Sustainable Resource Management Delivers Quality of Life

From guidelines to guidance

How to make change possible is a very relevant question from a governmental point of view. It ranges from market design issues down to specific measures. At the UNECE we have a ‘High performance buildings initiative’, that we’re pursuing. We’ve put in place guidelines for energy efficiency standards in buildings and products and we have international conferences with experts to share knowledge and experience. A much more effective way to make an impact would be working at city and local levels. That’s why we are establishing International Centres of Excellence that deliver hands-on training and policy reform, from developing local standards and guidelines to enabling case studies to from public-private partnerships. That’s a very good method of technology transfer and capacity building. It is also a fantastic mechanism for scaling up to global impact. We are identifying local actors and inviting people to embrace change with an exchange of knowledge and information. There is a need to modernize education in all of the professional communities involved in buildings and to have collaboration with universities. They need to re-write their textbooks and train the next generation architects and engineers – and so on. We can support countries and people from many different layers.

We are relying on ‘principles-based’ guidelines: We don’t dictate how to run a business, but we try to demonstrate what is possible to achieve. The architect, the engineer, the contractor, and so forth can design and build something that meets the UN’s standard without having to meet prescriptive requirements. Our guidelines can apply in Moscow and they can apply in Rio de Janeiro or in Washington, D.C. Humidity, temperature and all these factors of influence can vary a lot all over the world – so it’s not ‘one-size-fits-all’. And we do it on a very practical level, for the ‘people with hammers in their hands’. We’re mobilizing local level structures to be able to train and bring the professional skill set up to a level to deliver that kind of an outcome that has an impact. And that really makes a change.

Mineral resources and sustainability

Let’s have a look at the beginning of the value chain: conservation of resources starts with raw materials. A well-known and very current example is electromobility. We have a project under way, in partnership with the European Commission, focused explicitly on batteries and critical raw materials. The global average ‘material footprint’ today is 11.9 tonnes per capita – over the whole spectrum from developing countries to the more advanced countries (more consuming countries is the better expression here). That single number masks a huge range from 2 to 27 tonnes per capita. The average is expected to rise to about 18 tonnes! If all countries and everybody consumed the way the average American consumer does today, we would need seven Planet Earth’s. Last time I looked we don’t have seven Planet Earth’s, and that’s the issue. Raw material use cannot continue to use the same linear models that have delivered today’s patterns.

Changing incentives for a change

And there is something else we have to change if we want to reach our goals faster: the attitudes of decision makers. For decades in economics, we have talked about the concept of ‘shareholder value’. Most incentive structures that were put in place were very linked to share prices. That approach doesn’t work anymore, even for shareholders (as this Forbes article from 2017 explains). As the world is committed to the 2030 agenda to development sustainably, the incentives for senior management, for boards of directors, even for shareholders need to be better aligned to that goal. The incentive cannot be just the share price – we need more key performance indicators that are really helpful. We want governments to be rational economically, environmentally and socially. A very effective way of making that happen is to put executive incentives in line with those outcomes. That would be a useful step.

Additionally, we’ll need a change of attitude in business: From opposition to cooperation. Often lawmakers or regulators are very focused on keeping the private sector out of the room. There’s some sense of a corrupt influence of private money in decision making. Obviously, there can be such a harmful influence – but it is not the norm. When I was in California, we were doing work following an accident: A landslide provoked by lots of rain took out a substation and dumped it into one of the reservoirs. We went through a whole process of dredging out the reservoir because what has been in the substation was now in the reservoir and it contained hazardous materials. We asked the regulator: ‘What degree of clean-up are we trying to achieve?’ And they said: ‘We want to have one-half of detectable limits.’ How do you distinguish between one-half of detectable limits and three quarters of detectable limits when you can’t detect it? The point is: You need to have a collaboration among regulators, the private sector, and society. The work that I do at the United Nations is both competent and capable and is delivering results because we HAVE the private sector at the table, alongside governments. The way we avoid any undue influence is just complete, brutal transparency. And that way you can have a pragmatic, reasonable and effective approach – that kind of cooperation and collaboration is essential if we want to attain our objectives.

From isolationism to collaboration

Every country has got its own endowment of natural resources, and it’s got its own regulatory, cultural and legislative heritage. There’s not one pathway that applies to everybody. But we do need a common vocabulary. And we need a collective outcome that delivers two degrees or one-and-a-half degrees while allowing development to occur in a sustainable way. In the last years, ‘globalization’ has got a bad name for some people for a variety of reasons. But globalization has also brought growth and prosperity to areas of the world that previously had benefited little. We should also consider that certain complex products cannot be manufactured 100% in individual, isolated countries. Just imagine what resources are packed in this smartphone: when you are really concerned about this product and you want to ensure that you’ve got your own resources for everything that goes in here – that becomes an extremely expensive insurance policy that you’re paying for security of supply.

I would think you’re better off with a diversity of sources, a diversity of technologies and a choice of different ways to ensure the desired outcomes. Encourage countries and regions to align with societies and norms, rather than dictate: ‘You must do it my way.’ Because everybody has their own way, every individual, every city, and every country is going to act in self-interest. The real challenge we face is, how can we get self-interests aligned with societies’ needs. And that’s where proper pricing signals and proper market structures become really important. You’re getting into the psychology of what drives and motivates people’s behaviour. And a change in behaviour is what we need to mitigate climate change. We are facing a species existential threat; we should not deny that reality and we need to make faster progress. Global collaboration is our only chance. We will need much more of it – not less.

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