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SPEECH/ 11/783

Janez Potočnik

European Commissioner for Environment

Introductory remarks to environment committee

Environment committee meeting (European Parliament)

Brussels, 21 November 2011

Ladies and gentlemen, Honourable memb ers,

Victor Hugo said, "nothing is as powerful as an idea whose time has come".

You know from my hearing here two years ago that resource efficiency has always been my priority in this mandate. Over the last few months my mission has been to explain and promote resource efficiency. And from the reactions I get from academics to entrepreneurs, and from ministers to NGOs, it is clear that the time for resource efficiency has come.

Increasing resource constraints are inevitable, so resource efficiency is a necessity. But I believe that it is also an opportunity. It should inspire creativity, drive innovation, generate ingenuity, guide policies, motivate business decisions, and transform our everyday lives towards sustainability.

I know that when I speak here I have a well-informed audience. That most of you know what resource efficiency is about and need no convincing that it is the right way forward. I know that you are already working on an own-initiative opinion with Gerben-Jan Gerbrandy holding the pen.

Our common task will be to convince others, inside our institutions and outside them, on the conceptual arguments, and then on the practical actions we need to put us on the right path; on the "why" and on the "how" to transform Europe to a more resource-efficient growth path. This afternoon I want to explain how with the Roadmap we are moving from the "why?" to the "how?".

The challenges

You have already heard me explain why we need a new growth path. The birth at the end of last month of the seven billionth person reminded us of the challenge. Around 200 000 more people every day are sharing a planet, which will remain the same size. Demand for food, feed and fibre is expected to increase 70% by 2050. But already 60% of the world’s major ecosystems that help produce these resources have already been degraded or are used unsustainably.

The "business as usual" scenario tells us that we would need three times more resources by 2050. So "Business as usual" is not an option! Basically we have to grow using less resources or we will not grow.

We already see this in the rising commodity prices. The decline in resource prices of the last century (in real terms) – with breaks only for wars and the oil crisis – has been wiped out in the first decade of this century. The era of cheap and abundant resources is over. That is the reality which will influence our economic and social stability in the coming decades. It is already clear to most medium-sized and larger European companies. 87% of EU companies expect rising resource-prices in the next 5 years. Material costs make up more than 40% of total costs in manufacturing industries, compared to less than 20% for labour 1 .

So the invisible hand of rising commodity prices will do some of the work, but those prices do not always reflect scarcity or environmental impacts. Properly functioning markets do not exist for clean air, clean water, fish, or ecosystem services in general. It is our duty as policy makers to ensure that crucial and fragile resources are valued and protected, and to help industry and consumers get ready for the necessary transition by providing the right framework conditions.

If we are to achieve the decoupling of growth from resource use that we called for in the flagship on resource efficiency we need to provide clear signals for business and consumers, and the confidence and predictability for them to make the right investment decisions and lifestyle choices.

We need change

  • How can we overcome the tangible barriers that lock our economies, our businesses and our consumers into existing unsustainable patterns?

  • How can we broaden the short-term horizons that dominate decision-making?

  • How can we leverage the major innovation breakthroughs that will be needed in some sectors?

  • How can we boost private and public demand for green products and create an effective internal market for them?

The "How?" is what we try to answer in the Roadmap to a Resource Efficient Europe that we adopted in September.

The resource efficiency agenda

First let me remind you that this is not Janez Potočnik's Roadmap for Resource Efficiency. It is a Commission roadmap. It was adopted by the College. It is a common and agreed vision of where we need to be in 2050 and how to get there. Even if I am effectively in the lead.

Resource efficiency was already placed at the heart of the European strategy for structural economic reform when it became a flagship of Europe 2020. So it was already recognised as not only an environmental agenda, but as a competitiveness agenda for sustainable growth.

Building on the flagship, the Roadmap sets out how we get to our vision of sustainability with the positive engagement and cross-cutting co-operation from all stakeholders.

Let me just read that vision out to you:

By 2050 the EU has grown in a way that respects resource constraints and the capacity of our planet. Our economy remains competitive and inclusive, and provides a high standard of living at a far lower environmental cost. Resources are sustainably managed, climate change milestones have been reached, and biodiversity and its ecosystem services have been protected and substantially restored.

This vision needs tangible initiatives to make it reality. The Roadmap sets these out and defines milestones to be reached by 2020. We have put the focus on three areas of our lives:

  • where we live,

  • what we eat

  • and how we move around

Why? Because these three areas 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, and from research programmes to eco-design. But 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 context of our structural economic programme.

The Roadmap provides milestones for 2020, policy direction and priorities. But of course it does not set out details – in its 24 pages – of every new initiative or legal proposal.

For example we call for effective elimination of landfilling waste by 2020, for phasing out environmentally harmful subsidies, for a shift from taxing jobs to environmental taxation.
Other new policy areas for immediate development, on sustainable food, buildings and land-use are proposed for the first time.

In the context of the Europe 2020 strategy the Roadmap calls for the mobilisation of market-based instruments. In particular, our strategy seeks 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.

New policies should help to align the prices of resources that are not appropriately valued in the market-place, such as water, biodiversity or clean air. That is why the Roadmap proposes to shift the burden of taxation to pollution and resources, and to eliminate environmentally harmful subsidies. These two areas create huge opportunities for fiscal consolidation, and at the same time they provide industries and households with incentives to use resources efficiently.

To overcome the "rebound effect" we need instruments on both the supply- and demand-sides.

On the supply-side, we need to drive the process of producing "more with less". For instance, by widening the criteria for ecodesign.

And on the demand-side, we need to create a larger, more accessible and simplified market for sustainable products for example by aligning the European Ecolabel, Energy Label and Green Public Procurement criteria.

Setting targets and indicators

The discussion on the best targets and indicators to inform policy and business decision-making is intensifying. More and better results are coming out of this process. 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. In conjunction with that, we have identified a number of policy-specific indicators and we will step up the achievement of existing targets, notably on waste.

That is as much as we can do today, but we do not stop there – with the Roadmap we launch a participatory, multi-stakeholder process to develop and agree on comprehensive and dependable indicators and targets.

Integrating resource efficiency in the European Semester

It is said that you should never waste a crisis. The current crisis, hard as it is, provides opportunities for policy-reforms in order to ensure a sustainable exit route. That is why resource efficiency will be fully integrated in the European Semester, meaning that Member States must make it an operational part of their National Reform Programmes.

Some of the immediate priorities, as I mentioned before, are to eliminate environmentally harmful subsidies and to shift taxation away from labour to resources and pollution. But we will also need to ensure that we invest in green technologies and innovation, that we provide the conditions to generate markets for sustainable products and secondary materials, and that public authorities green all their spending.

The Roadmap and the new MFF

Budget mainstreaming is essential mainstream Of course we also fully intend to continue our dedicated environmental programme LIFE+ . But we have been actively greening the first MFF proposals to come from the Commission. I am happy to go into greater detail if you wish, but for the moment let me just say that I would highly appreciate your support in this strengthening of the environmental dimension of our budget.

***

Ladies and Gentlemen,

As you can see there is a lot of work ahead of us. I rely on your support all the way through, and particularly on the specific proposals which will come forward during the rest of my mandate.

I will finish with a beginning of a story: last month the Guardian asked readers to write to the seven billionth baby. I will read to you the top message:

" Welcome to the world, and sorry about the mess. We've left you a planet that seems to be warming and struggling to cope with all its inhabitants. We're not quite sure what'll happen yet, but your generation could be the makers or breakers. Find out what the scientists are saying and do something to help, even if it's only small."

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