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SPEECH/10/185

Janez Potočnik

European Commissioner for Environment

Resource efficiency as a driver for greening the economy

Figures and graphics available in PDF and WORD PROCESSED

Conference "Enriching the Planet – Empowering Europe"

The Hague, 26 April 2010

Good evening ladies and gentlemen.

I am glad that I get to speak to you before the main course…not because what I have to say is likely to give you indigestion…but because I want to give you some food for thought. If you had already eaten you might not be so receptive!

Actually, I know that you as an audience are already receptive to the kinds of ideas I want to put to you. The title of the conference tells me that we already share the same appetite for enriching and empowering our planet.

And on tonight's menu, we have a special plat du jour – resource efficiency.

Resource efficiency isn't perhaps the most obvious of concepts to explain, but perhaps I might start by asking you a question:

Who came to work on a bike today and who came by car?

I know that I'm speaking in Holland, so there might be an obvious answer…but it is a simple illustration of an everyday 'lifestyle' choice, which potentially has a real impact on the environment. We could take it further and think about Europe as a developed economy... there is much we have to 'weigh up' if we care about our environment. And these days there is plenty of evidence to show that we do care more than ever.

This is great, but it is simply not enough for our action to stop at the level of the individual.

And that is why we have legislation to limit damaging behaviour, and to sanction those who do the damage. We also have great new technologies, which have given us safer chemicals to replace hazardous ones or which are helping us recycle and re-use waste.

But even this is not enough. Why? Because there are just too many of us. Some 500 million Europeans are putting unprecedented pressure on our environment.

Part of the answer lies in changing our behaviour, as consumers and as producers. And that means using our markets to work in ways which put the proper value on the resources we use. This is one important part of building a resource efficient economy.

But what do we really mean by resource efficiency? The thrifty Dutch, just like some compatriots from my home region, have a history of doing this: using less of what we have to achieve the same, or even more.

It is all about managing our resources sustainably, throughout their life cycle, to reduce the environmental impact of their use. It is a means to help us live, produce and consume within our planet's natural limits. It's not rocket science, in fact it is nothing more than a common sense revolution.

It's not only about energy either. Energy is only one of the natural resources we are using on this Earth. Both our material resources and our natural systems and biodiversity have to be cherished and used carefully.

Some think that resource efficiency is just a way of promoting growth in the eco-innovation sector. This is not true. Sure resource efficiency needs eco-innovation, but we need to look further…to green the whole economy.

Think of the waste issue. We can find ways to avoid producing more waste than is absolutely inevitable – but a resource efficient outlook would mean looking at new practices and new business models, which could make the best use of and recover value from the waste we can't avoid producing. It is about recovering re-usable products, materials and energy while minimizing the amount of final disposal.

So yes to eco-innovation…but also yes to a broader meaning of eco-innovation which would mean cleaner industry in general, rather than just cleaning-up industries.

As Oscar Wilde might have said…"We want to be the unstoppable in pursuit of the re-usable…"

***

And so, Ladies and Gentlemen, we must make resource efficiency a central priority. We made this more concrete through EU2020, which focuses on "Sustainable growth: promoting a more resource efficient, greener and more competitive economy"...

EU2020 also has Resource efficiency is one of its seven flagship initiatives. Its stated objective is to “decouple economic growth from the use of resources, support the shift towards a low carbon economy, increase the use of renewable energy sources, modernise our transport sector and promote energy efficiency.”

This decoupling idea is at the core of resource efficiency…continued economic growth alongside the sustainable management of our resources. And it makes sense at every level…environmentally, economically, commercially and geo-politically.

But it won't happen on its own.

We need everyone who can to help bend our collective European will towards making it happen. And this will mean drawing in a lot of different people, because resource efficiency is a truly cross-cutting affair.

If you need an image… think of it as an umbrella, reaching across and over existing polices.

I will have to work closely with colleagues at European level – particularly those Commissioners responsible for energy, transport, industry, trade, agriculture, fisheries, regional policy and research. We have a decent track record so far with many good initiatives at European level – the Sustainable Production and Consumption and Sustainable Industrial Policy Action Plan, the Raw Materials Initiative, the Resource and Recycling Strategies, the Energy and Climate Package...

We will need the Member States to buy-into the concept too as well as the regions and municipalities. And of course we will need the private sector – who understand better than most the need to get “less in – more out”, which is what resource efficiency really means.

And we will need to change the behaviour of European consumers. To work on people's awareness, and to influence their habits.

But the arguments are changing and becoming more difficult to ignore. The recent report on the Economics of Ecosystems and Biodiversity (TEEB) tells us that ignoring biodiversity loss would be an expensive mistake – and could cost us 7 % of global GDP by 2050.

We need to take the heat off our natural resources. To do this we must change relative prices of different inputs in the economy to reflect the real value of those resources. The only other alternative is more regulation…but even policies need to be resource efficient. Having said that we have a duty to ensure that remaining legislation adopted during recent years – on air, waste, chemicals - is properly and effectively implemented. We know we have much work to do in this area and we will continue to prevent breaches where we can, and build a state of trust with regard to implementation and compliance with Member States.

But to return to the issue of pricing; if we don't make the changes in relative prices, innovation on its own will not deliver the changes we need in the balance of economic inputs. Take for example energy efficiency. Innovation can help, but as our energy output becomes more efficient demand for it increases…causing what is known as the "rebound effect". Looked at economy-wide, this effect can mean energy use remains more or less the same, even if we are more energy efficient. The story holds for other resources. If you get better at making something…it is likely that more people will want it!

The changes – which will need true 21st Century economic tools - have to be made at the heart of our fiscal policies, which may have to shift their aims beyond raising revenue. And we will be looking closely at the expertise that the Member States can contribute in this respect.

Subsidies will also figure. Inefficient technologies and business structures are sometimes 'protected' by subsidies, which can cause more harm than good to the environment. We need to unlock this cycle.

The flip side of this is the demand side. We want to encourage greener public procurement, which accounts for 16% of GDP. Consider this…if all public authorities across the EU were to opt for water efficient toilets and taps in public buildings, their water consumption would be reduced by 200 million cubic meters1 - that's the same volume as China's annual timber demand.

I said at the beginning that we have to think further than how much we care as individuals. While this is still true, individuals are so important. And the cycling vs. driving question I asked at the beginning shows just how much we all have to balance in our daily decision-making, and how much we need to use relative pricing to change behaviour.

Here's another example…one that is coming to a table near you...and it's about food. Recent research findings from a Dutch project2 show us we are moving quickly to a future where we do not have enough land to provide the animal proteins – the meat and cheese that have been for centuries the basis of our diets - that 9 billion people would need.

If this isn't a wake-up call about changing present consumption habits – where we waste about a third of the food we produce – then I don't know what is….

***

Ladies and Gentlemen

I said earlier that today's plat du jour was resource efficiency. I hope I have been able, not just to give you a clear description of what is on the menu, but also an idea of the ingredients which make it up.

I hope you can see that I believe in changing behaviour through enterprise, markets and prices, rather than through environmental legislation and sanctions, even if we need both.

And as policy makers – we must use the legislative power we have to engage and guide the wider society, as it is only by changing our collective behaviour that we will achieve sustainable growth.

After all that, I hope you still have an appetite. As a final word, I would like to say I am looking forward to hearing from Minister Schauvliege, who will be speaking after you have eaten, and to the good cooperation I am sure we will achieve with the upcoming Belgian Presidency.

1 :

RELIEF European Research Project.

2 :

Netherlands Environmental Assessment Agency (PBL), 2009. Getting into the Right Lane for 2050.


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