Keynote address by H.E. Børge Brende, Minister of the Environment, Norway and Chair of the UN Commission on Sustainable Development (CSD), 23 October 2003

European Investment Bank Forum 2003

Mr. President, Ministers, Excellencies, Ladies and Gentlemen,

20 years ago, scientists discovered what has become to be known as the ozone hole. The protective shield of the earth – the ozone layer – was at severe risk.

World leaders, the international community, science and industry rose to the challenge. Through the Montreal Protocol, the use of ozone‑depleting chemicals in industrialized countries was banned.

Intergovernmental cooperation and the commercialization of environmental sound products went hand in hand, demonstrating a "best practice" in working towards sustainable development.

I am convinced that the same firm and coordinated response may be applied also towards the broader range of challenges concerning sustainability.

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In Europe, we all know the importance of water and energy for development. We have experienced economic growth and prosperity due to environmentally sound water management and efficient use of energy.

One can easily imagine how fundamental water and energy is for the developing countries!

As Chair of the UN Commission on Sustainable Development I am honoured to address this important forum on sustainability and long-term energy and water policies.

In Europe both governments and industry have made huge investments in order to reduce the environmental costs in the long run.

By moving away from end-of-pipe solutions, attacking the problem at source, they have lessened the economic burden of costly clean up, expensive health care and the costs associated with an unproductive work force.

By applying a precautionary approach we have contributed to sustained – and more sustainable – economic growth.

In Sub-Saharan Africa, almost 90 percent of the sanitation enters the waterways untreated. As a result, 50 percent of those who are hospitalised are in hospitals because of water related diseases.

This leaves the work force unproductive, constraining a much needed economic growth. Moreover, it makes it even harder for governments to solve severe environmental and development problems.

EIB has targeted investments in Europe to reduce environmental problems and create economic growth.

What has worked in Europe, could also work for developing countries – adapted to local conditions.

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Mr. Chairman,

Time and again we are told that development in developing countries are going in the wrong direction. This is a too simplistic assessment. There has been significant social and economic progress, both in developed and developing countries during the last decades.

Within the last 25 years, life expectancy in the developing countries has increased with 8 years, whereas in OECD-countries it has increased by 6.

The last 30 years the child mortality rate is about halved in developing countries.

As a group, developing countries have experienced significantly stronger economic growth than developed countries.

However, huge differences exist among developing countries. Whereas Asia has experienced the strongest growth, Africa remains a challenge. We have to find out what has worked – and what has not.

In sub-Saharan Africa, GDP is at the same level as it was 40 years ago. Progress depends on better governance, fighting corruption as well as serious improvement of infrastructure and services. Of particular importance are investments in energy, water and education.

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This is the reason why water and energy were among the key issues at last years World Summit on Sustainable Development in Johannesburg.

Access to safe drinking water and energy services, are prerequisites for economic growth - by growth we can combat poverty and improve the environment, in short: to achieve sustainable development.

Mr. Chairman,

Three years ago, when world leaders gathered at the Millennium Summit, they agreed upon integrated goals with time bound targets for reducing poverty and improving the environment. The commitments were confirmed and strengthened at the Johannesburg summit last fall.

This means:

• We are committed to cut poverty in half by 2015.

• We have promised to reduce by half the proportion of people who do not have sustainable access to safe drinking water and halve the number of people without access to improved sanitation by 2015.

• We have pledged to achieve significant improvements in the lives of at least 100 million slum dwellers by 2020.

Targets for sanitation, the preparation of integrated water resources management plans and energy were added at the Johannesburg Summit. It also made it clear that the promotion of renewable energy is a crucial part of policies on climate change and sustainable development.

So – the international community and the world leaders have defined the problem, have taken on the commitments, and have set the deadlines. The "only" thing that is left is implementation. And while the goals might be global, we know that the actual implementation will always be region, national and local.

Who is overseeing the implementation? This is where I come into the picture. The Commission on Sustainable Development has been challenged to assist in transforming the ambitious goals of the international community into viable action for our common future.

