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Sustainable development reflexive inputs to world organisation

Final Report Summary - SUSTAINABLERIO (Sustainable development reflexive inputs to world organisation)

Answers to the question 'Why did the Rio Earth Summit (1992) not fully deliver?' abound. The most widespread is the definition of sustainable development itself, successively vague, malleable, contradictory and inapplicable. Our starting point is that whatever the flaws built up in the concept of sustainable development, these may not suffice to explain societies' inertia and delay in shifting their current development paths toward sustainability which is the core issue our project aims to address.

Our research suggests that a serious reason why sustainable development did not deliver lies in its doctrinal anchoring to globalisation. The sustainable development - globalisation mutual supportiveness assumption did frame the Rio (1992) project and conditioned the latter success to globalisation progress. This assumption eventually wrecked under the test case of globalisation effects. What is left is a decisive - and so far strategically masked - component of sustainability, which is conflict. Conflict across pillars within one country. Conflict in how globalisation fits in every country preferences and choices over sustainability amongst countries. These two sets of conflicts have been magnified by globalisation. Against this background, our key findings and recommendations are as follows.

(1) Without conflict elicitation and management mechanisms integrated into the current web of sustainable development governance, sustainable development conflicts will be transferred to the World Trade Organisation (WTO) - either into the negotiation process which hence will be blocked, or into the dispute settlement body (DSB) which hence faces the risk of congestion and inefficiency.

(2) A renewed sustainable development governance should provide policy space and coordination mechanisms for countries to experiment policies and arrangements in a bottom up approach, then learn from other countries and actors before scaling up so as to reach and possibly revise the global objective according to a shared long-term vision, which is a prerequisite. Globalisation of experiments and successes in sustainable development is now the priority, ahead of globalisation itself.

(3) At European Union (EU) level, we have identified a set of criteria for genuine climate policy integration (CPI) or 'mainstreaming' into other policy areas such as agriculture, transport and economic development with financial instruments. This set of criteria is based on the EU sustainable development strategy and provide a benchmark for the political discussion and for guiding learning / adjustable policy action.

4. A second policy area explored by the consortium on climate change issue is orchestration - i.e. the facilitation and endorsement of private regulation through states and intergovernmental organisations (IGOs). We recommend to establish a level playing field among private sustainability schemes. Assessment protocols should be amended to include criteria about stakeholder engagement and verification procedures. Furthermore, firms should be incentivised to become certified by a scheme not only covering basic environmental but also covering social criteria.

5. The third policy area deals with the bottom billion and millennium development goals (MDGs) and their possible integration into sustainable development goals (SDGs) in the post-2015 development agenda. We emphasise that most of the MDGs relate to the well-being of people: they are centred on individuals. On the other way round, many sustainable development problems like biodiversity protection, energy efficiency, waste management, can hardly be proxied by individual-based indicators. The same happens for the economic pillar of sustainable development: macro sustainability and sustained green growth cannot be reduced to individual indicators or 'targets'. The contribution of impact assessment to the definition and implementation of SDGs seems hence very likely to be marginal, contrary to what happened with the MDGs. Sustainable development inherently remains a political and contentious concept.

Project context and objectives:

The governance of sustainable development, institutionalised by the Rio Earth Summit in 1992 and its three conventions, has experienced tremendous changes over the last decade, with both diffusion of the idea of 'sustainability' in discourses, and unsatisfactory not to say disappointing results on sustainability itself. After Rio, the importation of sustainable development by globalis ation institutions and firms indeed flourished, creating a complex governance web, whereas the pattern and principles of accumulation and trade did not experience a clear shift toward more sustainability. Understanding the partial failure of Rio (1992) to better overcome it is the overarching objective of this project.

More specifically, we intend to answer two questions, pointing each to specific objectives:

- Firstly, what are the conceptual challenges raised by sustainable development, which makes it so difficult to translate into sound and effective policies in the globalisation context?
- Second, what are the empirical reasons why decision makers do not manage to create an appropriate structure of rules, policy and measures to make national economies switch toward a genuine sustainable growth path?

