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European Commission

Janez Potočnik

European Commissioner for Environment

The success or failure of Rio will depend on us and be decided in the years to come

European Environmental Bureau's Annual Conference/Brussels

1 October 2012

Ladies and Gentlemen,

First, let me start by thanking EEB for the invitation. I do appreciate your professional and dedicated work for the sake of better environment and better future. I would also like to thank you for that.

"Renewing Europe's commitment to sustainable Development in the aftermath of Rio" is timely and appropriate topic. A lot has already been said today. Was Rio a success or a failure? The interaction, the sense of solidarity and commitment that I saw while I was in Rio, the involvement and level of participation of the business sector, civil society and especially of the younger generations, gives me confidence that Rio was not the end of an important process, but only the beginning.  What I saw in Rio gives me hope and most importantly the determination to push the Rio process forward.

The truth is that the success or failure of Rio was not decided in June. It will be decided in the years to come.  The success of Rio will depend on us. We can still make a real difference. It’s only a question of will and determination. Do we have it?

Rio did not lead to the results we were all hoping for. But it did achieve some notable advances:

  • Action in key policy areas. This includes food security, land, sustainable agriculture, water, sustainable energy, oceans and fisheries, and sustainable consumption and production.

  • Sustainable Development Goals (SDGs). Rio decided to develop universal goals, applicable to all countries, and to be developed alongside post 2015 development policy. I cannot emphasize enough how important I find the "universal" nature of future SDG's.

  • Financing for sustainable development (including private, public, innovative, development assistance, trade, etc).

  • Institutional Framework (strengthening of UNEP, contributing to the establishment of High level Political Forum on sustainable development). 

  • And most importantly, Rio confirmed a broad buy-in of the concept of green economy. Despite the really hard time we had from some of the partners in earlier negotiations, we saw from statements of a vast majority of world leaders that they acknowledge the need for a global transition towards an inclusive green – or if you prefer - sustainable - economy.

And this is probably the most important achievement of Rio. Because the environment knows no boundaries and it is only by working together at – local, national, EU and global level - that we can achieve concrete results. This morning we heard again how serious the challenges we face are.

In light of this, I am very satisfied that the EU is already taking steps towards building a sustainable and resource efficient economy. The strategy that we, at the European Commission, defined in 2010 placed a knowledge based, resource efficient, low carbon economy firmly on the EU agenda. This in fact, is the same economic growth model we pushed for in Rio. 

It follows the vision identified in our Roadmap to a Resource Efficient Europe: By 2050 the EU's economy has grown in a way that respects resource constraints and planetary boundaries, thus contributing to global economic transformation. Our economy is competitive, inclusive and provides a high standard of living with much lower environmental impacts. All resources are sustainably managed, from raw materials to energy, water, air, land and soil. Climate change milestones have been reached, while biodiversity and the ecosystem services it underpins have been protected, valued and substantially restored.

Adopting a model that allows promoting competiveness, innovation and growth within the limits of our planet, is not only about safeguarding the environment, it also about protecting our health and preserving our future. Floods, droughts and the dramatic consequences they bring are the most visible effects of environmental degradation and climate change. But they are not the only ones.

Ladies and gentlemen,

As we struggle to find our way out of the economic crisis, we need to stabilise and reform our economies while dealing with structural problems and strengthening the competiveness of the European Union. On all this, there are no doubts. But we must not forget that our economies are built on decades of resource intensive growth. Most – if not all - of the sectors of our economy strongly depend on natural resources – water, energy, soil, raw materials. These resources are getting more expensive and some of them will run out. After a century of declining resource prices in real terms, pressures on resource supplies have led to a steady increase of prices since 2000, and prices will inevitably continue to rise and remain volatile. Moreover, in the EU more than half of the resources that we use are imported; indeed we import six times more than we export. We have the world's highest net imports of resources per person. And our dependency on import is increasing.

The sustainable growth model we have been pushing for in the EU, is not only about the environment, but also and foremost about our economies. In the long run it is not possible to separate the two – the economy and the environment must walk hand-in-hand.

 Some leading companies have already understood this and are already responding, focusing their innovation potential from improving labour productivity to improving resource productivity. A recent article in the “Harvard Business Review” drew attention to two important relations that emerged from the analysis of data on corporate sustainability:

  • The first: “Resource efficient companies – those that use less energy and waste and create less waste in generating a unit revenue – tend to produce higher investment returns than their less resource efficient rivals (with annual returns for 2010 of 18% compared to 9.5% for less resource efficient companies). 

  • And the second: “Resource-efficient companies also display high levels of innovation and entrepreneurship, pushing core value metrics above the average large cap global business (with for the period from January 2005 to September 2012, net margins of 12.7%, return assets of 6.2%, and return on equity of 16.5%, compared to 6.3%, 3.2% and 5.5% respectively for less resource efficient companies).

Certainly the private sector will have a key role in taking forward the transition and making the right investments towards change. But, it is for governments and public authorities to provide the right signals, incentives, direction and most importantly leadership. Our policy needs to go beyond traditional »three C's« approach – Command, Control and Compliance – and the polluter pays principle, by strengthening the »three I's« - Innovation, Incentives and Integration. As the situation is today, market forces are too slow and imperfect, the financial, business and economic world takes a too short-term view, and politicians tend to work tightly around electoral cycles. We need to move from an approach based mainly on a short-term vision – to one based on a long-term vision. 

