Janez Potočnik European Commissioner for Environment Our economies must change Responsible or irresponsible? Europe's resource use and its impacts – Friends of the Earth Europe Conference Brussels, 8 November 2011
SPEECH/11/732
Janez Potočnik
European Commissioner for Environment
Our economies must change
Responsible or irresponsible? Europe's resource use and its impacts – Friends of the Earth Europe Conference
Brussels, 8 November 2011
Ladies and Gentlemen,
Over the last months I undertook to hammer in the message of resource efficiency. We have fought our way through labyrinths of economic and policy analyses, case studies, data, positions and opinions, credible and incredible testimonies of facts we already feel in our bones – that we are not on a sustainable path, and that the resources underpinning our present and future well-being are endangered. That we have the choice whether to change or to be changed. That we need a "generation awake" to see the threats of unsustainable resource use and the opportunities the necessary transformation can bring. And that we should not be deterred by the scale of the challenge.
Most of the time, when I speak to businesses, NGOs or public authorities, I am glad to find that the message of resource efficiency has actually arrived before the messenger; that we have a compelling story to tell and that we share the same sense of urgency. Many progressive businesses are already turning this pressure into opportunities.
The challenges
By 2050 demand for food, feed and fibre is forecast to increase by 70 % and yet 60 % of the ecosystems underpinning these resources are currently degraded. Increased resource price volatility threatens economic and social stability and 87% of EU companies expect rising resource prices in the next 5 years.
It is clear that we need to apply the same ingenuity and innovation to improving our resource productivity now, as we did to improving our labour productivity in the past.
We cannot reproduce the "great acceleration" of the 20th century when our economic output grew 23 times and our resource use increased 8 fold at the expense of our natural capital. The "business as usual" scenario tells us that we will need three times more resources by 2050, a pace which threatens to break the boundaries of our Planet.
We need change
These trends present both challenges and opportunities. The resource efficiency agenda builds on a simple concept – that our economy and well-being should grow, while our resource use and its environmental impacts decrease, ensuring a safe operating space for our countries, companies and families today, and in years to come.
But, the devil is in the detail – how to overcome the tangible and intangible barriers that lock the economy, businesses and consumers into existing unsustainable patterns? How to broaden the short-term horizons that dominate decision-making? How to induce major innovation breakthroughs that will be needed in some sectors? These are hurdles that policy-makers, business and NGOs should work to overcome together.
Rising commodity prices are an important indicator, but not a solution in itself. There are a number of market failures that we need to fix: prices that do not reflect scarcity or environmental impacts, lack of property rights, lack of properly functioning markets (for instance, for fish, for ecosystems).
We need to change the energy we use to power our economy, to warm or cool our homes, and to fuel our vehicles; the agriculture we use to feed ourselves; the way we construct our buildings; the transport systems that move us from A to B; and the industries that make the products we rely upon.
The resource efficiency agenda
This is why Resource efficiency is part of the European strategy for structural economic reform: Europe 2020. It is essential both for our longer term competitiveness and sustainable growth. With the Resource Efficiency Roadmap we are seeking a positive engagement towards a shared vision of sustainability:
By 2050 the EU will have grown in a way that respects resource constraints and the capacity of our planet. Our economy will be competitive and inclusive, and provide a high standard of living at a far lower environmental cost. Resources will be sustainably managed, climate change milestones will have been reached, and biodiversity and its ecosystem services will have been protected and substantially restored.
To make this vision become a reality, the Roadmap sets out milestones that need to be reached by 2020. The focus is on three areas of our lives: where we live, what we eat and how we move around. Three areas that together account for up to 80% of the impact of our resource use.
The Roadmap builds on many existing instruments, from waste legislation to green public procurement, from research programmes to eco-design. But also on new ones, for example on sustainable food, buildings and land use. For the first time it puts these in a coherent framework, aiming to guide policy and business decisions. And for the first time it integrates them into the wider story of our structural economic programme. This, I dare say, is an important achievement.
I also clearly understand that the main question now is how the Roadmap will be implemented. I am talking about striving to eliminate virtually all landfill by 2020, for example, or to phase out environmentally harmful subsidies, to move from taxation on labour to environmental taxation. To make it happen, the Roadmap calls for better implementation of existing legislation and for the mobilisation of new policy instruments, such as market-based instruments. In short, these seek to correct market failures, and to get the prices right so that they reflect the true cost and impact of resources and point consumers and producers in the right direction.