The global goals on water require that safe drinking water be delivered to 270.000 more people, every day for the next 12 years. Simultaneously, we will need to meet the broader challenge of reversing depletion of fresh water and alleviating growing competition over scarce resources in many parts of the world.

In meeting the sanitation target, the numbers are even higher. Basic sanitation must be made available to another 370.000 people every day within the same time span.

Of the two, sanitation will become the toughest challenge.

Although a daunting task, I believe it can be done. The Water Decade in the 80's gave approximately 350.000 people access to clean drinking water and 200.000 access to sanitation services every day.

However, in many instances, these gains were temporary as the focus was on installation of "hardware" with insufficient attention to policies, institutional roles and management.

Too often, we see examples of dry pipelines and abandoned water pumps. In Africa, 30 percent of the rural water supplies are not functioning at any time. Due to lack of training in operation and maintenance, even the most elementary technology like electrified hand-pumps are not operated.

Even a small shift in policy can make a huge difference.

In Jordan, a simple mapping of the water supply revealed that the water used for irrigation purposes had better quality than the water allocated to drinking. By changing this, the quality of household water supply improved dramatically.

The importance of water management is vital to all of us. For some, it is a matter of life and death. Therefore, it is important that all countries prepare integrated water resources management plans by 2005.

An Egyptian diplomat once said, "We send our three most important diplomats to …" Guess which countries? United States is one; second is Sudan; and third is Ethiopia. It should be apparent why. Where's the watershed of the Nile River? Sudan and Ethiopia. If we do not have the Nile River protected, we are in trouble; the country will cease to exist.

Mr. Chairman;

The targets are ambitious – they demand the best of us – all of us.

How are we doing so far? What are the prospects of reaching the targets?

China, with 1,3 billion people, will probably achieve most of the Millennium Goals. India, with one billion people, is on track to meet the overall poverty goal. In South Africa, free access to basic water supply is well in reach.

In 1994, 15,2 out of South Africa’s population of 40 million lacked access to basic water supply. Last summer, President Thabo Mbeki attended the celebration of the 9th million new receiver of free water since the program was initiated.

At this rate of progress, access to basic water supply will be universal by 2010.

At the same time, let us not forget that Sub-Saharan Africa, with 600 million people, is lagging far behind. With current projections, the number of people living in absolute poverty will increase, not decrease. This requires an increased effort by all of us.

Mr. Chairman, let me turn to a key issue at Johannesburg – renewable energy.

I was pleased to note the formation of the Johannesburg Renewable Energy Coalition, where the European Union played a leading role. A shared goal of the coalition is to substantially increase the global use of renewable energy sources.

The Intergovernmental Panel on Climate Change (IPCC) has given us increasingly clear evidence of the urgency to deal with climate change. We have just learned that this September was the warmest September on record globally. The upcoming Conference of the Parties to the Climate Convention in Milan (COP 9) needs to give a strong response to these messages.

The coming months will define the fate of the Kyoto Protocol, and with it the framework for international cooperation to combat climate change. As you all know, Russia holds the key to the Protocol's entry into force. I visited Russia earlier this week and also attended President Putin's speech at the Climate Conference in Moscow three weeks ago.

Despite the negative press we've seen, I remain fairly optimistic on Russian ratification. However, we may have to wait for the new Duma that is to be elected later this year, to deal with it. In waiting, please be aware that Russia has a tradition to take its time when it decides on international treaties - as an example they took almost three years to ratify the Climate Convention after it was agreed before Rio.

Regardless of the fate of the Protocol, there are positive developments in climate policies. The EU has managed to agree a trading scheme, which defines rules for emitting installations, but also bankers and investors will have to adapt to. I am very impressed that the Council and Parliament has managed to reach agreement in such a complicated and politicised area in a very short time, and I really want to credit the Commission and Commissioner Wallstrøm in particular for this achievement.

In the field of sustainable energy the European Union has taken important steps lately through its work on the directive on renewables. Sustainable energy will be subject to extensive attention and discussions in the next cluster of the CSD 2006-2007.

Mr. Chairman,

The European Investment Bank has a varied portfolio of projects. These allow for specific contribution towards the implementation of the Millennium Goals and the Johannesburg commitments.

