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A European Union strategy for sustainable development

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OFFICE FOR OFFICIAL PUBLICATIONS OF THE EUROPEAN COMMUNITIES L-2985 Luxembourg

A European Union strategy for sustainable development

ISBN 92-894-1676-9

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EN



EUROPEAN COMMISSION

A EUROPEAN UNION STRATEGY FOR SUSTAINABLE DEVELOPMENT

European Commission

A great deal of additional information on the European Union is available on the Internet. It can be accessed through the Europa server (http://europa.eu.int). Cataloguing data can be found at the end of this publication. Luxembourg: Office for Official Publications of the European Communities, 2002 ISBN 92-894-1676-9 © European Communities, 2002 Reproduction is authorised provided the source is acknowledged. Printed in Belgium PRINTED ON WHITE CHLORINE-FREE PAPER

Foreword Over the last 10 years the European Union has made a number of important advances, such as the completion of the internal market and the introduction of the euro. More recently, the European Council, at its meeting in Lisbon in March 2000, launched a strategy aimed at turning Europe into the world's ‘most competitive and dynamic knowledge-based economy, with more and better jobs’, within 10 years. Alongside these economic reforms there has been a growing recognition that material prosperity has to go hand in hand with social progress and environmental responsibility if it is to be sustainable. The social fabric and the natural environment around us are as fundamental to our quality of life, and to that of future generations, as our economic performance. This vision of balanced and responsible progress in social, economic and environmental spheres is precisely what is captured by the idea of ‘sustainable development’. In May 2001 the Commission published a proposal for a sustainable development strategy. The Commission’s proposal was well received by the Gothenburg European Council in June, and many key elements of our proposal found their way directly into the summit’s written conclusions. The Gothenburg summit also confirmed that in future there would be a stocktaking at every spring European Council, to see what progress has been made in implementing the strategy. This means that sustainable development is now very much at the top of the European Union’s agenda. This brochure brings together the key documents that featured during this process of drawing up and debating the EU sustainable development strategy. It includes the Commission’s consultation paper on sustainable development, the Commission’s strategy proposal itself, and the conclusions of the Gothenburg European Council. The Economic and Social Committee also played a very valuable role in organising a stakeholder conference in April 2001 to discuss the Commission’s consultation paper, and summary proceedings of that conference are also included here. The strategy sets out very clearly what will have to be done if we are to put the EU on a more sustainable path. For example, in the environmental field we need to take measures to help tackle climate change, to reduce emerging risks to public health from hazardous chemicals, to manage natural resources more wisely and to improve the performance of our transport systems. The scope and variety of these challenges make it clear that sustainable development is not an academic concept with no practical importance — it is about real issues and real choices that profoundly affect our daily lives. The EU strategy also calls for a new approach to policy-making that takes better account of the interdependence between policy areas — such as transport and the environment, or health and poverty — and that focuses on the long term rather than finding quick fix solutions. Too often in the past policies in different areas have worked against one another, rather than acting in a mutually supportive way. Better use of scientific expertise and more comprehensive dialogue with stakeholders are also vital ingredients for improving the policy process. Sustainable devel3

opment will sometimes require hard choices, and so fair and transparent decision-making are at a premium. While the EU’s sustainable development strategy adopted at Gothenburg focuses mainly on what is needed to move Europe towards more sustainable development, we should not forget that sustainable development has an important global dimension. Sustainable development has always had a close connection to trade and development, following the important contributions of the Brundtland Report in 1987 and United Nations Earth Summit in Rio de Janeiro in 1992. It is clear that in a world where environmental and social problems can cross even continental boundaries, sustainable development requires improved governance at both national and international levels. The EU will therefore aim to play a leading role at this years’ United Nations World Summit on Sustainable Development in Johannesburg, the 10-year follow up to the 1992 Rio Summit. The EU sustainable development strategy will be part of the EU contribution to that summit. But this strategy will be extended, early in 2002, to include the global dimension. This will address the challenge of integrating markets, global governance and development finance, with the aim of moving towards a global partnership for sustainable development. This package will provide a concrete plan both for putting Europe on a path to a more sustainable future, and to pursue sustainable development on the global scale. In sum, sustainable development sets us the task of reshaping our policies to combine high environmental standards and social cohesion with a dynamic economy. The EU sustainable development strategy has set out a challenging road map for achieving this, and it is now up to us to live up to these challenges, both for ourselves, and to protect the interests of those generations to come.

Romano Prodi

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Contents

Gothenburg European Council, 15 and 16 June 2001 — Presidency conclusions (extracts)

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A sustainable Europe for a better world: A European Union strategy for sustainable development — Communication from the Commission (COM(2001) 264 final)

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Consultation paper for the preparation of a European Union strategy for sustainable development — Working document from the Commission services (SEC(2001) 517)

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Shaping the strategy for a sustainable European Union — Views from civil society and public authorities — Joint public hearing organised by the European Commission and the Economic and Social Committee (Brussels, 26 and 27 April 2001)

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Presidency conclusions

Gothenburg European Council 15 and 16 June 2001 (extracts)

PRESIDENCY CONCLUSIONS

[…]

II. A strategy for sustainable development 19. Sustainable development — to meet the needs of the present generation without compromising those of future generations — is a fundamental objective under the Treaties. That requires dealing with economic, social and environmental policies in a mutually reinforcing way. Failure to reverse trends that threaten future quality of life will steeply increase the costs to society or make those trends irreversible. The European Council welcomes the submission of the Commission’s communication on sustainable development which includes important proposals for curbing such trends. 20. The European Council agrees a strategy for sustainable development which completes the Union’s political commitment to economic and social renewal, adds a third, environmental dimension to the Lisbon strategy and establishes a new approach to policy-making. The arrangements for implementing this strategy will be developed by the Council. 21. Clear and stable objectives for sustainable development will present significant economic opportunities. This has the potential to unleash a new wave of technological innovation and investment, generating growth and employment. The European Council invites industry to take part in the development and wider use of new environmentally friendly technologies in sectors such as energy and transport. In this context the European Council stresses the importance of decoupling economic growth from resource use.

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A new approach to policy-making 22. The Union’s sustainable development strategy is based on the principle that the economic, social and environmental effects of all policies should be examined in a coordinated way and taken into account in decisionmaking. ‘Getting prices right’ so that they better reflect the true costs to society of different activities would provide a better incentive for consumers and producers in everyday decisions about which goods and services to make or buy. 23. To improve policy coordination at the level of the Member States, the European Council: — invites Member States to draw up their own national sustainable development strategies; — underscores the importance of consulting widely with all relevant stakeholders and invites Member States to establish appropriate national consultative processes. 24. To achieve better policy coordination in the Union, the European Council: — will at its annual spring meetings give policy guidance, as necessary, to promote sustainable development in the Union; — invites the Union institutions to improve internal policy coordination between different sectors; the horizontal preparation of the sustainable development strategy will be coordinated by the General Affairs Council; — notes that the Commission will include in its action plan for better regulation to be presented to the Laeken European Council mechanisms to ensure that all major policy proposals include a sustainability impact assessment covering their potential economic, social and environmental consequences. 25. To build an effective review of the sustainable development strategy, the European Council: — invites the Council to examine, for the purposes of implementing the strategy, the proposals in the 10

PRESIDENCY CONCLUSIONS

Commission communication, in particular its proposals for headline objectives and measures, as well as the sixth environmental action programme and the sector strategies for environmental integration; — will review progress in developing and implementing the strategy at its annual spring meetings, in line with the conclusions of the Stockholm European Council; — notes that the Commission will evaluate implementation of the sustainable development strategy in its annual synthesis report, on the basis of a number of headline indicators, to be agreed by the Council in time for the spring European Council 2002; at the same time, the Commission will present a report assessing how environment technology can promote growth and employment; — supports the Commission’s work on a draft on labelling and traceability of GMOs; — asks the Council to take due account of energy, transport and environment in the sixth framework programme for research and development.

The global dimension 26. Sustainable development requires global solutions. The Union will seek to make sustainable development an objective in bilateral development cooperation and in all international organisations and specialised agencies. In particular, the EU should promote issues of global environmental governance and ensure that trade and environment policies are mutually supportive. The Union’s sustainable development strategy forms part of the Union’s preparations for the 2002 World Summit on Sustainable Development. The Union will seek to achieve a ‘global deal’ on sustainable development at the summit. The Commission undertakes to present a communication no later than January 2002 on how the Union is contributing and should further contribute to global sustainable development. In this context, the Union has reaffirmed its commitment to reach the UN 11

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target for official development assistance of 0.7 % of GDP as soon as possible and to achieve concrete progress towards reaching this target before the World Summit on Sustainable Development in Johannesburg in 2002.

Targeting environmental priorities for sustainability 27. Building on the Commission communication on sustainable development, the sixth environmental action programme and the sector strategies for environmental integration, the European Council has, as a first step, singled out a number of objectives and measures as general guidance for future policy development in four priority areas: climate change, transport, public health and natural resources, thus complementing decisions on social and economic issues taken by the European Council in Stockholm.

Combating climate change 28. Emissions of greenhouse gases from human activity are contributing to global warming with repercussions on the world’s climate. Therefore, the conference of the parties in mid-July in Bonn must be a success. The Community and the Member States are determined to meet their own commitments under the Kyoto Protocol. The Commission will prepare a proposal for ratification before the end of 2001 making it possible for the Union and its Member States to fulfil their commitment to rapidly ratify the Kyoto Protocol. The European Union will work to ensure the widest possible participation of industrialised countries in an effort to ensure the entry into force of the protocol by 2002. To enhance the Union’s efforts in this area, the European Council: — reaffirms its commitment to delivering on Kyoto targets and the realisation by 2005 of demonstrable progress in achieving these commitments; recognising that the Kyoto Protocol is only a first step, it 12

PRESIDENCY CONCLUSIONS

endorses the objectives set out in the sixth environmental action programme; — furthermore reaffirms its determination to meet the indicative target for the contribution of electricity produced from renewable energy sources to gross electricity consumption by 2010 of 22 % at Community level as set out in the directive on renewable energy; — invites the European Investment Bank to promote the sustainable development strategy and to cooperate with the Commission in implementing the EU policy on climate change.

Ensuring sustainable transport 29. A sustainable transport policy should tackle rising volumes of traffic and levels of congestion, noise and pollution and encourage the use of environment-friendly modes of transport as well as the full internalisation of social and environmental costs. Action is needed to bring about a significant decoupling of transport growth and GDP growth, in particular by a shift from road to rail, water and public passenger transport. To achieve this, the European Council: — invites the European Parliament and the Council to adopt by 2003 revised guidelines for trans-European transport networks on the basis of a forthcoming Commission proposal, with a view to giving priority, where appropriate, to infrastructure investment for public transport and for railways, inland waterways, short sea shipping, intermodal operations and effective interconnection; — notes that the Commission will propose a framework to ensure that by 2004 the price of using different modes of transport better reflects costs to society.

Addressing threats to public health 30. The European Union must respond to citizens’ concerns about the safety and quality of food, use of chemicals 13

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and issues related to outbreaks of infectious diseases and resistance to antibiotics. To this end, the European Council: — notes the Commission’s intention to present formal proposals, and invites the Council and the European Parliament to adopt them, so that the chemicals policy is in place by 2004, thereby ensuring that within a generation chemicals are only produced and used in ways which do not lead to a significant impact on health and the environment; — notes the Commission’s intention to present by the end of 2001 action plans for tackling issues related to outbreaks of infectious diseases and resistance to antibiotics; — urges the European Parliament and the Council to profit from the substantial progress achieved and rapidly agree on the final adoption of the European Food Authority and food law regulation in order to comply with the time frame agreed at the Nice and Stockholm European Councils; — asks that the possibility of the creation of a European surveillance and early warning network on health issues be examined.

Managing natural resources more responsibly 31. The relationship between economic growth, consumption of natural resources and the generation of waste must change. Strong economic performance must go hand in hand with sustainable use of natural resources and levels of waste, maintaining biodiversity, preserving ecosystems and avoiding desertification. To meet these challenges, the European Council agrees: — that the common agricultural policy and its future development should, among its objectives, contribute to achieving sustainable development by increasing its emphasis on encouraging healthy, high-

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quality products, environmentally sustainable production methods, including organic production, renewable raw materials and the protection of biodiversity; — that the review of the common fisheries policy in 2002 should, based on a broad political debate, address the overall fishing pressure by adapting the EU fishing effort to the level of available resources, taking into account the social impact and the need to avoid over-fishing; — that the EU integrated product policy aimed at reducing resource use and the environmental impact of waste should be implemented in cooperation with business; — halting biodiversity decline with the aim to reach this objective by 2010 as set out in the sixth environmental action programme.

Integrating environment into Community policies 32. The Council is invited to finalise and further develop sector strategies for integrating environment into all relevant Community policy areas with a view to implementing them as soon as possible and present the results of this work before the spring European Council in 2002. Relevant objectives set out in the forthcoming sixth environmental action programme and the sustainable development strategy should be taken into account. [...]

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Communication from the Commission

A sustainable Europe for a better world: A European Union strategy for sustainable development

COMMUNICATION FROM THE COMMISSION

Contents

I.

II.

III.

IV.

Towards a sustainable Europe

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Sustainable development — a broader long-term vision

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Making sustainable development happen: achieving our ambitions

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Improve policy coherence Get prices right to give signals to individuals and businesses Invest in science and technology for the future Improve communication and mobilise citizens and business Take enlargement and the global dimension into account

26 28 28 29 31

Setting long-term objectives and targets: identifying priorities for action

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Action is needed across a wide range of policies Limit climate change and increase the use of clean energy Address threats to public health Manage natural resources more responsibly Improve the transport system and land-use management

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Implementing the strategy and reviewing progress: steps after Gothenburg

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Annual stocktaking checks our progress Working methods need to change Medium-term reviews allow us to adapt the strategy to changes in long-term priorities

Annex1: The goals of the Lisbon strategy in the field of social policy

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I. Towards a sustainable Europe ‘Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.’ — World Commission on Environment and Development (the ‘Brundtland Commission’), 1987 At its meeting in Helsinki in December 1999 the European Council invited the European Commission ‘to prepare a proposal for a long-term strategy dovetailing policies for economically, socially and ecologically sustainable development to be presented to the European Council in June 2001.’ This paper responds to that invitation. It builds on the Commission services’ consultation paper issued in March, and on the many responses to it. Sustainable development is a global objective. The European Union has a key role in bringing about sustainable development, within Europe and also on the wider global stage, where widespread international action is required. To meet this responsibility, the EU and other signatories of the 1992 United Nations’ ‘Rio declaration’ committed themselves, at the 19th Special Session of the United Nations’ General Assembly in 1997, to draw up strategies for sustainable development in time for the 2002 World Summit on Sustainable Development. This strategy forms part of the EU preparations for that summit.

‘Sustainable development should be seen as a global objective’ – the Brundtland Commission

Sustainable development — a broader long-term vision Just over one year ago at Lisbon, the European Council set a new strategic goal for the Union: ‘to become the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion’. The Stockholm European Council then decided that the EU sustainable development strategy should complete and build on this political commitment by including an environmental dimension. This recognises that in the long term, economic growth, social cohesion and environmental protection must go hand in hand.

Completing and building on the Lisbon strategy

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Providing a positive vision for the future

Sustainable development offers the European Union a positive long-term vision of a society that is more prosperous and more just, and which promises a cleaner, safer, healthier environment — a society which delivers a better quality of life for us, for our children, and for our grandchildren. Achieving this in practice requires that economic growth supports social progress and respects the environment, that social policy underpins economic performance, and that environmental policy is cost-effective.