Confronting the conceptual and empirical underpinnings of inertia, we derive policy implications for the EU by using two sustainable development issues as case studies - namely climate change and the bottom billion - as a third objective.
Rethinking the institutional link between globalis ation and sustainable development in the post 2015 development agenda concludes the project - implications for the definition of SDGs being the fourth specific objective.

Project results:

The first set of science and technology (S&T) results provides explanations to the inertia and deadlock in sustainable development-related negotiations, be they global or national. Departing from the conventional criticism of sustainable development according to which the concept is flawed, we have shown that sustainable development can be an operational concept provided that stakeholders / countries assume that they do not share the same vision and constraints for its implementation. Sustainable development reflects social choices or 'preferences' which depend on national contexts and histories, on idiosyncratic preferences for justice, social contract negotiation modalities, risk and uncertainty and relations between sciences and politics to craft policies.

Against the naïve or 'weak' approach of sustainability, we have shown that sustainable development / sustainability is conflict. Conflict across pillars - no theory nor empirical findings supports the idea of win-win-win solutions to any problems in any countries. Conflicts among countries whose preferences for the present / the future, the environment, development and growth actually differ. We have also shown that globalisation magnifies these conflicts, by exacerbating the trade-offs across pillars within countries, and the mismatch between the shift in power relations created by globalisation over the last two decades towards emerging countries and the inertia of their preferences. Countries' power changes over time thanks to - or because of - globalisation, while preferences (at least officially) remain stable and hence more and more contentious.

What follows from this new vision of 'sustainable development as conflict' is the likely rise of conflicts - we call them 'disputes' - at the core institutions of globalisation, namely the WTO. Without addressing conflicts within sustainable development institutions, these will be transferred indeed to globalisation institutions. This is actually what is occurring. Trade disputes are rising on sustainable development issues (Solar panel, feed-in-tariffs, green subsidies) with a risk of congestion and distrust in the world trading system (WTS) governance. Strikingly enough, sustainable energy policies for instance encompass supply and demand-oriented measures which, for most of them, have trade effects likely to be disputed for their impairing or nullifying other country's expected gains from trade agreements. The flow of sustainable energy goods and services (SEGS) is often constrained by a multitude of border and 'behind the border' policies and measures. Some of these measures may have legitimate objectives but the way in which they are designed or applied could hamper freer and fairer trade in SEGS. Such policies further point to possible loopholes in the 65-year-old WTS, making the trade dispute resolution process potentially awkward and long-lasting, and impairing the WTS efficiency. At stake in sustainable energy trade is for countries to agree on the appropriate balance of rights and obligations, allowing them to secure their policy space for sustainable energy investment and production, and actually any kind of experimentation like to make sustainability work, while avoiding trade distortions. Ending a WTS reform, what follows next are suggestions to make sustainability work within the existing policy spaces - at national, EU and global levels.

At national level

We have explored the implementation conditions for carbon taxation, which was chosen as a flagship measure for climate change mitigation policies. We have drawn on French and Sweden cases, respectively, a failure and a success. In the case of French failure in implementing a carbon tax, we have assumed that such failure highlighted the presence of barriers hindering decision makers' political action. Indeed, while most opinion polls on sustainable development issues such as climate change show that citizens are very much concerned and policy-demanding, decision makers seem to delay concrete action: it turns out that designing well-balanced sustainable development policies is highly conflicting. To address the gap between perceptions from citizens and the supply of policy, we have dedicated the empirical work to policy-makers' attitudes towards the concept of sustainable development and to policy-makers' judgement on the conditions of its transposition into concrete public policies.

