Sustainable Production and Consumption

UNEP Governing Council, Nairobi, February 6th, 2003,
The Norwegian Minister of the Environment, Mr. Borge Brende

Sustainable Production and Consumption

Colleagues, Excellencies, ladies and gentlemen,

Production and consumption is important to provide welfare today. Sustainable production and consumption is even more important to secure welfare tomorrow as well.

We need growth – but it has to be sustainable.

Zero growth makes it impossible to eradicate poverty, the most important threat to life. Unhealthy growth makes it impossible to sustain nature, the most important source of life.

To eradicate poverty and protect our ecosystems and bio-diversity, we must use the opportunities nature give us today, in a way that does not reduce our benefits from nature tomorrow. Zero growth cannot be a goal, but zero emissions most certainly can.

Developed countries bear a special responsibility to assist developing countries in “leapfrogging” some of the unsustainable choices that the developed countries have made – and go directly to profitable, but more sustainable solutions.

Still, sustainable production and consumption is a common concern that requires our common effort and will be to our common benefit.

The challenge is to achieve more growth with less use of land, resources, energy, harmful chemicals and waste. To de-couple economic growth and environmental damage is essential to protect nature. It is also essential in order to eradicate poverty. In short it is essential to sustainable development.

We have the means – if we choose to use them.

We have the means to apply the polluter-pays principle:

If a business sells its goods below costs, the company goes broke.

If businesses do not pay the full cost of natural resources, the country goes broke.

A company cannot sustain losses year in and year out. A country letting resources be consumed and polluted beyond the carrying capacity of nature, can keep going for a long time – undermining the opportunities of future generations to make any business at all.

Pollution is not free. It leaves the bill for cleaning up to our neighbors, and the costs of lost species to our grandchildren. Therefore a company must not only pay for the internal cost of production. It must also pay the external costs for its impact on nature and society.

Countries should apply licensing policies, taxation and resource pricing to make real costs visible. This does not necessarily impose long-term competitive disadvantages, making companies less profitable. On the contrary it may encourage businesses to produce in ways that are both more cost effective and less damaging to nature.

To use taxes to replace high impact energy-sources and raw materials with renewables and low impact resources; to create more value with less use of resources; to minimize environmental damage per unit; are good principles – ecologically as well as economically.

We have the means to eliminate harmful subsidies:

If it is cheaper to buy subsidized fuel than to adjust the car engine, or cheaper to let the subsidized water pipe stay open than to install water-efficient washing machines, then nothing helps. Governments should not encourage degradation of environment by paying for it!

Subsidies are not free; they come from state budgets. Subsidies waste money regardless of need – money that could have been targeted to give the poor a better life. More sustainable production cannot be realized without adoption of the "polluter pays principle" and the elimination of harmful subsidies.

We have the means to create new markets:

The most important is not how strong environmental regulations are, but that businesses have a level playing field. Environmental regulations not only make some harmful products unprofitable. It also opens new markets for innovative businesses.

One example is "hybrid cars". The International Herald Tribune wrote last week (Jan. 29th 2003) that: "Toyota and Honda are already selling tens of thousands of hybrids, and General Motors and Ford, worried about ceding another fast-moving market to the Japanese, have announced plans to join them. The hybrid's rise has been encouraged by pressure from environmentalists and regulators, particularly efforts in California to curb greenhouse gases and smog-forming pollutants".

This is, of course, an example from a developed corner of the world. It illustrates an improvement on the margin. But the effects – and markets – for environmental improvements are much more than marginal when there are large improvements to be made.

Leaded gasoline is one example. Leaded emissions are extremely harmful to children, interfering with the brain and other organs. Poor air quality causes 3 million deaths each year. Most OECD countries have eliminated leaded gasoline and phased down sulfur in diesel and gasoline fuels. Everywhere, it should be more profitable to sell “healthy” fuels than harmful fuels – and we do have the means to ensure it.

We also have the means to apply the cleaner production concept:

Decisions on materials, purchases and design are important to determine product life, lifetime resource use and whether the product can be easily repaired, recycled or disposed. Both costs and environmental impact can be minimized through applying the cleaner production concept.

It is a preventive approach rather than reactive. It can also be profitable. In Russia, Norwegian bilateral cooperation shows that a company regains 4 to 6 dollars annually, on average, for every dollar invested in cleaner production programs.

Such programs may not solve all environmental problems at a facility, but it will decrease the need for end-of-pipe equipment and create less toxic waste to treat and dispose. It reduces workers' exposure to hazardous chemicals and usually the number of accidents that can harm the surroundings. Products designed with cleaner production in mind are often less harmful for consumers and produce less waste.

Production-side efforts are necessary, but not enough. Environmental standards become stricter, but the total impact from land use, emissions and waste is still increasing due to rising consumption. Eco-efficient production must be supplemented by eco-efficient consumption.

We have the means to let consumers make informed choices:

If one sells toxic goods that damage your health, the law will catch the producer, consumers will be scared and sales will drop. If you buy goods where the emissions in the production process damage your health and environment, you may not even know it until your tax bill increases to pay for the cleanup.

Consumers have a right to know how their purchases will affect them. They have a right to choose not to buy if they are aware that their purchases will harm others. Life-cycle analysis is well established as a valuable design tool. Eco-labels already give consumer guidance. Green purchase is rapidly spreading.

Some companies demand verified certification, all the way from raw materials through to the consumer. They stake their reputation on being environmentally responsible – and make profits from it. By encouraging, for example, paper producers that are making new paper of old newspapers, or producers of cleaning products that are phasing out harmful chemicals, labeling is good for business and good for the environment.

Sustainability is a precondition to ensure that the natural capital is not used up or damaged, but may be the source of sustainable production tomorrow as well. Only strong certification, labelling and international cooperation can stop the trade in illegally mined diamonds and illegally logged timber. Most countries have laws that prohibit the sale of stolen goods. But we still lack sufficient laws that prohibit the sale of stolen natural resources!

Eco-labels must be applied in a non-discriminatory fashion by having transparent criteria for labeling and the necessary information and competence. We have the means to ensure that.

We have the means to demand and provide environmental information:

Democratic, participatory and transparent governance is a precondition for protecting our environment. To follow up the Aarhus Convention I have proposed an act that will give all citizens a legal right to obtain information, from public authorities as well as from private enterprises, on everything from production processes to the content of the products, that may have an impact on the environment.

A polluting factory must be able to answer questions about what substances it is releasing. A farmer must be able to answer questions about which pesticides he uses. A paint dealer must be able to answer questions about how the substances influence on the environment.

To conclude. To a large extent we have the means. Lots of good policies are being implemented both nationally and internationally. Still, the remaining challenges are formidable. We as ministers acknowledged this in Johannesburg and made commitments to action both at a national and international level.

This Governing Council should decide on what role UNEP should play. Firstly I see it as essential that UNEP take a leading role in developing a 10-years framework program for sustainable consumption and production in cooperation with other international organizations.

To this effect UNEP must strengthen the existing Life Cycle Initiative. It must help facilitate the use of life cycle based policies and economic instruments, including information tools. It must encourage the transfer of environmentally sound technologies and stimulate the design of sustainable products and services. Developing countries should see their window of opportunity in providing what they see of importance in this respect.

I see it as important that we during this Governing Council should decide on UNEPs role and I very much welcome the EU proposal for a decision. I also believe that we here and now should decide to revert to this issue at the next Governing Council, to report on status and progress and decide on further action.

We have the means if we choose to use them, and one of the most important means is UNEP. By applying the means we have, we will change our patterns of production and consumption – making them more sustainable.