A strategy to unleash opportunities to invest for the long term

Decoupling environmental degradation and resource consumption from economic and social development requires a major reorientation of public and private investment towards new, environmentally friendly technologies. The sustainable development strategy should be a catalyst for policy-makers and public opinion in the coming years and become a driving force for institutional reform, and for changes in corporate and consumer behaviour. Clear, stable, long-term objectives will shape expectations and create the conditions in which businesses have the confidence to invest in innovative solutions, and to create new, high-quality jobs.

Focusing on the most acute threats

To bridge the gap between this ambitious vision and practical political action, the Commission proposes that the strategy should focus on a small number of problems which pose severe or irreversible threats to the future well-being of European society:

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The main threats to sustainable development • Emissions of greenhouse gases from human activity are causing global warming. Climate change is likely to cause more extreme weather events (hurricanes, floods) with severe implications for infrastructure, property, health and nature. • Severe threats to public health are posed by new antibiotic-resistant strains of some diseases and, potentially, the longer term effects of the many hazardous chemicals currently in everyday use; threats to food safety are of increasing concern. • One in every six Europeans lives in poverty. Poverty and social exclusion have enormous direct effects on individuals such as ill health, suicide, and persistent unemployment. The burden of poverty is borne disproportionately by single mothers and older women living alone. Poverty often remains within families for generations. • While increases in life expectancy are obviously welcome, combined with low birth rates the resultant ageing of the population threatens a slowdown in the rate of economic growth, as well as the quality and financial sustainability of pension schemes and public healthcare. Spending could increase by up to 8 % of gross domestic product in many Member States between 2000 and 2040. • The loss of biodiversity in Europe has accelerated dramatically in recent decades. Fish stocks in European waters are near collapse. Waste volumes have persistently grown faster than GDP. Soil loss and declining fertility are eroding the viability of agricultural land. • Transport congestion has been rising rapidly and is approaching gridlock. This mainly affects urban areas, which are also challenged by problems such as inner-city decay, sprawling suburbs, and concentrations of acute poverty and social exclusion. Regional imbalances in the EU remain a serious concern.

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Solving these problems calls for a new policy agenda

Very few of these unsustainable trends are new. Attempts have been made at many levels of government and society to address them. Initiatives such as local Agenda 21 have proved to be an effective means of building a consensus for change at local level. However, these efforts so far have only had limited success due to the difficulty in changing established policies and patterns of behaviour, and in bringing the responses together in a coordinated way. Tackling these unsustainable trends and achieving the vision offered by sustainable development requires urgent action, committed and far-sighted political leadership, a new approach to policymaking, widespread participation; and international responsibility.

Doing nothing may be much more costly than taking early action

• Urgent action is needed: Now is the time to confront the challenges to sustainability. Many of the trends that threaten sustainable development result from past choices in production technology, patterns of land use and infrastructure investment, which are difficult to reverse in a short time frame. Although the major impacts of losses in biodiversity, increased resistance to antibiotics, or climate change may be felt only after many years, by then they may be very costly or impossible to tackle.

Political leadership is needed to take tough decisions

• Political leadership is essential: Strong political commitment will be needed to make the changes required for sustainable development. While sustainable development will undoubtedly benefit society overall, difficult trade-offs between conflicting interests will have to be made. We must face up to these trade-offs openly and honestly. Changes to policy must be made in a fair and balanced way, but narrow sectional interests must not be allowed to prevail over the well-being of society as a whole.

A coherent, long-term view should guide policy

• A new approach to policy-making: Although the Union has a wide range of policies to address the economic, environmental and social dimensions of sustainability, these have developed without enough coordination. Too often, action to achieve objectives in one policy area hinders progress in another, while solutions to problems often lie in the hands of policy-makers in other sectors or at other levels of government. This is a major cause of many longterm unsustainable trends. In addition, the absence of a coherent long-term perspective means that there is too

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much focus on short-term costs and too little focus on the prospect of longer term ‘win–win’ situations. • Action must be taken by all and at all levels: Many of the changes needed to secure sustainable development can only successfully be undertaken at EU level. Clear examples arise in policy areas where the Community has exclusive legal competence, or where integrated European economies mean that uncoordinated action by Member States is likely to be ineffective. In other cases, action by national, regional or local governments will be more appropriate. However, while public authorities have a key role in providing a clear long-term framework, it is ultimately individual citizens and businesses who will deliver the changes in consumption and investment patterns needed to achieve sustainable development.

Everyone has a contribution to make. A strong EU role is essential

• A responsible partner in a globalised world: Many of the challenges to sustainability require global action to solve them. Climate change and biodiversity are obvious examples. The Commission believes that developed countries must take the lead in pursuing sustainable development, and calls on other developed countries to accept their responsibilities as well. The Commission believes that the EU should start by putting its own house in order, to provide international leadership and as a first step towards achieving global sustainability. As EU production and consumption have impacts beyond our borders, we must also ensure that all our policies help prospects for sustainable development at a global level.

Acting at home will provide international leadership

To meet these challenges the Commission proposes an EU strategy in three parts: 1:

A set of cross-cutting proposals and recommendations to improve the effectiveness of policy and make sustainable development happen. This means making sure that different policies reinforce one another rather than pulling in opposite directions.

2:

A set of headline objectives and specific measures at EU level to tackle the issues which pose the biggest challenges to sustainable development in Europe.

3:

Steps to implement the strategy and review its progress. 25

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II. Making sustainable development happen: achieving our ambitions Current policies need to change

To achieve sustainable development requires changes in the way policy is made and implemented, both at EU level and in Member States. This in turn requires clear commitment at the highest level. This section makes a number of proposals aimed at securing more effective responses to the challenges we face.

Improve policy coherence All policies should be judged by how they contribute to sustainable development

Sustainable development should become the central objective of all sectors and policies. This means that policy-makers must identify likely spillovers — good and bad — onto other policy areas and take them into account. Careful assessment of the full effects of a policy proposal must include estimates of its economic, environmental and social impacts inside and outside the EU. This should include, where relevant, the effects on gender equality and equal opportunities. It is particularly important to identify clearly the groups who bear the burden of change so that policy-makers can judge the need for measures to help these groups to adapt. Assessments should take a more consistent approach and employ expertise available from a wide range of policy areas.

To do this, we need better information, especially to deal with risk and uncertainty

To assess proposals systematically better information is needed. For example, the implications of an ageing population are still imperfectly understood, as are the implications for biodiversity and public health of some types of environmental pollution or of chemicals such as endocrine disrupters. However, in line with the precautionary principle, lack of knowledge must not become an excuse for lack of action or for ill-considered action. Risk and uncertainty are a part of life. The role of science and research is to help identify the nature of the risks and uncertainties we face, so as to provide a basis for solutions and political decisions. Policymakers have a responsibility to manage risk effectively, and to explain its nature and extent clearly to the public.

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Action • All policies must have sustainable development as their core concern. In particular, forthcoming reviews of common policies must look at how they can contribute more positively to sustainable development: • The mid-term review of the common agricultural policy in 2002 should reward quality rather than quantity by, for example, encouraging the organic sector and other environmentally friendly farming methods and a further shift of resources from market support to rural development. • The common fisheries policy should promote the sustainable management of fish stocks in the EU and internationally, while securing the long-term viability of the EU fishing industry and protecting marine ecosystems. • The common transport policy should tackle rising levels of congestion and pollution and encourage use of more environmentally friendly modes of transport. • The cohesion policies need to improve their targeting of the least developed regions and those with the most acute structural problems — such as urban decay and the decline of the rural economy — and the groups in society most vulnerable to persistent social exclusion. • The Commission will submit an action plan to improve regulation to the Laeken European Council in December. This will include mechanisms to ensure that all major legislative proposals include an assessment of the potential economic, environmental and social benefits and costs of action or lack of action, both inside and outside the EU. The Council and Parliament should amend legislative proposals in the same spirit.

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Get prices right to give signals to individuals and businesses Getting prices right will encourage changes in behaviour and technology

Market prices have a powerful influence on the behaviour of individuals and businesses. Market reforms to get prices right can create new business opportunities to develop services and products that ease pressure on the environment and fulfil social and economic needs. Sometimes, this means public money for services which would otherwise not be supplied, such as essential public services in sparsely populated areas. More often, the issue is one of removing subsidies that encourage wasteful use of natural resources, and putting a price on pollution. Changing prices in this way provides a permanent incentive for the development and use of safer, less polluting technologies and equipment, and will often be all that is needed to tip the balance in their favour. Action The Commission will give priority in its policy and legislative proposals to market-based approaches that provide price incentives, whenever these are likely to achieve social and environmental objectives in a flexible and cost-effective way.

Invest in science and technology for the future Advances in knowledge and technology are vital

Our continued long-term prosperity depends critically on advances in knowledge and technological progress. Without these investments, adjustment to sustainable development will have to happen much more through changes in our consumption patterns. By promoting innovation, new technologies may be developed that use fewer natural resources, reduce pollution or risks to health and safety, and are cheaper than their predecessors. The EU and Member States should ensure that legislation does not hamper innovation or erect excessive non-market barriers to the dissemination and use of new technology. Public funding to support technological change for sustainable development should focus on basic and applied

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research into safe and environmentally benign technologies, and on benchmarking and demonstration projects to stimulate faster uptake of new, safer, cleaner technologies. Public procurement policies — provided they are not a cover for protectionism — are an additional means to accelerate the spread of new technology. A ‘green purchasing initiative’ from the private sector could similarly increase the use of environmentally benign products and services. Action • The Community should fully exploit the potential of the next Community framework programme for research to support research activities related to sustainable development as a part of the European research area.

• Drawing on the guidance document the Commission will issue shortly, Member States should consider how to make better use of public procurement to favour environmentally friendly products and services.

• The Commission will encourage private sector initiatives to incorporate environmental factors in their purchasing specifications.

• The Commission invites industry to identify what it considers the major obstacles to the development and wider use of new technologies in sectors such as energy, transport and communications.

• The Community should contribute to establishing by 2008 a European capacity for global monitoring of environment and security (GMES).

Improve communication and mobilise citizens and business Although science and scientific advice are a key input to decision-making, public confidence in its objectivity has been shaken by events such as recent human and animal health scares. There are concerns that the policy responses have been driven more by narrow sectional interests than the wider interests of society. This perception is part of a wider malaise. Many believe that policy has become too techno29

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cratic and remote, and is too much under the influence of vested interests. To tackle this rising disaffection with the political process, policy-making must become more open. More open policy-making will improve policy and stimulate citizens and business to get involved

An open policy process also allows any necessary trade-offs between competing interests to be clearly identified, and decisions taken in a transparent way. Earlier and more systematic dialogue — in particular with representatives of consumers, whose interests are too often overlooked — may lengthen the time taken to prepare a policy proposal, but should improve the quality of regulation and accelerate its implementation. The views of those from outside the Union should also be sought. Widespread popular ‘ownership’ of the goal of sustainable development depends not only on more openness in policymaking but also on the perception that individuals can, through their own actions, make a real difference. For example, local Agenda 21 has been effective at promoting sustainable development at the local level. The education system also has a vital role to play in promoting better understanding of the aim of sustainable development, fostering a sense of individual and collective responsibility, and thereby encouraging changes in behaviour. Public policy also has a key role in encouraging a greater sense of corporate social responsibility and in establishing a framework to ensure that businesses integrate environmental and social considerations in their activities. Some of the most far sighted businesses have realised that sustainable development offers new opportunities and have begun to adapt their investments accordingly. Business should be encouraged to take a proactive approach to sustainable development in their operations both within the EU and elsewhere.

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Action • The Commission’s forthcoming White Paper on governance will include proposals on wide-ranging consultation of stakeholders from within and outside the Union, typically including a public hearing, before tabling any major policy proposal. Reviews of major policies will similarly seek to obtain the views of stakeholders.

• All publicly-quoted companies with at least 500 staff are invited to publish a ‘triple bottom line’ in their annual reports to shareholders that measures their performance against economic, environmental and social criteria. EU businesses are urged to demonstrate and publicise their worldwide adherence to the OECD guidelines for multi-national enterprises, or other comparable guidelines.

• Member States should consider how their education systems can help develop wider understanding of sustainable development.

Take enlargement and the global dimension into account The EU strategy should look beyond the Union’s present borders to be relevant for the countries which will join the Union during the coming years. These future Member States face many of the same problems, but also have a number of distinctive features. For example, they have much richer biodiversity. However, economic and social disparities will be wider in an enlarged Union. The new Member States will have much larger agricultural populations on average, and a backlog of investment in infrastructure and in production technology. Future reforms of Community policy will have to take account of these differences. Candidate countries should be actively involved in implementing this strategy.

The EU strategy must look beyond our current borders

Moreover, many EU policies influence prospects for sustainability far beyond the borders of the Union, and EU production and consumption increase the pressure on shared global environmental resources. It is therefore important to ensure that measures we take to move towards sustainable development in Europe contribute towards sustainable

Sustainable development in the EU must foster global sustainability

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development in the rest of the world. Our policies — internal and external — must actively support efforts by other countries — particularly those in the developing world — to achieve development that is more sustainable. Cooperation with other countries and international organisations is important

To make an effective contribution to achieving global sustainable development the EU and its Member States need to cooperate effectively with other countries and international institutions, including the OECD, the World Trade Organisation, the International Labour Organisation, the International Monetary Fund, the World Bank, and the United Nations Environment Programme. The role of the EU in helping to achieve sustainable development in this wider context will be dealt with comprehensively by our preparations for the Rio + 10 Summit in South Africa in 2002.

Action The Commission will present a communication in the first half of 2002 further setting out its views on how the Union should contribute to global sustainable development, in advance of the World Summit on Sustainable Development (Rio + 10) in Johannesburg. Among other issues, this communication should address the question of mobilising additional financial resources for development aid, in particular to reduce global poverty.

III. Setting long-term objectives and targets: identifying priorities for action Action is needed across a wide range of policies Concrete actions are needed

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The main challenges to sustainable development identified above cut across several policy areas. Accordingly, a comprehensive, cross-sectoral approach is needed to address these challenges. Concrete actions in specific policy areas should be built on the policy principles set out in the previous section. Reforms to existing Community policies must aim to

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maximise their contribution to the strategic objectives of the EU strategy for sustainable development. Recent European Councils at Lisbon, Nice and Stockholm have already agreed objectives and measures to tackle two of the six issues that pose the biggest challenges to sustainable development in Europe: combating poverty and social exclusion, and dealing with the economic and social implications of an ageing society. This strategy does not propose new actions in these areas. However, these objectives are an integral part of the EU strategy for sustainable development and are set out in Annex 1 below.

The EU strategy must fully integrate the economic, environmental and social pillars of sustainable development

For the remaining four issues, the Commission proposes the following set of priority objectives and measures at EU level. Meeting these objectives will also require action to be taken by Member States, both in their domestic policies, and in the decisions taken by the Council on changes to Community policies. The Commission will report on progress in meeting all the goals of the strategy in its report to the annual spring European Council (the synthesis report).

Limit climate change and increase the use of clean energy Headline objectives • The EU will meet its Kyoto commitment. However, Kyoto is but a first step. Thereafter, the EU should aim to reduce atmospheric greenhouse gas emissions by an average of 1 % per year over 1990 levels up to 2020. • The Union will insist that the other major industrialised countries comply with their Kyoto targets. This is an indispensable step in ensuring the broader international effort needed to limit global warming and adapt to its effects.

