Asia will have to build new facilities to meet the rising energy demand that will accompany their growing economies. But they must also recognize that improving the efficiency of existing plants and existing uses, is usually the fastest, often the cheapest, and certainly always the most environmentally advantageous way to increase energy supply.


Asia and a Sustainable Earth

by Maurice Strong, Chairman and Executive Officer, Ontario Hydro and Chairman, The Earth Council, to the Asian Development Bank, Manila, 6 June 1994.

I can think of no higher compliment than to have been asked to participate in this lecture series, and I am profoundly grateful to the Asian Development Bank for affording the opportunity to meet with such a distinguished and influential group of people.

As you know, the lecture podium is not my natural habitat. I am a layman practitioner who has been privileged over the years of my involvement in the environmental movement to have had the guidance, advice and support of some of the world's leading professionals from all walks of life.

I want to use this opportunity to accord my special gratitude for the support and cooperation I have received from the ADB and its executive and staff during my own career in environment and development, particularly in my recent role as Secretary-General of the Earth Summit in Rio de Janeiro in 1992. I want to pay special tribute to Kimimasa Tarumizu. Under his leadership the ADB was amongst the first to recognize, and to alert the world to, the risks we face from the growing pressures on the Earth's resources and life support systems resulting from escalating human numbers and activities. I also want to congratulate his successor, Mitsuo Sato, and wish him well in this very demanding and important post. The continuing high priority which the ADB places on environment and sustainable development concerns in its programs and activities provides hope and encouragement to all of us who are working to give practical effect to the vision of Rio and the agreements reached there.

I also want to recognize the leadership role being played by your host country, the Philippines, in blazing the trail toward a sustainable world. With its Strategy for Sustainable Development, adopted in 1990, the Philippines government anticipated the Earth Summit's Rio Declaration and Agenda 21 by two years. And this country was among the swiftest and most resolute in following up Rio, when President Ramos signed the Executive Order creating the Philippine Council for Sustainable Development on September 1, 1992.

I am immensely gratified that my own country, Canada, has been able to play a part in the Philippines' sustainable development efforts, through the Environment and Resource Management Project of Dalhousie University. And, of course, as an active member and supporter of the Asian Development Bank, Canada is very much involved in the leading role the Bank is playing in fostering sustainable development throughout Asia. Having been involved as Canada's representative in the establishment and inauguration of the Asian Development Bank, I have felt a special affinity for it over the years, and I have naturally followed its fortunes with great interest.


Where do we stand today?


So where do we stand today in the movement toward a more environmentally sound and sustainable way of life on our planet?

In the twenty years between the first United Nations Conference on the Human Environment in Stockholm in 1972, and the Earth Summit almost exactly two years ago, a good deal of progress was made in many areas, including our understanding of the complex system of interaction through which human activities impact on the environment and resources of the planet. And a host of new institutions have been established at the governmental, inter-governmental and non-governmental levels to deal with the policy, regulatory, scientific, economic and other dimensions of these issues.

Virtually every nation, including developing countries which prior to Stockholm had evidenced little interest in the subject, established national ministries or agencies with responsibility for environmental policies and regulations. And the United Nations Environment Program was established with its headquarters in Nairobi, Kenya, to provide the focal point and framework for the international cooperation which is so essential to effective action on most environmental Issues.

Most of this progress was directly attributable to, or given impetus by, the Stockholm Conference, which succeeded in giving the environment an important place on the agenda of the international community. And it was accompanied by some significant progress in addressing a number of important substantive environmental concerns, notably the "close-in" problems of air and water pollution in industrialized countries. Some environmentally devastated areas were reclaimed and the deterioration of others arrested; there were improvements in energy efficiency and reductions in emissions of some of the more noxious pollutants like sulphur dioxide.


Global warming more acute


But despite this progress, it became evident by the mid-1980s that, overall, the conditions of the Earth's environment and some of its most vital ecosystems had continued to deteriorate and some of the primary global risks such as global warming and ozone depletion had become more acute and menacing than they appeared at Stockholm. At the same time, developing countries were experiencing problems of pollution and environmental degradation rapidly approaching the levels of the more industrialized countries while lacking the resources to cope with them.

