This speech was given to the Schumacher conference on 'Global conflict or human scale development?'.

No wonder there are repeated revelations of the steady and seemingly inexorable degradation of our planet when the regulatory framework to control man's exploitation of the Earth is so feeble, so fragmentary and so pitted with flaws. This is not simply a reflection of human rapaciousness and greed for economic gain, nor indeed of the convenient view that there is a virtually limitless availability of resources to plunder with impunity – though no doubt both of these play their part. The primary drivers are rather the relentless advance of man's technological mastery over the environment, combined with the continuing rise of vast corporate power machines determined to dominate world markets and indefinitely extend their control and manipulation of natural resources for their own commercial gain.

What is missing from this agenda is any conception of the cumulative impact on the Earth's eco-systems. True, there are the odd twitchings of environmental consciousness in the occasional more visionary boardroom member, but they are easily overwhelmed by the imperatives of the capitalist system, the oppressive culture of the bottom line, and the subordination of planetary survival to the pressing demands of immediate economic survival. Of course some may say this is too harsh a picture and it's not as bad as that. They're right. It's worse.

What we now face is a transformation of our world and its ecosystems at an exponential rate, and unprecedently brought about for the first time in the history of our planet, not by natural forces, but by the activities of the dominant species – us – across the Earth. The engine of that transformation is driven by three forces which have been steadily gathering pace over a long period – unfettered industrial exploitation, growing technological control, and soaring population growth – now joined by a fourth – climate change – the overarching dominance of which opens up a real apocalyptic scenario for the human race

Man's ecological footprint is now outpacing many of the natural phenomena which govern our world. Indeed we have almost become our own geophysical cycle. On a global scale our biological carbon productivity is now exceeded only by the krill in the oceans. Our civil engineering works shift more soil each year than all the world's rivers bring to the seas. Our industrial emissions now eclipse the total emissions from all the world's volcanoes. We are bringing about species loss on a scale of some of the massive natural extinctions of palaeohistory. We are totally altering the nitrogen cycle, in some parts of the world adding more nitrogen to rainfall than would have been added by agriculture. Even in the remotest parts of the world, trace contaminants like lead and DDT appear in the natural food chain.

The ravages of this human-driven process on the ground are there for all to see. About one quarter of the developing world's crop land is already being degraded, and the rate is increasing. Some 420m people live in countries which no longer have enough crop land to grow their own food, and have to rely on imports which they find it increasingly difficult to pay for. But the greatest threat is not shortage of land; it is shortage of water. Half a billion people already live in regions prone to chronic drought. By 2025 that number is likely to have increased 5-fold, to between 2.5-3.5 billion people, between one-third and one-half of the entire world population.

Human beings, like all other species, depend on habitable ecosystems to survive. Rapid climate change is resulting in ecosystems becoming increasingly unmatched to their environment. Deserts are likely to become hotter, with degradation of land in arid areas likely to become irreversible. Marine ecosystems are at risk, including salt water marshes, mangroves, coastal wetlands, and coral reefs, which will radically reduce fish populations further, in addition to sever over-fishing. Nearly 50% of all fish stocks are already fully exploited, 20% are over-exploited, and only 2% of global fisheries are recovering from over-fishing. Forests are another vital ecosystem at serious risk. In 1998, the hottest year on record, large areas of forest burnt down after prolonged drought conditions, 10 million hectares in Indonesia alone. By 2050 it is projected that the Amazon will have died back. No longer absorbing CO2 from the atmosphere, these forests would then begin to have the opposite effect, releasing into the atmosphere the billions of tons of carbon they already store. The risk in all these accelerated natural phenomena is the runaway feedback effect whereby shifts away from an equilibrium state unlock other changes which interact with the original shifts and grossly magnify their effects until the whole process spirals out of control and makes our planet uninhabitable.

Apart from increasing environmental destruction on a globe-threatening scale, there is a colossal economic price which is also steadily growing out of control. The number of natural catastrophes has tripled since the 1960s, but global economic losses from these events have risen 10-fold to $40bn a year now. Worse, the penalties have been distributed very unequally and very unfairly. Despite the majority of disasters occurring in the Third World over the last 15 years, 92% of insured losses of $178bn went to the industrialised nations. This has caused the Red Cross to propose a system of cross-national compensation.

