SDG

The (missing) human dimension of the circular economy

Posted on September 29, 2017 1 Comment

Last Sunday, I attended a “working dinner” on the circular economy. It was held at the Residence of the Holy See Representative to the UN, Chaired by the Vatican Minister of Foreign Affairs, and sponsored by ING. The residence of the Vatican in NYC is extra-ordinary. It was built and donated by the first 20^thcentury mayor of the city: Hugh J Grant. It is the only NYC townhouse with a built-in chapel and a bullet proofed bedroom where 3 popes have slept.

I was intrigued by the interest of the Vatican in the circular economy. That’s because I had missed the reference in Pope Francis’ Laudato Si: “We have not yet managed to adopt a circular model of production capable of preserving resources for present and future generations, while limiting as much as possible the use of non-renewable resources, moderating their consumption, maximizing their efficient use, reusing and recycling them. A serious consideration of this issue would be one way of counteracting the throwaway culture which affects the entire planet, but it must be said that only limited progress has been made in this regard.” [Emphasis added]

The circular economy proposes a growth model decoupled from natural resources. This means a shift from a linear model that “takes, makes and disposes” to a circular model that “reduces, reuses, and recycles”. The concept was born in environmental economists circles. It is connected to other, more familiar, concepts such as the sharing economy, the green economy and sustainable development. It is presented as a response to co-existing trends that contribute to environmental degradation: the increasing resources scarcity and commodity price volatility; and the growth of population and middle-class consumers.

Accenture estimates that the circular economy could generate 4.5 trillion by 2030. The first World Circular Economy Forum was held this year. And more and more businesses, mostly European so far, are embracing the concept. This means big changes to their strategies: Unilever commits to 100% recyclable packaging by 2025, Philipps moves from selling light bulbs to selling lighting as a service, Michelin leasesand retreads tires, etc.

A key question at the Vatican-hosted dinner was about the impact of the circular economy on the poor. This matters because so far the conversation has mostly happened in rich countries and focused on the environmental dimension of the circular economy. Not much has been written on its human dimension. My main message during the dinner was that circular economy advocates should not consider human wellbeing as an ex-post issue only. Rather human wellbeing should be a core element of the model where human capital wastes are considered alongside natural resource wastes. Under this broader message, here are some ideas I put on the table:

The circular economy

Should seek to optimize all resources, including human resources. That would require pricing negative human externalities (eg inequalities) so that goods and services bear the full cost of their production and consumption;
Could make certain goods and services more accessible to the poor (sharing is cheaper than owning);
Could offer jobs opportunities to young “green” entrepreneurs provided they have the skills, finances, and technology.
Would require life-long learning systems.
Could help formalize informal economic activities, in particular when digital platforms are used to share goods and services.

In short, the circular economy concept is transforming big industries into service providers, being promoted by influential political and financial actors, but missing a fully-fledged human dimension that I, for one, would like to help shape.

15 September

Posted on September 15, 2017 Leave a Comment

The just-released Bill and Melinda Gates’ “The stories behind the data 2017” tracks 18 SDG data points on poverty, child and maternal mortality, stunting, vaccines, universal health coverage, sanitation and more. It is a quick and easy read with clear graphs and good stories about what works, accompanied by a cool video. It will be published every year until 2030. Complement or competition to the UN SDG monitoring report? The Gates report is a teaser for the Foundation’s Goalkeepers GA event, one of the three off-site foundation-led events I will be tracking next week to see who wins the race to fill the gap left by the Clinton Foundation. The other two are the WEF’s Sustainable Development Impact Summit andBloomberg’s Global Business Forum. What is your bet?

This week, Apple released its Iphone X. It uses Face ID, a facial recognition option to unlock the phone, make payments, and use third party apps. It is advertised as easy, fun and super secure. But reviews andonline conversations also point to the possible creepy side, eg law enforcement abuse. Last week’sEconomist had four articles on facial recognition, its growing market, and possible uses and abuses. Short and good reads on this topic that some of you said could have featured in our last Horizons. Indeed, facial biometrics has applications and implications for children and young people. Our innovation team explores its potential for detecting malnutrition. This article shows how a software combining AI and facial analysis could “improve the performance” of online courses by picking up when students daydream and quizzing them on what was taught then.

My graph this week is from Brady and al’s “Emotion shapes the diffusion of moralized content in social networks”. It analyzes 560,000 tweets on 3 polarizing topics (in the US) – gun control, climate change and same-sex marriage, to understand how social networks transmit emotions and shape morality. The findings: emotional tweets are contagious. Each moral-emotional word included in a tweet increases its diffusion by 20%. But this effect is much greater within like-minded groups than between. So beware, getting emotional on twitter feeds the echo-chamber.

My quote this week is from Mars CEO Grant Reid launching his $1 billion Sustainability Plan: “Data and connectivity are helping us get smarter about our impact every year. Today, climate science is clear and we understand the environmental and social challenges in our supply chain better than ever before. With this knowledge, it is clear that the scale of intervention needs to be much bolder – now is the time for business to reassess its role and responsibility in the face of the evidence.”

