LDN/08/3.

25th November 2008

Programme on a New Path for World Development

Managing the Interconnected Challenges of

Climate Change, Energy Security, Ecosystems and Water

Policy Dialogue
Palace of Westminster, London,
26th and 27th January, 2009

Background Note: Initial Outline of Policy issues

1. A Conference of legislators from the G8+5 countries with scientists and experts from
around the world will be convened by GLOBE International and the Club of Rome in the
Palace of Westminster, London on 26th and 27th January 2009. This Note is to be circulated
for peer review and revision and will then, once finalised, be presented as a contribution to the
discussions. A short Executive Summary is also being prepared.

2. This Note is based on the discussions and conclusions of an international conference

of the Club of Rome which was held on 6th and 7th November in Winterthur, Canton of Zurich,
on the topic: “Managing the Interconnected Challenges of Climate Change, Energy Security,
Ecosystems and Water.” The Agenda included brief updated assessments of the emerging
risks, implications and opportunities of the four interconnected challenges of climate change,
energy, ecosystems and water. It identified critical linkages between these four challenges
and outlined strategies, policies and lines of action to contain and manage them in a coherent
way so as to avert the risks of dangerous breakdowns. And it suggested priorities and
methodologies for further analysis and for the development of action proposals through a
web-based network for international research and collaboration.

3. This Note has benefited from the meeting in Mexico City on 22nd and 23rd November
of the “International Commission on Land Use Change and Ecosystems” established by the
G8 + 5 through GLOBE International.

4. The Note is organised as follows:

I. Background
II. Key Conclusions from the Winterthur Conference
III. Implications for Policy
IV. Lines of Action and Follow-up

Lagerhausstrasse 9, 8400 Winterthur mail@clubofrome.org

Tel: +41 (0)52/244 08 08, Fax: +41 (0)52/244 08 09 www.clubofrome.org
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Summary of Key Conclusions

1. Recent evidence from across the world implies that radical measures must
be taken urgently to avert the risks of runaway climate change and
ecosystems collapse.

2. The world is headed into a perfect storm of interconnected environmental

and other crises. A forward assessment of emerging threats demonstrates
that business as usual and incremental improvement will not be sufficient.

3. Besides negotiating longer term targets, mechanisms and capacities must

be established to implement early action.

4. A new path of economic and social progress must be adopted which is

compatible with the environmental imperatives and limits of the planet.

5. The financial crisis and the consequent economic slowdown provide an

exceptional opportunity to move towards new patterns of more sustainable
and equitable growth.

6. The scale and depth of the challenges ahead will demand new ideas, new
partnerships, new mechanisms and radical institutional change.

7. There is a deep need across the world for a positive vision to provide hope
for the future.

I. Background

5. Over the past forty years, the Club of Rome has evaluated the longer term challenges
to humanity, taking account of their inter-relationships within a systemic view of the realities
of today and the prospects for future generations. In a new phase of its activities, approved at
its 40th Anniversary Assembly in Rome in June 2008, the Club has launched an international
programme of collaborative research and consultation to define the elements of “A New Path
for World Development” and to propose constructive lines of action (see NPWD/08/1).

6. This programme takes account of the complexity and interconnectedness of global

challenges. Within a coherent systems framework, it focuses its analysis on five clusters of
interconnected issues: Environment and Resources; Globalisation; International
Development; Social Transformation; and Peace and Security. (For further information see
www.clubofrome.org.)

7. As the first step in this programme, the Club convened a small, high-level
international conference on “Managing the Interconnected Challenges of Climate Change,
Energy Security, Ecosystems and Water” in Winterthur, Switzerland, on 6th and 7th November
2008. (ERC/2.8)
 -3-

8. The threats arising from climate change have become a priority issue in recent years
both for the public and for decision makers. But it is essential to recognise that climate change
is only one of an array of challenges. If policy measures are to succeed, other critical,
connected issues which threaten the future must also be addressed in parallel.

9. Climate change is intimately interconnected for example with the ecosystems crisis,
with the availability of fresh water across the world and with emerging issues of the security
of energy supplies related to “peak” oil. None of these critical issues can be understood and
resolved in isolation: the linkages between them must be properly recognised in the search for
solutions. The Agenda for the conference was therefore framed in an integrated, systems
perspective to focus attention on the vital linkages between the issue of climate change and
the three closely connected issues of energy security, ecosystems and water. (Document
ERC/1.8)

10. In recent months, the financial crisis and the consequent economic downturn have
absorbed the energies and time of top decision makers. But strategies to stabilise and reform
the financial system and to stimulate growth must be coherent with strategies to respond to
the threats arising in the fields of climate, energy, ecosystems and water: all these issues
should be framed within a broad perspective of a new path for sustainable world development.
The critical linkages between policies to address the challenges of climate change, ecosystems
collapse, energy security and water and policies to reorient and reform the financial system
will be the focus of a Club of Rome Conference to be held in April 2009 in Austria on the
topic: “New Economic Models and Strategies to meet the Challenges of the 21st Century.”

