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Global Governance and Risks: Strengthening the International System through Multidimensional Cooperation

Interactive Session on Sustainable Development: Water-Energy-Food Nexus 24 March 2011, 13.30 - 15.30 At the Stiftung Wissenschaft und Politik (SWP), Berlin, Germany
Session Description The discussion identified the nexus between water, energy and food production as a major concern regarding the future of sustainable development. It addressed the challenge of sustainable development in times of scarce resources and aggravating factors such as climate change that put additional pressure on the global environment. The following dimensions were addressed: • The risks associated with the water-energy-food nexus, its implication for sustainability and future trends • Risk assessment and evaluation • Actors, institutions and instruments of risk governance • The role of Germany in global sustainability politics Key Points • • • • The three sectors are highly interlinked and the water-energy-food nexus plays a key role in securing sustainable development. Two main risks were identified: 1) Quantity risk – is there enough food/water/energy to satisfy global demand? 2) Quality risk – is the quality needed attained with respect to the different goals within the three sectors? Sustainability in the water, food and energy sectors is closely related to decisions regarding lifestyle and consumption patterns. An integrated approach is necessary to appropriately address the complex challenges of the nexus. More emphasis has to be put on the fact that water, energy and food are cross-cutting issues that must be dealt with in a coherent manner. The central question is whether the existing institutions are able and willing to tackle those complex issues. Currently, no international organization has the mandate to tackle the nexus issue. The quality of assessment mechanisms varies across the different sectors. Some positive examples for monitoring mechanisms can be found in the food sector, but a broad, sector-wide improvement is without alternative, as in many regions around the world reliable data (in particular in the water sector) is still lacking. Global governance institutions in the field of sustainability are highly fragmented. Doubts remain, however, if a global approach is a realistic option: the prospect of global governance depends on the nature of the governance item in question and whether it is seen as a global public good that requires collective action at the global level (as is the case in climate governance). Since local and regional levels are directly affected by crises, the development of solutions is more likely to happen on those levels. The public perception of “not in my backyard” may force regions to look for innovative approaches leading to a higher problem-solving capacity on the local level. Globally, Germany is perceived as a front-runner in environmental matters. Nevertheless, Germany remains only “potentially influential”, missing the opportunity to push the global sustainability discourse.

Synopsis The image of a nexus underlines the complexity sustainable development is confronted with: water, food and energy security are linked in manifold ways. Feedback loops make decisions on appropriate measures extremely difficult and the emergence of trade-offs between the different sectors likely. Examples from the

