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European Commissioner for Environment
"The frog does not drink up the pond in which it lives”
Roundtable with EUCCC on Green Business Opportunities in China
Bejing, 19 July 2013
Ladies and gentlemen,
There is a Chinese proverb that says "The frog does not drink up the pond in which it lives".
If there are 7 billion frogs in one pond then it is time to consider together how to avoid drinking it dry; especially if those frogs are very thirsty.
Well that is the situation we find ourselves in today. With a global population of 7 billion, we already treat this planet as if we had another one to go to.
And we humans are very thirsty, not only for water, but for many other resources such as minerals, materials, clean air, energy and biodiversity. Within one generation we will have 3 billion more middle class consumers. This is progress. More and more people are being lifted out of poverty, providing vast new markets and opportunities for business.
But the pressures of this growth are on a whole different scale to those we put on our planet before.
To give you a rough idea: the industrial revolution in Britain doubled the income per capita over 100 years for a population of 10 million. Today China has one-hundred times that population, and will double incomes in 10 years. A fantastic achievement, but one that implies a resource shock on the world economy that is about one-thousand times greater than that first industrialisation.
We witness that pressure on resources already in the sharp rise in commodity prices since the beginning of this century, after a century of price falls in real terms. But also in increasing pressure on clean water, on forests and on biodiversity.
Different global regions will respond in different ways to these pressures, depending on their population sizes and their access to raw materials. For Europe the impact of future resource constraints is becoming more clear. We are highly dependent on imported energy and raw materials and our labour is relatively expensive. If we want to remain competitive in world markets we have to make sure that we specialise in high added-value products, that we improve resource productivity and develop circular economy models. Our manufacturing companies are today spending twice as much on materials as on labour, so they need to focus on increasing material productivity as they did in the past on labour productivity.
For China the equation is a bit different, but the economic imperative to environmental policy is also great, and you are very aware of this. I have noted the inclusion of resource efficiency and circular economy aspects – such as urban mining – into the most recent 5 year plan. You are highly aware of the potential constraints to your future growth from resource constraints.
In the end we are all in the same pond, whether we live in a resource-rich, low-population country, or a resource-poor, high-population country, or – like China – a resource rich, high population country.
China faces many environmental challenges due to its rapid industrial growth. In dealing with these - as in Europe – it is important to stop the excesses of pollution and punish those who cause them. But that is not enough, and it is far better to prevent the pollution and degradation in the first place. For all of us, in the global context of global resource constraints, environmental policy will increasingly be not just about dealing with pollution after it has happened, but about finding ways to design it out of our economic systems and design it out of our products. We must all embrace this “new environmentalism”.
And it is our companies – Chinese and European – that will provide the solutions to do this and respond to these promising markets.
China, one of the EU major trading partners, will be a key player is this transformation to more resource efficient production and products. Both the EU and China recognise that our future economic growth needs to be green. We share the same vision: Environmental protection and economic growth must go hand in hand. The emphasis on environmental protection by China’s new leadership creates a very good basis for closer cooperation.
This cooperation can easily be translated into new market opportunities for businesses in both countries. Green growth offers an opportunity to most sectors of the economy, from the building industry to the food sector, from transport to energy production and also for the services sector and tourism. The potential for new partnerships with Chinese companies is huge in all sectors.
It will be for policy makers to set the proper regulatory framework and market conditions to allow business and industry to generate the innovation and investments needed. And we are working closely with Chinese authorities both on a bilateral and international level to do this. We are for example engaging with China through cooperation projects on environmental sustainability, on sustainable urbanisation, emissions trading and management of water resources. But it is the private sector that will bring about economic transformation. Turning challenges into opportunities to do more business and to do it better and smarter.
That is why we are here today.
Ladies and Gentlemen,
The reason that the frog does not drink up the water in its pond is not just because the pond is beautiful, but also because it is a vital resource, essential to its own wellbeing. For 7 billion human’s, new environmentalism is about mutual self-interest, not only about the intrinsic beauty of the world that we share. We simply cannot continue with the old resource-intensive growth model on a global scale. What worked for a very small proportion of the frogs will not work for billions.