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Academic Symposium G8 2000
New Directions in Global Governance? G8's Okinawa Summit

19 - 20 July, 200, University of the Ryukyus, Okinawa, Japan

Safeguarding Environmental Values and Social cohesion under Trade Liberalization

Christine Lucyk
Fellow, LEAD Canada
(Leadership for Environment
and Development)
Professor John Kirton
Department of Political Science
Centre for International Studies
University of Toronto


  1. Introduction
  2. The challenges the G8 Leaders need to address
  3. What are priorities?
  4. Conclusions: Time for Action, not words

1. Introduction

It is fitting that some 30 years after the first Earth Day and nearly 50 since Rachel Carson sounded alarm bells about the risks of environmental degradation, that environmental issues are now receiving an increased profile on the G8 agenda. Certainly the public outcry at the ‘Battle of Seattle’ WTO meeting among others held by other global organizations has raised the profile of public concerns about the environmental abuses and the impacts on social cohesion.

Principle I of the United Nations Declaration set out in 1972 the rights of people to have adequate living standards in "an environment of a quality which enables them to live life with dignity…". However, it was not until the 1990s that we saw a significant reaffirmation of these principles in various declarations including the 1992 Rio de Janeiro Declaration on the Environment and Development, the 1992 Biological Diversity Convention, the Kyoto Protocol on Climate Change and most recently in the Declaration of Bizkaia on the right to the Environment adopted in Bilbao in February 1999. The essential principles embodied in this Declaration include:

These principles are briefly set out here because these themes will recur as we address specific environmental issues in the balance of this paper.

Parallel research has been undertaken largely among those concerned with public health on the issue of social cohesion, specifically the relationship between income inequality and health both within countries and between countries. The most clear definition of social cohesion comes from Judith Maxwell, Executive Director of the Canadian Policy Research Networks, Inc. She defines social cohesion as "building shared values and communities of interpretation, reducing disparities in wealth and income, and generally enabling people to have a sense of community." But the challenge we face in maintaining social cohesion, is according to Lester Thurow, due to the fact that "the ideology of inclusion [known as solidarity in social cohesion terminology] is withering away."

Taken together, economics, environmental protection, social cohesion and regional stability have brought us to the new paradigm of sustainable development which will hopefully come to fruition in this new century. To achieve this, there are both opportunities and barriers which are discussed in this paper.

So how did we get to where we are today? The Battle in Seattle and demonstrations at other international organizations are symptomatic of a lack of community for many people arising from the effects of globalization. Essentially it is a reflection in the words of Lester Thurow as "the conflict between the egalitarian foundations of democracy and the inegalitarian reality of capitalism" which often treats the environment as a ‘free good’, rather than a ‘common property resource’.

There is considerable documentation of the increasing gap between industrialized and non-industrialized countries. There is also a growing gap in income within industrialized countries following 20 years of political adherence to the mantra of market-driven solutions, privatization and deregulation with documented effects.

This gap is being further exacerbated by the ‘digital divide’. The sector has created more multi-millionaires in the last year that at any previous time. Yet the growth of technology is not being shared much outside of the industrialized world.

Globalization has lead to increasing concentration of power and wealth within the hands of multinational corporations (MNCs), whose prime responsibility is to increase ‘shareholder value’, with limited attention to their use environmental resources and social cohesion on which their growth is based. There is concern that the global economy is serving the interests of the MNCs through elite ‘clubs’ such as the WTO, World Bank etc, creating a society and economy which is based on exclusion rather than inclusion.

Even in industrialized countries, the dismantling of the underpinnings of social policies including access to health care, adequate housing and a positive psychosocial environment and programs, (the welfare state) is seen as a further contributing factor. A stated by David Coburn of the Department of Health at the University of Toronto, "the rise of neo-liberalism produces both higher income inequality and lowered social cohesion…More attention should be paid to understanding the causes of income inequalities and not just to its effects because income inequalities are neither necessary nor inevitable."

