As prepared for delivery

Opening

Your Excellencies,

Distinguished Guests,

Ladies and Gentlemen,

I am delighted to be here today with a group of global thought leaders of today -- and tomorrow.

“May you live in interesting times” is said to be the English translation of a Chinese curse -- the argument is that life is better in the peace and tranquillity of “uninteresting times” rather than in “interesting” ones, full of trouble.

It is true that we live in an extraordinary time of political, technological and social change.

Tipping points

We are at a social tipping point. Here in France, whose capital city lends its name to the international climate agreement, the gilets jaunes took to the streets – initially at least – to protest a planned rise in the tax on diesel and petrol. Indeed, demonstrations across the world have marked the end of one decade and the start of this new decade. At their heart is a sense that economic growth has left many people worse off even if, in most countries, the headline GDP figures suggest that countries are much wealthier.

We rightly talk about the need for systemic change – but often the drivers of change can come down to a movement -- or even just one person. In the span of just 12 months, Greta Thunberg went from a lone climate protestor on the steps of Stockholm’s parliament building to a global climate activist powerhouse.  At just 16 years of age, Thunberg had mobilized a climate strike that drew more than four million protestors around the world in a single day. The Power of One can be seen in its purest form.

And when it comes to climate change and biodiversity loss, there is no doubt that we are at a scientific tipping point, which has been dubbed by one scientist as the “drumbeat of the Anthropocene”.  The ten years to end of 2019 are the warmest decade on record  while 2019 was the second hottest year  on record. When it comes to the natural world, the IPBES Global Assessment  has highlighted that one million plant and animal species are now on the verge of extinction, many “within decades”  -- that number includes 40 per cent of all amphibian species, 33 per cent of corals, and around 10 per cent of insects.

And there are signs that we are moving towards an economic tipping point, where, increasingly, those managing large economies claim that the current discipline of economics is no longer fit for purpose, that the ‘take-make-use-lose’ industrial model has depleted resources and dumped waste into the environment, while traditional economic thinking and theories are increasingly deficient in explaining the workings of today’s data economy.

The former French President, Nicolas Sarkozy created a commission to explore alternative economic models, headed by Nobel laureates Joseph Stiglitz and Amartya Sen. Their 2010 report recommended a shift in economic emphasis from the production of goods to a broader measure of overall well-being that would include measures for categories such as health, education, security, and sustainability.

The objective of the Kingdom of Bhutan, for instance, where I visited last year, is to grow not the Gross National Product, but Gross National Happiness.  

And a recent survey  of CEOs found that 90 per cent believe sustainability is important to their companies’ business success. And some behavioural economists now believe that the entire premise of classical economics – that people will always act in their own self-interest -- is wrong.

And, perhaps, we are approaching a political tipping point.

Scotland’s declaration of a climate emergency in April last year sparked more than 1,200 jurisdictions to follow suit in just eight months.  The European Parliament did the same in Strasbourg last November.

But are political leaders really ready to listen to the diverse voice of youth, of indigenous peoples, of rural farmers – all of whom disproportionately bear the climate burden?

If the Madrid climate conference is any indicator, the answer is a resounding ‘no’.

While 500,000 people protested in the streets – it was perhaps symbolic that hundreds of young protestors were ejected from the Climate Conference in Madrid as governments largely failed to make any progress during the longest climate conference ever. Madrid reminded me just how hard social change can be, because it is often about shifting the balance of power between those who have little or none, and those who have much.

It is no wonder that climate negotiations are frequently derailed.

While talk of tipping points suggests that transformational change is tantalizingly close, therefore, change is not inevitable.

In this vital year for nature and climate, where the world will consider a new global biodiversity framework for the next decade, and governments will have a last-ditch chance to construct meaningful rules for the Paris Agreement before it takes effect in 2021, we must be deliberate in pushing past these tipping points where people take a lead role until a new system is the new norm.

There is a logical path that can take us from here to there, and that is what I would like to speak about with you today.

I will outline the path to change -- and how people are, in fact, leading the transformational change we need.

I see five important steps ahead.

First, we need a global plan, and we have it: the 2030 Agenda with its 17 Sustainable Development Goals.

They serve as a blueprint to achieve a better and more sustainable future for all, addressing the new and the stubborn challenges we face, including around the multiple dimensions of poverty, a new generation of inequalities, around climate action and the loss of nature, around preventing conflict and building a world that is just and fair.  