Thanks to first-hand interviews of 60 policy makers in France, we have explored the issue of social and political acceptability of carbon-energy taxation. Despite the existing theoretical consensus on the economic and environmental rationales of carbon-energy taxation, its implementation and / or outcomes are still limited by problems of political and social acceptability. Many failed carbon-energy taxes initiatives, among which France's climate-energy contribution, stem from the lack of support of the public and politicians alike: while the former oppose increased taxation as a means to implement climate policy, the latter doubt the effectiveness of the fiscal instrument. The constraints to the effective implementation of carbon-energy taxation are primarily cognitive, as linked to how policy-makers traditionally conceive taxation (budgetary vs. incentive). The low acceptance of carbon-energy taxation is also due to political decisions on the technical design of the instrument: in the case of France, the modalities concerning the tax base and the recycling mechanism agreed on by the government, while aiming at improving its political feasibility, paved the way for never-ending debates on equity and fairness and eventually worsened the tax's social acceptability. Finally, political factors such as administrative conflicts and a poor political marketing played a substantial role in the French project's low acceptance and final policy failure.

The Sweden case proves on the other way round that bipartisan politics could be made on carbon taxation provided that such policy is not set in isolation from a comprehensive fiscal reform package - what happened in Sweden in the early 1990s when the carbon tax was designed. For its social implications, a carbon tax is more than an environmental policy instrument and should be part of a fiscal package, broad enough to gain support from the society.

At EU level

At the EU level, we have worked on specific areas of EU policy-making - climate policy and biofuels - which share important, evidence-based findings for mainstreaming sustainability in decision-making. Our findings can be summarised as follows:

(a) including environment / climate policy integration criteria in ex ante impact assessments of policies will enhance sustainability mainstreaming;
(b) voluntary certification schemes addressing sustainability criteria have extended the geographical reach of EU sustainability governance (e.g. EU Renewable Energy Directive);
(c) voluntary certification schemes may have negative poverty reduction impacts by creating barriers to entry for small and medium enterprises in developing countries;
(d) EU promotion of private sustainability schemes as 'good governance' need to ensure that relevant assessment protocols include environmental and social criteria, including clear criteria on stakeholder engagement and verification procedures.

The general policy implication at EU level were summarised in a presentation to the final project conference (Paris, October 2012), featuring high-level officials and policy-makers, academics, and non-governmental organisation (NGO) representatives. It traced the evolution of Europe's strategy from creating a general normative commitment to sustainability to setting more specific targets and commitments in specific policy areas. European experience in moving towards greater policy specificity mirrors international developments, in that both serve the purpose of stimulating national policy developments and integrating national policies into an overall framework. However, the EU's difficulties in setting targets for biofuels policy that were later found to clash with competing objectives of its sustainable development strategy highlights the risks involved in setting specific but insufficiently coordinated sustainability policy targets.

An issue cutting across the crafting of national and EU sustainable policies as discussed above deals with the role of uncertainty and cost benefit analysis in the preparation / negotiation of sustainable development policies.

We have showed how scientific controversies entered the problem of global environmental governance via the problem of coordination and institutional organisation. Indeed, in the most shared view that issues of global environmental governance such as climate change or biodiversity preservation are problems of conflict resolution, the question was to understand to which extent scientific knowledge, along with different degrees of certainty and robustness, improved conflict resolution; hence functioned as element of coordination. However the main conclusion was that, when it comes to uncertain science, we do not know how to use it for the purpose of coordination and conflict resolution. Indeed scientific uncertainty or 'insufficient scientific evidence' is seen as a major evil of international coordination. This is due to the inability to provide legal certainty to scientific uncertainty, which appears both the domestic (EU) and the international level (WTO). On the converse, the culture of evidence-based policymaking seems dominant for enabling coordination and resolving conflicts. From market-based mechanisms adjusting incentives to act to ethical concerns advocating duties to act, the demand for ever more sophisticated information was meant to trigger change of direction in our ways of living in the name of self-evident necessity. After all, production of evidence serves many purposes: it bolsters policy legitimacy, provides elements that help coordinate different actors, offers grounds for justification in case of litigation and guarantees multiple accountability.