Essentially, the outcry we see today reflecting the income gap and declining social cohesion is the result of consistent abrogation of what governments must do in terms of public oversight to ensure the quality of the environment and maintain social cohesion. As the economist Karl Polanyi stated, "Socialism is essentially the tendency inherent in an industrial civilization to transcend the self-regulating market by consciously subordinating it to a democratic society". At issue, is who’s in charge and who makes the rules? Polyani is unequivocal in his position that governments have a responsibility to citizens to oversee corporations and other institutions as a fundament part of their role for public oversight.

What has been created are organizations which are essentially unelected, unaccountable, exclusive, and lacking in transparency. It is easy to try to simplify the protests and to demonize the protesters en masse to meet the media’ need for a 60 second soundbite. However, the issues are far more complex and nuanced, and reasonable discussion doesn’t fit within the short soundbite. In the final analysis, it is the lack of inclusion of a broader range of members of society in the setting of principles and the process of decision making, so these organization earn the trust of society rather than just expect it to be given blindly.

Now 20 years later, the pigeons have come home to roost. It is not surprising to see the current backlash to the lack of government oversight of MNCs and their use and abuse of environmental resources, coupled with de-regulation and the reduction in environmental standards. The fundamental need for individual government oversight is due to the fact that the market does not realistically value environmental goods and services, and community health and social services, nor does it incorporate community values. Coupled with the interplay with ‘privatization’ of government services, this has lead to declining social cohesion in industrialized countries as evidenced by the sustained growth of food banks (which were considered to be a ’temporary’ phenomenon).

At this juncture, there is a increasing concern about the relationship between environmental values and social cohesion, largely because of the impacts on economic prosperity and regional stability. If we do not address these issues, we risk creating a large group of ‘environmental refugees’ fleeing from areas with impaired resources or where competition for resources has created political instability.

Looking at the environmental issues in the context of environment values provides both a good news/bad news story for G8 leaders. The good news is that we’ve been making some progress; the bad news is that we are constantly falling behind and increasing the global environmental debt.

2. The Challenges which the G8 Leaders need to address:

We therefore present the following challenges to the Group of Eight Leaders at the Okinawa Summit:

Challenge #1: Define global environmental priorities. A short list includes climate change, deforestation, freshwater, biosafety and safety of GMOs, and other bioethic issues.

Challenge #2: Understand the relationship between environmental quality and social cohesion as it affects, and is affected by, political stability and economic prosperity, and

Challenge #3: Commit to action through the establishment of principles, norms, regulations and laws for damage avoidance, enforcement and remediation.

Challenge #4: Identify the present and prospective positive and negative impacts the Information Technology (IT) revolution is having on environmental protection and enhancement, and through it, on social cohesion.

Challenge #5: Begin to construct a new international regime of principles and governance processes that accords equally to, and reaps the full synergies among the values of broadening trade and IT, environmental enhancement and social cohesion.

What are the priorities?

One feature of the environment is that it is an eco-system. Since everything is connected to everything else, changes in one component ripple through to others, often with unintended or unpredicted consequences. This makes the determination of priorities difficult. However, since the G8 environment ministers issued a communique subsequent to their Ministerial Meeting in Otsu Japan in April of this year, this is being used as our starting point for discussion of the environmental issues.

Climate Change:

This has been described as "one of the greatest challenges facing the global community at the beginning of the century" according to the meeting of business and government leaders at the World Economic Forum. While there is not full agreement on all of the consequences of climate changes, some of those which are most disturbing include changing rainfall patterns, increasingly destructive natural disasters, melting of the polar icecaps and glaciers resulting in rising water levels and flooding of shorelines (possibly the complete loss of atolls in the south Pacific), bleaching of coral reefs which are essential to the supply of nutrients in the oceans and more.

