Session Two Discussion

Albert Fishlow: I want to thank Georg. He not only managed to take on a difficult topic, but managed to finish five minutes early. So that gives us a little more time for discussion, and that's where my job comes in. Someone who will speak tomorrow, I will not say his name because it may turn out to be an ineffective suggestion, indicated to me on the basis of the discussion that occurred this morning, or probably that did not occur, that it would be a little bit more interesting if I started out this afternoon by asking members of the panel is there anything that someone said that you really disagree with, that turns out not to be really compatible and consistent with a position that you have? And that seemed like a good idea, so I'm going to ask you.

All right, well, you know, you try one, you try another. I've got some questions. One of them comes back to the issue that has been latent in a number of your presentations, and that is the extent to which individual countries will deviate from international standards on a deliberate basis because of the advantages that they see themselves able to obtain in the process. That is true, for example, in terms of looking at the problem of the Amazon, and the question of conservation of the lands associated there, something in the order of 3-4% of the land area a year in recent years has been lost as a consequence of efforts at agricultural production. So there is an inconsistency which develops from national objectives and international objectives, global objectives, that we've all been discussing. And I'd like you to take on that issue. Georg?

Georg Kell: I do not quite agree with how you phrased the issue. I like to believe that all human beings wherever they live have the same aspirations, they like improvements of their living conditions. And when you are living in abject poverty survival is your first order of the day, obviously, and everybody wants higher standards, obviously. But the standards, depending in which area you define them, are cumulative, like technology is cumulative, it's acquired over time, and this is the process of development.

So what I would rather suggest is how can we capacitate, as it was phrased so well, and accelerate the building up of capabilities so that everybody can enjoy higher standards. And this is particularly true for least developed countries where indeed there is very little business activity as such going on to start with.

Albert Fishlow: Carol?

Carol Bellamy: Well, I'm not sure I follow entirely on Georg here, but I wanted to talk about was, your question was deviation by countries, you spoke about countries, you talked about national objectives and global objectives. I think we sometimes have to come back and remember where it is, and it's individual human leadership or lack thereof. And I go back to thinking about coming into the Special Session on Children, it turned out to be in 2002, it was supposed to be in 2001, and taking a look at development objectives that had been set, they'd been agreed by countries over a ten-year, a decade, period of time, reducing under five mortality, access to education, many of which are bound up into the MDGs right now, and you could go through what didn't happen here, what didn't happen here. But the key factor was the failure of leadership. And we're not talking about that, I'm not saying that's wrong, we're talking about technology and we're talking about systems and we're talking about processes, and yet so much of this ultimately depends on human leadership. And if you fail to have that leadership you can have as many instruments and processes in place and you're not going to achieve.

Rajendra Pachauri: Well I personally think there is a failure that we're confronting in terms of the pricing of some goods and services where unfortunately the social costs are not fully internalized. And I don't know how one can bridge the gap. It certainly would require leadership, it'll take a lot of political courage to be able to come up with systems of taxation whereby we attempt at least to internalize some of these costs. Now may I say that since you quoted the specific example of Brazil, if there was a cost attached to cutting down all the forests and perhaps converting that land to either pastureland or agricultural acreage, there would perhaps be much lower incentive for people to bring about that kind of conversion. But will the national leadership, or for that matter even at the international level, would we be able to come up with a system that provides that kind of a signal? And unfortunately at this juncture there seems to be a huge vacuum in terms of leadership on global issues. And I think we are all as a result confronting a danger that perhaps if this kind of vacuum continues we'll see much greater damage before things can get better. So this sounds pessimistic, but I really don't know how one can bring about a shift in the right direction. But it's urgent, we really don't have the luxury of time, and I think we need some political will at the international level to be able to.

If I may, let me just explain, or give you a little anecdote. Way back in 1989 Mr. Rajiv Gandhi was the Prime Minister of India. I interacted with him quite a bit, and he was totally convinced that climate change is going to be a serious problem, so much so that a few months later he went to Belgrade to the Non-Alliance Summit, and he declared over there that the world should set up something called the Planet Protection Fund. And each country, developed as well as developing, should contribute 0.1% of its GDP to that fund, except for the least developed countries. Now that was the kind of spirit that existed at that point of time. We've lost that spirit simply because there's been inaction, and that inaction has been the result of a paucity of political leadership. Somehow we have to recapture that spirit, so that people realize that national and local goals are really similar and identical to global goals. I'm sounding idealistic, but I think that's what leadership is all about, leadership inspires some degree of idealism. I don't see that happening.