It was also becoming increasingly evident that there was a direct and inextricable link between economic development and its environmental impacts.
Against this background, the United Nations General Assembly decided in December 1983 to establish the World Commission on Environment and Development to examine the condition of, and prospects for, the economy and the environment in the perspective of the year 2000 and beyond. The Commission, under the leadership of Norway's talented and able Prime Minister, Gro Harlem Brundtland, in its landmark report released in 1987, "Our Common Future", made a compelling case for sustainable development as the only viable pathway to a secure and promising future for the human community, and produced a set of recommendations for achieving it.

This report provided the basis for the decision by the UN General Assembly in December 1989 to convene, on the 20th anniversary of the Stockholm Conference, the United Nations Conference on Environment and Development in Rio de Janeiro, and that participation would be at the level of heads of state or government, making it the first "Earth Summit".

Preparations for the conference evoked the participation and contributions of an unprecedented number of governments, inter-governmental and non-governmental organizations. It produced a massive amount of evidence documenting the sobering fact that, despite all the progress made since Stockholm, the processes of environment deterioration identified there and of the population and economic growth that drive it, had accelerated.

Let me cite but a few examples:

Between 1972 and 1992 world population grew some 3.8 billion to 5.5 billion, an increase equivalent to the total population of the world at the beginning of the century. And most of this increase occurred in the developing world. At the same time the percentage of population concentrated in urban areas grew from 38 to 46 % and the number of mega-cities, with populations of 10 million inhabitants or more, grew from 3 to 13 of which 9 are in the developing world. The number of nuclear reactors grew from 100 in 15 countries to 428 in 31 countries; atmospheric concentration of CO2 from 327 parts per million to 357 parts per million; the number of motor vehicles from 250 million to 600 million; the annual fish catch from 56 million tonnes to 90 million tonnes and the annual rate of destruction of tropical forests from 100,000 square kilometres to 170,000 square kilometres per annum.

Preparations for Rio made it starkly clear that fundamental changes in economic behaviour offer the only viable prospect of effecting a transition to a secure and sustainable future as we move into the 21st century. Even some of the more enlightened and well informed business leaders recognize that this is a situation that is simply not sustainable as was pointed out persuasively in the seminal report, "Changing Course," of the Business Council for Sustainable Development to the Earth Summit. New patterns of production and consumption, which we have come to refer to as "sustainable development" are not just idealistic notions, but survival imperatives if our Earth is to remain a secure and hospitable home for humans and other forms of life with which we share our planet.


Was Rio successful?


One of the questions I am asked most frequently these days is "was Rio really successful?"

Two years after the Earth Summit it is still too early to pronounce any final judgement. As an event in itself it was clearly remarkable, indeed historic. Never before had so many of the world's political leaders come together in one place, and the fact that they came to consider the urgent question of our planet's future put these issues under an enormous international spotlight. This was helped by the presence at Rio, both in the conference itself and the accompanying "Global Forum", of an unprecedented number of people and organizations representing every sector of civil society, and more than double the number of media representatives than had ever covered a world conference.

This "people-pressure" helped to move governments to agree on a set of principles, the Declaration of Rio, and a comprehensive program of action to give effect to these principles, Agenda 21. Unfortunately, some sacrifices had to be made to achieve the consensus that made these agreements possible. This led to weakening of the provisions on population, on energy and on patterns of production and consumption, as well as in the commitment by industrialized countries to provide the increased resources required to enable developing countries to implement Agenda 21.

Nevertheless, Agenda 21 constitutes the most comprehensive and far reaching program of action to secure the future of life on earth ever agreed to by the nations of the world. And the fact that this agreement was reached at the highest political level lends it a unique authority. It presents detailed policy and action recommendations on a broad range of issues which are central to our prospects for survival and well being. And it does this within an integrated framework which enables our response to these issues to be guided by an understanding of the systemic linkages and interactions amongst them.