11. This Note provides an initial outline of key points arising from the analysis and
proposals of the Winterthur Conference. It will be revised and developed through
international collaboration for presentation at a meeting in the House of Commons in London
in late January 2009, to be jointly organized by GLOBE International, (the Secretariat of the
G8+5), and the Club of Rome. This meeting will bring together senior legislators and
officials from the G 8 + 5 countries with independent experts and members of the Club of
Rome. It will provide an opportunity for the action proposals and insights developed as a
result of the Winterthur Conference to be considered in the formulation of positions and
policies for ongoing international negotiations.

II. Key Conclusions from the Winterthur Conference

1. Radical and urgent measures are needed to avert the risks of runaway climate
change and ecosystems collapse.

(i) Physical evidence and analysis from all over the world demonstrate that climate
change is moving faster than anticipated while emissions continue to increase in
spite of all efforts and negotiations to date. Concern is rising in the scientific and
expert communities - which are aware of the facts and understand the science and
the systems dynamics of climate change - that we are approaching a tipping point
beyond which the positive feedbacks set in motion by human-originated
emissions, (which stimulate further rises in temperature), will become more
damaging than the impact of the emissions themselves and will overwhelm our
ability to avert potentially catastrophic climate change.
 -4-

Through the scale of its impacts on the environment, humanity for the first time is
putting at risk the prospects of future generations: policies must therefore focus
on the management of risk and the prevention of catastrophic outcomes, not only
on the potential costs and benefits of alternative lines of action.

(ii) In spite of inevitable uncertainties and disagreements, the case is clear that climate
change does represent an existential threat to our civilisation and this within, at
best, several decades. We are moving towards a climate change emergency.

The current goal of international negotiations, to contain greenhouse gas

concentrations in the atmosphere to 450 parts per million is too high. In any case,
it offers only a 50% probability of containing the global average temperature rise
to 2oC, which implies in any case, double this rise in many regions of the world,
for example, at the Greenland ice cap - with major implications for sea level rise.
Scientific and expert opinion is increasingly convinced that the target must be no
more than 350 ppm to be assured that catastrophic climate change will be averted.
(This would imply that, over a period of time, not only must emissions be cut
drastically but also, CO2 would have to be removed from the atmosphere.)

(iii) Policy makers must recognise that climate change will not be a gradual, linear
process: sudden and dramatic changes are probable and have occurred in the past.
Denial and delay will not only increase the costs of mitigation and abatement as
shown by the Stern review but will crucially increase the risk of catastrophic
climate change. We have less time to act than we have assumed. Besides the
extended process of negotiation, ratification, resource allocation and
implementation, radical and urgent action must therefore be taken in parallel to
mobilise the vast potential of knowledge, technology and resources which is
available now so as to counter the emerging threats to human, national and
international security.

(iv) Climate change is not a problem for the future alone: the impacts are being felt
today across the world, especially by the poor and deprived who have not caused
the problem but do suffer the consequences. This raises profound ethical issues
around the concept of climate justice. Through its impacts on rainfall patterns,
extended water stress and ecosystems degradation, climate change will compound
the consequences of population growth in fragile environmental conditions,
preventing the attainment of the Millennium Development Goals for hundreds of
millions of people. Besides mitigation, strengthened efforts in support of
adaptation are vital, but these must be part of a wider effort to improve human
security, to eradicate poverty and to accelerate sustainable development.

2. We are headed into a perfect storm of interconnected environmental crises. A

forward assessment of emerging threats demonstrates that business as usual and
incremental improvement will not be sufficient.

(i) Climate change is only one of the intensifying environmental challenges which
threaten the future, driven by the scale and impacts of human activities through
consumption, waste and pollution and the overuse of the biological resources of
the planet – as anticipated by the Club of Rome some forty years ago.
 -5-

We confront a systemic crisis not only in regard to climate change but, more
broadly, across the fields of climate, ecosystems, energy and water: a crisis of the
sustainability of human welfare and progress on a fragile planet. It is important to
note that such broad systemic crises do not respond to partial, ad hoc or national
measures, as we have seen so clearly in the evolving response to the financial
crisis.