One important aspect will be to make sure that technical efficiency gains do not lead to increased consumption which would erode the benefits of that efficiency. We urgently need to develop means to overcome this "rebound effect". That is why instruments on both the supply and demand sides are necessary.
On the supply side, a good example is setting benchmarks of environmental performance. The first 9 Ecodesign measures adopted under the Ecodesign Directive will allow yearly savings equivalent to nearly 13 % of present EU electricity consumption. This means that this instrument alone is taking the EU closer to its 2020 energy efficiency target.
We need this kind of impact not only for energy efficiency, but for wider resource efficiency.
On the demand side, there are opportunities to make our product policies work better and to align the European Ecolabel and the Energy Label, and make sure that Public Procurement is based on life cycle costs, thus creating a larger, more accessible and simplified market for sustainable products. The 15 % of EU GDP that is spent by public authorities should be used to give a boost to innovative resource efficient products and services.
Global Challenge
The Roadmap also looks outside Europe. The economic growth of this century will be most marked in emerging economies where it has the potential to lift billions out of poverty. But one thing is sure – the approach that worked in the 19th century will fail in the 21st, by accelerating the degradation of our already fragile environment, and worsening climate change. But the transformation we are internationally pursuing with the concept of Green Economy after all does offer opportunities for equal levels of well being; it is an agenda for poverty eradication, not against it.
The Rio+20 conferences will offer and important opportunity to achieve convergence of global views on this and it could mark the start of global transition to a green economy.
Overcoming the obstacles to the transformation
As in any economic transformation, there will be winners and losers. For those who are ahead of the curve it will be an immense opportunity. The winners will be those that are adopting new and innovative business models, working along their supply chains, looking for efficiency gains in all aspects of their production and properly valuing all of the natural inputs they depend on.
As for the losers … firstly, there will be far fewer if we prepare for the resource constraints of the future in a predictable and controlled way now, rather than wait for disorderly failure. Second, we will need to make sure that nobody is left behind. We need to provide opportunities to those that need new skills or make sure that food, shelter and energy are always available to the most vulnerable among us. But this can be done in a way that reinforces the transformation, not hinders it.
Setting targets and indicators
More and better results are coming out of the discussion on the best targets and indicators. But we are not there yet. Therefore, the Roadmap proposes initially to use as lead indicator resource productivity, and to follow the state of our natural capital via a dashboard of indicators on materials, carbon, water and land. We are determined to get there in a participatory, multi-stakeholder process.
Integrating resource efficiency in the European Semester
The current economic crisis is bringing a lot of hardship, especially on those that find themselves without a job. But it also provides unique opportunities for policy reforms needed for a sustainable exit from debts and deficits. That is way we want to integrate resource efficiency into the European Semester.
Immediate priorities are to eliminate environmentally harmful subsidies, to shift taxation away from labour to environmental taxes and to encourage research and innovation. These are not the goals in themselves. They should help boost further energy and resource efficiency, help fiscal consolidation and help the economic growth and employment through reduced tax burden on labour. I am particularly keen to explore the potential waste policy has to contribute to meeting a number of our objectives, from green house gas emissions to resource efficient growth.
The Roadmap and the new MFF
The EU budget is another important tool for the transition to a resource efficient, sustainable, smart and inclusive economy. Our approach has been to mainstream resource efficiency, traditional environment protection and climate action priorities into all the major EU funding instruments, including cohesion, agriculture, fisheries, research and external aid.
In addition to mainstreaming, the Commission will propose continuing the current dedicated programme for environment and climate, LIFE+ - with increased resources. Major innovation there will be the introduction of so called "Integrated Projects". These aim at reinforcing implementation of environmental action plans foreseen in major of the EU's environmental directives, such as the Habitats or the Water Framework Directive. With this we aim to leverage other EU, national and private sector funds to achieve results.
I sincerely hope that the final budget will keep this level of environmental ambition. Not least the new CAP.
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Ladies and Gentlemen,
A lot of work has been done by policy makers, NGOs and business to announce and prepare the transition to a resource efficient, low carbon economy. We have travelled a long way to be here today, yet, with the Roadmap in my hand, I still feel like I am at the beginning of a journey.
There is a lot of work ahead of us – to find together the best compass for our future decisions – the most appropriate targets and indicators. To seek relentlessly to demonstrate its benefits and thus get new allies needed to bring this forward. We do not need a green niche; we need to achieve an overall sustainable economic growth. We need to wake up the entire generation, the "generation awake".
