Rio+20 Was a Bust

The reason why the Rio+20 summit on sustainable development was a bust is simple: the summit’s agenda did not include the right issues. Let me be more specific. The real issue is not being unaware of the situation or technological impediments, it is the way humanity has organized itself.

The real issue, then, is the structure of global governance — the way in which incentive systems are organized and the lack of any credible leadership on global issues that would have the authority and ability to impose remedies.

For example, who is in charge of carbon emissions? Who is in charge of the oceans? Who is in charge of poverty? And who is responsible for the millions of people who do not have access to electricity and clean water?

When everybody is responsible, nobody is really responsible.

Therefore, the first agenda item for meetings such as Rio+20 should be how to consensually delegate sovereignty to global institutions and to make sure these global institutions have real legitimacy and jurisdiction over key global issues.

The ongoing global financial, economic and environmental crises have made it clear that many of the issues impacting the quality of life throughout the world today are global in nature. However, the way that humanity has organized itself — particularly in terms of public administration — is national in nature.

The fact that the jurisdiction for key governance issues — such as elections, education systems, taxation and military organizations — are overwhelmingly based on national boundaries makes it organizing global initiatives extremely difficult. Furthermore, since most national governments are elected for four- or five-year terms, whenever they do meet around the negotiating table, the average time horizon of an elected leader is only about two-and-a-half years.

It would be naïve to suggest dismantling national structures and moving towards a global government. Yet, longer perspective and more collaboration are definitely needed to address global issues. Forward-looking politicians need the support of the public in such a collaborative approach.

Global solutions require consensual delegation of sovereignty, in certain areas, to global institutions with adequate resources. Raising adequate resources for global institutions, in turn, needs appropriate power-sharing arrangements.

Understanding our interdependencies

The second agenda item should be to change the way we teach the next generation to prepare for a more collaborative world. To deal with global issues in an effective manner, citizens need to understand the interdependencies between countries. While the curricula of many national education systems focus on nation-building, there is an insufficient emphasis on global citizenship.

Therefore, a “global education initiative” is required to ensure that people fully understand their mutual dependence, rather than seeing neighbors and other foreigners as scapegoats for local problems. Living together requires sharing power — whether in the family, in the village, in the city, in a nation or in the world.

Only when such an understanding has become prevalent can we create global institutions with adequate resources and decision-making powers that are shared and exercised equitably.

Whatever their faults, companies are the institutions that have adapted best to globalization so far. They have centralized strategic decision-making, but increased empowerment of their local offices, eliminating mid-management levels.

If we are to address global issues, governments need to consider consensual delegation of sovereignty to global institutions with legitimacy and sufficient resources to implement remedies. On the other hand, unless we change the way we manage global institutions, it will be impossible for them to have legitimacy.

The essential principle driving modern human rights and democracy is this: People should have a say in shaping their own future and be able to contribute in the global decision-making processes that influence their lives.

Global institutions will gain real legitimacy only if this understanding is applied to global governance mechanisms. In turn, this requires a significant change in awareness of the responsibilities of global citizenship by the people.

The third agenda item should be how to reshape taxation schemes. The world is concerned about rising unemployment, yet most governments impose taxes on employment and subsidize unemployment.

The world is concerned about economic growth, yet most governments impose taxes on economic activity (sales and income). The world wants innovation, yet most governments impose taxes on value added.

On the other hand, we are all worried about issues such as carbon emissions, yet there are no universal taxes on carbon emissions to help the companies and individuals internalize these externalities.

Obviously, I am not suggesting that governments increase overall taxes in an environment where we all need increased economic activity. I am suggesting to change the way taxes are imposed.

Unless we put our minds together to identify solutions to changing the adverse incentive systems (imposed by taxes), we are unlikely to make a sufficient impact on issues world is facing.

We are unlikely to make significant progress in solving the environmental, social and economic problems until we put these issues — of optimal global governance and incentives and of promoting a widespread understanding of our global interdependence – on the front burner at global meetings.