Measures at EU level • Adoption of the energy products tax directive by 2002. Within two years of this, the Commission will propose more ambitious environmental targets for energy taxation aiming at the full internalisation of external costs, as well as 33

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indexation of minimum levels of excise duties to at least the inflation rate. • Phase out subsidies to fossil fuel production and consumption by 2010. Where necessary, put in place flanking measures to help develop alternative sources of employment. Analyse whether there is a need to create a stockpile of coal reserves, and whether or not we should maintain a minimum level of subsidised production for security of supply reasons. Commission proposal in 2001 for adoption by Council before the expiry of the ECSC Treaty in July 2002. Take account of the specific situation of some candidate countries in the accession treaties. • Greenhouse gas emission reduction measures based on the outcome of the European climate change programme. Specifically, the Commission will propose by end-2001 a proposal for the creation of a European CO2 tradable permits system by 2005. • Alternative fuels, including biofuels, should account for at least 7 % of fuel consumption of cars and trucks by 2010, and at least 20 % by 2020. The Commission will make a proposal in 2001 for adoption in 2002. • Clear action to reduce energy demand, through, for example, tighter minimum standards and labelling requirements for buildings and appliances to improve energy efficiency. • More support to the research, development and dissemination of technology on: • — clean and renewable energy resources; • — safer nuclear energy, namely the management of nuclear waste.

Address threats to public health Headline objectives • Make food safety and quality the objective of all players in the food chain. 34

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• By 2020, ensure that chemicals are only produced and used in ways that do not pose significant threats to human health and the environment. • Tackle issues related to outbreaks of infectious diseases and resistance to antibiotics.

Measures at EU level • Improve consumer information and awareness, including through education, and clear labelling of food. • Creation of a European Food Authority in 2002. • Improve capacity to monitor and control health impacts of certain substances (for example dioxins, toxins, pesticides) in food and the environment, especially their effects on children. • Reorient support from the common agricultural policy to reward healthy, high-quality products and practices rather than quantity; following on from the 2002 evaluation of the tobacco regime, adapt the regime so as to allow for a phasing out of tobacco subsidies while putting in place measures to develop alternative sources of income and economic activity for tobacco workers and growers and decide an early date accordingly. • Develop by 2003 a comprehensive Community strategy to promote health and safety at work, to achieve a substantial reduction in work accidents and professional illness. • All legislation to implement the new chemicals policy in place by 2004. • The Commission will present by the end of 2001 a European action plan to slow resistance to antibiotics, through improving information, phasing out their use as growth promoters in agriculture, and better control of the use of antibiotics in human, animal, and plant care. • Create by 2005 a European capacity to monitor and control outbreaks of infectious diseases.

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Manage natural resources more responsibly Headline objectives • Break the links between economic growth, the use of resources and the generation of waste. • Protect and restore habitats and natural systems and halt the loss of biodiversity by 2010. • Improve fisheries management to reverse the decline in stocks and ensure sustainable fisheries and healthy marine ecosystems, both in the EU and globally.

Measures at EU level • Develop an integrated product policy in cooperation with business to reduce resource use and the environmental impacts of waste. • EU legislation on strict environmental liability in place by 2003. • The Commission will establish a system of biodiversity indicators by 2003. • The Commission will propose a system of resource productivity measurement to be operational by 2003. • In the mid-term review of the common agricultural policy, improve the agri-environmental measures so that they provide a transparent system of direct payments for environmental services. • In the 2002 review of the common fisheries policy, remove counter-productive subsidies which encourage over-fishing, and reduce the size and activity of EU fishing fleets to a level compatible with worldwide sustainability, while addressing the consequent social problems.

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Improve the transport system and land-use management Headline objectives • Decouple transport growth significantly from growth in gross domestic product in order to reduce congestion and other negative side-effects of transport. • Bring about a shift in transport use from road to rail, water and public passenger transport so that the share of road transport in 2010 is no greater than in 1998 (the most recent year for which data are available). • Promote more balanced regional development by reducing disparities in economic activity and maintaining the viability of rural and urban communities, as recommended by the European spatial development perspective.

Measures at EU level • The Commission will propose in 2002 a framework for transport charges to ensure that by 2005, prices for different modes of transport, including air, reflect their costs to society. • Implement in 2003 a framework ensuring through the use of intelligent transport systems the interoperability of payment systems for road transport; promote further technological progress enabling the introduction of road pricing. • Give priority to infrastructure investment for public transport and for railways, inland waterways, short sea shipping and intermodal operations. In particular, the Commission will propose in 2001, for adoption in 2003, a revision of the guidelines for the trans-European transport networks, and will promote, in the mid-term review of the Structural Fund programmes, a marked reduction in the share of finance given to road transport. • Improve transport systems by addressing missing transport links, developing open markets and cooperation at EU level (e.g. railway liberalisation, air traffic systems). European single sky to be operational by 2004. 37

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• Promote teleworking by accelerating investments in next generation communications infrastructure and services. • In 2001, start the implementation of the European spatial planning observatory network (ESPON) in order to define a set of territorial indicators to analyse the regional impacts of Community policies. • Assess the coherence of the zoning of different Community policies, taking account of their objectives (e.g. Natura 2000, less-favoured agricultural areas, areas eligible under the Structural Funds or for State aids). • Diversify income sources in rural areas, including by increasing the proportion of common agricultural policy funds directed to rural development. • Encourage local initiatives to tackle the problems faced by urban areas; produce recommendations for integrated development strategies for urban and environmentally sensitive areas.

IV. Implementing the strategy and reviewing progress: steps after Gothenburg Annual stocktaking checks our progress Regular monitoring and reporting of progress, based on indicators

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The Stockholm European Council decided that all dimensions of sustainable development should be reviewed at the annual spring European Council. Measuring progress will imply adding a number of indicators to those already agreed for monitoring the Lisbon strategy. These indicators flow naturally from the long-term objectives and targets the Commission is proposing in this document.

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Action • The Commission will report to each spring European Council in its synthesis report on progress in implementing the sustainable development strategy. • The Commission will propose a small number of headline performance indicators for this purpose to the Barcelona European Council in spring 2002. • The process of integration of environmental concerns in sectoral policies, launched by the European Council in Cardiff, must continue and provide an environmental input to the EU sustainable development strategy, similar to that given for the economic and social dimensions by the broad economic policy guidelines and the employment guidelines. The sectoral environmental integration strategies should be consistent with the specific objectives of EU sustainable development strategy.

Working methods need to change At all stages of the Community legislative process, policy proposals in individual sectors are developed and discussed without paying sufficient attention to the linkages between different policy areas. The way the Commission, Council and Parliament are organised reinforces this narrow, sectoral approach. All three institutions should consider what steps they can take to overcome this weakness.

All Community institutions should review their working methods

The Commission will improve its internal procedures to deliver more consistent policy proposals. The Council of Ministers and the European Parliament should also review their working methods. The Council should change its structures to improve the coordination and consistency of the work of the sectoral Councils. The European Parliament should consider creating a sustainable development committee to give a view on the wider implications of sectoral policy proposals. This committee could consist of representatives of other committees, as is the case with the financial control committee.

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Action The Commission will establish a sustainable development ‘round table’ of about 10 independent experts offering a broad range of views, who will report directly to the Commission President in time for the preparation of the Commission’s synthesis report to the spring European Council and make recommendations to improve the coherence of Community policies.

Medium-term reviews allow us to adapt the strategy to changes in long-term priorities Periodic far-reaching reviews will keep the strategy on track

Sustainable development is by its nature a long-term objective. While annual stocktaking is important to maintain momentum and give early warning of unforeseen difficulties, too much focus on short-term developments and details may cause us to lose sight of the bigger picture. For this reason, the European Council’s annual exercise should be periodically complemented by a more comprehensive review at the beginning of each Commission’s term of office. This should examine the strategy’s effectiveness in achieving sustainable development. Over time, the severity of some problems — or the value of some measures — may change, and new, more pressing problems may emerge. Regular medium-term reviews will permit the Union to adapt the strategy to these changes and to changes in our long-term policy objectives.

The voices of stakeholders, including those from outside the Union, must be heard

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Opening the review to stakeholders will increase its credibility and value. The Union’s efforts to achieve sustainable development ultimately depend on widespread ‘ownership’ of the strategy by individuals and businesses, as well as civil society and local and regional authorities. Prospects for public acceptance of the strategy will be greater, the more it is based on comprehensive dialogue with representatives of society at large.

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Action • The EU strategy for sustainable development will be comprehensively reviewed at the start of each Commission’s term of office. • Starting in 2002, the Commission will hold a two-yearly stakeholder forum to assess the EU strategy. The Commission invites the Economic and Social Committee to join it in organising this conference.

Annex 1: The goals of the Lisbon strategy in the field of social policy The commitments made at the Lisbon, Nice and Stockholm summits are summarised below.

Combat poverty and social exclusion Headline objective • Make a decisive impact on the eradication of poverty. • Raise the employment rate to 67 % for January 2005 and to 70 % by 2010; increase the number of women in employment to 57 % for January 2005 and to more than 60 % by 2010. • Halve by 2010 the number of 18–24-year olds with only lower secondary education who are not in further education and training.

Measures at EU level • Combat social exclusion by creating the economic conditions for greater prosperity through higher levels of growth and employment, and by opening up new ways of participating in society. 41

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• Strengthen the implementation of the European employment strategy. Define common approaches to maintaining and improving the quality of work which should be included as a general objective in the 2002 employment guidelines. • Complete work by the end of 2001 on updating existing legislation on implementing the principle of equal treatment of men and women as regards access to employment, vocational training and promotion and working conditions. • Agree in the course of 2001 the proposal for a social inclusion programme. • Agree by the end of 2001 indicators on quality in work and for combating social exclusion. Develop indicators on the provision of care facilities for children and other dependants and on family benefit systems by 2002. Develop indicators to ensure that there are no discriminatory pay differentials between men and women.

Deal with the economic and social implications of an ageing society Headline objectives • Ensure the adequacy of pension systems as well as of healthcare systems and care of the elderly, while at the same time maintaining sustainability of public finances and inter-generational solidarity. • Address the demographic challenge by raising employment rates, reducing public debt and adapting social protection systems, including pension systems. • Increase the average EU employment rate among older women and men (55–64) to 50 % by 2010.

Measures at EU level • Use the potential of the open method of coordination in the field of pensions and prepare a report on the quality 42

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and sustainability of pensions in the light of demographic change in view of the spring European Council 2002. • Identify coherent strategies and practical measures with a view to fostering lifelong learning for all. • The Council should regularly review the long-term sustainability of public finances, including the expected changes caused by the demographic changes ahead, both under the broad economic policy guidelines and in the context of stability and convergence programmes. • An in-depth discussion will take place at the Laeken European Council in 2001 on immigration, migration and asylum within the framework of the Tampere follow-up. In this connection, due attention should be given to the position of third-country nationals legally residing in the Union. • The Council and the Commission to report jointly, in time for the spring European Council in 2002, on how to increase labour-force participation and promote active ageing.

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Working document from the Commission services

Consultation paper for the preparation of a European Union strategy for sustainable development

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Contents

Foreword

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1.

Introduction

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1.1. Why a sustainable development strategy for the European Union? 1.2. The political context of this communication 1.3. Interpreting sustainable development 1.4. The opportunities of sustainable development 1.5. Ensuring added value

50 52 52 53 55

Main sustainability challenges for Europe

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2.1. Focusing on the most important issues

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Topic Topic Topic Topic Topic Topic

58 63 67 71 74 78

2.

3.

4.

1: 2: 3: 4: 5: 6:

Climate change and clean energy Public health Management of natural resources Poverty and social exclusion Ageing Mobility, land use and territorial development

Common problems

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3.1. 3.2. 3.3. 3.4. 3.5. 3.6.

83 83 84 85 86 86

Wrong incentives Sectoral policy inconsistency Short-termism in policy-making Policy inertia Limited understanding Inadequate communication and dialogue

Common solutions: A toolkit for sustainable development in Europe

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4.1. 4.2. 4.3. 4.4. 4.5. 4.6. 4.7.

87 87 88 89 90 91

Introduction A common basis for policy design and implementation Long-term targets and intermediate milestones Creating markets and getting prices right Sectoral policy coherence Technology at the service of society Improving knowledge and understanding — sound science, risk and transparency

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4.8. Better information, education and participation 4.9. Measuring progress: indicators

5. Conclusions

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93 94 95

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Foreword The Helsinki European Council in December 1999 invited the European Commission to ‘prepare a proposal for a long-term strategy dovetailing policies for economically, socially and ecologically sustainable development’ for the Gothenburg European Council in June 2001. This consultation paper is designed to provide the analytical underpinnings for this strategy. It sets out the Commission services’ initial views on the challenges and opportunities of sustainable development. It identifies some important trends that pose a threat to sustainable development in the EU, and presents a policy toolkit for tackling these problems. This consultation paper does not include specific objectives and measures. These will be contained in the Commission’s proposal for a sustainable development strategy to the Gothenburg European Council. Accordingly, this paper aims to generate discussion and encourage input from other EU institutions and civil society. The Commission services propose to structure the debate around the 10 questions in the box. All stakeholders are therefore invited to express their views on these issues and to consider what more concrete measures should be included in the EU sustainable development strategy for Gothenburg.

Questions 1. Does focusing on a limited number of the most pressing problems help to make the concept of sustainable development operational? Do the six themes chosen embody the main long-term challenges confronting European society? 2. This document focuses on sustainable development problems in Europe. Are there any cases in which actions to place European society on a more sustainable path might make the attainment of sustainable development at a global level more difficult? How can reforms of EU policies support efforts to achieve sustainable development worldwide? 3. Since sustainable development is a longterm idea, it should be of clear relevance to accession countries. To what extent are the challenges they face different from those in the current Member States? 4. Do you share the analysis of the causes of these problems and their potential remedies identified here? Do you have any additions to the policy toolkit? 5. What practical measures can be taken to better translate the principle of ‘policy integration’ into concrete action to achieve greater sectoral policy consistency? 6. Governments cannot deliver sustainable development on their own. Business, workers, and civil society have an indispensable role to play. How do we make this happen? 7. How can we ensure that the costs of adjusting to sustainable development are minimised, and the opportunities seized?

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8. In what areas of sustainable development do you see a clear policy role for the European Union? 9. What are the most urgent steps the European Union should take in the framework of an EU sustainable development strategy? 10. What specific objectives would you like to see included in the EU strategy for Gothenburg? What arrangements should be foreseen to ensure their implementation?

1. Introduction 1.1. Why a sustainable development strategy for the European Union? During the course of the 20th century, the countries of the European Union have become enormously richer in material terms. Average incomes are now around five times what they were in 1900. Many inequalities have been reduced through more widespread access to education and the development of systems of welfare provision. Life expectancy has increased sharply due to better hygiene, nutrition and medical care. In most respects therefore, our standards of living now are higher than they have ever been. Growing economic interdependence resulting from the single market, globalisation, and new communication technologies provide a strong spur to efficiency and increased productivity, and offer new opportunities at all levels. But these positive developments 50

should not blind us to a number of potential threats. Indeed, not everyone is equipped to take advantage of these new opportunities. There is a real risk that some will fall behind and be unable to catch up. There is also a growing awareness that we are putting increased pressure on the carrying capacity of our planet. A number of worrying longterm trends have emerged: Main challenges for sustainability Severe weather events may become more frequent if we do not act to avert climate change. Rising sea levels threaten the very existence of some small island States, and we should not forget that a large part of the European population lives at or below sea level. Recurrent, persistent, poorly understood threats to food safety, rampant antibioticresistant strains of bacteria, the unexplained emergence of toxic algal blooms: these are all warning signs that we are interfering with our environment in unforeseen ways. Unresolved, these and other menaces to animal and human health threaten our very survival. One in every six Europeans — more than the population of all but the largest Member States — lives in poverty. Income disparities are widening in some Member States. Our social systems are failing to deliver on a large scale, and are ill-equipped to deal with the ageing of the population. We are failing to secure the long-run viability of our natural environment. Recent decades have seen very significant losses in biodiversity. A high percentage of existing species is at risk of extinction. Fish stocks in European waters are close to collapse.