(ii) In the new phase of its activities, the Club has focused initially on three issues
which are crucially connected to climate change: energy security and “peak oil”;
the ecosystems crisis; and the availability of fresh water. The four issues cannot be
understood or resolved separately. The connections between them are of profound
significance and should become the focus of policy analysis and action. This
complex of connected issues will determine in large part whether humanity can
move onto a path of world development compatible with the environmental and
ecological capabilities of our fragile planet.

Some critical links identified at the conference are:

- humanity is overusing the biological resources of the planet each year

by around 30%, which is clearly unsustainable. Ecological systems, both
terrestrial and ocean, constitute vital carbon sinks, absorbing some 40% of
human generated emissions. As these ecological systems, such as forests,
degrade through rising temperature and water stress, they absorb less carbon,
aggravating global warming. Also, the speed of temperature increase is of
profound importance to the survival of ecosystems: a 0.1°C rise in one decade
puts 15% of the established ecosystems at risk.

- the threats and implications of ecological collapse and environmental

degradation are perfectly demonstrated by the deteriorating state of the oceans.
(See Annex *).

- we are approaching the end of the era of cheap oil on which Western
civilisation and economic activity are based: additional reserves are not being
found at a rate sufficient to compensate for depletion. Projected growth in
demand is unlikely to be matched by comparable growth in supply, for a
variety of reasons. In addition, population growth and the rising aspirations of a
growing world middle class are rapidly increasing demand for limited
resources, raising profound issues of energy security as the competition for
vital resources intensifies.

Also, as the price of energy rises, the poor across the world will be excluded
from access to this vital resource, unless special measures are implemented.
This will put added pressure on biological sources of fuel, further aggravating
the pressures on fragile land, forests and ecosystems. Also, policies to improve
energy security may well be inconsistent with the energy policies which are
essential to move towards low carbon economies so as to reduce emissions.
This has been demonstrated by the debates on biofuels and tar sands. Thus,
energy security and climate change must be considered together.
 -6-

- Water is under stress all over the world and demand is increasing
rapidly. Climate change will aggravate the problems in several ways: for
example, changes in rainfall patterns, droughts and floods will impact on food
and human security; temperature rise will eventually reduce water run-off from
glaciers and will increase water stress in many regions. And rising sea level
will contaminate aquifers in coastal regions.

12. The Club intends to focus its follow up activities of research and consultation on
clarifying these and other critical connections and identifying their policy implications.

3. Besides defining and negotiating what should be done, we must now start to put
in place the capability to implement coherent action.

13. Action will have to be implemented in a coherent way across a wide range of sectors,
engaging a wide range of actors and interests. New approaches to scientific cooperation,
policy analysis and policy implementation will be needed to respond to the systemic,
interconnected nature of the issues, and this will arouse intense opposition. Education and
training will need to be refocused and strengthened to generate the expertise needed in both
developed and developing countries to diagnose the issues and to act.

14. The urgency and reality of the threats faced by humanity must be transmitted from the
scientific and expert communities to non-specialists in economics, government, legislatures,
finance and industry so that they recognise and support the necessary actions.

15. The Programme of the Club of Rome will focus on four aspects of converting
scientific analysis and understanding into action:

(i) Developing an integrated, systems approach to account for critical connections

between issues.
(ii) Converting scientific concern into policy and action.
(iii) Stimulating social, economic and behavioural change.
(iv) Mobilising public understanding and support for action.

4. We must move onto a new path of economic and social progress which is
compatible with the environmental imperatives of the planet.

16. The emerging crises which threaten our civilisation, in such fields as climate, energy,
ecosystems, water, poverty and rising inequality and also financial imbalances and instability,
are the consequences of our values and of social, political, economic and technological
choices and priorities. It follows that these can be changed in order to achieve a different
“quality of growth” where real human welfare can increase at a rapid rate but without the
adverse consequences of the present path.

17. Different models, strategies and patterns of economic growth can be chosen to reduce
the devastating impacts of humanity on the environment and to achieve a more fair and
prosperous world.
 -7-

18. In particular, new models for economic growth must take proper account of
“externalities.” They must find a new balance between individual rights and the common
interest, assigning real value to the conservation of public goods. And they must account for
the interests of future generations.

19. It is wrong to consider that environmental responsibility and efficient use of energy
and resources are negative factors which will reduce the rate of economic growth. A new
path and ethical concept of growth could be found which integrates economic, human and
environmental considerations to achieve real and sustainable increases in welfare, in harmony
with the potentials of the planet.
.
20. Within the framework of its programme on A New Path for World Development, the
Club of Rome will address these ethical, economic and financial dimensions at a conference
to be held in April 2009 on the topic: “New Economic Models and Strategies to meet the
Challenges of the 21st Century.”