This global plan is inspiring others – just as it was intended to do. An example is the new European Green Deal recently adopted by the European Commission,  which calls for Europe to become the first climate-neutral continent by 2050 -- while simultaneously creating measures for a ‘just transition’ for those employed in the fossil fuel industry and those impacted by the transition.

Right now, for example, UNDP is helping half of the countries and territories in the world – 97 in total --  to make the Goals relevant to their development plans at home, because they are the blueprint for a multilateral “Green New Deal” -- one that catalyses green circular economies and jobs, while rapidly phasing out subsidies, incentives and investments that accelerate our planetary emergency.

Second, we must tackle the financial drivers that underpin climate change and biodiversity loss

We can do this through fair market pricing.

If current trends continue -- the price of renewable energy will be at parity with fossil fuels within just 1-2 years. 

In a fully rational market, this would result in cascading devaluation in pricing,  but we can “nudge” this process along by encouraging fair carbon pricing, and by accelerating investments in renewable energy and battery storage to continue the precipitous drop in pricing.

Third, we need subsidy reform

As the Victorian economist William Stanley Jevons understood way back in 1865 -- the more efficient you become in your use of a fossil fuel, the more valuable that fossil fuel becomes to you, and the more of it you will consume.  Indeed, the use of fossil fuels can be described as an “addiction” and like so many addictions, they can be hard to kick.

The world’s governments currently invest $5.3 trillion in publicly-financed subsidies for fossil fuels, or 6.3 per cent of global GDP),  along with a $500 billion a year, or one million dollars every minute in agricultural subsidies. And since the 2015 Paris agreement, 33 major global banks have collectively invested $1.9 trillion into fossil fuels.

These are investments that accelerate biodiversity loss and climate change.

But shifts are starting to happen.

For instance, Canada, which by one estimate grants $1.6 billion  in subsidies to the fossil fuel industry annually -- announced in 2018 that it would phase out traditional coal-fired electricity by the end of this decade.

And are already seeing pro-poor examples of fossil fuel subsidy reform in countries such as Indonesia, which has eliminated gasoline subsidies and now limits their fossil fuel subsidies to selected social groups.  

Fourth, we need to “ride the wave” of technology

Historically, technology has been crucial to solve the world’s biggest challenges. Medical science has largely eradicated polio or other diseases and the “green revolution” in agricultural productivity which has made food available to more of the world’s 7.2 billion citizens.

And technology is at the fingertips of so many more.

The advent of near real-time high-resolution satellite imagery, drones, inexpensive sensors and blockchain, themselves are creating new tipping points, making the full transparency of commodity sourcing of commodities likely only a few years away.

To take one example, at UNDP, we are supporting indigenous rights and tropical forests by using blockchain to promote deforestation-free chocolate in Ecuador,  a process that both strengthens indigenous land rights and improves livelihoods while reducing carbon emissions.

It is not just about using technology such as blockchain but rather ensuring that wealth is distributed more evenly so that people can share wealth.
And UNDP is identifying innovative solutions, many grounded in digitalization or technology, to propel development forward. Our ground-breaking UNDP Accelerator Labs serving 78 countries will identify promising solutions on the ground – from energy, to business opportunities and scale them-up rapidly.

However, we must be wary of how technology can drive wedges between people.

As UNDP’s Human Development Report points out, technological advances such as machine learning and Artificial Intelligence can leave behind entire groups of people, even countries--creating the spectre of an un-certain future under these shifts.

Fifth, we need a new culture in finance, complemented by a new understanding of corporate risk

I will focus on this a little more, starting by stressing that this is about a shift; a change of culture and direction. It is not about ‘filling a gap’, around which much development discourse around financing has oriented for the past years.

Why? Because when it comes to private finance, there are $268 trillion in private investment assets under management worldwide,  including more than $70 trillion managed by high net worth individuals.  Just one per cent of this amount would finance the SDGs entirely.  

Yet private sector investment in nature is paltry. For instance, it largely ignores biodiversity as an investment asset, and viewing such investments as too risky, too conservative, or too small.  

As for public finance, despite the $125 trillion in benefits  that nature provides to society, the world’s governments invest just $52 billion annually in biodiversity-related activities,  or roughly .00065 of global GDP.

However, we are beginning to see the scale of shift required.

