UNITED NATIONS ECONOMIC COMMISSION FOR EUROPE

Integrating the Three Pillars of Sustainable Development: Challenges and Opportunities in the ECE Region

Ján KubišUnder Secretary-General and Executive Secretary of the UNECE

New York4 October 2011

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Structure of presentation

• Introduction

• Sustainability in the ECE region

• The underlying factors

• Examples of good practice

• The role of the ECE in promoting sustainable development

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Introduction

• The Great Recession hit the ECE harder than any other region of the world

• Employment remains below and poverty above pre-crisis levels in most ECE countries

• Transition to an inclusive and sustainable society will have to be achieved under difficult conditions

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Trends in Inequality

• Over the last two decades inequality has been increasing throughout the ECE region

• Underlying factors: changes in technology, globalization and government policy

• Although inequality has increased, in most ECE countries the poorest have been protected

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• Intergenerational issues are of major importance for sustainable development

• Most ECE economies face a demographic ageing problem

• Provision of pensions is well developed but their financing has not been adequately addressed

• Climate change may result from an excessive discounting of the interests of future generations

Intergenerational Equity

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Social sustainability in the ECE Region

• The ECE remains less unequal than other regions

• Only the Nordic economies have been very successful in achieving equity with growth

• Inequality in the European emerging economies varies considerably

• Social transfers reduce poverty but their sustainability is threatened by adverse demographic and economic trends

Markets are not enough

Social transfers and poverty, 2007

5.0

7.0

9.0

11.0

13.0

15.0

17.0

19.0

21.0

10.0 12.0 14.0 16.0 18.0 20.0 22.0 24.0 26.0 28.0

Social transfers (% of GDP)

Sh

are

of

po

pu

lati

on

wit

h l

es

s t

ha

n 5

0%

of

me

dia

n i

nc

om

e

FINLAND

F

GERMANY POLAND

IUNITED STATES

DENMARK

TURKEY

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Trends in Environmental Sustainability

• Over the last two decades CO2 emissions have increased in ECE advanced industrial economies

• CO2 emissions decreased in Emerging Europe and Central Asia – industrial restructuring and improving energy efficiency in transition economies

• The high social cost of this type of carbon-saving transition makes it unsustainable

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Annual average growth of CO2 emissions, %

-2

-1

0

1

2

3

4

5

6

7

World US China EU-15 Emerging Europe andCentral Asia

1971-1990 1990-2008

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Environmental Sustainability in the ECE

• High-income countries– high level of human development & heavy ecological

footprint

• Low and lower middle-income economies– lower level of HD & light footprint

• Upper middle-income economies– intermediate level of HD & heavy footprint

• High human development & light ecological footprint – a new growth model needed

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Towards Inclusive Green Growth in the ECE

0

2

4

6

8

10

12

14

0.6 0.7 0.8 0.9 1

Human Development Index (value)

Ecol

ogic

al fo

otpr

int (

Glo

bal H

ecta

res

per c

apit

a)

USA

DNK

MDA

AZE

SVK

TUR

NORRUS BLR

FRA

ALB

ARM

MKD

SWE

KGZ

UZB

BIH

UKR KAZ

TJK

CAN

DEU

SVN

HRV

CZE

HUN

FIN

LTU

EST

NLD

IRL

BGR

ISR

PRT

ISLBEL

ESP

CHE

GRC

LVA

POL

ITA

ROU

AUT

GBR

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Market Failures

• The unsustainable development trends due to market failures and policy failures

• Markets likely to deliver good results, if – there is competition – all relevant costs are internalized in prices– property rights are clearly defined and well

enforced

• ECE emerging economies – significant progress in the development of effective markets and legal institutions

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Policy Failures

• Policy failures have contributed to unsustainable trends in the ECE region

• Subsidies for environmentally harmful and socially unsustainable activities continue in most countries

• Some policy failures reflect strong political constraints

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Examples of Good Practice

• ECE countries provide a number of interesting examples of good practice

• They show that evidence-based policies can improve

– environmental sustainability

– economic performance

– sustainability of social security systems

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The EU 2020 Strategy

• The EU 2020 Strategy – most ambitious policy initiative for sustainable development

• Three interactive priorities– smart growth – sustainable growth– inclusive growth

• Employment, innovation, education, social inclusion and climate/energy goals for 2020

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The Role of ECE

• ECE projects and international legal instruments contribute to the emerging global, regional and national governance for sustainable development

• The 7th Ministerial Conference “Environment for Europe” in Astana – no one-size-fits-all approach for the transition to a green and inclusive economy

• ECE member States supported the development of an internationally agreed roadmap and a toolbox with concrete instruments and measures for the green economy as a potential outcome of Rio+20

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Copy of this presentation is available at:

www.un.org/regionalcommissions

THANK YOU