Integrating the Three Pillars of Sustainable Development: UNITED NATIONS ECONOMIC COMMISSION FOR EUROPE Integrating the Three Pillars of Sustainable Development: Challenges and Opportunities in the ECE Region Ján Kubiš Under Secretary-General and Executive Secretary of the UNECE New York 4 October 2011 1

Structure of presentation Introduction Sustainability in the ECE region The underlying factors Examples of good practice The role of the ECE in promoting sustainable development

Introduction The Great Recession hit the ECE harder than any other region of the world Employment remains below and poverty above pre-crisis levels in most ECE countries Transition to an inclusive and sustainable society will have to be achieved under difficult conditions

Trends in Inequality Over the last two decades inequality has been increasing throughout the ECE region Underlying factors: changes in technology, globalization and government policy Although inequality has increased, in most ECE countries the poorest have been protected

Intergenerational Equity Intergenerational issues are of major importance for sustainable development Most ECE economies face a demographic ageing problem Provision of pensions is well developed but their financing has not been adequately addressed Climate change may result from an excessive discounting of the interests of future generations

Social sustainability in the ECE Region The ECE remains less unequal than other regions Only the Nordic economies have been very successful in achieving equity with growth Inequality in the European emerging economies varies considerably Social transfers reduce poverty but their sustainability is threatened by adverse demographic and economic trends

Markets are not enough Social transfers and poverty, 2007 21.0 19.0 UNITED STATES I 17.0 TURKEY 15.0 Share of population with less than 50% of median income 13.0 F 11.0 GERMANY POLAND 9.0 FINLAND 7.0 DENMARK 5.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 24.0 26.0 28.0 Social transfers (% of GDP)

Trends in Environmental Sustainability Over the last two decades CO2 emissions have increased in ECE advanced industrial economies CO2 emissions decreased in Emerging Europe and Central Asia – industrial restructuring and improving energy efficiency in transition economies The high social cost of this type of carbon-saving transition makes it unsustainable

Annual average growth of CO2 emissions, % 7 1971-1990 1990-2008 6 5 4 3 2 1 World US China EU-15 Emerging Europe and Central Asia -1 -2

Environmental Sustainability in the ECE High-income countries high level of human development & heavy ecological footprint Low and lower middle-income economies lower level of HD & light footprint Upper middle-income economies intermediate level of HD & heavy footprint High human development & light ecological footprint – a new growth model needed

Towards Inclusive Green Growth in the ECE

Markets likely to deliver good results, if Market Failures The unsustainable development trends due to market failures and policy failures Markets likely to deliver good results, if there is competition all relevant costs are internalized in prices property rights are clearly defined and well enforced ECE emerging economies – significant progress in the development of effective markets and legal institutions

Policy Failures Policy failures have contributed to unsustainable trends in the ECE region Subsidies for environmentally harmful and socially unsustainable activities continue in most countries Some policy failures reflect strong political constraints

Examples of Good Practice ECE countries provide a number of interesting examples of good practice They show that evidence-based policies can improve environmental sustainability economic performance sustainability of social security systems

Three interactive priorities The EU 2020 Strategy The EU 2020 Strategy – most ambitious policy initiative for sustainable development Three interactive priorities smart growth sustainable growth inclusive growth Employment, innovation, education, social inclusion and climate/energy goals for 2020

The Role of ECE ECE projects and international legal instruments contribute to the emerging global, regional and national governance for sustainable development The 7th Ministerial Conference “Environment for Europe” in Astana – no one-size-fits-all approach for the transition to a green and inclusive economy ECE member States supported the development of an internationally agreed roadmap and a toolbox with concrete instruments and measures for the green economy as a potential outcome of Rio+20

Copy of this presentation is available at: www.un.org/regionalcommissions THANK YOU