I have taken special notice of the 2.2 billion Euro investment facility that has been established within the framework of the Cotonou Agreement.

I understand that this facility will engage in scaling up the quality of services to benefit the poor, also within the water and sanitation area.

Furthermore, I am pleased to learn that the local private sector is targeted as providers of public sector services. I find this way of deploying aid as a means to create national ownership constructive and efficient.

I can see four issues where the EIB can make a contribution:

• firstly, the provision of infrastructure as a key to development;
• secondly, to attract resources from private actors;
• thirdly, support the concept of micro-credits
• and fourthly, to advocate the sequencing of reform and investments.

Access to infrastructure as one of the most important basic needs and a critical factor for moving out of poverty. Investments in well-functioning infrastructure services will indirectly reduce the fiscal burden of governments, thereby creating space for other expenditures.

But investments in water have not been sufficient.

Private investment in infrastructure projects in developing countries has declined with more than 50% between 1997 and 2003. Furthermore, private sector participation in infrastructure has been heavily concentrated in a few sectors, most notably in telecommunication and energy.

Our efforts clearly need to be scaled up.

I welcome the European Union's Water Initiative – "Water for Life", particularly with its focus on Africa and Central Asia. We are all eagerly awaiting to see the specific modalities for this initiative being finalized.

The EIB and the EU have a vital role to play in harnessing and facilitating support from the private sector to infrastructure development.

A sensible way forward is to focus on developing domestic capital markets that can be used to raise investment capital.

A key problem for the poor is lack of financial resources to improve their living conditions. Their credit worthiness is considered inadequate to obtain ordinary loans or mortgages.

Micro-finance-arrangements may counter these problems. They have been developed especially with the needs and financial resources of the poor in mind. In many communities micro financing is the economic backbone of the community. It is an instrument that should be widely practiced as it enables individuals to become self-sufficient.

I strongly support the idea of the United Nations Secretary-General, Mr. Kofi Annan, who has announced that the "International Year of Micro-credit" is to be observed in 2005.

A support for these arrangements would contribute to create national ownership, enabling poor countries to take a lead role in their own national development.

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But making headway requires more than just money.

There is general agreement that the problems facing the water sector arise partly from weaknesses in governance.

Unfortunately, many governments do not give water sector issues high priority. Water is not prioritised in development plans or in poverty reduction strategy papers. A survey undertaken by the World Bank indicates that only two out of 30 PRSPs address water and sanitation sufficiently.

Moreover, free, or subsidized water and electricity, too often fail to reach poor people. Targeted subsidy schemes need to be developed. Governments must support reforms to make the water and energy sectors more accountable, transparent, efficient, and environmentally and socially responsible.

In my view, actions to enhance institutional capacity and implement policy reforms should come together with funding for infrastructure as a package.

Allowing reforms and investments to take place simultaneously, will help address the tension between the desire to have reforms in place before investments, and meeting the Millennium and Johannesburg goals by the deadline of 2015.

This parallel approach is dependent upon a credible program of investments and a commitment to reforms simultaneously.

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Mr. President, Ladies and Gentlemen,

The Rio Earth summit in 1992 was a successful one. But in many ways it marked the end of a process. We must now make sure that the Johannesburg summit marks the beginning, and not the end of a process.

As Chairman of the CSD, I can assure you that today's issues are placed at the very core of the CSD agenda. The CSD needs to ensure that the international community can address the global issues in a coherent and effective manner and translate words into action.

The discussions resulting from this symposium will serve as valuable inputs for the commission in the coming years.

We aim to mobilise the political will to provide additional resources and encourage alliances and partnerships to drive the process forward.

My aspiration is to see the international community, the donor nations, national governments, the financial institutions and the private sector placing the implementation of the Millennium Goals and the Johannesburg commitments on the top of the agenda.

We certainly have the means. The tool-kit is varied and effective. For those lacking adequate water, sanitation and energy there is no time to wait for more summits, new conferences, new financial mechanisms or technological breakthroughs.

What they need is political courage. The time for action is long overdue.

Thank you for your attention.