Two of the most important products of the Earth Summit were the conventions on Climate Change and Biodiversity, each of which was negotiated prior to the conference and opened for signature in Rio. Representatives of more than 150 nations signed each of these conventions. A notable exception was the unwillingness of the United States to sign the convention on Biological Diversity -a decision that has since, fortunately, been reversed by the Clinton Administration. And both conventions have now come into force.

The Conventions on Climate Change and Biodiversity represent significant steps forward in the efforts by the international community to address two of the most critical environmental threats to the human future. But it should be recognized that these conventions are only starting points in the process of achieving agreements that are sufficient to deal effectively with the risk of climate change and loss of biodiversity. Most of the difficult issues on which agreement must be reached are still ahead. The conventions signed in Rio provide no basis for complacency; indeed I am deeply concerned that the impetus which the Earth Summit provided for these negotiations has diminished since Rio and that the process of continuing the negotiations that are necessary is lagging.


Agenda 21: Key issues


Let me briefly cite some of the other key issues which Agenda 21 addresses:

Water - The quality and supply of fresh water is emerging as one of the most critical issues in virtually every region of the world. It will undoubtedly become a growing source of conflict, particularly in areas like the Middle East.

Cities - Our world is becoming largely urban. By 2025, 60% of the world's people is expected to be living in and around cities as compared to only 3% in the 1870's. The cities of the developing world are growing at rates never before experienced, far out-pacing the capacity to provide jobs housing, health and sanitation facilities and services to their people. They are becoming seedbeds for social breakdown and conflict. In the industrialized world, many large cities are also being congested by concentrations of people, industry and automobiles and are becoming increasingly difficult to manage and to live in.

Oceans - The marine environment, which includes the oceans, seas and adjacent
coastal areas, forms an integrated whole which is fundamental to our global life-support system. Coastal areas, regional areas and fish stocks are suffering serious deterioration which requires new dimensions of international cooperation. Yet the United Nations Convention on the Law of the Sea which provides the framework for this has still not come into force.

Waste - We face the mammoth and immensely costly task of disposing safely of the mounting tide of hazardous and solid wastes our industrial civilization is generating.

Food and Agriculture
- There is a grim paradox in the fact that today there are food surpluses on the one hand and millions of starving and undernourished people on the other. Prospects are for a worsening of this situation as population increases while arable land diminishes in food deficit areas, notably Africa, in which some of the poorest people struggle for mere survival. 

What all of these issues have in common is that they must be managed if the risks to which they give rise are to be averted or contained within tolerable limits. And they can only be managed on an integrated, cooperative basis. In this, governments have a primary responsibility. But it cannot be left to governments alone. It will require a vast strengthening and re-orientation of institutional mechanisms and capacities at every level and an incorporation of the objectives of Agenda 21 into international agreements and arrangements in respect of trade, investment and finance.

It will require the development of an effective and enforceable international legal regime which will extend into the international arena the rule of law, which is the basis for the effective and equitable functioning of national societies. It will require the integration of ecological disciplines into our educational system, and the development of the understanding and skills required to manage these issues.


Each sector must be committed


The values on which implementation of Agenda 21 in the final analysis will depend must also be integrated into our cultural and social systems. Each sector of society - business and banking, trade unions, scientists, farmers, educators, religious leaders, communicators, indigenous people, women, children and youth - must be fully committed to and engaged in the implementation of Agenda 21.
Industrialized countries have a responsibility to set an example. But the ultimate success in implementing Agenda 21 will depend on the performance of developing countries, representing as they do some three quarters of the world's population.

The transition to sustainable development cannot be effective without them, and they cannot do it alone. They demonstrated at Rio their willingness to join the commitment to sustainable development and Agenda 21. At the same time, they made it clear that this would only be possible if they have the means to do so through access to additional financial resources, technologies and strengthened institutional capacities.

