By Dr. Julia Trefilova December 2020

The notion emerges and the concept forms in the global context

The idea of sustainable development articulated in Our Common Future report released by the United Nations World Commission on Environment and Development in 1987 has recently come into true prominence. International documents that proclaim the ‘sustainable development’ principle augment. So do fora and conferences with ‘sustainable development’ as the main theme. The list of pressing issues is becoming longer and wider thanks to the efforts of officials and civil servants of different levels as well as grants initiated to further promote this topic.

What is the term ‘sustainable development’ truly about? And where does it come from? Can development not be ‘sustainable’?

The term ‘sustainable development’ (German Nachhaltigkeit) was used in German forest law back in the 18^th century to indicate a principle according to which “to receive a permanent wood-connected income, you cannot withdraw more wood than can be offset by remaining tree growth and planting new ones”.

The resulting documents from international fora, starting with the 1987 report, witness that sustainability did not mean a task to sustain a threat but rather a steady continuous development without any backlashes. Our Common Future report provides the following definition: “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” The Brundtland Commission ideas of sustainable development began transforming and expanding very soon.

The Stockholm Conference of 1972 recognized deep environmental issues in certain regions and on the planet as a whole. Unless immediate measures were taken, apocalyptic future was claimed to hit the humankind very soon. Ideas of this conference later laid the foundation for the United Nations Environment Programme (UNEP).

The United Nations Conference on Environment and Development held at Rio de Janeiro in 1992 introduced the concept into national and supranational laws of European countries and brought it vast support at the international level. The Conference stated that “standards applied by some countries may be inappropriate and of unwarranted economic and social cost to other countries, in particular developing countries”. This way might lead to a disaster, to avoid which the global community needed to shift to sustainable development.

The new millennium was marked by declaring 8 goals that were to become a ‘global barometer’ showing the international community progress on the way of attaining wellbeing.

In 2002, the United Nations International Conference on Financing for Development held in Monterrey (Mexico) released the Monterrey Consensus. This policy paper was the first attempt to describe specific steps that global community was supposed to take to gain ‘sustainable development’. It drew conclusions about mobilizing domestic and international resources to implement sustainable development goals. It underscored the criticality of developed and developing countries equitable participation in the formulation of financial standards and codes.

It was the time when the notion of ‘sustainable development’ saw wider adoption in the governance of European Union, China, Japan, the US, and Canada.

In 2015, the UN General Assembly passed a resolution titled Transforming our world: the 2030 Agenda for Sustainable Development. 17 elevated goals, encouraging endeavors and total absence of specific practical steps to fulfill them.  That is how the term ‘sustainable development’ was taken from local ecosystems to global economy and paved itself the way for a global doctrine.

Noteworthy, Our Common Future report (1987) provides the most profound and detailed explanation of the concept. It talks about development as economic growth impeded in its turn by poverty. It deems continuous (sustainable) development a process of change with effective use of resources, investment into technologies, improvement and transformation of public institutions in line with the needs of the present and future generations. Thus, initially the concept did have a key idea that gave it a certain novelty.

 

‘Sustainable development’ and path dependence

Let us put it into perspective and share our view on the process and initiatives that are presented today under the guise of ‘sustainable development’.

To this end, consider the paper Institutions and economic growth: An historical introduction by a famous American economist and Nobel laureate Douglass North, where he draws up the Path Dependence Theory. The paper helps explain how the phrase ‘sustainable development’ turned into a mantra to developed countries and their economies and also a term that practically any meaning can be assigned to. It shows why ‘sustainable development’ to emerging and transition economies today is a complicating trend that lays an additional burden on economic and social spheres of these countries.

The Path Dependence Theory was first applied to study the history of technological innovations. It came into the spotlight when it was used to study institutions.

Douglass North enunciates that institutions are shaped depending directly on their previous development. Initial differences in the choice of institutions with time widen the gap between national economic models and economic performance of countries. The occurring path dependence hinders the countries’ transition to the next level of development causing every time a backlash.

Douglass North also notes that countries choose institutions at turning points in their history, at moments of highest tension. The turn may come as a natural result of civilized evolution or can be spurred artificially by an external global game-changer.