5. The financial crisis and the consequent economic slowdown provide an

exceptional opportunity to move towards new patterns of more sustainable and
equitable growth.

21. As the financial crisis has impacted on the real economy, values and behaviour are
changing towards new attitudes to consumption and growth is slowing. It would therefore be
possible to take advantage of this opportunity to reconcile financial system reform with the
structural changes needed in response to climate change, ecosystems stress and the overuse of
resources. There is in fact an exceptional opportunity to capitalise on this slowdown to move
towards new patterns of less environmentally damaging, less energy intensive and more
equitable economic growth. A rapid return to the established growth path may bring short-
term benefits in employment and consumption. But a more considered perspective of the
underlying imbalances and threats confronting the world community indicates that a return to
the present path of energy- and consumption-intensive growth will lead to potentially
irreversible environmental consequences and prevent the achievement of sustainable and
equitable progress, stability and peace.

6. The scale and depth of the challenges ahead will demand new ideas, new
partnerships, new mechanisms and radical institutional change.

22. The world community is confronted by an array of interconnected issues which, in

their scale, their intensity, their complexity and their rate of change, are different from those
of the past. The long established ideas, models, methods and processes developed for a
clearer and simpler world are no longer adequate.

23. However, the weakening of the credibility of long-established concepts is creating an

opportunity for the development and application of new insights, new ideas, new methods and
new partnerships. This trend must be encouraged in every context, from government and
education to business and finance.
 -8-

24. Disconnected, sectoral responses to individual issues are unlikely to succeed in the
absence of a coherent overall vision and strategy. We are in fact challenged to identify the
underlying causes of the array of interconnected crises we face, to reconsider the concepts,
assumptions, policies and actions which have created the present complex of threats and to
develop integrated measures across sectors and disciplines to achieve long-term stable and
sustainable solutions.

(i) It will be necessary to engage all the social partners and capabilities in a
concerted effort across society, including industry and finance, trade unions,
education, science and research, and government and the legislature. All must
come to understand the reality and the urgency of the problems and also, the
opportunities and benefits which can be created. New styles of partnership and
social mobilisation can be implemented at the local, national and international
levels and much is already in progress.

(ii) To manage the systemic problems which lie ahead, which are of a truly global
nature, including the move towards a low carbon emission economy, will
require a substantial reordering of priorities and a restructuring of
responsibilities and competences in government and at the international level.
National political systems which have traditionally been dominated by local
and national concerns – and in which international development issues and
environmental issues have been subsidiary – will now have to adapt to respond
to the overriding importance of the regional and global issues of sustainable
world development. And the new procedures and structures of government
will have to become more resilient and flexible so as become proactive –
anticipating and responding to the further deep changes which lie ahead.

(iii) Substantial reorganisation of the international institutional system will also be

essential if the necessary decisions are to be taken in time, to be considered
legitimate, and to be effectively implemented. In the past, major restructuring
and innovation in the international system have occurred as a consequence of
world war. Today, the greatest threats to national security and world peace
arise from the consequences of climate change, ecosystems collapse, intense
competition for vital resources such as energy and water, and from frustration
and conflict arising from exclusion and the failure of development. The
necessary institutional reforms must, on this occasion, be forced through before
the crises hit: once the crises are upon us, it will be too late.

7. There is a deep need across the world for a positive vision and hope for the future.

25. It is clear that there are grave challenges ahead and that the path of business as usual is
not viable. However, the move towards new patterns of growth does not imply a reduction in
the level of growth: only that growth will be achieved in a different way, with less material
consumption, less energy use, less environmental devastation and more social and
international equity.
 -9-

26. The process of “creative destruction” as economies develop always produces winners
and losers, but the overall balance can be very positive. Environmental responsibility and
care in the use of resources is not a negative factor which reduces real growth, when properly
measured. The path of sustainable development should be presented as offering opportunities
for increased human welfare on a long term basis. Such a positive perspective will help to lay
the basis for concerted, longer term action by the world community to manage and contain the
systemic issues we face.

III. Some Implications for Policy

1. A constellation of intense environmental, ecological, economic and social problems is

emerging which together threaten progress and peace. Within a decade, many of these
problems may become irreversible: marginal change and business as usual are not
viable options. Radical new thinking and action is imperative. A far greater priority
will have to be assigned to understanding and managing the systemic, global
problems which lie ahead so as to achieve sustainable and equitable development and
preserve world peace.

2. Averting the risks of catastrophic climate change must become a central focus of
government policy and of corporate strategic planning. This will require clear
strategy and leadership and coordination across the established competences of
government departments. Policies should adopt the precautionary principle,
focusing first on the prevention of potentially catastrophic risk and then on the
analysis of costs and benefits to ensure the most effective use of resources.

