with multiple crises.
• Business and civil society can help government in identifying issues, changing values and implementing solutions.
• Working together, we can build the new sustainable development models for a 21st century Global Eco-Civilization.
M I N D Munasinghe Institute for Development
“DEVO VASSATU KALENA SASSA SAMPATTI HETU CA PHITO BHAVATU LOKO CA RAJA BHAVATU DHAMMIKO”
“May the rains come in time, May the harvests be bountiful May the people be happy & contended May the king be righteous”
Even in ancient times, a favourable environment, economic prosperity, social stability (and good governance), were clearly identified as key pre-requisites for making development more sustainable.
Environmental:Economic:
Social:
Ancient Pali Blessing (Sri Lanka)
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M I N D
Environment
Society Economy
Munasinghe Institute for Development "making development more sustainable - MDMS“
10/1 De Fonseka Place, Colombo 5, Sri LankaPhone: +9411-255-1208; Fax: +9411-255-1608
E-mail: <[email protected]> ; Web: <www.mindlanka.org>
M I N D Munasinghe Institute for Development
MIND PROGRAMMES • Awards
Research fellowships, Scholarships, MIND Sustainable Support Service (MS3), Book donations
• Dissemination & ResearchDissemination & Training workshopsExpert meetings & conferencesApplied research studies and evaluationsUN “Centre of Excellence” for Asia in the Climate Change Capacity Development (C3D) network of the United Nations Institute for Training and Research (UNITAR).
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Graduate level courses on Sustainomics have been given at leading universities worlwide, including:
Brazil - Federal Univ. of Para China - Peking Univ. Denmark - Copenhagen Univ.Germany – Darmstadt Univ.India - TERI Univ. Sri Lanka - Colombo Univ. UK - Manchester Univ. USA - Yale Univ.
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MIND CC-SD Training Course, CMA, Beijing, July-Aug, 2006 270 Senior Chinese Officials
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MIND SD Course, Delhi, Feb. 200725 Senior Indian Civil Service Officers
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MIND-ERC CC-SD Training Course, University of Cape Town, October 2007, for 30 Senior Decision Makers from Government, Business and Civil Society
M I N D Munasinghe Institute for Development
Suggestions for Further Information
1. Munasinghe, M. (2010) Making Development More Sustainable Development, Second Edition, MIND Press, Sri Lanka – Translated into Chinese and Portuguese.
2. Munasinghe, M. (2009) Sustainable Development in Practice – Sustainomics Methodology and Applications, Cambridge University Press, UK.
3. Munasinghe, M., and Swart, R. (2005) Primer on Climate Change and Sustainable Development, Cambridge University Press, UK – Translated into Chinese.
4. Website URL: <www.mindlanka.org>
M I N D Munasinghe Institute for Development
MIND Press Book: 650 pages
Second Edition Published in April 2010
M I N D Munasinghe Institute for Development
Cambridge University Press Book: 650 pages
Published in May 2009
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