At issue is whether recognition stated by the WEF and the G8 Environment Ministers are merely paying lipservice, or devel op a commitment to realistic rules on the enivironment, but more importantly to enforcement The Kyoto Protocol which provides the framework to address reductions in carbon dioxide has achieved some success through the International Council for Local Environmental Initiatives (ICLEI) which was established under the auspices of the United Nations in 1990. Along with a few organizations such as the OECD and the US EPA, ICLEI program is on the leading edge of assisting in the establishment of local community environmental and social values through public consultation to determine local priorities, which in turn reinforces social cohesion. It also shares information and learning from projects throughout the world to avoid re-inventing the wheel. Through some of ICLEI’s work, municipalities have really taken the lead on reducing emissions by ‘thinking globally and acting locally’. But that’s largely where things end.

In fact, the Pembina Institute, a policy think-tank in Canada has suggested that based on the level of action to date, Canada’s emissions are predicted to increase. This is not surprising since the strategy is based on undertaking studies, developing action plans and a plethora of voluntary and public education measures. The Pembina Institute concludes that the Voluntary Challenge and Registry (VCR) program has been "wholly ineffective in helping Canada to meet its greenhouse gas reduction commitments". Clearly a stronger regulatory-based approach coupled with appropriate financial incentives will be needed. It would not be surprising to find similar limited progress in other industrialized countries, particularly when the burden for implementation falls on corporations.

The common arguments used to explain the low level of action include uncertainty about the effects and timing of climate change, the lack of technology and of course, high costs and relatively low benefits. It is not surprising that some of the most energy-intensive industries in North America are the slowest to show any action.

The reliance on public awareness is also troublesome. People tend to assume that the other person will take action and they personally do not have to change lifestyle or consumption patterns. A startling quote from a major automaker when challenged at the World Petroleum Congress about why they are continuing to manufacture so many gas-guzzling sport vehicles which contribute significantly to the emissions problem: "we produce what our customers want". Let’s adapt the phrase of Henry Ford about his Model T car, "you can have it in any colour you want, as long as it’s black". In a demonstration of leadership, the auto industry could say to customers, "you can have a sport vehicle in any size, as long as it meets the toughest emission standards for the new generation of eco-friendly cars."


The world’s fragile forests are being cleared at an alarming rate, whether for the value of their timber (Solomon Islands) or to create crop and grazing lands in the rainforests of Brazil and Indonesia. The anomaly with deforestation is that it seems de-coupled from the issue of climate change. The burning of timber in these two areas only adds to the creation of carbon dioxide emissions, removes these forests as carbon sinks to absorb emissions, and it appears that whereas climate change programs offer offsets for planting new trees, the reality is that the destruction of forests is outpacing replanting.

A report by the World Wildlife Fund released in June of this year documented the devastation of tropical forests by multinational companies in the Africa-Caribbean-Pacific (ACP) countries. These forests contain much of the Earth’s biodiversity and are critical to retaining the fragile tropical soils in these countries. The results were considered so explosive that the report was reviewed three times prior to release.

The report lays bare the root causes of this devastation. First, funds from industrialized countries being poured into forest management are being wasted. Laws have been developed, but not enforced. Second, the World Bank and IMF have made things worse by imposing monetary and structural reforms. Third, "new investment [by Asian multinational companies] have been concentrated in countries with weak or outdated environmental and social laws. This is coupled with widespread bribery of officials in these very poor countries." Essentially the forests are being mined for short term gain rather than being managed. In part the problem relates to growing demand for forest products of paper and timber. However, in the absence of government oversight of the multinational forest products industry, several major buyers have developed policies to purchase timber only from companies which can certify that it comes from forests which are being sustainably managed. More specifically, the G8 Leaders need to endorse the advancement of the trade and environment agenda at the next round of WTO negotiations as recommended by the G8 Environment Ministers. The deforestation issue is critical right now, so in the interim, concrete actions can be taken by individual countries, such as ensuring that funds are spent on effective forest management. Otherwise, there may be very little tropical forest products to include within a trade and environment framework.