3. The present target of international negotiations is too high. To stabilise

concentrations at 450 ppm, so as to contain the rise in temperature to 2°C, by no
means guarantees the avoidance of dangerous climate change. Concentrations may
have to be reduced even below current levels. This implies that measures to reduce
current concentrations by sequestration of carbon from the atmosphere may be
necessary. This could be achieved in part by the restoration of ecosystems and
degraded areas.

4. Recent evidence demonstrates that climate change is accelerating: we have less time
to act than we recently thought. Immediate action must be mobilised on an
international scale using available capacities and solutions – in parallel with the
negotiations on longer-term agreements now in progress. Action is needed
immediately on adaptation, the conservation of forests and the prevention of
biodiversity loss which is irreversible.

5. Partial, ad hoc and incremental measures will not contain the systemic threats faced
by humanity. The connections between the issues in the fields of environment,
ecology, energy, resources, finance, economic and social policies and peace and
security are of primordial importance. Strategic thinking, concerted action and
institutional innovation are preconditions for successful intervention. Long-established
institutional structures and policy approaches are evidently failing and must be
renewed.
 - 10 -

6. The negotiating process for a post 2012, post Kyoto Treaty should explicitly recognise
that climate change is not a “stand alone issue” but is one of an array of
environmental, economic and political issues which will define the future.
Consequently, action to contain climate change will have to be implemented in all
fields of government and society calling for leadership at the highest level.

7. Challenges arising from climate change, ecosystems degradation and the intensifying
competition for energy, water and other resources constitute growing threats to
national and international security and peace. This fact should be a core feature in
new conceptions of national defence and the related allocations of public expenditures.

8. The emerging crises of climate change, energy security, ecosystems and water are all
consequences, or symptoms, of the current concepts and patterns of economic growth
and consumption. The present path of world development and globalisation is
unsustainable in the longer term. A sustained, multicultural effort should be
launched to define the radical rethinking and restructuring required to achieve a new
path of development and cooperation which can provide improvement in living
standards, security and welfare across the world without infringing the intensifying
environmental and physical constraints.

9. The established system of international institutions must be transformed to meet the

constellation of challenges we face today but principally to anticipate and manage the
further deep changes which will arise in the future. International institutions, such
as the UN, should be obliged to develop coherent visions for the future and, from
these, to draw conclusions for policies, international cooperation and institutional
reform.

10. It is urgent to organise specific activities to communicate the realities and urgency of
all these emerging issues to key actors and groups whose support and commitment
will be critical to achieve action and to overcome entrenched resistance – government
leaders and officials, legislators, business and trade union leaders, educators and the
media, the general public and younger people.

IV. Lines of Action and Follow-up

27. Through a continuing process of collaborative research and consultation, the Club of
Rome intends to develop further the ideas emerging from the Winterthur conference and the
London Policy Dialogue, so as to make proposals on key themes and to suggest well founded
conclusions and lines of action. Password protected internet sites will be established to
mobilise high quality expertise in this process.

28. Subject to further consultations and the outcome and priorities which will emerge from
the London conference in January, the Club is focusing on four broad themes to deepen
understanding of a coherent strategy. These are:
 - 11 -

1. Integrating strategies for climate change, energy security, ecosystems and

water and linking these to strategies for the reform of economic and financial systems.

2. Combining strategies to eradicate poverty and improve living standards with

the move towards low carbon emission economies.

3. Combining longer-term policies for mitigation with adaptation and immediate

action.

4. Defining new models and strategies to achieve equitable and sustainable

economic and social progress.

29. Through its web-based process of research collaboration and consultation, the Club
will refine proposals for action. At present the following have been retained for further
analysis:

1. Disseminating knowledge, best practice and technology and stimulating innovation to

reduce emissions and to improve resource efficiency.

2. Reversing the decline of forests and vital ecosystems.

3. Generating financial resources and targeting them into strategic areas.

4. Revising the framework of international institutions to support coherent strategies.

5. Promoting behavioural change through public education and human resource

development.

6. Communicating the reality and urgency of the issues to key actors, including leaders
in government, industry and finance, academia and civil society.

30. In all its further work the Club will seek to identify examples of the positive
opportunities and benefits which will emerge in the economic and social transition to a more
sustainable path of world development and to publicise these positive elements so as to
demonstrate that economic growth can be combined with efficiency in the use of resources
and responsibility for conserving the environment to produce higher levels of human welfare.
This should help to build a constituency in favour of the change which is needed so as to
counterbalance the entrenched resistance which can be anticipated from established interests..