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GUEST SPEAKER: I'm here
to talk to you today

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about why mission
of the World Bank's

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new Office of
Sustainable Development

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should be to promote sustainable
economic development.

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First I'll explain what
sustainable development means

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in the context of global
investment in developing

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countries.

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Then I will discuss why
the World Bank ought

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to put a premium on these
particular kinds of investments

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and why it ought to promote
environmental protection

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in its work.

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To understand
sustainable development,

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we must first understand
that the well-being

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of the economic system
is intrinsically

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tied to the well-being
of the environment.

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The economy's
functioning depends

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on inputs from
nature, which is then

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exchanged among
various market actors

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and eventually output is
waste into the environment.

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The economy grows at
a unsustainable rate

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when the rate of resource
consumption and waste

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production exceeds the rate
in which the environment can

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regenerate and absorb
waste products.

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It is also important
to note here

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that economic growth is simply
a measure of total resource

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throughput.

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It says nothing about happiness,
health, safety, or sense

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of community within a region.

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Now that we've
defined growth, we

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can contrast it with the
concept of development.

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Development is the quality
of improvement of resource

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efficiency within a region.

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To invest in projects
that promote development

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in poor countries is
to invest in projects

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that allow people to produce
more with the resources they

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already have.

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These kinds of projects might
involve investing in education,

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investing in the construction
of local hospitals and clinics,

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or investing in research and
development of crop seeds

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that are less
resource intensive.

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While projects that
promote growth simply

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increase production
and consumption,

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projects that
promote development

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increase the efficiency of
production and consumption

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towards some end that
enhances human welfare.

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Economic growth
is less important

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than economic development
because growth,

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usually measured
in terms of GDP,

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is a flawed measure of progress.

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There is nothing
inherently beneficial

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about economic growth.

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This is because growth only
implies an increase in resource

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throughput.

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But It doesn't take into account
whether the resources are being

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used in ways that efficiently
maximize well-being

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while minimizing
resource consumption.

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On the other hand,
economic development

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does a far better job of
indicating economic progress.

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Development implies that
resources are being used

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in increasingly efficient ways.

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The more developed a
country is, the more

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of benefits from
the resources it

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has while minimizing its total
consumption of these resources.

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As it becomes more and
more clear to people

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across the world that
development, not growth, should

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be our top priority, then
the base investment goals

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would be in line with the
goals of the rest of the world.

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This is because investors
will want the same thing

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as anyone else, the
maximum amount of benefit

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they can get at the lowest cost.

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Likewise, individuals
who recognize development

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as their goal want to
receive the greatest benefit

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from natural resources they use
while minimizing these risks

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consumption.

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As the UN's international
financial institution,

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the World Bank's mission
is to reduce poverty.

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It should do this by promoting
economic development which

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insures the long-run
integrity of economic systems.

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If the bank instead chooses
to promote economic growth,

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it will be investing in projects
that contribute to constructing

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an unsustainable economic
and social paradigm

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with incredible inertia.

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The longer economic growth
remains the dominant measure

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of progress, the
more difficult it

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will be to change
our consumption

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patterns in business
practices to ones

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that are more sustainable.

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The World Bank may
not look very far

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in seeking out
philosophical justification

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for taking this measure.

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Utilitarianism, the common
philosophical foundation

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for much of existing
environmental policy,

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tells us that we should take
the forward-looking utility

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maximizing action.

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Choosing to make investments
that promote development, not

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growth, is just such an action.

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This is because human
well-being, in the long run,

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is maximized when the very
goal of the economic system

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is to provide for human
needs while maintaining

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the integrity of the
environment in the long run.

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Human welfare is
certainly not maximized

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when the goal of
the economic system

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is to simply
maximize consumption

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without regard to the
system's long-run viability.

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Such economic growth reduces
our collective welfare

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because it leads to
depletion of economic inputs,

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natural resources, and it
uses raw materials, as well

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the accumulation
in economic outputs

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which are manifested by
landfills and garbage patches.

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Neither of these outcomes are
ones that anyone would want.

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If the World Bank's goal is to
reduce poverty in the long run,

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then let's take a
long-run view of success.

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As a UN initiative with
a moral imperative,

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the World Bank should work to
ensure that it's investment

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decisions are based on the
utility maximizing philosophy

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that promotes long-run
human welfare.

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Indeed investments and
development related projects

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pay dividends over many
years, while investments

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in growth related
projects may only

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provide for human needs
for a short period of time.

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It is the World
Bank's responsibility

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to take into
account the long run

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well-being of the environment
because the viability

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of economic systems depend
on its sustained integrity.

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To promote growth is to promote
the idea that the economy can

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continue to flourish
independently

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of the environment, an
idea that is a fiction.

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However, to promote
development means

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to promote human
progress that is

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sensitive to the environments
carrying capacity

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and actively works to promote
environmental stewardship

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while tending to human needs.

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This is the goal on which all
economies should be based.

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To that end, the
World Bank should

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work to promote this idea
in our newest economies

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so that they take no
time in choosing the best

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method to promote the
progress of their people.

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Thank you.