June 2, 2011
Venue: The Japan Institute of International Affairs

Ian Johnson, Secretary General, The Club of Rome“How will new organizations be used to achieve sustainabledevelopment?”

Let me begin by offering, on behalf of the Club of Rome, my heartfelt condolences to thevictims of the recent tsunami and earthquake. The Club of Rome’s “The Limits to Growth”
report forty years ago noted that continued growth at the levels attained at that time would
become unsustainable at some point.
world today.

Issues of a global scale are emerging around theAdhering to a long-term perspective, the Club of Rome believes that we must

not only contemplate today’s global problems but also support actual reforms, and the Clubof Rome conducts fundraising efforts in order to host seminars and workshops and conduct
research in this regard.

We have spent forty years thus far contemplating the world, and we must now consider
world affairs forty years from now, that is, the mid-century world of 2050.

If we take noaction at all, in forty years the population will rise from 6.9-7.0 billion to 9.5-9.7 billion, with a
median of 9.5 billion and a high estimate of 10.5 billion; if per capita income also grows by
3.5% to 4%, global GDP will swell from about US$60 trillion at present to US$200 trillion.
Population and income will grow exponentially rather than linearly.

Today I will examine

how to manage these issues and what systems are necessary in view of the alarms orcrises in five areas – (1) poverty, (2) finance, (3) food supplies, (4) ecosystems, and (5)unemployment – and then consider frameworks of conceptualization and organization forsuch an age of change.

I will also posit energy policy as a sixth topic for discussion.

1) Poverty
Although we live in a wealthy world, few people share in that wealth.

About 1.7 to 2 billion

people live in absolute poverty, and 800 million to 1 billion suffer from malnutrition.

Around20% of the population controls 80% of global wealth, with the top 1% owning 39%.
Unfairness and inequality are on the rise. The poor must be empowered to break out ofpoverty and become consumers.

2) Financial crisis
The current financial crisis was initially triggered in the US, impacting the overall real1

economy worldwide.

Although this led to talk of greater oversight of certain banks andfinancial institutions, efforts in this regard have been non-uniform and inadequate.

3) Food crisis
The crisis in food prices can be viewed as a manifestation of the food crisis.

Food prices

are up 1-2%, population 4% and income 3-4%. In addition to the impact on land use andincome, diets and consumption patterns are also affected, especially in terms of greater
meat consumption and livestock.
kilogram of meat.

Seven kilograms of grains are required to obtain just one

We must respond to these changes in the food system.

4) Ecosystem crisis
We face urgent issues pertaining to ecosystems, including biodiversity, climate change, andforestry/fisheries.

Data from the International Energy Agency shows that it will be difficult

to constrain the temperature rise to 2°C.

We are losing biodiversity, marine resources andforests at an unprecedented rate.

5) Unemployment crisis
200 to 250 million people of working age are without jobs, while 1 billion are underemployedor only working part-time.
for an adequate living.

Several hundred million poor have incomes too low to provide

Without an adequate living, people are unable to perform work,

enabling employment and poverty to coincide. Poverty stirs up both social and politicalunrest, and some of the circumstances currently facing the Middle East can be attributed to
the fact that many younger people do not have jobs.

Of the more than 200 million

unemployed, it is estimated that the younger generations account for more than 80 million.
The worldwide population under age 15 has climbed to 1.7 billion.

While this presents anopportunity for nurturing new and skilled human resources, a crisis could ensue if they are
not fostered properly.

Next, I would like to say a word about energy policy.
Energy is more a focus of discussion than of crisis, but climate change, nuclear power
generation, and future energy mixes are all topics meriting attention.

Revisions to the tax

system and other measures are needed to rectify the situation.

By 2050 – a readily

foreseeable time, given a useful life for infrastructure of 30-40 years, in which our children
will still be living – energy demand will triple.

The IPCC has declared that significant

progress in decarbonization will be needed by 2050.

The effective use of water for

agricultural and other purposes will also become a problem.
covered these in a report entitled “Factor Five.”

2The Club of Rome has

The preceding description of the crisis may sound pessimistic, but we are wiser than weonce were and public interest has also risen, prompting some parties to already begin taking
steps.

Furthermore, communications are now much more rapid.

noted when considering solutions.

Two points must beThe first is that complex problems entail multifacetedand complex solutions, and the second is that the reasons these complex problems havearisen must also be given serious thought.
time.