Jomo Sundaram: One of the serious problems we face in the world today is the double standards, and I didn't have a chance to elaborate some of the points I had partly because I couldn't read them in the darkness. And we have the situation where the wealthier countries in the world are regularly advised by the fund, the International Monetary Fund, to adopt counter-cyclical policies. Europe, for instance, has been moribund for quite a number of years now, and the Stability and Growth Pact is recognized as being part of the constraints on recovery in Europe. And when the Fund suggested the same thing for this country, the Wall Street Journal protested vehemently and criticized the Fund for daring to suggest that the United States adopt a counter-cyclical policies. But when it comes to developing countries the Fund's advice is very different. It is to adopt a pro-cyclical policies, in other words, let market forces take the full consequences and not…

…on this country would be seen as violating the sovereignty of this country. And so argument allows one to opt out of the say, of Kyoto, and a whole range of international agreements. This I think is a very serious problem which we need to come to terms with.

If I may make one last point, Dr. Pachauri earlier referred to Gandhi. And one of the things Gandhi had to say was that there's enough in the world for everybody's needs, but certainly not for everybody's greed. And this is a particularly serious problem I think in New York. One of the things I've learned in my fifteen months at the UN is to be very diplomatic with everybody else, but with a fellow UN staff member and I can disagree. And I think we just do not have the resources to meet everybody's wants, but we do have enough to meet everybody's needs. So I think we increasingly have to seriously address redistributive questions, because as I suggested earlier, if we just rely on growth and only 4% of that growth is actually going to reach the bottom half of the world's population we are not going to get very far. So we really have to think not only in terms of growth but we need to think in terms of redistribution as well.

Thank you.

Arthur Fishlow: I want to address the next question by starting with Eric, which has to do with this high volatility in the implementation of rules that you presented so effectively in the case of the United States. Clearly that kind of variability is multiplied many times internationally. And it's therefore much more difficult to be able to think about extrapolating from the US experience and the difficulties one has had in applying what seem to be rules that are appropriate, that are agreed upon, that can reduce environmental consequences, and try to make that into a global kind of picture. And I wonder whether you and others would like to speak to that issue, which is the whole issue of really being able to implement more effectively the kinds of rules that are necessary.

Eric Schaeffer: That's a challenging question. If you look at power plants in the United States and the tracking of emissions, although I have other criticisms of the trading program, it's pretty good. Those lessons you can't take away and apply to 100,000 brick kilns, nor would you want to. But power plants are 38% of the carbon emissions in the United States, and an enormous share of carbon emissions in places like China and India, a growing share. It does seem to me that, you know, in certain limited areas that are still very important, sort of working under the theory that you've got to do what you can, there are some lessons you can lift and take to other countries, just as the information can flow from other countries to the United States, I don't want to suggest it's one way. If you have big polluters that are disproportionate in their impact and they're relatively easy to monitor, then I think you have the basis for an international system, if that's what your question is, how do you establish an international system? In the example from the acid rain database I showed you we have been tracking carbon dioxide emissions since 1995. That's really a fairly straightforward transaction. So some lessons there that can be applied.

There are other places where we haven't solved the problem here, and I think we are not in good shape to suggest that we've got sort of lessons that can be applied elsewhere. We're still struggling to measure particulate matter which we've known how to do for thirty years in this country, and we're still not there. And that's basically a political battle.

So I guess the other worry is not so much that we shouldn't have market-based systems, but at the very least we ought to know what we're getting and know what we're not getting, and keep pressing to get at the data and information that we need to make those systems work. Again, from the World Bank paper, it does seem that a lot of these ideas were exported, not thought through necessarily very carefully, some of the problems we had in the US are now being found in other countries, not surprisingly. So maybe it'll work for power plants. I think there's a basis for hope there. If you're dealing with other kinds of problems with far greater numbers of sources then it's pretty daunting, I don't have an answer.

Rajendra Pachauri: Could I say that in the case of a number of developing countries perhaps tough standards are in our own interest. I gave you the example of the design of buildings. There is such a rapid growth of construction in China, India, and other countries, that if we lock ourselves into high intensity energy consumption appliances and structures, then we're going to have to pay a very heavy price for it for a long time to come.