The Secretariat of the conference estimated that for developing countries to implement Agenda 21 it would cost some 625 billion dollars per year - a large sum, yes, but not in relation to the twenty trillion dollar size of the world economy or the billions in military expenditures, and subsidies of various kinds to unsustainable practices. Some eighty per cent of this must come from developing countries themselves through redeployment of their own scarce resources. And the twenty percent that would need to come from industrialized countries, some 70 billion dollars per year in excess of current flows of Official Development Assistance, would bring resource flows to developing countries to about the level of 0.7 Per cent of their GNP, to which most of them have long been committed, but only a handful, including Sweden, are meeting.

With the demise of the communist regimes of eastern Europe and the Soviet Union, the full extent of the massive environmental devastation they produced has been revealed. They too will need massive additional investment and assistance to ensure that the rebuilding of their shattered economies is carried out on an environmentally sound and sustainable basis. Unfortunately there are all too few signs at present that this is happening. I will return to this important issue in a moment.

The economic growth of developing countries and the re-development of the former Soviet Union, if it proceeds in the traditional mode, will soon overtake industrialized countries as the principal source of global environmental impacts. That would increase risks to dangerous levels the world community cannot afford to accept. Yet the right of developing countries to grow cannot be denied; nor can it be constrained by conditions unilaterally imposed by the industrialized countries.

The only answer to this dilemma lies in industrialized countries reducing their impacts to leave environmental "space" for developing countries to grow, while expanding their support for developing countries in effecting their transition to sustainable modes of development.

All of the environmental deterioration we have witnessed to date has occurred at levels of population and human activity a great deal less than they will be in the period ahead. The astounding success of the human species, its proliferation in numbers and in the scale and intensity of its activities, is threatening the future of the Earth's life systems and of the human species itself. And the concentration of population growth in developing countries and economic growth in industrialized countries which has given rise to such serious imbalances in our global society shows no significant signs of changing.


Borders of the world


One of the traditional outlets for the pressures generated by population growth, conflict and economic difficulties has been migration. But today the borders of the world are closing as pressures for migration escalate. Scarcely had we celebrated the tearing down of the Berlin Wall than new walls were being erected in Europe and elsewhere against the entry of the poor, the homeless and the dispossessed of the east and the south.

The "new world order" which has entered the rhetoric of international politics is far removed from the grim realities in which nations are retreating from the commitments and responsibilities this entails. Any new world order must provide for the full and fair participation of the majority of the people of the world who live in developing countries. They must have equitable opportunities to share the benefits, just as they share the risks, of our technological civilization. And surely the highest priority should be accorded to eradication of the dire and debilitating poverty that condemns so many people to suffering and hunger that are an affront to the moral basis of our civilization. This is one of the primary themes of Agenda 21.

This was a primary theme of the Earth Summit and Agenda 21, and represents the principal challenge we confront in giving effect to their conclusions and recommendations the need for fundamental changes in our economic life through a full integration of the environmental dimension in economic policies, decision making and behaviour. This can only be achieved through major changes in the system of incentives and penalties by which governments motivate the economic conduct of corporations and citizens.

In general terms, this means providing positive incentives for environmentally sound and sustainable practices, products and services together with penalties and taxes that deter environmentally unsound behaviour. This needs to be accompanied by the adoption of accounting methods, both in national accounts and business accounting, in which environmental costs are fully integrated into the costs of products and transactions. It is, after all, fully consistent with the principles of market economics that the price of all products and transactions should incorporate their full real cost.

As I said in my final statement at Rio, the high level of agreement reached at the Earth Summit does not provide any assurance of its implementation. The world still lacks an enforceable legal and governance system. Accordingly, implementation will depend on what governments and others do now to follow up and give concrete effect to the decisions taken at Rio. So far the record is mixed at best, particularly at the level of governments. To some degree this is understandable. The changes called for at Rio were fundamental in nature and will not come quickly or easily.

There have, however, been some positive developments. The United Nations Commission on Sustainable Development, accompanied by a high-level advisory committee, has been established as the forum for continuing governmental consultation and cooperation in following up and implementing the agreements reached at Rio. The United States is re-establishing its leadership in respect of the issues on which it was so reluctant at Rio. In addition to signing the Biological Diversity Convention, and agreeing on targets and timetables for reduction of CO2 emissions, which it was not prepared to do under the Climate Change Convention, it has established a new President's Council on Sustainable Development. Japan has enacted a Basic Environment Law. Other countries, including China, are developing their own national "Agenda 21" in response to the global Agenda 21.