And this is about moving towards a green economy, a sustainable growth model. We now need to debate and discuss the tools and find measures that help us get there. We have a long way to go but already the lessons learned in Europe, both positive and negative, can be useful for other regions. The more Europe gets its own house in order, the more credibility and authority it will have in efforts to ensure that sustainable development is pursued at the global level in a systematic way.

 So, building on what Rio did achieve, what do we need to do to bring the global transition about? What are the practical steps? They are of course tightly linked to the already mentioned advances achieved in Rio.

 Let me expand on them. From a certain perspective, one could say that Rio was weak on the green economy. No strong statements of a global transition to a green economy were actually voiced. However, green economy as a pathway to sustainable development is now firmly rooted in the global agenda and many countries are moving forward. From a different perspective, a more practical one, the business community present at Rio showed a lot of enthusiasm, with many companies really wanting to push ahead. Clearly, there is nothing stopping us from forging ahead on the green economy with those businesses, with a number of individual countries and with international partners that are willing to go ahead. To put it bluntly, there is no UN timetable for the green economy. We must promote it within the EU and with our partners. How?

First, the Green Economy is a way of bringing together a range of activities undertaken as part of our internal and external strategies:

  • Internally, within the EU we need to continue and accelerate the transition. Concretely we are currently working on single market for green products initiative – exploring methodology for environmental footprint for products and organisations, on initiatives for sustainable food and sustainable buildings, on major activities to safeguarded European water resources and on comprehensive review of our air quality policies. We are also actively engaged in the European Semester process via recommendations to MS for shifting taxes from labour to environment and pollution (12 MS this year) and preparing the same approach to start phasing out Environmentally Harmful Substances next year. We have established high level Resource Efficiency Platform to politically steer the whole process. Agreeing on resource efficiency indicators and potential targets remains a key priority. All mentioned activities should deliver this year or at the latest till the end of next year. I'm also systematically engaging with all my colleagues in the Commission to contribute to all proposals important for improving resource efficiency.

  • Externally, with developed countries and emerging economies  we need to create the necessary conditions to reap the benefits of the global market; and finally

  • With developing countries, and consistent with the EU Agenda for Change, we need to promote the green economy also as a way of addressing poverty.

These three aspects are clearly interlinked and I believe that the EU needs to engage at all three levels.

Second, Rio agreed that a set of Sustainable Development Goals would be developed at UN level. These must be coherent with and integrated into the post-2015 development agenda. They will be the essential drivers of sustainable development in the years to come, and will apply equally to developed, emerging and developing countries. For these reasons we must ensure that the design of these goals will be in our and everybody's interests. Most importantly, we need to ensure a healthy balance between economic, social and environmental aspects, one that is consistent with our values and aspirations. SDGs must go beyond the development agenda, even though it is very important that they will be eventually integrated into one coherent UN process to deliver the post 2015 framework.

Third, we should engage beyond the EU in global action in specific policy areas, for example: food security, land and soil and sustainable agriculture, sustainable energy, oceans and fisheries, sustainable consumption and production and getting the data and measurement right (work on beyond GDP concept, corporate sustainability reporting and green capital accounting). There are indeed a number of things we have to do, but we also need to prioritise in those areas that are the most promising in the EU's interest and are essential to push forward sustainable development.

Fourth, any economic transition needs investments. In jargon, we called this "means of implementation" in the run up to Rio. A sustainable development financing strategy will be elaborated at UN level, to present a comprehensive view of all financial investment and trade resources to be mobilised for achieving sustainable development goals and objectives. The EU needs to clearly stress that financing needs to be tackled in the broadest sense. They need to be primarily mobilised from a range of public and private sources, including through innovative financing.

However, we must remember that financing itself is only part of the picture and ODA is only a part of financing. Creating the right conditions for business to invest and grow is crucial to encourage pathways to a greener economy. We need to revitalise efforts to give priority to free flow of trade in environmental goods and services, which has been stagnating in WTO discussions for a number of years now.

Finally, we need to continue pressing for institutional reform at the UN, this is both in terms of strengthening and eventually upgrading UNEP, but also in terms of the High level forum for sustainable development, many aspects of which are still not defined and need to be developed with EU and global interests in mind.

Ladies and gentlemen, Dear friends,

The follow-up to Rio+20 offers the EU a number of strategic opportunities. But, it will require engagement and commitment that need to be followed through by the EU at both international and EU level, and by all partners. Rio did not lead to all the results we hoped for. However, its failure or success will really depend on how we – governments, business, civil society and researchers, will take its outcome forward. It will depend on the decisions we will make, the actions we will take, and on our readiness to work closely together towards the future we want.

The 7th Environment Action Programme, which I aim to put on the table before the end of the year, will serve as an important vehicle to driving forward the environment-related aspects of the Rio agenda. I also plan to propose a Communication covering Rio+20 follow up in the first half of next year. I will also continue working with my colleagues both within the Commission and in the Member States, to make sure that the EU delivers on the full package of Rio. commitments and benefits from the full range of opportunities it offers.

Many of my recent speeches in the post Rio period ended by quoting my good friend Achim Steiner. There is obviously no need for doing that today. That is why let me conclude by just saying that the images from Rio are still very much alive in me. The already mentioned interaction, sense of solidarity, commitment, involvement ... all that lengthy and thorough preparations, all that energy for change gathered there in one place... Rio+20 was simply not just another conference. It was loud and clear, dramatic call for sustainable future, call from many for the changes needed to improve and sustain our quality of lives by respecting boundaries of the only planet we share. Call not entirely heard and understood by all of us politicians. It is high time that we start listening better and act accordingly.

Thank you for your attention.

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