Short-term thinking is problematic at such a

While the cost of decommissioning reactors is deemed zero for the nuclear powerindustry given the economic discount rate, it will not in fact be zero.

Politicians generally

think only three to five years out, and there are few politicians who think beyond that timeframe.

There are two things I would like to stress here: values and the new economy.

As to thefirst, it is important that we think about and discuss the future and take up values pertinent tolifestyles and public goods as topics for discussions.
the new economy is needed.

Secondly, a link between values andWe have lost sight of the true purpose of the economy: tomaximize welfare and minimize suffering.

GDP counts the value of harvested trees ascontributing to wealth but does not incorporate volunteer work, harm to health from pollution,or the depletion of natural resources.
wealth.

Social capital is important for understanding true

Social capital includes satisfaction deriving from social interaction, one’s own

sense of existence, a family’s sense of security, the security of communities and cities, andconfidence in the security of one’s children.
and physical destruction.
considered.

Conversely, social anxiety gives rise to crime

Impacts and costs 10 years down the road must also be

Uncertainty is now on the rise worldwide, and the maximum options bearing

the minimum risk must be made available.

The new economy features four systems for dealing with genuine issues: (1) state policy, (2)market roles, (3) global governance, and (4) local communities.

(1) State policy
State policy must be restructured to ensure greater continuity.

We must not only increase

wealth but also raise living standards, and this requires courage transcending short-term
political mandates. In other words, we need newly enlightened economic activities/markets
that demonstrate an understanding of public policy and the role of states.

(2) Market roles
Markets have two aspects.
moderation, and stability.

First, the market needs greater correctness, transparency,Global rules must be created for financial capital.

3Among theefforts that should be undertaken are reviewing excessive compensation and building trust
between markets and citizens.

Second, the market must incorporate public goods.

Forinstance, there are many people who reject the Kyoto Protocol, but the carbon market wentfrom zero to $30 billion in 2008 and will reach a turning point in 2012.

Public approaches

can provide markets with returns by sustaining public goods over the long term. If a carbon
market is possible, then markets for forests, water and social values are also likely possible.
A global partnership to this end is needed.

(3) Global governance
The world has become smaller.

Electronic communications have evolved, transport costs

have shrunk, and interrelationships have grown closer.

Japanese citizens should bethought of not only as citizens of Japan but also as regional and global citizens.
are three aspects to global governance.

The first is the global commons, i.e., collective

property rights in the environment, natural resources, etc.

Second, there is awareness ofissues pertaining to poverty, starvation and human security.
global rules.

ThereThird, there are clear-cut

These are the costs incurred for engaging in actions connected with aviation

safety, war norms, financial transactions, environmental goods, trade systems, humantrafficking, etc.

The UN is in the vanguard of creating rules for global governance, but parties who did notcommit directly to the Copenhagen Accord could perhaps argue that it was developed
top-down.

The UN can create a broad-ranging framework for discussion, but thisframework will lack the flexibility to implement actual restrictions.

On the other hand,common accounting standards provide one example of bottom-up codification.

Flexibleorganizations are needed that can implement measures, develop targets, and coordinate
between the government and the private sector across various areas of endeavor.

(4) Local communities and individuals
In local communities, it is possible for a flexible organization to coordinate governmental andprivate-sector efforts to steer the efforts of individuals.

In the past, for instance, many

people were negative toward recycling, but it has now become part of the social mainstream.
It is important to provide knowledge, education and information about values to theindividuals in local communities, and to give further thought to the reasons economic growthis necessary.

Going low-carbon will not immediately create a sufficient number of new jobs,

but it will likely lead to new employment under the new system.

While technology cannot

replace ecosystems, biodiversity and natural resources, it constitutes an important social
foundation as well as ecological and social capital.
future purchases, lifestyles and fates.

4These values will likely impact ourFinally, the future issues of great interest to the Club of Rome, as apparent in its three work
programs, are (1) a future vision for employment, (2) the new economy, and (3) theorganizations and governance that will oversee these.

What types of educational systems

are necessary to ensure meaningful employment? Will half of the productive-age population
work full-time or will all of the productive-age population work half-days as part-timers?
Genuinely worthwhile discussions on the new economy are needed when deciding on
investments and formulating public policy.

A guild for values is needed for governance.

As noted earlier, we must discuss the philosophical issue of the universal values of mankind
as we look ahead toward 2050.

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