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In major cities, transport congestion has been rising rapidly and is approaching gridlock. This has major social, economic and environmental costs which fall largely, though not exclusively, on the three quarters of the European population who live in urban areas. Enlargement will intensify the challenge of achieving economic and social cohesion.

The Community’s responsibility The EU Member States share a significant number of common values and aspirations, together with a similar sense of what constitutes progress and how our societies should develop over the next generation. The aim of a European sustainable development strategy should be to give substance to this vision, and to map out what needs to change if we are to make this vision a reality. Moreover, the growing institutional, economic and social interdependence of our countries requires us to work together to meet these challenges. In a number of economic sectors, moves towards sustainable development can only be achieved by action at the EU level. Clear examples arise where the Community has exclusive competence because of internal market regulations, or where integrated European markets mean that uncoordinated action by Member States is likely to be ineffective. However, achieving sustainable development will also require action at national, regional and local level, as well as from business and citizens. For this reason, in identifying and analysing the main challenges to sustainability facing the European Union, the Commission services have not confined themselves to subjects for which the EU institutions have an exclusive or shared

responsibility. Moreover, the EU strategy should look beyond the present borders of the Union to be relevant for all the countries that will join the Union in the coming years. Economic and social disparities will be wider in an enlarged Union, and many of the problems identified in this paper are faced to a greater or lesser extent by the future Member States. Our common future demands a common European approach.

Leading by example — the international dimension EU policies in areas such as international trade, foreign direct investment, development cooperation and immigration influence prospects for sustainability far beyond the borders of the Union. This is very obviously the case for issues such as global poverty or climate change, where the EU and Member States are only part of a much wider picture. Furthermore, as a number of developing countries industrialise and approach European levels of economic development there will be a gradual increase in global environmental pressures. Sustainable development is therefore a global objective that the EU cannot achieve by itself. Tackling these problems will require a coherent international approach by international organisations. However, to provide credible and effective leadership in this global context, the EU has to show it can make progress at home towards sustainable development, as well as meet its international commitments. This paper therefore focuses squarely on policy reforms needed within Europe to enhance sustainable development. It will nevertheless be important to consider whether any of the measures that we might take in Europe to move towards sustainable development might put at risk the prospects for sustainable development in the rest of the world. 51

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The role of the EU in helping to achieve sustainable development on a global scale will be dealt with much more comprehensively by our preparations for the Rio + 10 Summit in South Africa in 2002. This work has already started, as described in a recent Commission Communication ‘Ten years after Rio: Preparing for the World Summit on Sustainable Development in 2002’ (1). The EU also has an important role to play in international organisations, such as the World Trade Organisation and the upcoming UN Conference on Least Developed Countries. Our influence in this wider context will be all the greater if we can demonstrate that we are putting our own house in order and thereby improving prospects for global sustainability.

1.2. The political context of this communication Sustainable development was put on the global political map by the 1992 United Nations Earth Summit in Rio de Janeiro, following the report of the World Commission on Environment and Development (the ‘Brundtland report’) in 1987 (2). At the Rio + 5 follow-up conference in 1997, the EU and other signatories of the Rio declaration committed themselves to drawing up sustainable development strategies for the Rio + 10 World Summit on Sustainable Development in South Africa next year. The Amsterdam Treaty, which came into effect in 1999, makes sustainable development one of the core tasks of the European Community. Article 2 of the EC Treaty states (1) COM(2001) 53; European Commission, 2001. (2) ‘Our common future’; World Commission on Environment and Development, 1987.

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that ‘The Union shall set itself the following objectives [...] to promote economic and social progress and a high level of employment and to achieve balanced and sustainable development, in particular through [...] the strengthening of economic and social cohesion’. Against this background, the Heads of State or Government asked the European Commission in Helsinki in 1999 to draw up a European sustainable development strategy and submit it to the European Council at Gothenburg in June 2001. This consultation paper is the first step in this process. It sets out the analytical basis for the EU sustainable development strategy. It gives the Commission services’ initial views on sustainable development, and the challenges and opportunities it presents. More specifically, it identifies some persistent trends that pose a threat to sustainable development in Europe, and analyses the causes of these problems. Finally, it presents a policy toolkit to put Europe on a more sustainable path. Comments on this paper are invited from all stakeholders as the Commission finalises its proposals for the Gothenburg European Council.

1.3. Interpreting sustainable development The most widely quoted definition of sustainable development is that in the Brundtland report. It defines sustainable development as ‘development that meets the needs of the present without compromising the ability of future generations to meet their

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own needs’. In essence, ensuring a better quality of life now and for future generations. There are many alternative interpretations of sustainable development, and even with the definition above it is clear that different views are possible on what is meant by the term ‘needs’. Nevertheless, there is a broad consensus that, at a minimum, sustainable development captures two important ideas: — That development has an economic, a social and an environmental dimension. Development will only be sustainable if a balance is struck between the different factors that contribute to the overall quality of life. — That the current generation has an obligation to future generations to leave sufficient stocks of social, environmental and economic resources for them to enjoy levels of well being at least as high as our own. Because of its origins in the environmental movement, sustainable development used to be dismissed as a ‘luxury’ that should not be bought at the expense of economic growth. But sustainable development is much more than a purely environmental concept — it poses the fundamental challenge of combining a dynamic economy with a society offering opportunities to all, while improving resource productivity and decoupling growth from environmental degradation. Although sustainable development has a very wide scope it should not be seen simply as a convenient way to bundle loosely together a collection of social, economic and environmental problems under a new label. Instead, a comprehensive perspective is needed that ensures that policies — both sectoral and horizontal — are mutually supportive rather

than working against one another. Achieving this in practice will oblige policy-makers to ensure that economic growth is not bought at the expense of a social divide and environmental deterioration, that social policy underpins rather than undermines economic performance, and that environmental policy is based on sound science and is cost-effective.

1.4. The opportunities of sustainable development While sustainable development will require changes to individual business and consumer behaviour to avoid some negative consequences for society as a whole — present or future — it also offers great opportunities. Indeed, many of the more far-sighted businesses have already realised that sustainable development offers new possibilities and have begun to adapt their operations and investment plans accordingly. It is now increasingly recognised that stringent environmental policy need not put a brake on economic growth even as conventionally measured (3). While environmental regulation can impose a one-off cost in terms of economic output, these costs are at least partly offset by a boost to employment and revenues in eco-industries providing cleaner technologies and services. Moreover, the evidence shows that the long-run growth rate depends largely on the rate of technological progress. Policies for sustainable development could increase economic growth by (3) Current statistical measures of economic performance, such as gross domestic product (GDP), are valuable indicators, but are limited in many ways. For example, GDP does not take into account the costs of pollution or put a value on unpaid work.

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boosting our rate of innovation, and may eventually lead to goods that are cheaper to buy and use than their ‘dirty’ predecessors. In addition, many of the more concrete policies needed for sustainable development are likely to have a positive impact on economic growth. For example: • Policy-making in the last quarter century has tended to underexploit the potential of the labour market and overexploit natural resources. The inefficiencies in present tax systems mean that there is scope to price labour back into the market and pollution out of it. • Removing unnecessary or harmful subsidies will bring direct financial benefits to tax payers and improve the efficiency of the economy. Market reform to get prices right will create new business opportunities to develop services and products that ease pressure on the environment, and that fulfil social and economic needs. • Policies to reduce poverty and extend opportunity to all can help avoid the waste of resources and individual talent that are implied by social exclusion and unemployment, while lowering the costs of social support. • Better pricing and new technologies can break the trend of increasing congestion on our roads by encouraging greater use of other modes of transport and more efficient use of infrastructure. This will prevent gridlock and save time and other costs for business and the general public. • Enhancing economic and social cohesion by helping lagging regions to exploit their full productive potential should benefit the Community as a whole. 54

• Encouraging the research, development, and innovative use of new, cleaner and more efficient energy technologies will not only have a positive impact on the environment and possibly employment, but also on the security of European energy supply.

Creating the opportunities These examples show that there are many ‘win–win’ situations. A sustainable development strategy should seek to identify and exploit these opportunities, fostering economic efficiency, employment growth and environmental friendliness. The EU has an industry with a rich potential in the application of efficient and environment-friendly technologies. This is one of Europe’s most promising assets. To exploit this potential, policy must provide Europe’s industry with a better framework for innovation and technological development. More generally, policy-makers should create the conditions in which citizens and businesses are encouraged to integrate environmental and social considerations in all their activities. Although this will be beneficial for society as a whole, some policy changes create clear winners and losers. In such cases, we need to ensure that we pursue policies that are in the general public interest, while making sure that those who have to adapt to changes in policy are treated fairly and do not suffer unnecessary costs. Sustainable development therefore has an important institutional dimension. It cannot be achieved without good governance and active public participation (4).

(4) These issues will be dealt with in much more detail in the Commission’s forthcoming White Paper on governance.

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1.5. Ensuring added value The EU sustainable development strategy will need to build on the foundations of several processes rooted in Treaty provisions which already guide European economic, social and environmental policy-making. The broad economic policy guidelines, and the economic reform process initiated at the Cardiff Summit in 1998, provide a solid framework for economic policy coordination. Employment and social policy coordination has given rise to guidelines for employment and labour market reform and to cooperation between Member States in modernising social protection and promoting social inclusion. Environmental policy has its own process for the integration of environmental concerns into other sectoral policies (the Cardiff process), while at the beginning of this year, the Commission proposed the sixth environmental action programme setting out a 10-year perspective for EU environmental policy. At Lisbon in March 2000, the Heads of State or Government decided to bring various social and economic initiatives together in a single annual review, geared towards making Europe ‘the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion’. As there is some obvious overlap between the scope of the Lisbon review process and the sustainable development strategy, the Commission has proposed in its report to the Stockholm European Council to complete the Lisbon process by integrating an environmental dimension, and suggested that to ensure consistency between the two, the mechanisms to review progress should be dovetailed.

In order not to duplicate the work contained in other policy reviews, the EU sustainable development strategy should focus on a small number of themes where a cross-cutting approach provides new insights by taking into account the spillovers between decisions in different sectoral policies. The sustainable development strategy can also add value to existing initiatives by putting stronger emphasis on the long term. As the following sections of this document show, many of the trends that threaten sustainable development are the consequence of past choices in production technology, patterns of land use and infrastructure investment, and are difficult to tackle in a short time frame. The decisions we take in the near future will also have longterm effects over many decades on our patterns of development — and their social, economic and environmental consequences. It is therefore important that we address our current problems as a matter of urgency.

2. Main sustainability challenges for Europe 2.1. Focusing on the most important issues By its very nature, sustainable development is an inclusive approach to policy-making. Its scope covers almost any issue with an important social, economic or environmental component. This very wide perspective has both advantages and disadvantages — there is a trade-off between breadth of coverage and depth of analysis. The Commission services have deliberately limited the scope of this consultation paper to a small number of issues that in their view pose the greatest threat to sustainable development. 55

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Choosing a set of topics to include implies making judgments. The criteria that we have used to judge whether a topic should be covered in the EU sustainable development strategy are: — Severity — Do current trends pose a significant threat to our quality of life or threaten to significantly reduce our stocks of social, environmental and economic assets? Are the costs of doing nothing likely to be high or unevenly distributed? — The time dimension and irreversibility — Is there a ‘slow burn’ problem that worsens only gradually but that may be very costly or impossible to put right if action is left to a very late stage? Is there a significant inter-generational aspect? — A European dimension — Is the problem identified common to a number of EU countries, or are there spillover effects between countries? Are policy responses likely to have implications going beyond national boundaries? Based on these criteria, the Commission services propose the following six topics as priorities for inclusion in the European sustainable development strategy: — climate change and clean energy; — public health; — management of natural resources; — poverty and social exclusion; — ageing and demography; — mobility, land use and territorial development. 56

Clearly, each of these topics covers a very wide range of issues and we cannot hope to provide a comprehensive picture here. Moreover, within each broad heading, there are some problems and policy dilemmas that are much more acute than others. Within each topic we have therefore again narrowed our focus by applying the criteria above, in order to identify those trends that pose the most serious threat to sustainable development: • Climate change is a global problem which can only be solved by widespread international cooperation. While its impacts are difficult to predict precisely, they could include changes in agricultural patterns, land use, disease zones, water supplies, increased risk of natural disasters and flooding, and resulting labour migration. These would have enormous economic and social consequences. Decoupling economic activity from emissions of greenhouse gases — notably carbon dioxide — requires a major shift to clean energy use, which will not be achieved quickly or easily. • Severe threats to public health are posed by the growth in antibiotic-resistant strains of some diseases, which reduce the effectiveness of existing treatments. We also do not yet know enough about the longer term effects of the thousands of chemicals currently in use. Health problems related to sedentary lifestyles or poor eating habits are often passed from parents to their children. All Member States face the challenge of delivering high standards of healthcare without excessively burdening public finances. • Our management and use of natural resources has implications for the wellbeing of future generations. Loss of biodiversity and the resultant reduction in gene-

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tic resources are irreversible. Restoring fish stocks to sustainable levels will not be achieved unless the severity of the problem is recognised and traditional management attitudes change. The volume of waste — some of it hazardous — is rising inexorably. • Poverty and social exclusion are problems common to all Member States. The severity of the issue can be judged from the fact that one European in six is poor (with much higher concentrations in some groups such as one-parent families), and poor health, low educational attainment and deprivation tend to be passed from one generation to the next. Moreover, rapid changes in technology raise the threat of a ‘digital divide’ and a two-tier society. • All European countries face similar challenges due to the ageing of their populations. This will place considerable stresses on the funding of pensions. Ageing populations may also place higher demands on healthcare services and on long-term care, though much will depend on whether people enjoy relatively good health in old age. The structure of the population alters very slowly over time: those who will be pensioners at the start of the second half of this century have already been born, as has a substantial part of the future population of working age. • Current patterns of mobility cause severe pollution and congestion throughout Europe. Emissions of greenhouse gases from transport are growing more rapidly than from any other source, and in many urban areas traffic seems to be grinding gradually to a halt. Transport infrastructure is one of several factors influencing territorial development and land use. In turn, concentration of economic activities can give rise to congestion, but also has eco-

nomic benefits such as the creation of business networks and fluid labour markets, and can allow new solutions to emerge such as the provision of urban public transport systems. Each of the topics touches to a greater or lesser extent on each of the economic, environmental and social dimensions of sustainable development. Each topic is relevant for a number of existing Community and national policy areas. Moreover, each is linked to some of the others. For example: • Addressing climate change should have beneficial impacts on natural resource use, on mobility and land use, and on public health. • Poverty can lead to poor health. Poverty is also closely related to educational underachievement. • The degree of social exclusion is influenced by urban planning and land-use policies: low-income families tend to cluster in cheap housing, often on outlying suburban estates. In such areas, investment in transport infrastructure and other facilities may not be economically viable, so uncontrolled spatial development can aggravate segregation and social disparities. • The ageing of the population has implications for public health policies. The following pages identify the main issues raised by each topic. The discussion of each takes roughly the same structure. First, the nature of the problem and its relevance to sustainable development are described. Then, the key drivers of the issues raised are reviewed (where are we? how did we get here? and where are we going?). Emerging threats or risks are also highlighted. The 57

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examination of each topic concludes with an outline of the ways in which policy to date has tried to respond to the problems, and sets out the main policy challenges which must be overcome if we are to successfully tackle these unsustainable trends.