30 June 2017

Posted on June 30, 2017 Leave a Comment

Nelson and Detrixhe’s “The World Bank’s “pandemic bonds” are designed so investors pay in the event of an outbreak” explains how the just-launched pandemic bonds work. Investors who buy bonds basically act as pandemic insurers. This allows the Bank to release money to poor countries as soon as an outbreak occurs. Take Ebola, $100 million could have been made available as early as July 2014 with such instruments but “money did not begin to flow on this scale until three months later, by which time the number of deaths had increased tenfold”. So that’s a useful tool. And investors are ready to take the risk: the pandemic bond sale was 200% oversubscribed. These instruments have been used for years by insurance companies to transfer risks of natural disasters to financial markets. And they could be applied to other emergencies beyond health and natural catastrophes.

Ziad Haider’s “The case for a Global Council for Refugees” calls for the creation of a new structure that would bring together private efforts supporting refugees. It illustrates how the private sector already helps refugees, mostly around getting jobs. It points to similar business alliances in other areas, e.g. the Global Business Coalition on HIV/AIDS. It lays out the main functions a Global Council for Refugees would play: repository of existing initiatives to avoid duplication; one stop-shop for partners; peer-to-peer catalyst, and advocacy amplifier.

My map this week is from IFAD’s “Sending money home: contributing to the SDGs, one family at a time” which presents the flows and trends in remittances during 2007-2016. The report is full of great facts. 1 billion people are involved with remittances: either sending or receiving. Half of remittance senders are women. Remittances flows to developing countries grew by 51% over the past decade while migration from these countries only grew by 28%. And look at Asia-Pacific: remittances increased by 87%!

My quote this week is from Iraqi Nori Sharif, the videographer of the brutally disturbing “Nowhere to hide”: “It is difficult to diagnose this war. It is an undiagnosed war. You can see all the symptoms: death, pain, sorrow. But you don’t understand the disease.”

13 April 2017

Posted on April 13, 2017 Leave a Comment

It is always good to have a quick look at the curtain raisers for the IMF-World Bank Spring Meetings. They give a sense of where the IFIs are going. This year, they come out right after a joint WTO-IMF-World Bank expression of support for open trade and international cooperation. IMF Christine Lagarde’s “Building a more resilient and inclusive economy” brings some good news about the health of the global economy including in low income countries helped by a much awaited rise of commodity prices. She zooms in on equitable growth arguing that technology has increased income gaps and will slow employment growth in emerging and low income countries. She points to governments’ responsibility to provide lifelong learning (from ECD to online senior course) and to maintain intergenerational equity in ageing societies. World Bank Jim Kim focuses on “Rethinking development finance” which is about using billions of public money to leverage trillions of private finance. What is worth keeping an eye on, here, is the new IDA $2.5 billion private window that came out of the last replenishment round concluded last December. Note the focus on fragile contexts which could shake up operations on the ground. And note the push to change the organization’s culture and incentivize staff to work at facilitating investments rather than designing loans: the Bank is “putting in place a tracking system that captures indirect forms of mobilization, and figuring out how to reward staff who focus on advisory programs, building markets, and creating the environment for investment”. Heads up!

Tom Jackson writes about technology in Africa. His March round-up helps us keep up with the fast financial services transformation in Kenya. Safaricom-supported M-Pesa, the super successful mobile money transactions system born in Kenya a decade ago, has since spread to India, Afghanistan and Romania. But Kenyan banks who originally tried (and failed) to regulate M-Pesa out of their industry just launched a competitor product, PesaLink, cutting transaction costs, allowing real-time inter-bank transfers, and attracting 2 million customers in two months. Safaricom responded by launching an M-Pesa App, and halving its fee. And it is now possible for Kenyans to buy government treasury bonds through their phones.

My graph this week is from Ana Moraru’s “Ghost village project” that uses monthly data of household power consumption to map population density and identify patterns of rural-urban migration in Moldova. Moraru works with the UNDP-sponsored Moldova Social Innovation Hub and tells us that this project is meant to inform a major 2018 administrative reform and associated local investments in public services in a context where internal migration is only documented by low frequency census data.

My quote this week is from Kevin Watkins’ interview with Sarah Brown in her Better Angels series “[The SDG agenda] ought to appeal to anyone who is driven by values and by a sense of solidarity, compassion and empathy. We need hard skills that are harnessed to good values. We need economists, people who understand finance, people who understand the law. Because these are great instruments for achieving change.” [30’]

13 January 2017

Posted on January 13, 2017 Leave a Comment

Iris Bohnet’s What works: Gender equality by design is the book I was waiting for on the topic. Using a behavioral economics lens, Bohnet systematically compiles evidence from businesses, universities, and governments about what works and does not, and offers super practical steps to boost gender equality. The book first unpacks the unconscious biases we all suffer from. It then shows that changing mindsets is not the solution. $8 billion are spent yearly in diversity training in the US alone with no evidence of success. It also argues that going it alone is hard and risky. Bohnet’s central thesis is that de-biasing our environments by design is what yields the most impact. And she offers 36 research-grounded design suggestions to increase inclusivity in the workplace. They include: adopting a Gawande-inspired interview checklist, getting rid of self-evaluation in performance assessment, using people analytics to screen job applicants, having quota to appoint counter-typical leaders, using a point system to measure workload, using public rankings to motivate and compete on gender equality. A fundamental pre-requisite to these recommendations is the collection of staff data to understand where inequalities are and how they evolve. Despite its title, the book’s thesis and solutions apply to inequalities beyond gender. If you are committed to increasing diversity in the workplace, read this book and experiment with some proposals, or pass it on to someone in your office who is in a position to move the needle. I am doing just that.