On a planet which has more water surface area than land area, it’s often difficult to comprehend why freshwater is emerging as an issue. Quite simply, there is growing shortage of freshwater in terms of both quantity and quality on all continents

For several years, the alarm bells have been ringing in the Middle East where there is an increasing shortage of freshwater. Given the countries involved, this could lead to competition for water resources and consequent instability. But the problem is that there is no single agency which can take steps to work out a sharing agreement to deal with the issue before it becomes a full-blown crisis.

Europe and North America are not exempt from this issue. Hundreds of millions of people in Europe rely on the major rivers for their drinking water. We have seen the consequences of poor environmental standards or their enforcement through major mine tailings spills and disposal of toxics in countries upstream of others. The problem is one of shared watersheds and in order for countries to maintain water quality security, actions will have to be taken to work in co-operation with the upstream countries lacking technology or enforcement capabilities.

The recent European White Paper on Environmental Liability could become a role model . The main aim of the policy is to avoid environmental damage. Compensation and remediation are secondary. There are two reseasons why this is important. First, regulators traditionally rely on the threat of fines to encourage compliance. Fines are often so modest as to be seen as merely ‘the cost of doing business’.

Second, pioneering work in the 1980s by Professor Jack Knetch of the Economics Department at Simon Fraser University demonstrated that people value losses higher than they do gains of the same magnitude. The reason is that it’s more difficult to adjust consumption downward because of the tough choices. Gains, on the other hand are often considered a windfall and it’s easier to spend more than less.

This has implications for social cohesion. Faced with environmental loss, there will an increased value placed on the remainder, resulting in increased competition and potentially increasing the income gap.

North America which also faces both a quantity and quality problem with respect to freshwater. Aquifers in the southwestern U.S. are being depleted faster than they can be recharged. There has already been a contentious debate about the application of the North American Free Trade Agreement to export water from Canada to the U.S. Canadians place a high value on their freshwater.

Professor David Schindler, a freshwater expert at the University of Alberta has been cautioning for some time about lax monitoring of the Great Lakes, the world’s largest body of freshwater, making them vulnerable to degradation. Remarkable progress has been made in cleaning up the Lakes since the establishment of a Joint Commission between Canada and the U.S. in 1972. However, this progress may be squandered as governments diminish their role in monitoring largely as a result of expenditure cutbacks coupled with the prevailing philosophy in Ontario, that industries and municipalities can be self-regulating.

The water quality disaster in the Town of Walkerton Ontario is a prime example of the dangers of the abrogation of government oversight. Walkerton, a small farming community had about 10 deaths and hundreds became ill from the contamination of the Town’s water system by e.coli. The lesson to be learned is that delegation of authority without appropriate levels of financial resources and expertise can lead to disaster. Today, the social cohesion of this community is being severely tested as residents have waited months to have their drinking water declared safe.

The challenge for the G8 Leaders is to initiate an approach for water management now to ensure that everyone has access to clean drinking water, water to satisfy hygienic needs and food production. Because water is so essential to health, the impacts on social cohesion and regional instability could be enormous. As Lester Brown of the Worldwatch Institute puts it, millions will be sentenced to hydrological poverty.

Health, Biosafety and GMOs:

A major challenge lies in addressing health, biosafety and GMOs which are in some ways inter-related, but not dealt with collectively.

In the area of health, some regions are suffering enormous health effects from AIDS, malaria and tuberculosis. The statistics on AIDS alone are particularly chilling. Apart from the sheer numbers particularly in Africa, the impact on GDP associated with health care expenditure represents a significant opportunity cost in a continent which already ranks among the lowest in economic performance. Life expectancy has been reduced in many African countries. The loss of human life during the most productive years, not only impairs potential economic growth due to the loss of the skill base, but additionally burdens the social system with the care of orphans.

The statistics on spending on AIDS are also disappointing. According to a recent article in The Economist by Professor Jeffrey Sachs of Harvard University, "governments and private firms together spent a mere $300 million on AIDS vaccine research last year…compared with $3 billion on treatment drugs in North America and Europe."