Topic 1: Climate change and clean energy Introduction Human activity is affecting the planet’s climate system. Available scientific evidence shows that the accumulation of greenhouse gases in the atmosphere due to human activity is causing global warming. The current central estimate is that temperature will increase by between 1 to 6° C by 2100 (5). Significant geographical variations are expected, and temperature extremes may be even more susceptible to change. Climate change is likely to have severe and unpredictable consequences, such as higher mean temperatures and radical changes in weather patterns and rainfall. Higher temperatures may mean that dry regions become drier and wet regions wetter. Rapid temperature change may cause more extreme weather events (hurricanes, floods) with severe implications for infrastructure, property, social systems and nature. Changes in agricultural patterns, land use, water supplies and the migration of labour will have knockon effects on the economy and society. While some of these may be beneficial, major dis(5) Intergovernmental Panel on Climate Change Working Group I third assessment report, summary for policy-makers; IPCC, 2001.

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eases such as malaria are likely to extend their reach as temperatures rise, with major implications for public health. Climate change is a global problem that the EU alone cannot solve, as all countries emit greenhouse gases. In 1992, the United Nations Framework Convention on Climate Change (UNFCCC) was agreed. At present, 186 nations have ratified this convention and are legally bound by it. This convention explicitly recognises the problems posed by climate change, and sets an ‘ultimate objective’ of stabilising ‘greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic (humaninduced) interference with the climate system’. However, the text does not specify precisely what this level should be — it remains a subject of scientific research and political debate. The Kyoto Protocol to the UNFCCC, agreed in 1997, was an important additional step, committing developed countries to emission reduction and limitation targets for greenhouse gases. The EU agreed to cut emissions by 8 % relative to 1990 levels by the years 2008–12. However, the Kyoto Protocol has not yet been ratified by most signatories, and in particular none of the industrialised countries, and is therefore not yet legally binding. Moreover, the Intergovernmental Panel on Climate Change estimates that to stabilise CO2 concentrations at even around twice the pre-industrial atmospheric concentration would require cuts in global emissions of around 50 to 70 % over the next 100 years. This implies that implementing the Kyoto Protocol will only be a first step. At present, the developed world has far higher emissions per capita than developing countries (the EU accounts for around 14 %

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of global CO2 emissions, but about 6 % of world population, while the rest of the OECD has about 35 % of emissions and 11 % of world population). This raises important questions about how to reconcile the need to cut global emissions with economic growth and development in poorer countries. However, it also needs to be borne in mind that greenhouse gas emissions from less developed countries are expected to surpass those of industrialised countries in the next 15 years. Thus, any long-term solution to climate change needs to include all nations of the world.

Major concerns and driving forces Global greenhouse gas emissions have increased seven-fold during the 20th century. This has largely been the result of increased use of fossil fuels for energy as economies

have grown. The main facts and figures for the EU are: • The dominant greenhouse gas produced by human activity is CO2 released from consumption of fossil fuels which accounts for around 80 % of emissions. The remaining 20 % are due to other gases, such as methane, nitrous oxides and the fluorinated gases (HFC, PFC, SF6). • Some greenhouse gases have bigger effects on global warming than others. In order to put different gases on a comparable basis, the emissions figures for non-CO2 gases are usually converted to tonnes of CO2 equivalents (6). The table below gives 1990 total EU-15 greenhouse gas emissions by sector on this basis as well as projected growth to 2010 (7).

(6) The conversions are based on the global warming potential for 100 years, as agreed in the IPCC. The GWP for methane is 21, nitrous oxide 310 and for the fluorinated gases more than 1 000. In other words, methane is 21 times more potent greenhouse gas than CO2. (7) These figures include the projected effects of a number of recent policy measures, such as the landfill directive, the voluntary agreement with vehicle manufacturers to cut CO2 emissions from cars, the renewables directive, and the liberalisation of the energy market.

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Table: Projected growth of greenhouse gas emissions between 1990 and 2010 1990 Mt CO2 eq.

Baseline 2010 Mt CO2 eq.

Growth 2010/1990 %

1 421.7

1 276.6

– 10.2

Industry

757.1

686.1

– 9.4

Transport

753.1

1 098.2

45.8

Households

447.5

440.0

– 1.7

Private and public services

175.6

188.9

7.6

Agriculture

417.0

397.6

– 4.7

Waste

166.4

137.3

– 17.5

4 138.3

4 224.8

2.1

Energy supply

Total

Source: ‘Environment 2010: Our future, our choice’, sixth environmental action programme of the European Community, COM(2001) 31 final, p. 25.

• EU Member States use large amounts of energy, but they tend to use it relatively efficiently: energy use and CO2 emissions per unit of GDP are low compared to most other countries. However, emissions per capita from fuel combustion in the EU are around twice the global average and about four times the average for developing countries. Due to the legacy of central planning, the accession countries emit several times more CO2 per unit of GDP than the current Member States. • Some countries have also managed to make significant improvements in energy efficiency over time. For example, between 1985 and 1998, the GDP of the EU grew by 35 % while energy-related CO2 emissions grew only by 4 %. This is partly due 60

to a move towards less energy-intensive sectors. In addition, a substantial part of this decoupling has to do with one-off events, such as the switch from coal to gas on a large scale as a source of energy supply. The main driving forces behind emissions in the EU to date are listed below: • A high level of economic development linked to a dominance of fossil fuels in energy supply. Around 80 % of our energy needs are supplied by fossil fuels. Our current heavy reliance on fossil fuels results from past investment decisions that were made without adequate attention being paid to the long-run environmental impacts.

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• Low energy prices: prices in real terms of oil, natural gas and coal have been relatively low throughout the 1990s and much of the 1980s. Coal prices declined by almost 50 % between 1990 and 2000 in real terms. The low price of fossil fuels has reduced incentives for households, industry and the transport sector to invest in and use energysaving technologies. • Rapidly increasing demand for mobility, being met largely by increased road transport and aviation. Between 1970 and 1998 passenger transport demand (measured in passenger kilometres) increased by over 100 %, as did freight transport (measured in tonne kilometres). These trends are likely to continue. At present, emissions of greenhouse gases from transport are growing much faster than any other source. • Emissions of non-CO2 greenhouse gases such as methane from landfills and fossil fuel extraction, methane and nitrous oxide from agriculture, as well as fluorinated gases (8) from industrial processes.

Policy issues At the EU level, the only current instrument specifically aimed at reducing CO2 emissions is the voluntary agreement of European, Japanese and Korean car manufacturers to improve the average fuel efficiency of new cars by 25 % by 2008–09. However, some other measures will reduce greenhouse gas emissions. These include the landfill directive (which will reduce methane emissions from landfill sites), a proposed directive that

(8) The Montreal Protocol covers the phase out of ozone depleting gases that are simultaneously greenhouse gases, such as CFCs and HCFCs. Attention is shifting towards HFCs, PFCs and SF6, all three of which are covered under the Kyoto Protocol.

aims to encourage energy from renewable sources and a directive on integrated pollution prevention and control. Some policy instruments are best applied at the national level, whereas others may require international coordination to be effective. A number of questions arise concerning the appropriate balance between policy developed at the EU level and policy at the national level. At present, the Commission is working with stakeholders in the context of the European climate change programme (ECCP) in order to identify the building blocks for possible Europe-wide initiatives to implement the Kyoto commitment. Major issues to contend with are the following: • Meeting the requirements of the Kyoto Protocol means achieving a reduction in greenhouse gas emissions of 8 % compared to 1990 levels by 2008 to 2012. The costs of reducing greenhouse gas emissions vary from sector to sector. Critical questions therefore are what policy mix is best suited to implementing a cost-effective approach, and on which areas or sectors most attention should be focused. • Making the deep cuts in CO2 emissions and other greenhouse gases needed to help stabilise atmospheric concentrations in the long term will require major investments. For example, in the power generation sector much of the current plant will reach the end of its operating life during the next 20–30 years and there is a continuing technological and political debate about the future contribution of various energy sources, including nuclear energy and renewables, to electricity supply (9). (9) As described in the recent Green Paper ‘Towards a European strategy for the security of energy supply’ COM(2000) 769.

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Investments in energy supply, transport infrastructure, housing and industrial installations are long lived. It is therefore vital that consideration be given to what instruments are needed to ensure that these investment decisions take into account these long-run effects. • The costs of reducing emissions are likely to be significantly lower if cost-effective instruments are put in place in good time. A first step would be removal of subsidies that encourage inefficient use of energy and are a significant drain on the public purse. An important question concerns the speed at which subsidies should be withdrawn, and how major adverse effects on particular sectors might be limited. • Energy taxes related to the CO2 content of fuels would be a cost-effective way to reduce CO2 emissions. Higher taxes would increase costs in some sectors, but the revenue could be used to cut other taxes. Any disruptive effects of energy taxes on the competitiveness of energy intensive sectors could be minimised by having EU wide coordinated tax measures. The European Commission proposed an EU wide carbonenergy tax in 1992, as well as a directive setting a framework for taxation of energy products in 1997. However, neither of these initiatives has been accepted by the Member States, and progress would require a significant increase in political will.

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• The Kyoto Protocol includes a number of flexibility mechanisms that allow emissions reductions to be achieved in a more costeffective way, such as emissions trading schemes. Starting from a target for total emissions, this instrument allows firms flexibility to reach this joint target in a costeffective way. Some Member States are considering introducing emissions trading, and in this context an important issue is whether it is best to arrive at European and international emission trading schemes by linking national trading schemes, or through a more centralised design. The liberalisation of energy markets will improve operating efficiency in the sector and lower energy prices. However, this will increase energy demand in the absence of any offsetting measures. Consideration needs to be given to what flanking measures might be appropriate. Liberalisation has the potential to allow new suppliers to enter the market (such as renewable energy sources), provided steps are taken to ensure that they are granted fair access to the transmission grid. • While it is uncertain what climate change will bring, it is fairly certain that some climate change will take place. The damage that climate change causes will be lower if we can reduce the rate of change and help nature and human habitats to adapt. Efforts to reduce emissions are necessary, but it is also important to consider now how our societies can best adapt to climate change as it occurs.

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Topic 2: Public health Introduction A healthy population is crucial for the wellbeing of our societies, and is therefore a prerequisite for sustainable development. A safe environment and decent healthcare are basic elements of social and economic progress. How a society cares for its most fragile members is also a measure of its own health and sustainability. Good health is important for our economic and material prosperity: sick or unhealthy people cannot work and are dependent on those who do. In general terms, the health of the Community population has never been better. Infant mortality has fallen sharply. People are living longer: between 1960 and 1999, average life expectancy increased by eight years for men and women. Nevertheless, in recent years new potential threats to health have emerged. A number of major public health issues which threaten social and economic development are set out below.

Major concerns and driving forces Potential threats to our health come from the substances and products we are exposed to through the air we breathe, the water we drink, and the food we eat. • Major health problems and causes of premature mortality, such as cancers, cardiovascular diseases and road accidents, are related to lifestyles. Poor nutrition, lack of exercise, tobacco use and misuse of alcohol, for example, impose a considerable burden of disease and give rise to substantial costs for individuals and society. Health problems caused by lifestyles can have sig-

nificant and long-lasting effects, as parents may pass bad habits on to their children. Obesity is a rapidly growing problem in many developed countries, and poor diet generally is a feature of others. • Poor health is also related to social and economic inequality. Various studies have shown that relatively disadvantaged populations have lower life expectancy and higher burdens of morbidity than higher socioeconomic groups. For example, in the early 1990s in England and Wales, unskilled men aged 20–64 were almost three times more likely to die from coronary heart disease than professional workers. Moreover, the difference in death rates had been widening over the preceding 20 years (10). • The emergence of bovine spongiform encephalopathy (BSE) and its transfer to humans as new variant Creutzfeldt-Jacob disease (nvCJD) have heightened concerns about food safety and drawn attention to the incentives facing farmers and the food industry. According to a recent Commission report (11), by guaranteeing high prices over decades, agricultural policy contributed to increasing the quantity of food produced, but had negative effects on the quality of some food products. In addition, agricultural policy has paid too little attention to its effect on diet (12). (10) Report of the independent inquiry into inequalities in health, UK Stationery Office, 1998. (11) ‘Agriculture, environment, rural development: facts and figures — a challenge for agriculture’; European Commission, 1999. (12) For example, Council Regulation (EC) No 1254/1999 of 17 May 1999 included among its objectives ‘to rebalance meat consumption in the Community to the benefit of the beef sector’, despite evidence linking higher levels of consumption to increased risks of heart disease; see also ‘Agenda 2000 CAP reform decisions — Impact analyses’, European Commission, 2000.

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• Various types of environmental pollution from agriculture, industrial activity and transport also cause ill health. Indeed, some studies have suggested that transportrelated air pollution is a bigger killer than traffic accidents (13), though the impact on life expectancy is generally less than 12 months, as many of those affected are chronically ill from other causes. Importantly, emissions of ‘conventional’ air pollutants such as sulphur dioxide, nitrogen oxides and small particles are declining due to new pollution controls, and this trend is expected to continue, significantly reducing their impact on health. Nevertheless, high levels of pollution may still occur in some areas. Agricultural runoff, wastewater discharges, and atmospheric deposition are the main sources of nutrients in the marine environment which are suspected to lie behind the unexpected appearance in several coastal waters of toxic algal blooms, an emerging threat to public health. • Chemicals (especially in the form of pharmaceuticals) make an important positive contribution to public health, but there is widespread use of chemicals whose properties and risks are poorly understood. There are gaps in our knowledge about the toxicity or otherwise of the tens of thousands of chemicals in use in Europe today. While many of these are surely harmless, recent studies linking chlorine in the atmosphere in indoor swimming pools to asthma illustrate the range of our ignorance of the effects of chemical substances. The increasing incidence of allergies, which now affect one in three Europeans, has also been linked with exposure to toxic chemicals, (13) ‘Public-health impact of outdoor and traffic-related air pollution: a European assessment’, The Lancet, Vol. 356, pp. 795–801.

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though other factors are also important. The effects of allergies go beyond their direct impact on health: they are the major cause of days lost from school and so may lead to poor levels of educational achievement. • The substances of most concern are those that are persistent pollutants — that is, they break down only slowly — and are ‘bio-accumulative’ — that is, they build up in the body — so that continued exposure to even small doses can have chronic effects on health. For example, dioxins — byproducts of some industrial and combustion processes — are a continuing cause for concern. Despite large and sustained falls in emissions of dioxins, a recent Commission study (14) indicated that many individuals’ average daily intake of dioxins was likely to exceed the World Health Organisation recommended maximum intake. Higher levels of dioxin exposure are also related to diet, since dioxins accumulate in fatty foods. Some chemical products have been identified as actual or potential causes of cancer or physical deformities. Endocrine disrupters, substances that may interfere with human and animal reproductive systems, are especially disquieting. • Communicable diseases, particularly the re-emergence in a more virulent form of diseases thought to have been conquered, continue to threaten the health of the population. The recent rise in tuberculosis encapsulates the dangers. Increasing levels of resistance to antibiotics damage public health: infection that cannot be treated quickly spreads, and is more likely to be

(14) Compilation of EU dioxin exposure and health data — Summary report; October 1999.

