The Rio+20 United Nations Conference on Sustainable Development, which will take place in Rio de Janeiro, Brazil, on June 20-22, does not aim to produce multilateral ‘hard law’ agreements like the Earth Summit in 1992, which led to the UN Framework Convention on Climate Change. Instead, the core of the draft outcome document produced by the UN is a proposal to agree by 2015 a set of Sustainable Development Goals, similar to the Millennium Development Goals.

The theme of the Conference is: “Green economy in the context of sustainable development and eradication of poverty”. But there is a divergence between countries centred on whether the transition to global sustainability will be based on the economic or on the social dimension of sustainable development.

The unresolved issue remains whether the focus should be on critical changes that governments, largely in developing countries, will need to make to convince investors that aligning asset allocation with the green economy will provide superior risk-adjusted returns ‘business as usual’. Or, whether there will be agreement to modify longer-term trends in production and consumption patterns to recognise ecological limits of natural resource use.

A note circulated by the UN to assist in the negotiations suggests a new global framework focused on natural capital rather than on the eradication of poverty. The draft suggests that governments agree on the need to develop a global policy framework for “all listed and large private companies” to integrate sustainability within their reporting cycles, and for global industries to develop “green economy roadmaps”, which would provide a starting point for long-term investor engagement and benchmarking.

However, due to the lack of a consensus, the suggested establishment of a ten-year “framework on sustainable consumption”, which many consider to be the key element in the global transition to sustainability, is relegated to the status of one among a number of programmes rather than the central element of the framework for action. Similarly, objections have been voiced on the inclusion in the outcome of the principle of common but differentiated responsibilities.

Also unresolved is which upgraded UN body—the Commission on Sustainable Development, the United Nations Environment Programme or the World Trade Organisation—should provide oversight of the policies and monitor progress of measures taken at the national level. Here again, there is a divergence of perspectives on whether the objective of the annual reviews and dispute settlement should be to provide investors with timely information on the links between sustainability and economic performance, or to let governments know the shifts in consumption and production patterns so that they can share experiences and monitor progress of the joint research, development and deployment of innovative technologies.

The proposed outcomes of the Conference include ensuring universal access to energy, doubling the rate of energy efficiency improvement and doubling the share of renewable energy. These are not considered strategic goals, as the hard lesson from the demise of the Kyoto Protocol is that targets are only useful if baselines are well defined, the scope is clear and loopholes are closed. In this case, the UN note specifically states that the objective will be “a basic minimum level” rather than an adequate level. The unresolved issue is whether we can achieve this without reliance on coal in the absence of innovative technologies that are commercially available at affordable cost.

Beyond energy, however, real sustainability targets are being sought for critical areas of “natural capital”, such as food, forests and soils, as well as oceans and freshwater to foster a green economy in which economic value creation is not coupled with environmental degradation.  The formulation ignores the natural resources needed for the establishment of essential infrastructure for the eradication of poverty. For example, urbanisation in developing countries will involve a population shift that is more than five times larger than what happened in developed countries, with entailing pressures on natural resources.

The note recognises the limits to current measures of GDP, which are suitable only for measuring economic activity. Yet it does not include in the framework for action how to incorporate the effects of economic activities on the global ecosystem in standard growth models. There are only suggestions for environmental pricing of national ecosystem goods and services.

The central challenge in all the discussions about the green economy is how to deal both practically and morally with the huge unevenness of development, which has left some parts of the world with far greater ecological footprints than others. Humans have always altered their local environment; with industrialisation, urbanisation, motorisation and an increase in incomes, we have begun to alter our planet. What is new is that the adverse effects of economic activities exceed those of resource extraction.

There is scientific evidence that soon Earth will not be able to absorb the carbon dioxide generated by excessive consumption. The lifestyle that comes with increased incomes in industrialised societies threatens half of humanity who has yet to enjoy the benefits of higher incomes. Therefore, the objective now has to be transforming societies towards living in balance with the natural environment. This will lead to more equity, as well as coherence in the global agenda.