I personally believe that if large countries like China and India set certain standards then the rest of the world will also have to fall in line, because let's face it, this is where the largest markets are going to be. So if we require certain types of technologies and insist on certain standards, then suppliers elsewhere in the world will have to wake up and do something about it. So I'm afraid we've looked for much too long at standards, knowledge and technologies flowing from the north to the south. We need to ask ourselves the questions whether we can really adopt the best possible technologies and do so in our own interest rather than keep ignoring them.

I can give you several examples where if you look at the proliferation of motor cars, for instance, it certainly is not in the interests of the developing countries to have the same kinds of usage patterns, ownership is one thing, but usage is quite another. And therefore it's vitally important for us to think in terms of solutions that rely much more on public transport. Ownership is fine, people can own cars, but at least let them not use it for commuting to work morning and evening every day.

So I think we need to look at this whole in the context of the dynamic situation that we're faced with, the shift that's taking place in terms of consumption in different parts of the world, and what it means in terms of standards that we should be adopting in the emerging economies of the world.

Carol Bellamy: Just one example on uniform standards and the implications. I mean one of the areas in which there has historically been uniformity is in vaccines. And it was important to try and have implications for the cost, but the vaccines were the same from the poorest countries to the richest countries, although we had a vaccine for measles which is a disease that kills on the market for years before the cost was able to be pushed low enough to get it into developing countries. But there is increasingly in recent years now standards being put into effect by the US FDA for certain kind of vaccines that is dramatically sending the costs up, and we're seeing for the first time ever a real disparity, and no pressure into making the vaccines that really are needed just for basic, simple health in poorer countries today. And so this having a single standard across the board, which is not a second class level of healthcare, it's actually denying the availability of healthcare in this case by having a single standard across the board.

Albert Fishlow: Well this is an obviously much broader problem because what it does is make, as Rajendra was suggesting, the technology flow from the north to the south the determinant one, whereas one clearly sees in the case of production of medicines and the like that India and Brazil are now capable of dealing with the AIDS problem in a much more effective fashion than would've been conceived. And one of the reasons that has been possible has been precisely the fact that the original patent limitations were able to be surpassed in that particular instance. But more generally…

Carol Bellamy: But do recall that the US government's AIDS money was initially only available to purchase from US manufacturers, clearly undercutting the competitive capacity of countries like India and Brazil to produce these.

Albert Fishlow: But clearly here is again one of these conundrums where you have the issue of national policies on the one side, which are conceived as defensive of the interests of those countries, and may in fact maximize over the short term incomes and welfare, but clearly they don't manage to take account of the implications elsewhere. And US obviously is a very important factor in all of this.

Eric Schaeffer: Just to clarify, because I may have answered your question too narrowly, I thought you were asking about a global system that might involve some emissions trading. I may have assumed too much. And if to the extent that's what we're looking at for something like carbon, I do think you need a common system of weights and measures for a program like that to work. There are some things we've done here that look promising and others not, but it seems like we have to work towards some commonality. You know, when you're talking about drugs and you're talking about all kinds of other pollution problems, the car example is an excellent one, I think you would have very different solutions in India than you would in the United States for good reason.

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If I can pursue the point raised by Carol, I think what the US has done recently with the national licensing of Tamiflu manufacturing is actually very important. The US Bush administration has allowed four manufacturers to produce Tamiflu here in this country to meet national needs. And this is allowed for under what is called national licensing provisions. Unfortunately no other country in the world has been able to exercise this. When Taiwan and other governments hinted that they might do so they were immediately slapped very hard on their wrists. And the point you made, Al, regarding Brazil and India has now been slightly constrained by the Indian legislation passed last year, which limits what Indian pharmaceutical manufacturers are able to export in terms of the generic pharmaceutical production. And this of course has serious implications, particular in Africa, because the main source of cheap generic imports has been from India and generic manufacturers. So this is another situation where I think it would very interesting and useful for that same standard, the principle of national licensing, to be effectively exercised by other countries. We are staring at a threat of a very, very serious avian flu pandemic where the prognosis is very, very bleak. And we seem not to be preparing ourselves for an outbreak.