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fatal. It is the older and less expensive drugs that are in more widespread use which tend to become ineffective as their targets develop and mutate. If we cannot master this trend, we risk undoing much of the social and economic progress that has been achieved on the back of improved healthcare. Much of the problem is due to ‘mis- and overuse of antibiotics’ (15) for the treatment of illness of both humans and farm animals. The remaining four antibiotics still allowed for use as growth promoters and as additives in animal feed are planned to be phased out by 2006. The Community’s Scientific Steering Committee has also recommended changes in animal husbandry as an additional way to maintain animal health and welfare, and reduce use of antibiotics (16). • Delivering high-quality health services is a further challenge. The costs of healthcare systems are high and rising, and now absorb an average of around 8 % of GDP in Member States. Much of this money might be better spent preventing disease by encouraging healthier lifestyles. The high cost of many modern treatments, the high rate of technological innovation — which makes available treatments for previously incurable conditions — and rising demand for improved healthcare, place new pressures on the financing of public care services. The impact of the ageing of the Community population puts further strain on healthcare costs and could cause public expenditure on healthcare to rise by 3 % of GDP. (15) Antibiotic resistance in the European Union associated with therapeutic use of veterinary medicines’, report and qualitative risk assessment by the Committee for Veterinary Medicinal Products, European Agency for the Evaluation of Medicinal Products, 1999. (16) Opinion of the Scientific Steering Committee on antimicrobial resistance, 28 May 1999.

• The most important challenges of an ageing population, however, are the need for better understanding and management of diseases which particularly afflict the elderly, and for health services to adapt to provide patterns of care particularly suited to meeting the needs of frail, elderly patients, while also meeting the needs of the healthy aged. These new patterns of care will require substantial change in the nature of public healthcare systems, particularly as extended family networks become less common.

Policy issues Specific Community competence in the area of public health only dates from 1993. Nevertheless, a wide range of policy areas affects health, so Community action to address health issues dates back much further than this (17). For example: • A directive on the classification, packaging and labelling of dangerous substances was adopted in 1967, and has been updated on many occasions. The Commission communication on endocrine disrupters (18) listed some 30 Community legislative measures relating to environment and health impacts of chemical products; several of these measures were directed at improving food safety by reducing chemical use in farming. The White Paper on a new Community chemicals strategy (19) has the overriding goal of sustainable development. It aims to protect human health and the environment (17) Article 152 of the Treaty on European Union states that ‘A high level of human health protection shall be ensured in the definition and implementation of all Community policies and activities.’ (18) ‘Community strategy for endocrine disrupters’, COM(1999) 706, European Commission, 1999. (19) White Paper ‘Strategy for a future chemicals policy’, COM(2001) 88; European Commission, 2001.

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while ensuring the competitiveness of the chemical industry, though its implementation will raise many important practical questions. • In the area of environmental policy, measures taken under Community legislation to reduce pollution from large combustion plants, and vehicle emissions technologies have contributed to the substantial and continuing improvements in air quality. Nevertheless, much research work remains to be done on assessing the impact of some pollutants on health, particularly the effects of small particles. • Four EU action programmes on health and safety at work have been implemented since 1978 (20). They have led to Community measures to protect workers against dangerous substances and situations, and to improve the working environment. With Member States responsible for the organisation and delivery of health services and medical care, the new Community health strategy aims to develop a coherent approach to health issues across all EU policy areas. Its core objective will be to identify all policies and actions which might have an impact on health (including healthcare systems) and to find ways of assessing the health impact of these policies. This will require better policy coordination (a ‘joined-up approach’) to address inter-sectoral issues such as enlargement or social exclusion, and emerging health problems.

activity, intended to address many of the issues raised above. • A first objective is to improve health information and knowledge. A comprehensive health information system will be developed to provide information and data on health status, health determinants and health systems to policy-makers, health professionals and the general public. • A second priority will be to monitor and respond rapidly to health threats, for example from communicable diseases. This could include attention to antimicrobial resistance, work on hospital infections, vaccine policy, and communicable diseases such as HIV/AIDS. • Finally, the new public health action plan will address health determinants. It will include actions aimed at tackling the underlying causes of ill health, including lifestyle and environmental causes, by promoting health and preventing disease.

The proposed public health action programme will focus on three main strands of

As many risks to health result from individual lifestyle choices, giving accurate information to the wider public and improving understanding at all levels is critically important. Food safety is paramount in this respect. In recent years, the credibility of public authorities in the management of food safety has been severely damaged by the perception that they were more concerned to protect the economic interests of producers than the health of consumers. Assessment and regulation of food safety that is independent of the economic sectors concerned is thus essential to improve public safety and to restore public confidence (21). In addition,

( ) OJ C 165 of 11.7.1978, OJ C 67 of 27.2.1984, OJ C 28 of 3.2.1988 and COM(95) 282 of 12.7.1995.

(21) The Commission White Paper on food safety (COM(1999) 719) proposed creating a European Food Authority.

20

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clear labelling of the health and nutritional properties of foods is long overdue, given the importance of diet and nutrition to health and well-being.

Topic 3: Management of natural resources Introduction Natural resources underpin sustainable development. They provide essential life support functions such as foods and habitats, carbon storage and water catchment, and provide essential raw materials. Although small changes in most stocks of natural resources pose little immediate threat, a persistent decline is of great concern for resources that are difficult or impossible to replace, such as biodiversity. We can distinguish broadly between those natural resources that are renewable if carefully managed (such as fish stocks and fresh water), and those that are non-renewable (such as oil and mineral resources). In this paper, we have concentrated on those where the long-run trends are of most concern (biodiversity, waste generation, fish stocks). We also include the question of exhaustion of non-renewable resources such as minerals and coal, although on current consumption rates stocks may last for decades or even centuries.

Major concerns and driving forces There are a number of general problems that undermine the efficient and sustainable use of natural resources. Different forms of industrial and agricultural activity affect many natural resources. When natural

resources are part of a shared ‘commons’ and access to their use is open to all, this means that there is often little incentive for individuals to conserve and use them in a responsible way. Overexploitation can be the result. Poorly defined or disputed rights of ownership or access to resources weaken the incentives to conserve and use natural resources in a sustainable way. Bio-diversity

At present, we are failing to secure the longrun viability of our eco-systems. Despite measurement problems, there are indications that recent decades have seen very significant losses in virtually all types of eco-systems at EU level. A high percentage of existing species within the EU are at risk of extinction (22). In recent decades, the trend has been persistently in the wrong direction, and this poses a serious long-term threat to the natural resources on which our economic and social system depend. Changing land use is an important factor. Although measurement is difficult and imprecise, data for the period 1980–90 for 11 EU countries indicate that close to 14 % of land previously considered to be part of natural cover was lost to urban development and housing. In addition, between 1980 and 1998 there was an 11 % rise in amount of land taken by road networks in Member States. A large percentage of all nature conservation sites in Europe can be considered at risk from new infrastructure development (23). Although policy at present

(22) Towards sustainable development — Environmental indicators’, OECD, 1998. (23) ‘Headline environmental indicators for the European Union’, European Environment Agency and the European Commission, forthcoming.

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tends to pay some attention to preserving particularly important habitats or sites of interest from development, the average level of protection is much lower. Agriculture also profoundly influences the pattern of land use. The scale, the scope, and the nature of production techniques can have substantial impacts — good and bad — on the landscape and on natural habitats. Intensive aquaculture in sensitive marine areas is one of the driving forces for the appearance of toxic phytoplankton which can kill fish, seabirds and mammals. Intensive farming practices seem particularly prone to cause negative effects. These include ‘monotonous landscapes, the abandonment of traditional management methods, the use of large areas of wetland, moorland and natural rough pasture, pollution of groundwater by increased use of pesticides and fertilisers, and reduction in biological diversity.’ (24) Another European Commission report noted that intensive farming had ‘taken little or no heed of its impact on the environment.’ (25) However, it would be too simplistic — and wrong — to conclude that agricultural practices do nothing but damage the countryside. Many landscapes and site-specific environmental amenities reflect a farming heritage. Particularly in remote or mountainous areas, agriculture can play a crucial role in preserving attractive landscape features and ecological diversity. Abandonment of land or of traditional land management practices in such areas would (24) ‘European spatial development perspective — Towards balanced and sustainable development of the territory of the European Union’; European Commission, 1999. (25) ‘Agriculture, environment, rural development: Facts and figures — A challenge for agriculture’, European Commission, 1999.

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be bad for biodiversity and would reduce the environmental and amenity value of these areas. Public policy therefore has a potentially important role in setting the right incentives to encourage the management of biodiversity and rural sustainability. Water resources

At the global level, the problem of water shortage will prove one of the major challenges over the next few decades. However, at the level of the EU, there are few water shortage problems, with the important exception of parts of southern Europe, where overexploitation of water has led to drying out of some areas and to salt water intrusion in aquifers around the Mediterranean coast. It is a cause for concern that in some areas current extraction is tapping water tables that will take centuries to replenish. Pollution of water resulting from agricultural, household and industrial activity is a more widespread phenomenon in Europe. Water pollution causes damage to aquatic life and imposes sizeable costs in terms of the treatment needed to supply clean water to agricultural, household and industrial users. The spread of built-on land, including into natural flood plains, highlights the links between water management and land-use planning. Absence of an integrated approach to these issues is causing increased damage from floods. Fish stocks

Fish represent an important renewable resource that provides a livelihood for those in the fishing industry and an important food source. There is strong evidence that existing rates of harvesting of fish stocks are unsustainable and threaten the viability of major

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fishing areas. The International Council for the Exploration of the Seas has persistently warned that EU waters are being over-fished. The same is true worldwide. Stocks of hake and cod in EU waters are at crisis point, and catches of all fish are falling rapidly. Landings of fish in the mid-1970s were nearly twice as high as in 1998. Collapse of stocks is potentially disastrous for those who derive their livelihood from the industry and has important consequences for marine eco-systems. The collapse of the Canadian cod fisheries in the early 1990s devastated local fishing communities, leaving them few long-term prospects. The EU industry is characterised at present by over capacity, falling employment, and low profitability. Lack of recognition that radical adjustment is needed has also tended to delay the introduction of effective adjustment measures, aggravating the problems of those in the industry. Since 1983, the EU has regulated fishing under the common fisheries policy (CFP). The CFP has offered, and still offers, important benefits, such as a legal framework for regulation and enforcement, and a mechanism for restricting access to the main fisheries. On the whole, however, the policy has serious shortcomings:

cuts. Member States have until recently lacked the political will to act decisively. • The financial instruments used in the sector under the CFP have tended to work against each other. The effects of measures to reduce capacity have been partly offset by subsidies to modernise and improve fleet technology. Other operating subsidies, such as exemption from fuel tax for fishing vessels, encourage over-fishing. • There are technical problems in the scientific measurement of stocks, and in controlling the impact of fishing on growing fish and other species: finding a way to reduce ‘discards’ — fish that are caught and then thrown back into the sea — is a major problem. • There is evidence that enforcement of regulations on the part of Member States has been too lax and very uneven, which has reduced confidence in the CFP as a viable policy.

• The setting of total allowable catches yearby-year has led to a neglect of longer term conservation and management. Member States have regularly postponed difficult decisions because of the short-term costs of the stringent measures needed for stocks to recover.

Current policy has failed to secure sustainable exploitation of fisheries resources, and will need to be changed if it is to do so. In the future, the Community fisheries sector will have to be significantly smaller than it is today, if it is to survive. The common fisheries policy is to be reviewed between now and 2002. Unless there is meaningful reform, the costs in long-term economic damage to fishing communities, as well as to the marine environment, will be high. The recent Commission Green Paper (26) puts forward options for a change of approach towards subsidies in the fisheries sector.

• As a result, the quotas that each country is allowed for catches of fish are too high, and are difficult to reduce by negotiation as each country would prefer others to make

(26) ‘The future of the common fisheries policy’, COM(2001) 135, European Commission, 2001.

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Non-renewable resources

Extraction of non-renewable resources such as coal, oil and minerals may have significant impacts on landscape and biodiversity if appropriate measures for waste management and restoration are not undertaken. A balance clearly has to be struck between exploiting these resources and protection of nature. In addition, there has been a long-running debate about whether certain non-renewable resources that are valued mainly for their commercial potential, such as iron ore, coal and oil deposits, are running out. Conventional indicators such as trends in prices do not suggest a rapid increase in scarcity of these resources, and measured reserves for many assets run into decades. Moreover, rising prices in themselves stimulate the development of alternative technologies that reduce resource use. In many cases, we can more than compensate for reductions in stocks of resources by providing other forms of wealth for future generations, such as technology and infrastructure, or by developing substitutes for the resource being used up, such as renewable energy sources. However, despite little apparent evidence of scarcity, there is still a question of whether we are using these resources up too quickly, leaving little for future generations. It is of course true that these resources are essentially finite, and so our current use erodes the stocks available in the future. We should therefore aim to use these resources responsibly and more productively wherever possible. Waste

Every person in the EU generates on average 3.5 tonnes of solid waste each year (27). In (27) ‘Environment in the European Union at the turn of the century’ (second assessment report), European Environment Agency, 1999.

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recent years, waste volumes have grown faster than GDP. Similar growth rates over the longer term could significantly increase pressure on the environment and adversely affect public health. To date, the pressure to improve resource efficiency and reduce waste has come largely through commercial pressures to cut costs and from regulation by pollution control authorities. However, regulation can be expensive if it forces unnecessarily rapid adjustments to existing technology, rather than being designed to allow cheaper improvements to develop over time. As in other policy areas, the phasing in of new measures therefore has to strike a balance between the costs and benefits of early introduction. A number of industrial sectors, such as the paper, glass, and metals industries have made significant improvements in resource efficiency in recent years, either through restructuring their activities towards higher valueadded products, or through raising process efficiency. There has also been a reduction in the use of hazardous substances in products, thus helping their management as waste. These are welcome developments, and there are other innovative approaches being adopted in the business community to improve resource efficiency. Policy needs to facilitate an active approach from the business sector that stimulates long-run improvements in resource efficiency if we are to decouple growth of waste and GDP.

Policy issues The major challenge that cuts across almost all resource issues is how to revise incentive structures in such a way that non-commercial considerations are given adequate weight by those managing and exploiting natural resources. The diversity and complexity of natural resources makes this difficult. A par-

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ticular concern is how to reform policies that have an unacceptably high impact on natural resources (such as over-fishing and agriculture) without unacceptable socioeconomic costs. In particular, how support and subsidy regimes can be reoriented to generate an interest in effective long-term management. Water shortages and water pollution are both due to failure to provide adequate incentives to encourage more responsible water use. In the farming sector, first steps have been taken in broadening the focus of the common agricultural policy towards taking account of wider economic, environmental and social objectives. These have had some success (28). Reduced levels of price support contributed to less use of inputs such as chemical fertilisers and pesticides. ‘Agrienvironmental’ measures have contributed to preserving biodiversity and led to lower levels of water pollution. Taking land out of production (‘set-aside’) has been shown to have beneficial environmental effects, provided it is properly managed. However, at present, the goal of sustainable rural development remains subsidiary to the narrower objective of supporting farmers’ incomes. An important prerequisite for improved long-run management of our natural resource base is improved information on the current state of our natural resources, such as the measurement of biodiversity and levels of fish stocks. Such data are essential for ensuring that consumption does not exceed the capacity of the resource to regenerate. The difficulties in measuring stocks of some resources and how they are evolving means that trends are not picked up as quickly as they should be. (28) ‘Agriculture, environment, rural development: Facts and figures — A challenge for agriculture’, European Commission, 1999.

In order to decouple economic growth from the use of resources and the generation of waste there is a need for effective instruments to shape the awareness of business and consumers and provide steady pressure for a long-run increase in resource efficiency throughout the economy. Greater efficiency in our use of resources should reduce pressure on the environment, preserve larger amounts for future generations, and allow more time for the development of substitutes.