Interestingly, it is developed countries that initiate transition to ‘sustainable development’. They have depleted the potential of conventional industrial development, reached the peak of their efficiency and can no longer keep track of modern (energy-intensive) economic model.

They set new rules of the global game. To shift to another development model, they incite global competition of economic systems and institutions. For the outcome of the game to satisfy the initiators, they needed a global unifying multicomponent agenda that would inveigle all stakeholders of modern international relations into the game. Thus, the concept of ‘sustainable development’ became both a reason to frame a new economic system and a trigger to carve new opportunities of economic growth to the countries that have this potential.

The UN introduced to the global community an ideal model of ‘sustainable development’ (a number of principles) that quantitative calculations are hard to apply to. Parameters that would ensure ‘sustainable development’ of countries were not defined when the concept was put together. Meanwhile, it is obvious that ‘sustainability’ should have different parameters to different countries. And to go to ‘sustainable development’ adequate indicators have to be designed to monitor whether the goals set are achieved.

Proclaimed as a global agenda, the concept of ‘sustainable development’ comes as a trigger to shape a new framework of institutional economy whose main principle is global competition of economic systems and institutions.

Thus, ‘sustainable development’ declared as a humankind development agenda for the oncoming centuries will be one to those countries only that are not trapped in institutional inertia (path dependence). To all other countries ‘sustainable development’ is a complicating trend that first has to be cognized and then adapted to current conditions of every country separately according to a designed set of steps.

 

‘Sustainable’ game with predicted outcome ‘for the few’

The ‘sustainable development’ concept was underpinned by three basic pillars: economic development, social equality and environmental protection. However, recently the concept has been employed more in the climate change context. It is the backbone of green transformation – a new code of rules of the game ‘for the few’ that the European bloc of developed countries initiated.

Steps towards economy going green were stipulated in the Green Deal (announced at COP25, December 2019) that the EU called upon the world to endorse. Noteworthy, China actively supported this idea. The deal implies radical reforms in economy, energy, and transport to make them carbon-neutral. Therefore, even now the countries and their companies’ competitive edge will be by far determined by their ability to adapt to low-carbon future. To the EU, green transformation is a chance to lower its dependence on energy sources importation, thus, abandoning conventional model of economic growth.

Meanwhile, emerging and transition economies engaged into the game with the new rules are scarce in resources for full integration into a new economic paradigm. Being stuck in the path of institutional inertia, these countries are restricted in their choice and set of actions by their developmental paths. Thus, it will be impossible to fully apply new institutional models promoted by developed countries in developing countries and transition economies. The declared green transition is a regulatory (incentivizing and binding) vehicle. It brings about substantial risks to economic models of several countries (those depending on the export of petroleum products and energy sources).

Therefore, countries that follow different development trajectories will not be able to equally successfully implement the ‘sustainability’ concept as it implies a combination of initial parameters that the countries should have.

To shift to ‘sustainable development’, a country should overcome the institutional lack of confidence, that is to have flexible and adaptive institutions that can duly and adequately respond to the changing conditions dictated by the global community. Successful transition to another development trajectory is impeded by a strong commodity orientation of certain countries that is why inertia development scenario is a powerful alternative to innovation scenario, a certain path that emerging and transition economies get into.

 

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Lately, the topic of ‘sustainable development’ has been the key novelty at respectable international fora of the highest level. For example, the theme of the jubilee World Economic Forum in Davos, Switzerland in 2020 was Stakeholders for a Cohesive and Sustainable World. Outcomes of climate change on the planet were named the main economic risks of the present day.

‘Sustainable development’ is intertwined into business strategies of large companies and transnational corporations enjoying hefty support from business lobby all over the world. Declaring commitment to ‘sustainable development’ goals comes as a tool to promote an endless number of projects, innovative solutions and straightforwardly opportunistic initiatives.

The major concern for now is absence of conceptual clarity and a vague definition of ‘sustainable development’ goals. Therefore, the declared ambitious goals are hard to turn into specific practical measures and as a result yield developmental benefits.