All these threats are being further exacerbated by relentless population pressures. Since homo sapiens emerged out of Africa to conquer the world, it took around 150,000 years for the world population to reach 1 billion in 1804. It then took another 123 years to reach 2 billion in 1927. It then took only 14 years to reach 3 billion, a further 14 years to reach 4 billion, then 13 years to reach 5 billion, and just 12 years to reach 6 billion. The UN now projects world population to rise to 9.3 billion by 2050, by which time nearly 90% of the world's population would be living in developing countries, with Africa projected to have three times as many people as Europe. The pressures that this exerts on the environment – with high and rising rates of natural resource exploitation demanded by ever rising population bases – is scarcely calculable. It is already causing biodiversity loss at a rate between 100 and 1,000 faster than at any recorded time since homo sapiens arrived And global consumption of freshwater is doubling every 20 years, with new sources becoming ever scarcer and more costly to develop.

So what is to be done in the face of this apocalyptic scenario? What is clearly needed is a framework of international law which permits the operation of free trade and a competitive world economy, but only within parameters strictly drawn to safeguard the biosphere, our planet, as an active adaptive control system able to maintain the Earth in homeostasis. No such system of international environmental governance exists at present, and none is currently even being seriously pursued. Indeed the dominant realpolitik within the world economic is a powerfully deregulatory one which is designed to give ever greater freedom of action to the transnational companies as the biggest economic players in an open globalized economy aimed at maximizing economic growth, unfettered trading, and corporate profit with minimum regard for environmental impacts.

This focussing on growth, trade and profit as the dominant drivers, with the environment treated as an unwelcome constraint, even an anti-aspirational hurdle to be controlled and marginalised, derives from the right-wing ideological ascendancy which developed in the 1980s in the Reagan-Thatcher era. The issue of regulation of multi-national corporate activities grew strongly in the 1960-70s, but dissipated in the political kickback against rampant inflation and OPEC power in the late 1970s. The first stirrings of resistance to this right-wing corporate hegemony are now beginning to be seen in the anti-globalization movement, the increasing resistance to the WTO at Seattle and Cancun, and the international opposition to American assertions of unilateralist dominance.

However, this has yet to be translated into a viable and coherent alternative ideology which can provide the political driving force for a wholly new system of international economic governance. Such a system would not only elevate the environment to its rightful place within a much more comprehensive and balanced vision of mankind's role on this planet; it would also elevate issues of international labour standards and social justice, which have been downgraded systematically over the last two decades, to a much more prominent position within the overall new governance model.

The core of this new international environmental governance that is required needs to be constructed around the network of multilateral environmental agreements (MEAs) that have been negotiated over the last few decades. There are some 200 of them, of which perhaps a dozen or more are the most important, and they cover such areas as international trade in waste, chemical pollutants, endangered species, genetically modified organisms, and oil spills. Their weaknesses are that they are not readily enforceable, their coverage is fragmentary and incomplete, and there are many policy gaps where no effective MEAs exist at all. All these defects need to be remedied.

The most important issue is enforceability. The OECD Guidelines on Multi-National Company activities have never been enforceable at law. The MEAs have an international regulatory status, which no doubt influences TNC actions, and almost all MEAs have provision for dispute settlement. What is notable, however, is that MEA dispute settlement procedures have never been used. The multilateral nature of the issues dealt with by the MEAs make the provision for bilateral dispute settlement procedures largely irrelevant. By contrast, the WTO dispute settlement mechanisms work effectively because they normally involve only two or a very limited number of parties in contention.

The environmental model, which is par excellence multilateralist, demands a very different legal framework. The essential missing requirement is a World Environment Court. This will need many years of determined and persistent negotiation before any such authority is globally acceptable, bearing in mind how long it took to bring to reality the permanent International Criminal Court against genocide and torture (with the US still opposed). But there is no other route which is likely to be as effective.

How would a World Environment Court operate? It would be the supreme legal authority for settling issues regarding harm to the environment, in whatever form, by land, water, or in the air or upper atmosphere. The basis of its legal operations would be a global environmental charter specifying in detail the ecological conditions which require to be met if the biosphere is to be allowed to operate within tolerable elasticities from its natural functioning.