Topic 4: Poverty and social exclusion (29) Introduction Reducing poverty is central to sustainable development. Although it is not a new phenomenon, it has an enormous direct effect on individuals in terms of ill health, suicide rates, persistent unemployment, and potential exclusion from the mainstream of society. The burden of poverty is borne disproportionately by single mothers and older women living alone. Poverty also has a strong tendency to repeat itself, often remaining within families for generations. This has a high social cost, particularly the waste of human talent and energy implied by unequal opportunities. A well-designed set of integrated policies to reduce these social costs would improve both fairness and efficiency. Poverty is a problem with long-term consequences and requires a long-term approach. (29) Poverty and social exclusion are closely related but different. Exclusion is a broader idea than poverty as it implies the idea of ‘access’ at all levels, and this can be interpreted very widely. We do not propose to expand on the differences here, and for short hand we simply use the term poverty.

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Poverty can arise for a whole range of interdependent reasons. Major factors are differences in family background and wealth, differences in access to education and jobs, effort and luck, the effects of tax and benefit systems on redistributing wealth, and the direct provision of some services by the State (for example, health, policing, social services). These different effects can offset or reinforce one another, so small initial differences can sometimes have big effects. This complexity also explains part of the difficulty in arriving at a satisfactory definition of poverty. The willingness to accept different forms of deprivation depends on our social and political values. These inevitably vary from Member State to Member State, but there is also a shared commitment between countries of the EU to forming a more cohesive society, and the fight against poverty and social exclusion is acknowledged to be a major element in the value systems of Member States (30). This vision is reflected in the EU Treaty (31).

spread: 32 % of Europeans experience at least one annual spell of low income over a period of three years, while 7 % of the population — around 25 million persons — experience persistent poverty during this period. Persistent income poverty ranges from around 3 % in Denmark and the Netherlands to 12 % in Portugal. • There are significant income inequalities which threaten social cohesion. At EU level, the poorest 20 % of the population receives less than one fifth of the income of the richest 20 %. Social benefits reduce the proportion of poor people in all Member States but to very differing degrees, the reduction ranging from around 10 % in Greece and Italy to over 60 % in Denmark. • Income gaps between women and men remain significant, with women’s earnings almost one quarter below that of men. This gap increases the risk that women will fall into poverty, since social security benefits and pension entitlements are often related to previous earnings.

Major concerns and driving forces Current patterns of poverty within the EU are diverse and evolving. This section provides an overview of important trends, drivers of change, and emerging risks: • The measurement of poverty depends on the definition used, but on one common definition (relative) poverty (32) averages 17 % in the EU (excluding Finland and Sweden). Vulnerability is more wide(30) See the conclusions of the European Council at Lisbon, Feira, Nice (2000), which may be downloaded from the Internet (http://ue.eu.int/en/Info/eurocouncil/index.htm). (31) See Section 1.2 above. (32) Poverty line defined as 60 % of national median income adjusted for household size. Source: Eurostat, European Community Household Panel, 1996.

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• Many cities have serious pockets of poverty and social exclusion. Unemployment rates can vary significantly between districts, being up to 10 times higher in the worst affected parts than in the least affected. • There is a high level of early school leavers: more than one in five of those aged 18–24 leave the education system with only lower secondary education at best. This is a particular worry, as there is a possible vicious intergenerational circle between childhood poverty, low educational achievement and poverty in adult life. • Significant proportions of the adult population fail to attain the literacy levels con-

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sidered as necessary to cope with everyday life in advanced societies, though the Nordic European countries in particular have made significant progress in resolving this problem (33). • Rapid change in the labour market is posing a risk to those unable to adapt to change. Organisational and contractual changes present risks for vulnerable individuals. • There is also some concern over the risk of a technological divide. Persons in the highincome groups use the Internet three times more frequently than lower income groups. Older people have scarcely any access to the Internet (one in seven of the youngest group). There is a significant gap between men and women as regards access to information and communication technologies. Moreover, there are significant differences across the Union in access to the Internet, with a clear north–south divide. In Greece, Spain, Portugal and Italy, the rate is half the EU average, while in the Nordic countries it is considerably higher (34). • Changing family patterns and household structures are increasing vulnerability for particular groups in society. Household sizes are declining. Around one in 12 people live alone, an increase of 50 % over the last 20 years. The proportion of dependent children living in one-parent households (mainly single mothers) has increased by 50 % since 1983. Around 13 % of all dependent children in the EU are living with just one parent. Three out of four single-parent families are facing financial diffi-

(33) See the IALS–OECD study (2000). (34) Second report on economic and social cohesion in the European Union, European Commission, 2001.

culties and the probability of living in poverty is twice as high for these children. • Ageing populations raise new concerns about social exclusion and poverty among the elderly. Provision for retirement income needs to reflect the prospect of increased life expectancy, with many living perhaps 30 or 40 years after retirement. This will be a particular problem for the very old if their pension income fails to keep pace with price rises. Changing family patterns may reduce the amount of support and care given by families. • Immigration flows make global poverty a domestic EU concern. The persistence of racism, xenophobia, and of social and economic discrimination make it difficult for immigrants to be effectively integrated.

Policy issues Economic and technological developments offer new opportunities and more choices to individuals to fulfil their potential. At the same time, these developments increase competitive pressures and carry the risk of creating a ‘two-tier’ society where the more vulnerable members find themselves unable to keep up with fast-moving changes. At the Lisbon European Council in March 2000, the EU set out a new strategy to strengthen employment, economic reform and social cohesion. Modernising social protection and combating social exclusion were identified as essential elements of this strategy. Tackling the sources of unemployment and poverty is central to its success. This means enabling greater access to quality jobs, in particular through increased opportunities for education and training for all ages, to encourage flexibility and the capacity to adapt to the requirements of a rapidly chang73

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ing labour market. Equally important, tax and benefit systems must be reformed to make them more employment friendly and to remove poverty traps, particularly those which deny women the opportunity to take up paid employment. The Nice European Council gave further substance to the objectives set at Lisbon by approving the European social agenda. To take full advantage of this momentum for change, social policy must be placed in its wider context of the European Union sustainable development strategy: many other policies (such as education and training, transport, housing, health) have an impact on social exclusion. In addition, we must look beyond the 10-year horizon of Lisbon: • Poverty is a persistent problem that is often transmitted from one generation to another. Eradicating poverty will take more than a decade. It is especially important to limit the passing of problems — such as lack of education or poor housing and living conditions — from one generation to another. • Strategies to tackle poverty and social exclusion require a balance between targeted initiatives and general social measures. There is a particular need to avoid the risks of an underclass within which poverty replicates itself. This may require specific action for groups at risk (such as children, early school leavers, minority groups, disabled, elderly) or for some geographical areas. Community support comes from the European Social Fund and a specific programme on social inclusion. • Financial integration and the increased mobility of the tax base are putting more pressure on tax and benefit systems. While private markets have the potential to ease this pressure by delivering some services 74

more cost-effectively, their use must be carefully designed to ensure that universal access to basic entitlements such as decent healthcare, good education and core social services is maintained. Modernising social protection means building an active welfare state, not dismantling it.

Topic 5: Ageing Introduction The population of the European Union and of the accession countries is ageing, in contrast with trends in most developing countries. Migration flows into the EU have occurred in recent years and this has offset some of the effects of the ageing of the Community population. Nonetheless, recent Eurostat projections show that the old-age dependency ratio (those aged over 65 as a percentage of the population aged 20–64) will double between 2000 and 2050. By the middle of the century, there will be one person aged 65 or over for every two aged 20–64. These demographic changes will have profound economic, budgetary and social implications. An ageing population puts into question the financial sustainability of pension schemes and public healthcare. Under plausible assumptions, pension expenditure (now reported to amount to 10 % of GDP on average) would increase by 3–5 % of GDP in the majority of Member States between 2000 and 2040 (35). Spending on healthcare could increase by a further 3 % of GDP over the same period. At the same time, the shrinking

(35) See ‘EPC progress report to the Ecofin Council on the impact of ageing populations on public pensions systems’.

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labour force will lead to a lower rate of economic growth, unless it is offset by increased productivity. Public pensions in the EU are either provided by governments, using revenues from taxation, or by the social partners, based on contributions of employers and employees. Many pension systems are funded on a ‘pay as you go’ basis, where today’s workers support today’s retired. Because demographic change occurs slowly and is largely predictable, there is a strong temptation to put off difficult political choices when problems lie in the distant future. This raises the prospect of threats to fiscal stability, or a significant reduction in entitlements for future pensioners. A long-term approach is essential to prevent the occurrence of a social divide between generations and widespread poverty among the elderly. Some options for reform to existing pension systems would put more emphasis on today’s young people to provide for their own retirement. For example, moving towards a ‘funded’ system in which individuals build up their own pension provision over time, often with State support. This may have some advantages in terms of transparency about who pays for what, but funding would not overcome the structural tension between the length of working life and pension needs in retirement. Moreover, a rapid shift from ‘pay as you go’ to a funded system would mean that the current workforce would pay twice — once for pensions for the current aged, and once to build up provision for their own retirement. A wider range of policy options must therefore be explored.

those of working age and those of non-working age is changing. In essence, we are living longer and therefore require more in terms of pension provision, but the length of active working life is not increasing to provide a matching increase in pension contributions. The ratio between years in which contributions are paid and those in which benefits are received is continually decreasing. The share of young people in the total population is declining, while that of older people is increasing. The key trends and drivers are: • Unfavourable labour market developments, in particular high unemployment rates and falling participation rates amongst older workers. Employment rates tend to drop off very sharply after the age of 50. Effective retirement ages in the EU are now well below both the statutory retirement age and levels in other industrialised countries. This partly meets a social preference for more leisure time (36), but in many cases it is due to structural features in the labour market that discourage employers from taking on older employees, or the lack of suitable job opportunities matching the capacities and requirements of older people. • The sustainability of pensions systems will also depend on what percentage of the total population is active in the labour market, as well as their productivity levels. Current employment rates are much lower in the EU than in other developed countries, particularly for women and older workers.

Major concerns and driving forces

• Life expectancy at birth in EU-15 increased by eight years between 1960 and 1999, from 73 to 81 for women, and from 67 to

Due to rising life expectancy and declining birth rates in Europe, the balance between

(36) See Eurobarometers, 1992 and 1999, about attitudes in relation to retirement and pensions issues.

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75 for men. This reflects improvements in diet, less occupational risk, and better healthcare, amongst other factors. • Birth rates have fallen well below the level necessary for population replacement, due to social and cultural change, and difficulties for men and women in combining work and family responsibilities. The average number of children per woman was around 1.5 in 1999, whereas the figure required for a stable population is 2.1. The number of children per woman is also below the average number of children desired by couples (around two children, according to survey data). • As a result, the proportion of people aged 65 years and over in the EU-15 has risen from around 10 to 16 % over the last 30 years, while the proportion of those under 25 has fallen from just below 40 % to just under 30 %. This trend would have been even more marked were it not for immigration. It will continue over the next few decades, when ‘baby boomers’ progressively reach retirement age (see graph).

Percentage of total population

Share of each age group in the total EU population, 1999 and 2040 50 40 30

1999

20

2040

10 0 0–14 15–24 25–54 55–64 65 +

80 +

Source: Eurostat — (2000-based) baseline scenario.

• The number of ‘very old’ people aged 80 and over will rise very sharply, and by 2010 the number is expected to increase by about half. Changes in the structure of 76

households accentuate the significance of this development. The elderly must increasingly rely on themselves and on public support, rather than on a family network. • The age structure of the working age population (15–64) is also affected: the share of those aged 55–64 is increasing and this is projected to continue. This raises questions about how to stimulate lifelong learning and to adjust working patterns to accommodate this ‘greying’ of the workforce. People may prefer to spread economic activity more evenly over their lifetime. For example, through more part-time work when they have young children, and also towards the end of their working lives, to ‘phase in’ retirement.

Policy issues A comprehensive approach must be adopted to address the economic, budgetary, and social implications of ageing (37). The number of pensioners over the next three decades can be forecast reasonably accurately, but there is considerable uncertainty about migration and other long-run demographic developments. If birth rates do not increase as expected, and if there are very big increases in life expectancy due to technological breakthroughs, the implications could be much greater than described above. Raising employment rates in line with the Lisbon strategy is a critical first step to meeting the ageing challenge. To achieve the target of an employment rate of 70 % in the EU

(37) See Commission communications ‘The future evolution of social protection’ (COM(2000) 622), and ‘The contribution of public finances to growth and employment: improving quality and sustainability’ (COM(2000) 846), European Commission, 2000.

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by 2010, a higher priority must be attached to lifelong learning and improving the adaptability of the labour force. There is a need for more family-friendly education structures and better care services for both children and the elderly, as present structures make it difficult to reconcile working and family lives. Moreover, the taxation and pension systems need to be reformed to discourage early retirement. This long-term approach focusing on more employment among women and older people should help to increase the number of potential contributors to pension schemes, reduce the number of recipients and therefore improve budgetary sustainability. However, further progress must be achieved: • Simulations have shown that the EU employment rate needs to reach 75 % by 2020 to ensure that the number of adults not at work stabilises at its present level, relative to the number of employed people. Raising overall employment rates, especially amongst women and older workers, could go a long way towards offsetting the projected fall in the ratio of active to inactive persons, and considerably lessen the budgetary and economic impact of ageing populations.

and maintaining other essential public services. • If the employability and employment rate of older workers is to be increased, a major investment in lifelong learning is required, particularly in IT skills. Member States and the social partners should intensify their efforts in this respect. • The provision of infrastructure and services (care, transport, etc.) must be reconsidered to take account of the increasing number of the elderly and their circumstances. Population ageing in the EU Member States could be partly counteracted by migration. Building on the indications given by the European Council in Tampere, legal channels for economic migrants should be reopened, and arrangements should be agreed at EU level to develop and coordinate a common immigration policy. This should be accompanied by measures to integrate migrants and to combat discrimination and social exclusion. Partnership with the countries of origin should be developed to facilitate orderly migration flows, to fight illegal immigration, and to mitigate any negative effects of migration for the countries of origin (‘brain drain’) (38).

• Revising early retirement schemes and the tax and benefit systems in cooperation with the social partners will be necessary to encourage people to stay longer in employment, possibly part-time, in line with the decreasing morbidity and disability levels among older people.

Migration within the EU may influence the impacts of ageing at regional level if younger, more mobile people leave less developed regions for regions with a more attractive range of employment opportunities. Southern regions may also experience inward migration of older people drawn by the milder climate.

• Social protection and public pension systems should provide adequate income and healthcare services to the elderly, while keeping the tax burden at acceptable levels

(38) Commission communication on a Community immigration policy, (COM(2000) 757), European Commission, 2000.