Despite the recent agreement on replenishing the Global Environment Facility, developing countries have good reason to be disappointed in the response by industrialized countries to their needs for financial support in effecting the transition to sustainable development. In fact many countries, including I am sad to say, my own country, Canada, have actually reduced official development assistance. The rich have never felt, or acted, so poor as they do today.

It would clearly be unrealistic at a time when all industrialized countries are experiencing severe economic pressures and budgetary stringency to expect these additional resources to come through increases in foreign aid in traditional terms. But even in times of economic stringency, the funds can be made available if the task of securing our common future is given sufficient priority. What is required is not totally new funds - you can't pick money off trees - but a massive reorientation of current budgets, subsidies, fiscal, tax and economic policies to provide positive incentives for sustainable development, and new, innovative approaches to resource transfers.

Estimates made for the Earth Summit indicated that if developing countries were accorded full and free access to the markets of industrialized countries, they could earn through trade much more than they now receive as development assistance. And the relief from the oppressive burdens of debt which are stifling their attempts to revitalize their struggling economies could go a long way toward freeing up the additional resources they need to effect a transition to sustainable development.

Economic instruments and tradeable emission permits offer promising means of using the market system for channelling resources available for environmental improvement to those places in which they can be utilized most cost effectively. While there are still many difficulties to resolve in designing and implementing emission trading, the US government has introduced an ambitious S02 program as part of the 1990 Clean Air Act Amendment. And my own company, Ontario Hydro, is examining ways of supporting the introduction of an S02 and a NOX trading system in Ontario.

The most exciting and promising post-Rio developments are occurring outside of governments, where there has been a virtual explosion of activities and initiatives on the part of grass-roots organizations, citizens groups and key sectors of society. It is evident that people returning from, and inspired by, Rio are determined to translate its basic themes into their own responses to Agenda 21. Engineers and architects, through their international bodies, have committed their professions to cooperative programs designed to support implementation of Agenda 21 in their sectors.

The Business Council for Sustainable Development has been reconstituted with a commitment to continuing leadership in effecting the change of course it called for at Rio. And regional business councils are being established, which will help to initiate all the small but vital "changes of course" needed to effect the overall transition to sustainability. The International Chamber of Commerce has brought together a similarly impressive group of business leaders in its World Industry Council for the Environment. Many of the world's cities are establishing their Agenda 21 under the aegis of the International Council of Local Environmental Initiatives. And similar initiatives are proliferating at the community and sector levels in every region of the world.

These are all hopeful signs, but they are not enough. The evidence produced for the Earth Summit made it clear that what is needed is fundamental change in the dynamics and direction of our economic life. This basic change of course has not occurred and until it does we will, despite our rhetoric and good intentions, continue to move in a direction that is simply not sustainable. Business is at the heart of this dilemma.

Economic life


For it is largely through our businesses, big and small, that we manifest our economic behaviour and conduct our economic life. In addressing the challenge of achieving global sustainability, we must apply the basic principles of business. This means running "Earth Incorporated" with a depreciation, amortization and maintenance account. On this basis, much of what we have been regarding as wealth creation has in fact represented a running down of our capital. Earth Incorporated, like any other business, can simply not function for long on that basis. In fact, if we were to present its accounts on a business basis, Earth Incorporated would be, in a very real sense, in the process of liquidation, headed for bankruptcy.

It is nevertheless understandable that those faced with painful trade-offs between immediate economic benefits, including jobs, are seldom prepared to exchange these for long term environmental benefits to society. But these, I contend, must not be written off as neanderthals. Rather they must be enlisted in the movement towards sustainability by helping them to deal with their immediate, transitional problems and providing the longer term incentives for them to place their businesses on a sustainable basis. This is nowhere more true than in the field of natural resources, which has given rise to so many of the most immediate and divisive conflicts in my own country and others, in which natural resources are an important source of income and employment.