It would be essential that the right to bring cases before it – and only after due process had been exhausted nationally – would not be confined to the governments of nation states, otherwise it would become a forum for settling nationalistic claims rather than a protection for the global commons. This could be secured in two (not mutually exclusive) ways. One would be to allow public interest bodies, notably NGOs, to bring cases which met a test of overriding international public interest. Another, using the precedent of the standing environmental investigatory commission set up in India under the auspices of the Supreme Court, would be permanent specialist bodies of the Court tasked to investigate major damage to the global environment, whether already inflicted or threatened, with powers to subpoena evidence and prosecute individuals and corporate bodies wherever necessary. This provision would of course only work if it is properly funded and resourced, though if the fines and penalties imposed on corporate offenders were recycled at least in part to pay for the Court's investigative and legal work, these activities would quickly become self-financing. Then maybe both external and internal ways of initiating proceedings could be operated in tandem.

Alongside a World Environment Court we also need a strengthened UNEP (United Nations Environment Programme) and strengthened MEAs. Whilst the enforceability of legal torts would lie with the Court, the role of promoting a more sustainable world economy would lie with UNEP. It would work with other institutions with related objectives within the UN system, notably UNDP on development programmes, UNFCCC on climate change, UNCTC on transnational corporations, and CSD on sustainable development.

The weakness of all these bodies at present lies in their organisational incapacity to form a clear set of objectives, establish a business plan to implement them, monitor shortfalls and failures in the execution of the plans, and effectively address those shortfalls and failures in revised plans. The reasons for this chronic ineptitude is partly institutional – the hidebound bureaucracy of the UN system and low administrative capacity of many developing countries, but mainly political – the unwillingness of most of the richer countries to invest the high level of funding and quality manpower to make UN programmes properly effective, as well as (particularly in the case of the US) the unwillingness to cede supra-national sovereignty to the UN. Even with concerted pressure at the international level to change these views, which is urgently needed, it is likely that attitudes will only be transformed as nation states and their peoples steadily come to realise that they can only achieve some vital objectives – an eco-system which can guarantee their survival and quality of life – if they co-operate strongly with other nations. A globalized or multilateralist economy cannot work with unilateralist or piecemeal social and environmental rules.

How should this transformation to an increasingly supra-national perspective be engineered? Events are the most pungent answer, and the annually growing ravages of climate change upheaval, from which no country on Earth is exempt, are the most potent driver. That was why the Kyoto Protocol, probably the most complex and comprehensively global negotiations in history, came into being, with the albeit grudging consent of every nation. But it will take perhaps another 10-20 years before it bites to a degree which begins systematically to alter the structures and processes of the world economy in the direction of sustainability.

Given that the irresistible pressures of threatened climate change catastrophe will enforce change in human conduct, how can the lesser, but still very significant, pressures from growing environmental degradation, pollution and biodiversity loss generate the political and institutional forces to arrest and reverse the slide into the environmental and economic destitution I described at the outset? The role of UNEP is crucial here, but it needs three fundamental changes to become effective. First, it needs adequate and reliable funding based on some system of assessed contributions related to GDP, to overcome its current handicap of chronically unstable and low-level programme financing. Second, it needs world Environment Ministers, meeting in an annual Global Ministerial Environment Forum, to act, not as a talk-shop, but as a genuine decision-making entity – drawing up a business plan for rolling three-year periods with specific targets, allocating responsibility for implementation to each member State or groups of States, and regularly reviewing progress and dealing with any failures where action on the ground falls short of the agreed plan. That is the commonsense way a business behaves, and Ministers need to regard themselves as real players on the board of World Environment plc.

Third, and most important of all, UNEP must be empowered on a par with the WTO. Whilst the WTO can require (and enforce) that countries act in accordance with what it enunciates as free trade, UNEP cannot at present require or enforce that companies or countries act in accordance with the environmental constraints that it believes necessary. So unless a specific area of activity is covered by an MEA, unfettered free trade remains the dominant motif, and even where there is a specific MEA in place which may conflict with some aspect of trading, the WTO constantly presses to ensure that trade takes preference. UNEP therefore should be empowered to receive reports and intelligence, whether from its own staff around the world or from NGOs or any other source, and then either to give advice or warning – about remedying cropland degradation, failure of water supplies, generation of waste or pollution, assistance to agriculture, protection of forests, or whatever – or to take legal action against serial or major offenders, either in national courts or in the World Environment Court.

