World Bank on the Road to Johannesburg 2002: Making Sustainable Commitments

Introduction

Mr. Chairman, Distinguished Delegates:

Thank you for the opportunity to bring to the attention of this important gathering the commitment of the World Bank to contribute to the best of our ability to the work of the Commission on Sustainable Development and the whole UN family in preparing for the 2002 World Summit on Sustainable Development. As we look back to Rio and ahead to Johannesburg, there are reasons for both hope and distress. The goal of sustainable development has inspired governments, the private sector and civil society toward a more comprehensive, integrated, systemic approach. That approach takes a long-term view of development and balances its different dimensions--economic growth, social equity, and environmental sustainability. The good news is that the general public increasingly supports strengthened environmental management. Sample surveys around the world, in developed and developing countries alike, show that there is clear public consensus for stricter environmental laws and regulations--which provides hope that stronger political leadership on environment will emerge.

A the same time, we have all learned that accepting the principles of sustainable development is much easier than putting them into practice. In the last decade unprecedented advances in technology and communications have fueled growth and prosperity. But despite the advances, we have fallen short on delivering a more equitable and sustainable world. I'm sure you know the statistics. Today, less than a quarter of our planet's population consumes three-quarter of its raw material, while 2.8 billion people still live on less than $2 a day. Across the developing world, environmental problems are imposing severe human, economic and social costs and threatening the foundation on which growth and, ultimately, survival depend. Environmental degradation alone costs 4 to 8 percent of GDP annually in many developing countries.

Environmental problems undermine the quality of life of the millions of people who depend directly on environmental and natural resources for their livelihoods-farmers who face depleted soils and insufficient water for irrigation, fishers who confront collapsing fisheries, women who walk for hours to collect fuel wood. Environmental problems also threaten the health of millions. Every year in developing countries, an estimated 3 million people die prematurely from water-related diseases, nearly 2 million women and children die from exposure to indoor air pollution, and another million people die from urban air pollution. Environmental degradation vastly increases the vulnerability of people to natural disasters-deforestation increases the incidence of flooding, for example, while damage to mangroves and coral reefs reduces protection from storms. In most cases, it is the poor who suffer the most severe consequences. It is the poor who are often forced to live in vulnerable areas such as floodplains and drought-prone areas, and who have limited capacity to cope when disasters occur.

The impact of environmental degradation reaches far beyond its effects today and threatens the basis for growth and livelihoods in the future. Growth based on depletion and degradation of the resource base, while ignoring the interdependence of national economies, as well as the importance of the global commons, is short-lived. In the context of globalization, sustainable development requires integrating into the the world's economy a set of global public goods, including biodiversity, international waters and climate.

The World Bank's New Environment Strategy:

We in the World Bank recognize the need to take a fresh look into the challenges and opportunities for sustainable development in a rapidly changing and globally inter- dependant world. We have prepared a new Bank-wide environment strategy with the intent to better align work on environmental issues with our central mission of poverty alleviation: by using either environmental interventions that directly benefit the poor or through changes in governance and public policies that foster sustainable economic development. This strategy will be presented to our Board of Directors in July 2001 and will guide our operational efforts to forge the links between sustainable development, the environment, and poverty reduction. It focuses on improving the quality of people's lives, improving the quality of growth and protecting the quality of the regional and global commons, on which life on earth depends.

Going Down the Road to 2002 Mr. Chairman,

Like the rest of the world, we in the World Bank highly value the achievements of Rio.

Countries, municipalities, corporations, citizens and international organizations alike are now better equipped to assess and address environmental constraints. We see the way forward by deepening our commitments to Agenda 21 and aggressively turning concepts and action plans into successful reality to help improve people's lives, development opportunities, and prospects for a sustainable future.

What does this mean for the World Bank?

We stand ready to work with our clients and partners to address core priorities for sustainable development.

Key of course is reduction of poverty. An equitable and sustainable world is a world free of poverty. We are committed to improving environmental conditions as a means to provide opportunities, security and empowerment to the world's poor people. We strongly endorse the International Development Goals, supported by the United Nations Millennium Summit, now widely accepted as key indicators for sustainable development.

