In the past few months, certain media articles have left me wondering what impact the mixed economic fortunes of various leading nations will have on sustainability leadership emanating from them.
First, the juxtaposition of a Time cover story on April 2 called The Wimpy Recovery with Newsweek’s America is Winning – and Why on May 7 made my head spin momentarily. Is the United States thriving or not?
Then the New York Times posted a story on May 10 called China’s Growth Slows, and Its Political Model Shows Limits. Has the bloom come off the dragon’s rose? Will other emerging economies that appear more vibrant, like Brazil as it gears up for a near unparalleled turn in the global spotlight as host of this year’s Rio+20, the 2014 World Cup and the 2016 Olympics, prove more resilient?
We have also been bombarded by news about a potential economic meltdown in Europe. Will Greek voters elect an anti-austerity government and flee the euro for the drachma, and what will happen if they do? What can we expect on the heels of the largest bank bailout in Spanish history, with more than $20 billion intended to save Bankia? Is the sovereign debt crisis back, or did it never leave?
The effect on sustainability
As executive director of SustainAbility with more than 15 years of experience in the field, I believe sustainable development is bound to take a backseat as these countries try to right themselves financially, especially as the recession drags on. Remember when the Dow crested 14,000 in July 2007? Pundits practically guaranteed eternal prosperity. While we have not reclaimed those heights, the Dow has been up and down over the 13,000-point-barrier a number of times in the last few months. Instead of celebrating, many observervers are worried the bottom could fall out. News last week that Standard & Poor’s Case-Shiller Home Price Index “ended the first quarter of 2012 at new post-crisis lows” will do nothing to allay fears that any U.S. recovery is tenuous, or worse, a mirage.
Here are some predictions as to what the waxing and waning of regional and global economic fortunes might mean for the sustainability agenda.
I recently interviewed an expert at a large environmental nonprofit with headquarters in Washington, D.C., about expectations for Rio+20, who said that the U.S. remains the only country to not only perceive the importance of aligning global and national interest, but also to have the capacity to try to accomplish this. If the U.S. shifts its priorities away from sustainability, then it would leave a leadership void, said my colleague. A bitter election battle looms, and the realization is sinking in nationwide that while U.S. productivity has returned to pre-2008 levels, it has done so with five million less people employed. If most productivity gains continue to come from technology, unemployment will not loosen its grip and the U.S. government will be forced to continue to fight a jobs battle it may not be able to win.
This makes significant American sustainability leadership, especially internationally, highly unlikely. Maybe a green jobs agenda will take effect once the next administration is sworn in? But that too will depend on the new division of power between the executive and legislative branches.
In China, a downturn will strip more resources from regulatory agencies already unable to effectively enforce environmental standards attached to air quality, water or other resources, or to address labor rights issues like those returned to prominence by Apple and Foxconn’s recent travails. The national government, distracted by corruption scandals at the highest levels in the wake of the Bo Xilai ouster in Chongqing (which Washington Post columnist David Ignatius claims is just “the tip of an iceberg of corruption menacing the country”) will pour its efforts into maintaining whatever levels of growth it perceives are required to satisfy a population that has been asked to trade wealth for personal freedoms for decades.
And Europe? Some may delight in Eurozone strife or believe Europe deserved it on the back of a failed Eurozone experiment. But we will lose certain sustainability-related policy innovations (regardless of their success or failure) like the European Union Emission Trading Scheme in years to come, and I expect overall E.U. sustainability ambitions to draw back as the Eurozone focuses on righting itself financially. Unless Europe actually drives recovery through strategic investments in a green economy, proving the two can co-exist.
While we wait to see if Europe finds the capital and the will to invest in a sustainable recovery and continue to watch events unfold in the U.S. and China, where else do we look to for leadership? One place is local and regional government – energized mayors are truly the new black – and related initiatives like the C40 Cities Climate Leadership Group. I am also keeping tabs on big, ecologically rich emerging economies like Brazil and Indonesia. While Brazil sometimes promotes social and economic equity to a point that’s detrimental to environmental progress, it’s progressing on all fronts and likely to announce new initiatives at Rio+20 in a few weeks. Similarly, Indonesia has tremendous leadership potential and is another nation likely to be vocal at the 2012 Earth Summit and beyond.
Finally, business can and must make a difference. Lack of government leadership is no excuse for inaction on sustainable development. Conversely, it demands that business helps fill the leadership vacuum, which includes pushing for better policy. According to recent polling by SustainAbility and GlobeScan, sustainability experts see efforts like Unilever’s Sustainable Living Plan, GE’s ecomagination and Marks & Spencer’s Plan A as most compelling among corporate approaches. And big corporate efforts are unique for global reach – multi-nationals cross borders alongside the borderless systemic challenges endemic to sustainable development more easily than most governments, even when economic times are good. Similar plans from the majority of corporates could lessen the impact of economic turmoil on government sustainability leadership, making it all but invisible. Time to get started?
This article originally appeared as part of SustainAbility’s Changing Tack column on GreenBiz.com.