The normative use of scientific uncertainty was explored in the case of international arbitration at the WTO, in the case of multilevel governance in the EU, and in the case of check-and-balances in the United States (US). Using the precautionary principle to delineate the analytical framework, it clearly appeared the incapacity to use science in its non-conclusive form, that is, when a consensus had not yet emerged on the causality between two events. Not only non-conclusive science did not serve the purpose of conflict resolution: in the case of the EC-Biotech dispute, only conclusive science based on risk assessment was apprehended to the purpose of providing a legal case; but also it did not promote coordination between the parties at dispute and contributed reiterating policy inertia: despite the final decision of the dispute faulted the EU, the latter failed to take it into account and align the approval of genetically modified products on WTO rules. In the same spirit, it emerged that the kind of use made of science by the American system of regulation - whatever the degree of contestation, science is named as such only when it provides clear and supposedly undisputable results - is superior in terms of exportable mode of governance at the international level. The reason, as it can be easily anticipated, is that that is the only kind of science which the international system is able to apprehend as useful, hence, as element of coordination.

In a related part of our work, the same incapacity to use science beyond its capacity to provide facts and evidentiary elements of coordination was showed in the policy use of integrated assessment modelling for climate-economic scenarios. Similar conclusions have indeed followed on the incapacity to make non-conclusive scientific evidence relevant for policy action, but this time the underlying reasons have been detailed through the explanation of how science and economics combine into the process of knowledge production for policymaking. The role of science as element of reference re-emerged: as much as it served coordination in the first part of WP4, in the second it proved to be creative of a comfortable symmetry between the past and the future and, similarly, of a justificatory ethics. This aspect marked the passage from the expected coordination-improvement role of science to its cooperation-improvement role. However, again, if scientific knowledge is apprehended also in its uncertain and non-conclusive form, then this last role is hardly performed.

Hence the question: is there any possibility to promote coordination and cooperation for decision-making beyond the production of evidentiary elements, notably expected from science? And if so, how to make policy use of scientific uncertainty? The key to the solution is in the re-appropriation of the concept of public responsibility for the determination of legitimacy and authority of institutional arrangements. The notion of legitimacy is as crucial as contested in global governance and the normative void that this situation creates is at origin of the trade-off between national sovereignty and international cooperation is felt. As for any void, the objective is to fill it, and science has precisely entered this exercise. Indeed science - also in the form of technical expertise - seems showing a superior organising capacity than other normative principles and, as well described by John Meyer, its paradigmatic diffusion ensues precisely from this superiority.

However, two problems emerge which are strictly connected: on the one hand, in case of global and long-term risks the organising properties of science through the normative quest for 'evidence' are not adapted to apprehend fundamental uncertainty; on the other hand, the superiority of the organising principles of science are the source of a sort of international authority which has not yet found legitimacy.

The disconnection between perceived authority and unaccomplished legitimacy of science is the source of the seeming trade-off between competence (i.e. through scientific and technical knowledge) and democracy (i.e. through the principle of national sovereignty). Indeed, even though the notion of legitimacy is historically attached to the notion of democracy, global environmental governance has particularly put forward the problem of the efficacy of democratic principles for undertaking choices over the exploitation of natural resources that be both efficient and fair from a distributional point of view. The inherent imperfections of democratic regimes could prove to be actually vital for sustainable development and scientific and technical participation for better decision-making could offer a precious advantage in terms of finding the correct, rational, hopefully self-evident and self-imposing action. However, as both the WTO dispute between the US and EU and the properties of integrated assessment modelling have demonstrated, this normative vision of science pertains to an illusion.

The illusion is specifically nurtured by a distort vision of science as certainty provider, to which we have has tried to provide a different view - science as also uncertainty - and, by consequence, a different use - uncertainty as a matter of choice, hence an issue of democracy. The details of this new use of science are included in the reverse engineering methodology put forward in the project, in which scenario building enables the connection between the legitimacy of global action and the public responsibility toward the future. Science enters policymaking not by superposing its own legitimacy to that of public policy or, worst, by substituting to it, but by providing the elements for organising public accountability and keeping track of policy responsibility. This solution proves on the one hand that coordination can be achieved even in the absence of stable evidence, and on the other it can be achieved on the reflexive justification of legitimacy.