The successful pursuit of sustainable development will ultimately depend on successfully mitigating global environmental threats the protection of the global commons, such as climate, the diversity of life, shared water resources. These commons are being degraded at disturbing rates indicated by the rapid deterioration of global ecosystems. Developing countries are most vulnerable. The World Bank is helping them to build up adequate institutional, policy and management capacity for meaningful strategies and actions to address key threats, and to benefit from international cooperation and financial transfers under the global conventions. This is being done in close collaboration with the Global , Environment Facility, the Montreal Protocol and bilateral donors.

The Bank is also working to support good governance and sound economic policies. Complex modern societies cannot function effectively and sustainably in the absence of an equitable legal framework, based on a public consensus, and a competent and impartial civil service to administer the law. In their absence, both local and foreign capital are unlikely to be sufficient to fund environmental services and fuel the engine of growth. Similarly, unclear property rights or under-priced natural resources may provide perverse economic incentives and undermine sustainability.

Beyond those core priorities, we are committed to support financing for sustainable development in three ways-by continuing World Bank assistance for projects with strong environmental and social development objectives; by creating new markets that service the needs of the environment; and by pursuing policies, regulations and enforcement for private sector investments in environmental goods and services.

The World Banks is one of the key financiers of environmental projects in the

developing world, with a portfolio of stand-alone environmental projects worth

$5.6 billion, and additional financing for projects with environmental objectives and components, amounting to $12.4 billion. Recently we have expanded our efforts to include the Stockholm Convention on Persistent Organic Pollutants, finalized in December 2000, and have reached an agreement with the United Nations Environment Programme (UNEP) to strengthen our collaboration under the POPs convention.

I am pleased to report to you that in the last year we have launched two innovative initiatives aimed at protecting the global environmental commons the Prototype Carbon Fund and the Critical Ecosystem Partnership Fund. The Prototype Carbon Fund (PCF) is the world's first market-based mechanism to address climate change and promote the transfer of finance and climate-friendly technology to developing countries. The $150 million Critical Ecosystem Partnership Fund (CEPF) a partnership between the Bank, Conservation International and GEF -is aimed to better safeguard the world's threatened biological hotspots in developing countries.

Within the World Bank Group, the International Finance Corporation (IFC) has an important role to promote corporate social and environmental responsibility in support of sustainable and equitable private sector investments in the developing world. As the traditional balance of power between corporations and governments has changed, business has to come to grips with new definitions of corporate responsibility. Corporate environmental and social values have to be redefined alongside traditional values such as profitability, and integrated even more deeply into the heart of strategic thinking and everyday practice. IFC operations offer global standards and best practice for corporate environmental and social management, and promote the globalization of social and environmental governance.

As part of the Bank's continuing commitment to understanding the key drivers of development and appropriate development policy especially over the medium and long term-the World Development Report 2002 called Sustainable Development with a Dynamic Economy will address the interaction among growth, poverty reduction, social cohesion, and the environment. We hope the preparation of the report will contribute to a global dialogue on social institutions and behavioral incentives. Inherent in that is the imperative for individuals and communities to better manage human, social, physical, and natural assets over longer time period and rethink our basic assumptions about how we use the world around us, and how we measure and plan economic development. The Bank is keen to see a stronger international effort to reform the system of national accounts and adopt more accurate measures of growth and development.

Working in partnerships

Mr. Chairman,

Sustainable development is inconceivable without broad participation of responsible institutions at national, local and international level, private sector, NGOs, academia, media etc. Bringing all stakeholders together should be one of the key guiding principles for the Summit of 2002. Without strong partnership, it is impossible to expect the achievement of the new political commitment to the further implementation of Agenda 21 and the International Development Goals. This partnership should encompass developed and developing countries; local, national and international levels; NGOs and governments; the UN and the Breton Woods institutions; the public and the private sector - everyone who calls this planet home.

As we look forward to the next benchmark in the journey to sustainable development in 2002, it is time for all of us in the UN system, in governments, businesses, urban and rural communities, rich and poor countries to commit to working together. We must acknowledge the complex interrelationships among our activities, our economies, our values, and our environment. Together we have the chance to overcome the tremendous development challenges that we face and leave a good place to be home to our children and grandchildren.

Thank you.