Albert Fishlow: Let me move onto a third issue which I think was present in many of your statements, which really has to do with the importance of non-state actors as part of this process, that one can talk about moving from the top down and changing the rules and international agreements and all of that, but much of the efforts have to come from the bottom. And Georg you were speaking about the enormous growth within the corporate sector. Very clearly a dramatic change that evolved has been the evolution of NGOs, and the role that they play in a very important fashion politically, within countries, but also providing pressure as well at the international level. And I wonder whether that particular subject is one that doesn't merit a little bit more discussion. The private sector and the willingness of corporations at Davos and other places to speak about the nature of corporate responsibility has occurred, but is that really going to be sufficient to produce the kinds of changes that one is interested in seeing?

Georg Kell: You point to me to kick it off again? Well, I think it can bring about enormous improvements. You can think of little islands you can create all over the world. It's a fact that today many of the non-state actors are far more global that many governments are, both in their orientation, sourcing, thinking and exposure. No doubt so the propensity to at least come to grips with some of the global issues we are dealing with here is actually quite high. And don't forget that some of the global NGOs which were born only in the last three decades, they have also experienced an enormous growth, and they started off as a simple campaign, as an idea, Amnesty was just an idea, the idea of human rights and today it is a global movement. So at the end of the day it about a battle of ideas. Ideas travel beyond borders. There are important advocates for ideas and you look for convergences of the right ideas at the right point in time, I guess. But clearly a corporate-led world order in itself would be unsatisfactory from every respect, and we heard much about inequality which obviously is a serious, serious issue, not only between but also across countries, and you need an imbeddedness in a broader social legitimacy, and that can only be provided by civil society and citizens at large. I personally believe that one of the basic dilemmas of our time is, and without just pointing a finger at policymakers, which is convenient and often correct, but I think we all have to ask ourselves whether we really have caught up with the rapid changes that the world has brought upon us in many respects, are we thinking globally, are we also acting accordingly, is our own consumer preference setting in sync with actually how we contribute? I think everybody, every citizen everywhere is challenged to catch up with that. And I like to believe that global business and global civil society at the forefront of the exposure on these issues has a particularly high propensity to engage in these issues. So running with them and with them making the case, ideally forming policy positions to impress upon citizens at large but at policymakers in particular, is probably one way forward.

Eric Schaeffer: I guess I think voluntary programs are a good thing because we have to do what we can wherever we are. But I think in the United States they overall make a very small difference. When it comes to carbon dioxide the overwhelming majority, I mean 99.99% of American industry is waiting for regulation. That's just a fact, they're just waiting. Their commitments they're making, the few that are making commitments are making commitments that are pretty timid, so we're not going to see any real movement in the US without regulation. I don't presume that that's true in every other country, that's the situation here.

With respect to the growth of NGOs and the role they play, I used to be in government and now I am with a non-government organization. NGOs, environmental groups, die without information. That's why I've become so obsessed with getting at how you can measure the effectiveness of programs, whatever they are, market-based or otherwise. So I think one of the positive developments is more and more of it is available online. Your ability to manipulate is getting more sophisticated. The quality is lagging and we need to deal with that.

Rajendra Pachauri: May I just say a word on that? I think NGOs all over the world will have to undergo some kind of a transformation. Jeff Sachs rightly said sustainable development has two components, one is the development component, the other is environmental sustainability. Now if NGOs only focus on the environmental sustainability component then I'm afraid they're going to lose their relevance. And that's why it's vitally important, as Eric has just said, is not just information, they need knowledge, they need to be innovative, they need to come up with solutions, and one sees that this is going to be the critical need of the future. And that's why I think the partnerships that seemed to be in the air in Johannesburg really need to be ?? because if the corporate sector can work with NGOs, if government can work with NGOs, I think there will be a cross-fertilization of ideas and more positive and constructive actions will flow from the NGO sector.

Carol Bellamy: I believe in the long run sustainable is dependent so much on human capacity, and it seems to me third-party actors are critical to that. That being said, there are NGOs and NGOs, and they should be set against standards as well. But I think third-party actors are critical.

Albert Fishlow: I take it this panel has now fulfilled its obligations, according to the time chart that I see in front of me. And before they all disappear, I want to thank very, very much all of the panelists for excellent presentations and for their participation in the discussion.