At global level

At global level, we have focused on the policy space existing at the WTO for sustainable energy production and trade, and on the one opened by Rio+20 with the ongoing negotiation of SDGs in a globalis ation context. Two side events were organised at the Rio+20 conference on the need (or not) to reform the WTO for the green economy and sustainable energy. While acknowledging that the WTO could be overburdened by sustainable development-related trade disputes (on renewable energies in particular), the necessity and possibility to reform the WTO for propelling the 'green economy' and / or 'sustainable energy' set off lively debates among participants, with no clear conclusion on the full compatibility - or not - of the WTO set of rules with the requirement of the green economy.

What is the policy space opened by the SDGs (SDGs) and how can Europe use it to promote its vision of sustainability were the two 'global' questions we have intended to address, as set out in paragraph 247 of summit's declaration, The Future we want, 'action-oriented, concise and easy to communicate, limited in number, aspirational, global in nature and universally applicable to all countries while taking into account different national realities, capacities and levels of development and respecting national policies and priorities'. At the United Nations (UN)' initiative, an intergovernmental working group and an international expert network are being set up to work on defining the SDGs.

IDDRI and Ferdi organised the conclusive conference of Sustainable RIO within the framework of the Initiative for Development and Global Governance (IDGM), in partnership with the FGEF, the French Ministry of Foreign and European Affairs, the EC's Directorate-General (DG) for Research (our project). The conference was also backed by the Investing for the future programme. The conference brought together the technical expertise of French and international researchers, the policy approaches of French, European and international public authorities and the views of leading development experts. What emerged from the discussions was the need to develop a 'post-2015' vision of development able to engage the international community for the next twenty years. Yet, some critical questions are still outstanding. For a start, the need to coordinate the working groups and the expert network. Also unresolved are the potential divergences between a post-2015 development agenda that some wish to see materialise as a 'post-MDG' agenda and a more overarching sustainable development agenda inclusive of the SDGs. Another open question is our joint ability to restore confidence and put together, in less than two years, an operational framework for commitment to sustainable development, only flimsily outlined - and at great pains - at Rio+20, the conference marking the twentieth anniversary of the Rio Earth Summit.

Apart from bringing different viewpoints and communities closer together, the forum undertook a comprehensive review of the current state of play regarding ongoing initiatives to define (sustainable) post-2015 development goals and examined the content of their proposals as well as at the related risks and opportunities. Blocks of goals emerged from the discussions - access to energy, water, sustainable cities - as well as the shared conviction that a declaration of objectives with no framework and clear criteria to delimit them and ensure their political survival would be a purely speculative exercise doomed to failure. Governance by objectives, a pivotal component of the post-2015 sustainable development agenda, is necessarily coupled with key success factors that involve learning, measuring progress, financing and evaluation. Yet, currently, there are no specific mechanisms to deal with each of these aspects. Building them is now urgent and vital to restore confidence in our joint capacity to 'deliver' - i.e. act and produce. The task is not insurmountable and we are not starting from scratch: for twenty years now, public (sustainable) development policies have been part of the learning process; they are measured, financed, evaluated and, though doubtless incomplete and imperfect, they are making good headway. What already exists offers enough ways forward to fire the imagination and ensure that political commitment to the SDGs becomes less of a risk.

A last S&T benefit from the project applies to LSE more specifically as an institution; that is, an enhanced capacity for mainstreaming sustainability within the school. The LSE project investigator has played a central role in sustainability decision-making, both in terms of educational design and environmental management. The LSE employs an environmental management system, which is embeds the School's environmental sustainability policy across the campus and student halls of residence, setting performance targets and monitoring progress to demonstrate continual improvement. In August 2012, LSE was awarded ISO 14001 status, an internationally recognised standard of EMS, by an independent external auditor. The school also received a 'Platinum' award, the highest level of certification under the higher education-specific 'Eco-campus' system. The LSE project investigator has led environmental accreditation activities at a departmental level, taken part in school-wide sustainability policy debates (including hosting public lectures by globally renowned sustainability practitioners, e.g. John Elkington), and serves as an environmental representative for School staff.