Mekong region and the rivers Euphrates and Tigris help to illustrate the tight relationship, for instance between upstream energy production from hydropower and downstream food production on irrigated land. In some sectors and regions, it seems almost too late, and in about 20 years the developments are likely to result in a veritable crisis. In particular, climate change, population growth and urbanization have further impact on resource availability and exacerbate existing scarcity. Business actors also play a significant role within the water, energy and food framework. Their increasing influence may create further tensions, as underlined especially in the agriculture sector, where the purchase of arable land in developing countries – known as landgrab – has an impact on water and food supply. With these challenges ahead, the improvement of resilience is essential. It is also highly important to keep in mind the implications of living and consumption standards for the environment and resources. In particular, future developments in emerging economies will have significant impact, and increasing living standards are a main driving force for global resource consumption. It lies within the industrialized countries’ responsibility to set a good example: they function as role models and hence have a particular responsibility in exemplifying a sustainable way of life. In general, a new perspective in the management of natural resources is needed, introducing a more demand-led approach regarding water, energy and food. The cross-cutting character of each sector makes it obvious that an integrated approach is a fundamental prerequisite for sophisticated risk management in sustainability politics. However, the status quo looks different. Even within each sector, there are fragmented structures and incoherent decision-making procedures. Capacities for adequate risk management differ widely across the sectors, and mutual interdependencies are usually ignored. In the water sector, for example, 23 UN-bodies deal with water. Meanwhile, other entities in the UN system neglect the topic even though they have a clear stake in the issue. Regarding monitoring and assessment, the food sector is quite well positioned since reporting and early-warning systems have been developed in recent years. However, the focus is rather on agricultural parameters, while cross-sectoral implications tend to be ignored. A minimum of cross-sectoral governance can instead be found in the water sector, where instruments such as integrated water resource management (IWRM) take consequences for other sectors into consideration. Furthermore, the UN High-level Panel on Global Sustainability was able to bring the water issue on the agenda of the Rio+20 preparation process. The fragmented discourses prevail, in particular in the energy sector, though the relationship between energy security and climate change is already identified as a twin challenge of the 21st century. The classification and evaluation as a risk, remains a matter of political momentum. Current risk assessments, however, tend to be mere explanatory statements rather than action-oriented instructions. Statistical data and technical analyses are a good basis, but it is important to compile assessment results in a way that they back informed political decisions. At the same time, there is a need for trust and confidence building to avoid conflict. Especially the question of who pays the cost for transition is not always straightforward. Moreover, risk management always has distributive effects. In this regard, the decision on how the assessment is organized can play a vital role. Different formats of risk assessment are applied: in Germany, there is a strong tendency towards expert discourses; other countries prefer a more participatory, societal discourse. Overall, the translation of technical risk assessments into corresponding strategies and policies is not yet satisfactory and a coherent governance framework is missing. The discussion emphasized the need for reform of the international sustainability governance. Rather than creating new institutions, existing structures should be strengthened. The UN system provides many examples of inefficient and ill-conceived institutions in the field of sustainable development – demonstrating the huge potential for improvement. A policy nexus is now needed to address the challenges appropriately. Enhanced governance of water, energy and food risks requires a multi-sector and multi-level approach. Some existing structures such as the recently founded Intergovernmental Platform on Biodiversity and Ecosystem Services could be a veritable opportunity to combine the different sectors into one, single framework. Also, inter-agency mechanisms on the UN level like UN-Water or UN-Energy are a good starting point to strengthen coherence and coordination across different UN entities regarding water and energy. Nevertheless, they have yet to reach their full potential due to lack of resources and high-level commitment. Existing governance structures at all levels must be improved. Bottom-up processes can be considered to be more promising than global solutions; however, the risks resulting from the water-energy-food nexus

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constitute a global challenge. Thus, the global level should not be excluded from a risk governance framework. Concerted multi-level action should ensure that each level is involved, fulfilling the tasks it is particularly qualified for. International guidance remains necessary, most notably because of dynamic parameters such as urbanization, demography, etc. Strengthened regional institutions and a global governance structure that facilitate, for instance, technology transfers and the diffusion of innovations could further improve multi-level governance for sustainability. The Rio+20 summit constitutes a window of opportunity for smart redesign initiatives. Its emphasis on a “green economy” provides a new frame for reform debates. Following the principle that form follows function, it is necessary to achieve a framework that is much more capable of addressing the water-energy-food nexus. However, the summit faces the challenge of being paralysed by discussions on institutional reform. Success requires determined leadership. Commitment by heads of state is crucial to create the political momentum necessary for any reform project. Without high-level engagement, Rio+20 will probably be another missed opportunity. By bringing in more of its expertise, Germany would be able to play a vital role in this process. The conference in Bonn on the water-energy-food nexus and green economy, which will take place in November 2011 and is organized by the Federal Government as the German contribution to the Rio+20 process, may be a promising starting point for a stronger role for Germany in sustainability politics.

Participants Discussion Leaders Alexander Carius, Managing Director, adelphi, Germany Uschi Eid, Vice-Chair of the Board, United Nations Secretary General's Advisory Board on Water and Sanitation, USA Fritz Holzwarth, Head, Subdivision for Water Economy, Federal Ministry for Environment, Nature Conservation and Nuclear Safety, Germany Moderated by Marianne Beisheim, Stiftung Wissenschaft und Politik (SWP), Germany Rapporteur to the Plenary Bettina Rudloff, Stiftung Wissenschaft und Politik (SWP), Germany Disclosures This summary was prepared by Leonie Beining. The views expressed are those of certain participants in the discussion and do not necessarily reflect the views of all participants or of the World Economic Forum, the German Institute for International and Security Studies or the German Federal Foreign Office. Copyright 2011 World Economic Forum No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of the World Economic Forum. Keywords: environment, sustainability, risk, global governance, global cooperation If you want to know more about this event, please contact Matthias Catón, Associate Director, by e-mail at matthias.caton@weforum.org, or telephone at +41 (0)22 8691311.

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