A quarter of a century ago, the Brundtland Commission outlined the concept of sustainable development for the first time. It began its rather sobering report with the memorable phrase, “The Earth is one but the world is not,” to describe the interactions between the world’s environmental and economic and political systems. Sustainable development was to provide a new paradigm for economic growth, social equality and environmental sustainability.

Now, UN Secretary-General Ban Ki Moon has created a new panel, including former Norwegian Prime Minister Gro Harlem Brundtland, CIGI Chair of the Board Jim Balsillie and 21 other distinguished world citizens, to reinvigorate the concept in advance of the World Summit on Sustainable Development to be held in Rio de Janeiro in late June 2012. The panel was chaired by the presidents of South Africa and Finland, which are about as far south and north as it is possible to go.

The panel sets out its vision with an equally memorable phrase, based on the opening lines of Dickens’ A Tale of Two Cities:

Today our planet and our world are experiencing the best of times, and the worst of times. The world is experiencing unprecedented prosperity, while the planet is under unprecedented stress… As the global population grows from 7 billion to almost 9 billion by 2040, and the number of middle-class consumers increases by 3 billion over the next 20 years, the demand for resources will rise exponentially. By 2030, the world will need at least 50 percent more food, 45 percent more energy and 30 per cent more water — all at a time when environmental boundaries are throwing up new limits to supply. This is true not least for climate change, which affects all aspects of human and planetary health.

Sustainable development pervades the language of international diplomacy. Its fingerprints are all over the climate change convention and it is even one of the few stated substantive goals of the World Trade Organization. Yet, it remains an elusive concept in day-to-day decision making. Among the reasons for this, the panel points out the attraction of the short term, for both political and economic decision makers. There are few rewards for politicians who make decisions that will take several elections to produce results, while investors and CEOs are rewarded for the next quarter’s results, rather than what will be achieved over the next decades. Secondly, we have failed to integrate environmental considerations into economic policy making. The panel calls upon CEOs and heads of government to take the lead in integrating sustainable development across all of their departments and for national budgets to be accompanied by sustainability analyses, similar to those already being carried out in Norway.

The panel highlights the need for urgent action, even in a time of economic turmoil. The current debate on economic reform offers a unique opportunity to change the economic system so that it is not only robust economically, but also more likely to foster longer-term investments in sustainable development. We need to begin to have the price of products reflect the full environmental and social costs of their production. And we need to start with carbon. Without a carbon price through regulation, cap and trade systems or a carbon tax, efforts to combat climate change will be doomed to fail. It is also critical that we begin to value the contributions of natural ecosystems. These ecosystems are vital to our prosperity, yet we are only just beginning to pay for biodiversity, clean water and soil conservation.

As the “Stern Report,” the Organisation for Economic Co-operation and Development (OECD) and the UN Environment Programme have pointed out, the transition to a lower carbon, more sustainable economy will be expensive — anywhere from one to 2.5 percent of world GDP. But the costs of doing nothing could be as much as 10 times higher in terms of lost production. Doing nothing about our present situation is an expensive option.

Set out in these terms, one to 1.5 percent doesn’t sound like a high price to pay for a more resilient planet with an end to widespread poverty. Since the 1970s, the rich world has been struggling to meet the goal of one percent of GDP to be devoted to development assistance, as recommended to the world by former Canadian Prime Minister Lester B. Pearson. It is a very large number — a trillion dollars or more. So how will we pay for the transition to sustainable development? Is there no money for sustainable development programs? Governments are now spending up to US$750 billion a year to subsidize the fossil fuel industry and OECD governments are putting at least US$400 billion a year into subsidizing agriculture. Is there no money for encouraging the growth of a market for green goods? Governments spend up to US$7 trillion a year purchasing goods and services. What would happen if even half of that money was directed to purchasing sustainably produced goods and services?

Governments will continue to provide some money through their foreign assistance programs and the new US$100 billion international Climate Fund, but the majority of funding will have to come from new and imaginative private sector financing. And here is where the sustainable development and economic reform agendas come together. The challenge is to make our economic system better able to withstand economic shocks, while at the same time, being prepared to finance the transition to sustainable development. Short-term greed was one of the major causes of the economic crisis. The panel urges efforts to reform the reward systems for investment managers so they will be more likely to invest for the longer term. They urge governments and stock exchanges to develop metrics for sustainable performance of their member companies, and call for mandatory corporate reporting on sustainability performance for companies with a value of more than US$100 million. The panel also urges governments to reform their laws on fiduciary, so that pension fund and other money managers are no longer literally prevented from investing in longer-term, slightly riskier ventures. Additionally, they urge governments to work with the ratings agencies in order that ratings for both companies and countries are not just based on financial solvency, but also their ecological solvency. A country with a bankrupt environment is no more capable of success than one whose economy is broke. The panel also calls upon the new and fast-growing sovereign wealth funds to follow the Norwegian example and invest more sustainably.

Anyone who has attended an international conference over the last few years knows how poisonous the diplomatic environment can be. For example, success in the climate negotiations is defined as the avoidance of failure. But this panel’s report is refreshingly clear of that international name-calling and blame game. Instead, it offers the kind of vision of hope that made the “Brundtland Commission Report” such a success 25 years ago. And it does succeed in driving home the need to integrate the environment and the longer-term perspective in our politics and economics.

A country with a bankrupt environment is no more capable of success than one whose economy is broke.