We are seeing a mass mobilization of investors -- 230 institutional investors with more than $16 trillion in assets under management recently called for corporate action on deforestation,  investors with $11 trillion in assets pledged to divest from fossil fuels,  and Environmental, Social and Governance (ESG) investing is now estimated at more than $20 trillion – one quarter of professionally managed assets worldwide.

But the private sector is still finding the rapid change of pace hard to understand.

As The Financial Times points out, businesses are trying to figure how to get money to green projects. They are asking -- how do we issue green bonds? How do we help companies that are trying to transition away from being dirty, oily companies into green technology? Where does the money come from for that process?

In response, UNDP is helping to answer those questions. It is catalysing private sector finance for the SDGs through new partnerships and finance instruments.  In particular, UNDP’s flagship initiative SDG Impact to show alternative investment models. It aims to drive SDG-enabling investment at scale.

A new culture of finance will emerge when the corporate world truly “feels the risk” of not changing – and build systems around mitigating those risks. When businesses are held to account differently, then they will start divesting from fossil fuels, for example.

We can do this through promoting the disclosure of financial risks of companies, with the help of groups such as CDP and Ceres. Shareholders can make a pointed fiduciary case for divestment in fossil fuels in targeted campaigns by exposing the risk of stranded assets in the future.

For instance, we can tackle financial drivers by making deforestation-related commodities a business and reputational risk to corporations, especially those corporations trading in beef, soy, palm oil and timber, commodities that drives 80 per cent of deforestation worldwide -- for instance through targeted consumer advocacy efforts.  

Many businesses are realising that if they do not start paying attention to stakeholders, they face regulatory and investor pressure and consumer backlash, while if they can get ahead of the really important social and environmental changes right now, from renewable energy to non-meat alternatives, then they can also propel their business forward.  

Take Whirlpool, for example: It has improved appliance energy efficiency because it has watched energy efficiency move from number 12 in consumer priorities in the 1980s to number three, just behind cost and performance, today.  

Closing

These five steps, all interconnected, would deliberately ‘tip’ the world towards a New Economy.

As the most recent Nobel Prize winners in economics, Abhijit V. Banerjee and Esther Duflo have put it: “The rich may eventually see that it is in their self-interest to argue for a radical shift toward the real sharing of prosperity”.

But if it was an easy mental shift to make, the world would have made it already!

The Slovenian philosopher Slavoj Žižek said it well: that even the brightest minds would rather fathom the end of the world than plan for the demise of capitalism.

And while we may know the steps to the carbon transition that will underpin a new economy, we don’t know, is what political sequence these carbon transitions will take.

The fundamental question, therefore, is how to transform the energy, passion and frustration of millions of people into positive, transformative action for people and the planet within this decade -- and starting today.

No national government, no regional parliament and no General Assembly will move unless the political representatives hear the voices of the people -- unless they know their actions today will be supported by people tomorrow, and realize there is more risk in doing nothing than in taking action; that the cost of doing things will be buffered by the millions of people who not only allow a carbon transition to happen, but actively demand one.

Political and business leaders need to listen to the will of the people.

And there is reason for hope.

Only a relatively small number of people are needed to propel transformational change, somewhere between just 3.5 per cent and 25 percent of a population, according to recent studies.
 
Political and business leaders gather in Davos tomorrow [21 January] -- where Greta Thunberg and others are demanding that participants from all companies, banks, institutions and governments immediately halt all investments in fossil fuel exploration and extraction, immediately end all fossil fuel subsidies and immediately and completely divest from fossil fuels. Reflecting the will of so many people, Thunberg rightly says, “We don’t want these things done by 2050, 2030 or even 2021, we want this done now -- as in right now.”

Thunberg is showing how the Power of One to tip the balance in the direction we need. She demonstrates that it is possible to harness concern and frustration into a direction we need to jolt governments and businesses into the level of action required.  

And as we enter this crucial Decade of Action, we must recall that the UN turns 75 years old. From shepherding the de-colonization of Africa to eradicating smallpox to the safety of air travel to tracking weather – the United Nations has brought the world together to help set the standards for things we take for granted every day.

As people come together to push past tipping points holding us back -- and as you start to make your mark on the world -- remember that the Charter of the United Nations begins with the preamble:

“We the peoples…”

We cannot wait for change or simply outline the steps we need to take and then rely on others to drive change -- change begins with you.

The Power of One is not an abstract concept.

Rather, it will be the Power of One that will transform our world for the better.