But our natural resource industries must learn the lesson that the fisheries industry is paying such a high price for learning too late -that sustainable development is the only pathway to a healthy, productive future. The experience of some industrialized countries, notably Japan, has shown that environmental improvement and efficiency in the use of energy and resources is fully compatible with, and indeed contributes to, good economic performance. Japan has succeeded during recent years in reducing levels of domestic air and water pollution and the amount of energy and raw materials used to produce a unit of GDP more than any other nation, while leading the world in economic performance. And in the course of this it has created a new generation of competitive advantage for Japanese industry. Indeed, the Japanese, more than most, have realized that the next generation of economic and industrial opportunity will be environment driven.

Asia has become the primary engine of world economic growth, and the ADB is one of the most important fuels of that engine. But as a recent United Nations report warned, there is a real danger that many Asian nations will repeat the patterns of environmental destruction which characterised our industrial revolution. With the state of our environmental knowledge to date, this is not only unnecessary, but patently disastrous. It would be no exaggeration to say that the battle to save our planet through sustainable development will be won or lost in Asia. It is inconceivable that there could be an effective global transition to sustainable development unless Asia develops sustainably. Here, the ADB's influence and support and the increasing awareness on the part of China and other important nations of the region provide some basis for hope. But any visitor to the rapidly developing areas of Asia and the Pacific today could not help but be concerned at the lack of any great evidence on the ground of this increasing awareness and commitment at the policy level.

This is particularly true in the case of energy development. Several months ago the World Energy Council, in a major report called Energy for tomorrow's World, noted that energy issues are shifting from the industrialized to the developing world. Within 30 years, it said, energy consumption in developing countries will rise to 55 per cent from the current 33 per cent of the world total.

Within only 25 years, developing nations on the Pacific Rim and Southern Asia will increase their coal consumption by up to 250 per cent. China alone will double its already heavy use of coal in the electric power sector in the current decade. And China is the third largest national source of carbon dioxide emissions, accounting for more than 11 per cent of the world's total. Let me quote from the World Energy Council report: "The dominance of China in this matter is such that assisting China in achieving economic development with reduced greenhouse gas emission rates may be the single most beneficial action which mankind can take -with the potential improvement eclipsing that obtained by further improving the performance of the developed world."

Certainly China - and the rest of developing Asia - will have to build new facilities to meet the rising energy demand that will accompany their growing economies. But they must also recognize that improving the efficiency of existing plants and existing uses, is usually the fastest, often the cheapest, and certainly always the most environmentally advantageous way to increase energy supply. This is true not only of energy. Efficiency is what sustainable development is all about. This point was made very persuasively by the Business Council on Sustainable Development in its report to the Earth Summit, when it said the eco-efficiency is the key to the new generation of industrial opportunity and increased prosperity for all - efficiency in the use of energy, resources and materials, as well as in the prevention, disposal and re-cycling of waste. The Rio experience highlighted the fact that government action needs to be inspired and nourished, and at times sharply prodded, by the insights, policy analyses and initiatives of the private sector.

It is to aid in this process that the Earth Council has been created following more than a year of preparation and consultations with some 10,000 organizations and a broad cross-section of development, environmental, social and public policy leaders and experts throughout the world. The headquarters of the Earth Council has been established in San Jose, Costa Rica. It will act as a catalyst to facilitate implementation and follow-up of the results of the Earth Summit. It will do this by cooperating with and adding value to, rather than duplicating, the work of other organizations to ensure that the issues of Rio remain at the centre of the public agenda. It will help to ensure that the concerns and the experience of people at the grass-roots level are brought to bear at all levels of public policy and decision making.

The issues addressed at the Earth Summit in Rio are integral to the fundamental processes of civilizational change in which we are now caught up. The demise of the cold war signalled the end of the old order that had shaped international, political, economic and security relations since the end of World War II. Yet a new world order has not emerged. We are in a dangerous and frustrating interregnum in which political leaders are more prone to resort to ad hoc responses to the problems and pressures they face based on considerations of narrow, short term political expediency than to face up to the root causes of these problems.