In effect, that would give UNEP powers to safeguard the environment like a global Environment Agency. It should also sponsor and support the MEAs by assisting their secretariats and co-ordinating their regulatory activities, and in particular addressing any weaknesses or gaps in their operation. Again, the central issue for the MEAs is their enforceability. That requires them not only to be properly resourced, but also to possess the powers and capacity (and willingness) to prosecute offenders where necessary. Only if the power of enforcement is seen to be there, and known to be used, will the milder instruments of advice and warning be heeded. These provisions would then secure that the MEAs had at least parity of status with WTO rules, and indeed would set the parameters within which corporate trading and economic activities were carried out in compliance with an agreed world environment charter, drawn up to keep the world economy within the limits of what the world ecology will tolerate without damage or overall loss.

If that power of prosecution is used where appropriate, as it must be, one further requirement is needed to make it effective. The level of penalties must be on a scale to constitute a real deterrent. Just as the WTO permits a retaliatory penalty to be pitched at a level related to the harm done to the country offended against over a breach or trading rules, so the World Environment Court, and in tandem the national courts, should impose penalties which require not only the full remediation of damage done to the environment, but also a deterrent fine large enough to give a strong disincentive to repeating the offence. In the case of TNCs, that should be a percentage of turnover, scaled according to the severity of the offence and whether it was first time or repeated.

One possible consequence of such arrangements might be the achievement of greater equity for the victims of environmental disasters and climate change (mainly the developing countries), allied to greater pressure to avoid such catastrophes wherever humanly generated on the part of the perpetrators (mainly the industrialised countries). Indeed the Red Cross has suggested that “poor countries might seek legal compensation (from countries causing global warming) to pay for reconstruction through an international tort climate court”. Given that the sums involved are enormous, one way of funding them might be the Tobin tax on cross-national speculative financial flows, which it has been estimated might raise at a ½% rate some £200 bn a year.

All these proposed provisions at global level can, and should, be complemented at national level by a regulatory framework which underpins the supra-national institutions. The huge gap that exists at present is any workable and enforceable system of corporate social responsibility (CSR). After a great deal of persistent lobbying at Johannesburg last September, some useful text was finally secured in the communiqué at the end of the World Summit on Sustainable Development. But it has so far been ignored by national governments. What is needed is implementation on three fronts.

First, all companies above a certain threshold of turnover or employment should be required to report annually on their environmental and social impacts. At present in the UK it is purely voluntary. Some 80% of the top 100 companies in the FTSE index do provide some kind of regular environmental reporting, but it falls to only about 15% in the top 350, and probably to as little as 2% in the top 7,000. However, DTI is now proposing under a new Operating and Financing Review that the most important 1,000 companies in the UK should now be required to provide a regular environmental report on matters material to their business. This is a welcome advance as a first step, but needs to be extended quickly to cover most of industry and commerce.

Second, if corporate responsibility is to mean anything, the penalties for breaching it need to be effective in discouraging any repetition. At present, the penalties for environmental offences in the UK such as polluting rivers or watercourses, illegally discharging chemicals or illegally depositing waste, though often colossally damaging, are met by often derisory fines – a few thousand pounds levied on a company with a turnover of hundreds of millions of pounds. These footling fines should be urgently replaced by deterrent penalties related to turnover. In addition, companies or individuals convicted of environmental offences should be 'named and shamed' by being listed on the Environment Agency website and public registers (and similarly at UNEP level).

Third, corporate governance in the UK (and of course other countries also) should include the principle of foreign direct responsibility of the directors for the activities of their subsidiary companies abroad. There has been a host of examples of corporate wrongdoing overseas during recent decades where virtually no action has been taken to bring the offender to legal accountability. Such numerous cases include the depredations of Shell in the Nigerian Delta, illegal logging in S.E. Asia and South America, chemical spills as at Djibouti from the loading of chromium copper arsenate in plastic containers, and Thor Chemicals severe factory pollution of the nearby environment in South Africa. Since legal action in the host country is often extremely difficult to carry through effectively, there should be statutory provision in the TNC headquarters country (the UK or wherever) to hold the parent company to account in the UK courts. An Act of Parliament to enforce this, and the other necessary elements of CSR, is urgently needed.

The approaching apocalypse which I outlined at the start is not inevitable. I believe that the broad framework of global and national governance spelt out here could effectively arrest this spiral of environmental decline and begin the recovery of our fragile global ecology. It does not impede a competitive economy; it merely ensures that economic competitiveness takes place within safe ecological parameters and does not destroy the base on which it depends. It also gives hope to the developing countries who have suffered the worst afflictions of environmental degradation, whilst at the same time containing the richer countries' industrial aggrandizement over nature within the limits of what nature can bear. It is a new world order whose time has come.