Potential impact:

(1) Socio-economic impact and wider societal implications:

(a) better understanding of why sustainable development is so difficult to negotiate and how conflicting preferences can trap negotiations into a deadlock;
(b) identification of conflicts root causes and their relation with globalisation forces;
(c) proposition of a new operational vision of sustainable development, more procedural than substantial, focusing on preferences heterogeneity across countries, experiments, learning and up-scaling processes;
(d) better understanding of the conditions under which carbon taxation is politically viable:

(i) develop an intelligible marketing strategy to address the information asymmetries and lack of understanding among the general public;
(ii) establish a strong and independent communication to overcome lack of public trust in the government and to build public support for a future scheme;
(iii) embed carbon taxation in a wider set of fiscal policies designed to increase the fairness of the fiscal system, with a reform of the income tax system and of environmentally harmful subsidies;
(iv) if outside of a fiscal overhaul, couple the introduction of carbon taxation to the decrease of other fiscal measures weighing both on firms and households (i.e. employee and employer social security contributions, value-added tax, domestic tax on the consumption of energy products, tax on complementary health insurances, etc.);

(e) better understanding of the perception of sustainable development within the political elite:

(i) at the international level, sustainable development is not perceived as a power lever as yet
(ii) sustainable development is still a concept perceived as mainly environmental, lacking rigor and operationality;
(iii) sustainable development does not seem to be a concept that is fully integrated in the cognitive framework of most of the administration and representative institutions as yet;
(iv) in some administrations, sustainable development policies are still perceived as a cost, even if they can provide medium and long-term benefits;
(v) although they might be individually convinced that stringent sustainable development policies are necessary, civil servants from specific ministries will, within their professional environment, strongly fight against the adoption of such policies in order to protect the interests of their administration;
(vi) since the financial crisis and the mere results of United Nations Framework Convention on Climate Change (UNFCCC)'s COP-15 in Copenhagen, sustainable development has not been politically beneficial in the short-term, and has been displaced by more urgent concerns such as the state of the economy, employment, and the purchasing power;
(vii) in order to gain back the support of public opinion and politicians, policy-makers should base sustainable development policies on socio-economic rationales rather than environmental rationales;

(f) knowledge sharing between experts from different communities and policy-makers on specific instruments of sustainable development policies (two conferences and three workshops held on environmental taxation in a globalisation context, two workshops held on reforming the WTO to enhance sustainable development and the green economy).

Potential impacts also include reconsidering negotiating processes at the international level for climate change following the main lessons of the reverse engineering methodology put forward in our project.

Several lessons can be drawn from for improving the transatlantic dialogue on regulatory convergence. For instance, the parsing of the dispute, the revision of the WTO jurisprudence on science-related controversies as well as the comparative analysis of the regulatory frameworks of both sides of the Atlantic have revealed that there exist at least two regulatory cultures competing at the international level in which the quest for evidence, in its scientific and technical form, is linked to specific discourse of legitimacy at both international level (i.e. regarding cooperation and effective governance) and nation states level (i.e. regarding sovereignty and state intervention in favour of protecting public goods). These discourses of legitimacy originate from specific conceptions of democracy connected to the relation between private and public agency. Science enters these discourses of legitimacy in a different way in the US and the EU, which should not be underestimated in terms of the conflicts that explode at the international level when the two regulatory systems are confronted. Indeed, as it emerges from our findings, the notion of legitimacy for global governance is as crucial as contested in global governance and it is precisely in it that the origin of the trade-off between national sovereignty and international cooperation is felt.

In its drafting form, deliverable 12 has provided the fulcrum for a collaboration with Alberto Alemanno (HEC, Paris) to build a European panel on cost-benefit analysis for climate change in occasion of the Washington conference of the Society for Benefit-Cost Analysis. The aim was precisely to reinforce the transatlantic dialogue on the policy use of benefit-cost analysis.

(2) The main dissemination activities related to the project involve:

(a) submission of papers for scientific publication in peer-review journals;
(b) presentation of findings in international conferences;
(c) interviews with media (web and radio) especially around carbon taxation in a globalis ed world and during the Rio+20 summit;
(d) dissemination of specific papers through IDDRI e-network.

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