Peter Fabricius’ “Peering into a murky crystal ball; where will Africa be in 2030?” shares the main findings of a recent Institute for Security Studies (ISS) seminar on Africa’s future. Under each of the three ISS-designed scenario (baseline, optimistic, pessimistic) Africa misses most SDGs by 2030. The main factors responsible for this outcome are poor governance and service delivery. Prospects drawn from the UK Ministry of Defense’s analysis of regional strategic trends to 2045 for Africa are more upbeat. Here extreme poverty is defeated by 2045 when Africa’s numbers catch up with the rest of the world. In this scenario, positive drivers of change are external to the region with a global economy increasingly reliant on African youth’s cheap labor. This illustrates how a foresight exercise can bring different perspectives. What matters is not to get it right but to unearth different possible futures so as to be ready no matter what.

Uber’s Movement is on my list of visual tool this week. It is new and shiny. It is launched in the midst of long-lasting (data sharing) disputes between Uber and regulators. And it could transform urban planning. But I also need to flag this graph from the WEF Global Risk Report plotting the 2017 global risk landscape because the top risks, once impact and likelihood are aggregated, are environmental. This report has been published for 12 years and this is a first.

My quote this week is from Facebook’s Fidji Simo in her “Introducing: the Facebook Journalism Project”: “We will work with third-party organizations on how to better understand and to promote news literacy both on and off our platform to help people in our community have the information they need to make decisions about which sources to trust.”

12 February 2016

Posted on February 12, 2016 Leave a Comment

Gabriel Zucman’s “The hidden wealth of nations”, said to be the most comprehensive study on tax evasion, estimates that 8% of global financial wealth is held in tax havens. Poorer countries suffer the biggest loss with 20-30% of wealth held offshore for many African and Latin American countries compared to 10% for Europe and 4% for the US. Zucman is very critical of attempts made so far to counter tax dodging and proposes a new approach based on (i) financial/commercial sanctions against key uncooperative players (e.g., Switzerland, Luxembourg and the Virgin Islands) and (ii) the creation of an automatic global wealth registry accessible to national tax authorities for verification purposes. Being Piketty’s protégé, Zucman also suggests that such global financial registry could be used in combination with real estate registries to impose a global tax on wealth stocks. The final chapter of the book on corporate tax avoidance points the finger at US firms accounting for more than half of the global problem ($130 vs $240 billion per year). Very critical, again, of existing countering initiatives (e.g., by OECD & G20), Zucman calls for focusing corporate taxation on the consolidated profits of firms at the global level. Many have called Zucman “utopian” but what I found most interesting is that his book contributes to bringing tax avoidance – once an expert- or activist-type issue only – into the mainstream. Podcast suggestion here (1h18’).

Ban Ki Moon’s “One humanity: Shared responsibility”, setting the stage for the World Humanitarian Summit, came out this week. Pundits are offering summaries and analyses. And here are the take-aways of our colleague Emily Garin who read it for us: The report does a great job of laying out the myriad challenges that need to be tackled, though it (perhaps understandably?) doesn’t break much new ground in terms of grand solutions. The hundred-odd recommendations contained throughout are helpfully summarized here. The big missing piece, however, is a compelling vision for the added value of the UN in the midst of these problems and solutions. The report rightly accepts the oft-repeated call for more investment in national systems and local actors, but simultaneously fails to make the case for the distinct role that only UN agencies are or should be playing. As our donors and partners look more closely at bottom lines and value-for-money, what is our answer to this increasingly common question?

My graph of the week is from Chris Hoy’s “Can developing countries afford the SDGs?” which compares the price tags of 3 SDG targets (poverty, health, and education) with the public finance capacity (government revenue + ODA) of low income (LICs) and lower middle income countries (LMICs). It shows that most LICs cannot afford the SDGs. For the Democratic Republic of Congo, the cost of reaching these targets equals the national GDP. But Hoy also shows that most LMICs could cover SDG costs with government revenue only. So his recommendation is for donors to redirect ODA from LMICs to LICs. This is going against the latest ODA trends.

Two quotes this week as I could not make up my mind. One from Kimberly Bryant and Kim-Mai Cutler at the 9th Annual Crunchies: “… and the Crunchie [for biggest social impact] goes to … Code.Org !”.
And one from Prof. David Reitze: “We have detected gravitational waves. It’s the first time the Universe has spoken to us through gravitational waves. Up until now, we’ve been deaf.”