This process has extremely important implications for the prospects of effecting the transition to sustainable development called for by the Rio agreements. It threatens to deepen and entrench the rich-poor dichotomy both within nations and internationally. Even as Marxism has been discredited as a political doctrine, one its main tenets may be given renewed credence by the emergence of a new "class war." I am convinced that addressing the increasing dichotomy between the haves and the have-nots will be the principal challenge to industrial societies, as well as to relations between industrialized and developing nations in the period ahead.

When traditional institutions and constraints break down -whether they are democratic or totalitarian -the result is often a regression to anarchy, tribalism and social conflict. We need look no farther than Bosnia to see that in a post-Cold War world that is awash with weapons, ethnic tensions and regional rivalries can readily ignite armed conflict.

An interdependent world


Reversion to nationalism, parochialism and narrow self-interest can provide only a brief respite from the realities of an interdependent world, and only at a cost that most would find unacceptable. The only conceivable answer is to establish a new international system of governance, which would provide the mechanisms required to avoid the risks and realize the benefits of our global technological civilization.

The 50th anniversary of the United Nations next year provides a unique opportunity to restructure and revitalize the U.N. and its system of organizations and agencies, including the Bretton Woods institution, to prepare them for the vastly increased role they must have as the primary multi-lateral framework of a new world order. The results of the independent Commission on Global Governance will be available to make a timely and invaluable contribution to this process.

In this critical area of governance, environmental issues cannot be seen or dealt with as separate and distinct from the other major issues now shaping our destiny. The wasteful and destructive economic practices which have brought us to our present pass are in a very real sense the products of deficiencies in our economic structures and our processes of governance. National governments need to share with internal jurisdictions, regional, provincial and local, as well as non-government actors, responsibility for activities that can be most effectively handled at these levels.

The real-world cause and effect system through which human policies and actions are translated into their economic and social consequences is systemic in nature, and can only be managed on a systemic basis. Yet the processes of governance through which we are trying to manage these issues are highly compartmentalized. There must be a more systemic relationship amongst each of the various levels of government than now exists, and amongst the institutions and disciplines into which our response capabilities are divided.

The world needs some breathing room, and we in the industrialized world must begin the process by lightening OUR demands on the Earth's resources, and reducing OUR impacts on Earth's environment. And what this implies -in fact, demands -is nothing less than an eco-industrial revolution - not some comprehensive patching - up of our old political and economic systems. And for the venturesome and the entrepreneurial, it will create many more opportunities than it forecloses.

The issues I have been addressing are focused on the pragmatic challenges of transforming our vision of a sustainable civilization into reality. But we must recognize that this will not occur without a major cultural transformation - a reorientation of the ethical, moral and spiritual values which provide the primary motivations for human behaviour. For the privileged it will require a shift to lifestyles of sophisticated modesty which place much greater emphasis on the qualitative, non-material dimension of living.

Concepts of caring, respect for, sharing and cooperation with others must be at the centre of the motivational system that undergirds the transition to sustainability. This does not mean homogeneity. Diversity and variety are as much a source of strength and resilience in human affairs as they are in natural ecosystems. But as we see, in the human domain it is also a source of conflict and division. Nevertheless our common interest and security require that we transcend our differences and cooperate on matters that are essential to the survival and well-being of the entire h~man family.

In a world in which capital investment is one of the primary drivers of societal change, institutions such as the ADB have a pre-eminent role. But it is one they share with leaders and practitioners of politics, economics, social affairs, culture, education and religion. The task of moving the human community toward a more secure, sustainable and equitable future is a challenge which must unite us all as never before.

Is there, then, any basis for confidence that we can rise to the challenge? Despite the persuasive case for pessimism, I remain convinced that we can do it. The reason is that we must do it or civilization will degenerate into chaos, conflict and continued degradation of the environment. Pessimism would be self-fulfilling. As long as there is the slightest chance that we can make the transition to a more secure and sustainable way of life on our planet, we must continue to strive for it.