Statistics on spending on control of other infectious diseases is equally depressing. Due to paltry spending, growth of infection rates are outstripping vaccination rates in some of the poorest regions.

But there have been some creative, low cost recommendations to increase access to vaccines and drugs. These include the use of tax credits to match drug companies sales of vaccines to poor countries and the suggestion by the International AIDS Vaccine Initiative (IAVI) that upfront financing of vaccine research by major institutions and governments coupled with the purchase guarantee to market effective vaccines would provide sufficient assurances to stimulate research.

In the area of biosafety, it is unfortunate that the Cartagena Protocol excludes the issue of food safety although GMOs (called LMOs: living modified organisms) are covered for trade purposes. The GMO and food safety issue has become one of the most volatile and polarized issues at the moment. It is not surprising that there is no clear consensus even among the scientific community on safety and long term effects of GMOs. Moreover, private control of GMOs and the human genome means that people are worried of being held hostage to the MNCs

But there are further biological issues which remain to be resolved. In her forthcoming book, The Ethical Canary, Margaret Somerville, Professor of Law and Ethics at McGill University, uses the analogy of the coalmine canary used to warn of the buildup of often fatal levels of noxious gases. Today, the warning of the ethical canary through its diminished chirping about the lack of agreed upon protocols on issues such as biotechnology, reproductive technology and lack of enforcement of the protection of biodiversity. But is anybody listening to the canary?

The message to Summit Leaders is that there is an urgent need to develop legal and international frameworks to guide the ethical use of a wide range of biotechnology issues not included with the Cartagena Protocol The reality is that these industries are moving ahead in leaps and bounds outpacing the ability of individual governments or individual international organizations to develop appropriate legal frameworks, essentially setting their own rules. If the progress of the ratification of other conventions and protocols is any gauge, Biosafety is likely to take lengthy negotiations, despite the desire of G8 Environment Ministers to see its early entry into force. As a subsidiary agreement to the Biodiversity Convention, implementation of the Cartagena Protocol is dependent upon achieving 50 signatories to the Convention on Biodversity.

4. Conclusions: It’s time for Action, not words

Based on this brief overview of some of the greatest environmental challenges, one has to ask: Can we afford to wait even a few more years to the prospective "Rio plus ten" review in the year 2002 and the G8 Summit to be held in Canada that year?

The challenge to the G8 Leaders is to set a clear course of new directions and concrete action on these key issues, not just more study. Even in the absence of all of the evidence and effects, action can and should be taken to accelerate tackling these issues before they become major problems. The vitality of the earth’s environment is so essential to social cohesion and regional stability. The costs of environmental improvement are going to be high, but that alone does not mean we should defer significant action. We know that mega-projects such as hydro-electric dams and nuclear power plants have often failed to meet their potential, but the investments were made anyway. It would therefore seem that the cost/benefit equation is understated. It is also possible that the converse is true when it comes to investments in environmental protection: costs may be overstated and the benefits understated.

However, this is no justification for taking little or no action. The success of the community level initiatives on climate change under ICLEI, demonstrate that small steps achieve results. Moreover, the nature of the actions required to effectively address these environmental issues suggest that actions would be dispersed over a number of players. In the case of climate change, they could collectively begin to achieve some substantive results rather than endless negotiation while our environmental debt increases. After all, ‘Rome wasn’t built in a day.’ By setting targets for action here in Okinawa, the G8 Leaders could reassert responsibility for public oversight of the use environmental resources to meet society’s needs.

At this Summit, the Leaders can seize the opportunity to develop a new initiative by packaging together the principles of IT, environmental enhancement and social cohesion within the globalized trade environment and building on the "new Cologne consensus" for socially safeguarded globalization.

It is time to seize the opportunity to address these challenges, rather than letting the problems fester, and perhaps more importantly, leave a poor legacy for future generations and an incredibly daunting task for future leaders to rectify. In short, no guts, no glory!

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