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Topic 6: Mobility, land use and territorial development Introduction Mobility, land use and regional development are tightly interwoven in modern societies. In the short run, the demand for increased mobility depends on incomes and prices for using different modes of transport. In the longer run, it also changes according to patterns of land use — the location of people, homes, factories, offices, farms and shops. This spatial pattern is in turn a function of factors such as local planning rules, availability of infrastructure, the price of transport services, and personal preferences about where people want to live. The relationship between spatial patterns and transport thus runs in both directions. Mobility, for both work and leisure, is important to our continued economic and social wellbeing. However, mobility is not an end in itself, but a means to access different goods and services. It may enhance business, employment and education opportunities as well as allowing for a wider range of leisure activities and lifestyles. However, increased mobility has important side effects, like emissions of greenhouse gases, air and noise pollution, the use of land and congestion, effects which reduce quality of life. Emissions of greenhouse gases from transport are growing more rapidly than from any other source. Congestion costs are rising, while damage to eco-systems and biodiversity are major concerns. More than 40 000 people are killed and over 1.7 million injured every year on European roads. Encouraging people to live close to work and avoiding low-density development (‘urban 78

sprawl’) can reduce the need for mobility and land take. Better pricing of different modes of transport and policies to improve the quality of life in urban areas can limit the desire for long-distance commuting and would help encourage less transport-intensive living patterns. However, high-density living implies less living space, as well as more congestion and urban stress if not supported by effective urban infrastructure and public transport. Striking an appropriate balance between urban and rural areas is therefore not solely a transport issue, but also a matter for rural and urban policy. There is also a complex link between mobility and regional development. At present, the picture of the EU is one of a richer, more densely populated core and a poorer, less populated periphery. The second cohesion report (39) identified a group of central regions covering just one fifth of the Union’s area, but which contain over two fifths of the population and account for half of the EU’s GDP. However, several prosperous regions lie outside this area. The uneven distribution of population and economic activity will be more marked in an enlarged Community. Improving transport links can be important to give regional economies access to wider markets, but it is not a panacea for regional underdevelopment and the costs and benefits of new infrastructure need to be carefully weighed. A region also requires a range of other infrastructure and services to support a centre of economic activity.

Major concerns and driving forces Higher mobility and greater land use for building and infrastructure are above all

(39) ‘Second report on economic and social cohesion’, COM(2001) 24, European Commission, 2001.

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driven by economic development and increased affluence. Recent decades have seen very rapid growth in distances travelled by both freight and people, as incomes have grown and prices of some modes have fallen or remained flat in real terms. The key facts are: • Over the last 30 years freight transport demand has persistently grown faster than GDP and has doubled since 1970, with much of the increase coming in road transport. Air freight transport has grown even more rapidly. Passenger transport, particularly by car, has followed a very similar pattern. On average, almost one European in two now owns a car (40). • These trends are predicted to continue in the immediate future. Freight transport is expected to grow by around 40 % between 1998 and 2010, with road transport accounting for most of this increase. Passenger transport is expected to grow more slowly, mainly due to the rising costs of congestion on the roads, slow population growth and lower growth of car ownership as it approaches saturation in some countries. Air travel is expected to grow by a remarkable 90 % over the same period. • Change in vehicle emissions technologies have significantly reduced emissions of some atmospheric pollutants over the last decade, improving air quality. To some extent these improvements have been offset by growth in traffic volumes, but despite future increases in traffic, air quality is expected to improve significantly over the next 20 years. Greenhouse gas emissions on the other hand, are rising very rap(40) ‘Defining an environmentally sustainable transport system’, Commission expert group on transport and environment, September 2000.

idly due to the continued increase in transport overall. • Congestion and inefficient use of infrastructure have large economic costs, perhaps as much as 2 % of GDP. As well as wasting time, congestion raises costs for business and prices in shops for consumers. In Amsterdam, if current trends continue, rush hour public transport will move at little more than walking pace by 2005. One tenth of the trans-European road network suffers from capacity constraints, causing congestion. The costs of congestion will rise rapidly as infrastructure increasingly reaches capacity. • Over three quarters of the European population live in towns and cities, which play a vital role as providers of services and centres of economic activity. Traffic congestion affects above all urban areas, which are also challenged by problems such as inner-city decay, sprawling suburbs, and concentrations of acute poverty and social exclusion. • In aggregate terms, the Community has been able to maintain a rough balance between the rural and urban communities. At present, the population of rural areas is increasing, and in recent years their employment levels have grown faster than the Community average, though the picture varies from region to region (41). However, this may change after enlargement of the Union. Structural change in the new Member States could lead to a collapse in rural areas and rapidly growing pressure on urban infrastructure. • In some Member States, income inequalities between regions are worsening, though

(41) Second report on Economic and Social Cohesion.

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at the level of the Community the gap between richer and poorer regions has narrowed somewhat in recent years. Nevertheless, the differences remain substantial, and can be expected to be greater still in an enlarged Union. In the EU-15, the richest region has an income per head six times that of the poorest; if the accession countries were included in the calculation, the ratio would be more than 10 to 1. • Relatively low levels of spending on research and development in some lagging regions may hamper their ability to catch up, though this is only one of very many factors influencing economic performance. The factors that lie behind these problems include: • The affordability of travelling by road and air improved relative to other modes over time. The price of private motoring and aviation travel as a percentage of average wages has fallen as cars have been produced more cheaply and efficiently and airlines have raised productivity, while the price of public transport has tended to keep pace with wages over time. For distances of more than a few kilometres, road transport — whether of people or freight — offers the convenience of ‘door-to-door’ service that other modes find difficult to match. • The completion of the internal market has boosted trade flows, but the resulting pattern of transport activity has been unbalanced due to an absence of corresponding improvements in the pricing structure for different modes. In addition, liberalisation of freight transport by road has been achieved across the Community but only a few Member States have opened rail freight to competition, so rail freight markets 80

remain fragmented and closed. This uneven pace of reduction in the costs of different modes of transport has had adverse environmental effects. • Local planning regulations also affect transport demand. ‘Urban sprawl’ — in particular low-density housing — drives people into private cars. The growth in car use is closely associated with an increased degree of urban sprawl, and the availability (or not) of public transport. Transportrelated noise and poor air quality in urban areas can encourage migration of people and enterprises from cities to suburbs and create a vicious circle. • Transport policy has generally sought to match the increase in demand for road and air transport by significant public investment in infrastructure, both from national budgets and the Community structural funds. Extension and improvement of the road network has significantly increased the flexibility and speed of road freight and the speed and convenience of cars. This has underpinned the rapid growth in freight transport and use of private cars. Patterns of mobility and land use are also linked to the balance between rural and urban communities. Access to good transport and communication infrastructure is an essential part of preserving the viability of both rural and urban society. Poor infrastructure and lack of access to services such as information and communication technologies may discourage private sector investment in rural areas, limiting employment opportunities. However, while better transport links can support the rural economy by expanding markets for local produce, they also tend to increase commuting and rural house prices and have environmental impacts.

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Policy issues In recent decades, transport demand has risen broadly in line with GDP. While further growth in activity is expected, this trend is not sustainable. There is clearly a longer term need to decouple transport growth from GDP and to limit the economic and environmental costs of transport growth that does occur. The Commission is preparing a review of the EU’s common transport policy, to be published in a forthcoming White Paper. This will set out the broad thrust of Community policy over the next 10 years or so. Although the time horizon for the sustainable development strategy will go beyond this, it will be important to ensure that the two are consistent. An accurate appraisal of the policy issues is needed: • At present, the relative prices of using different transport modes do not reflect their full costs of use, in terms of additional congestion, damage to infrastructure and to human health and the environment (42). As a result, there is inefficient use of existing infrastructure, and the balance between modes is distorted. For example, aircraft fuel is at present not taxed, unlike other fuels. The need to develop better pricing of different modes has been recognised in a number of Commission documents (43) but progress has been slow.

(42) See for example ‘Revenues from efficient pricing: evidence from the Member States’, study for the International Union of Railways, Community of European Railways and the European Commission’s Energy and Transport DG, 2000, ‘Efficient prices for transport (estimating the social costs of vehicle use)’; CE consultants, 1999. (43) See for example ‘Fair payment for infrastructure use: a phased approach to a common transport infrastructure charging framework in the EU’ (COM(1998) 466), and ‘Towards fair and efficient pricing in transport: policy options for internalising the external costs of transport in the European Union’ (COM(95) 691).

• New developments in intelligent traffic management systems, such as the use of global positioning systems that track the movement of vehicles, and electronic fee collection systems for road pricing, have the potential to improve the use of infrastructure and reduce congestion costs. In addition, successful technology would be a world leader and could be exported widely. Improvements in communication technologies offer a potential alternative to transport. Distance working using modern communications may provide one way of reconciling demands for distance living with reduced mobility. It will be important to consider how best this potential can be exploited. • Improvement in use of infrastructure can reduce congestion, and new infrastructure — when it is proved to be necessary — can fill important gaps in the network and increase capacity. Local planning rules also affect the location of economic activity and the development of new infrastructure and resulting transport flows. Planning decisions in the past have often not properly accounted for the effects of new development on the natural environment, congestion and other impacts, and policy needs to take these issues into account in the future. • Development of housing, business, and new transport infrastructure also has implications for the relationship between town and countryside. Attention is needed to ensure that policy does not actively undermine the balance between the rural and urban economies. This means ensuring that urban areas do not develop urban sprawl that fractures communities and destroys the distinctiveness of the countryside, while ensuring that rural policy provides active support for a living countryside. This cannot be a matter for transport policy alone, 81

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but also requires more coherent rural and urban policies. • The rural economy also continues to depend to an appreciable extent on farming and the Community’s common agricultural policy has been geared to maintaining farm incomes. The recent shifts towards more sustainable rural development — which aimed to improve the competitiveness of agriculture while enhancing its social and environmental functions — are still modest. Agriculture is still associated with high levels of pollution, and has damaged many of the aesthetic and ecological qualities of the landscape it once helped to create. This in itself undermines the attractiveness of the countryside as a place to live. There is therefore potential for agricultural policy to provide more support for a sustainable rural economy. • Community structural funds have made sizeable investments in physical and social capital in the less developed regions of the Community and Ireland’s phenomenal economic growth in recent years shows the possibilities for territorial development if Structural Fund assistance is used within a coherent policy framework. In addition, measures such as the trans-European networks (TENs) have aimed to improve links between peripheral and central regions of the Community. One of the main objectives of the TENs in the future will be the completion of a rail network that will encourage a shift from road to rail. • Enlargement is likely to bring with it new and more acute challenges. The new Member States will in general be poorer and have a much larger agricultural population. Their infrastructure has suffered from many years of under-investment. Closing the gap with the Union will need a 82

major investment effort. Since these investments will shape their future transport and land-use patterns for many years ahead, it will be crucial to integrate economic, environmental and social issues into planning and infrastructure appraisal to ensure that all costs and benefits are taken into account. • Many of these issues are identified in the European spatial development perspective (44). This aims to offer Member States, their regions and cities a non-binding framework for coordination of policies with significant impacts on regional development, without, however, seeking to impose it on them or on other policy areas. This approach reflects the fact that solutions to many of the problems relating to the interactions between mobility, land use and territorial development can only be implemented at regional and local level, while others may benefit from a national or Community approach. Very few, if any, of the unsustainable trends reviewed above are new. They have been known to informed public opinion and in policy circles for some time. This can at times give rise to a sense of déjà vu, even complacency. Such attitudes are, however, mistaken, as familiarity with the phenomena is not the same as understanding the fundamental causes and how to tackle them. Nor does the fact that many of the trends are already well known make them any less preoccupying. To make a decisive step from awareness to action, and to put in place an effective response to the issues raised in this section, two important questions must be answered. (44) ‘European spatial development perspective — Towards balanced and sustainable development of the territory of the European Union’, European Commission, 1999.

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First, are there any common causes to these long-term social and environmental challenges? Second, why have we not done more to deal with them? If, as argued in Section 1, greater social and environmental responsibility is not an obstacle to long-term economic development, why have Member States and the European Union failed to pursue sustainable development more vigorously? The next section develops a general answer to these two questions by identifying the main obstacles to creating a more sustainable society and economy. Following from this diagnosis, we then lay out the main tools we can use to achieve the specific goals of the European sustainable development strategy which the Commission will propose to the Gothenburg meeting of the European Council.

3. Common problems Many of the problems identified in the previous section have common roots. They are characterised by complex interdependencies between sectors. Several are long term in nature, with problems building up gradually. Firms and citizens often face poor incentives to produce and consume in a sustainable way. They may be ill informed about the wider effects of their actions, or about alternatives. And institutional obstacles make it difficult to respond effectively to these failings. This section looks at these issues in more detail, and shows how they have contributed to the problems identified above.

3.1. Wrong incentives Individuals and companies often face incentives which encourage them to behave in ways which, while individually rational, have

negative impacts on others. Market prices for the use of goods and services which do not properly reflect the true cost to society of providing them lead to too much consumption of those goods and services and too little of others. For example, when we drive we generally slow down the progress of other road users. Since this cost is not incorporated in the price we pay to drive we do not take it into account in deciding how and when to travel. As a result, there are enormous inefficiencies in the way we use road space. High taxes on labour income act as a disincentive to participate actively in the labour market, while poorly designed tax and benefit systems can generate poverty traps. Incorrect prices are also a major source of many environmental problems. In general, the market prices for goods and services do not incorporate the costs of pollution. Consequently, producers have little incentive to find and adopt cleaner methods of production, and consumers are not encouraged to seek out cleaner products. Worse, in some cases the most polluting industries benefit from significant subsidies that encourage the production of dirty goods and discourage consumers from switching to cleaner options.

3.2. Sectoral policy inconsistency Both at national and Community level, individual policies generally concern specific sectors of the economy such as coal and steel, or particular areas such as trade or competition. These policies are normally developed by separate administrative departments which have specialised knowledge of their own sectors, but are less concerned with how their policies affect other parts of society and the economy. This narrow, sectoral approach to 83

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policy-making has led over time to some significant problems: • Due to a high level of interdependence between some sectors, the solutions to some problems lie in the hands of policymakers in other sectors. Environmental policy increasingly requires action by other policy areas such as enterprise, energy, transport and agriculture. Transport policy depends on taxation, research and technology, and land-use planning policy. Social policy instruments acting in isolation will not solve problems of social exclusion. In many cases, these spillovers between sectors are not fully taken into account, so policies in different sectors pull in opposite directions. This undermines their effectiveness and wastes resources. • The narrow sectoral approach makes it easier for interest groups representing a particular sector to obstruct reforms which would benefit society as a whole but would have negative consequences for them. This uncoordinated focus on sectoral impacts rather than on the wider interests of society means that reform in practice is attempted in a piecemeal and inconsistent way. Measures that have clear winners and losers are fought over one by one, rather than being seen as part of a wider package that could benefit all. • The Community dimension adds extra potential for inconsistent policy-making. Both responsibility (the extent of ‘Community competence’) and the way in which decisions are taken (unanimity or by weighted majority) vary from one policy domain to another. The sequence in which new policy initiatives are taken, both at EU and national level, can also lead to undesirable outcomes. 84

• Problems of coordination are compounded by a proliferation of new policy initiatives and multi-annual programmes at EU level. There are currently over 60 multi-annual initiatives described as ‘strategies’. The different initiatives are rarely synchronised. The Agenda 2000 time frame runs from 2000 to 2006, the single market strategy from 1999 to 2005, the next framework programme for research from 2002 to 2006 and the new environment action programme from 2001 to 2011. Clearly, there are limits to the extent to which policies in different sectors can be reformed simultaneously. The Agenda 2000 reforms involved changes in particular to agricultural, structural, and external policies. Undertaking a similar exercise for an even wider set of policies would pose severe practical problems. Attempting to review all Community policies at the same time would lead to institutional paralysis. Measures to improve coherence should instead focus on linking together policies where the gains from coordination are expected to be greatest. In addition, if the design of sectoral policy attempts to take wider considerations than the interests of the sector into account, improving policy consistency should not mean that all policies need to adopt identical timetables.

3.3. Short-termism in policy-making A striking example of the possible effects of a short-term perspective is our inability to manage renewable natural resources sustainably. The Community has been unable to agree cuts in fish catches that are essential to preserve stocks for the future because of the short-term costs. This is despite the substantial long-term economic and ecological bene-

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fits in preserving stocks from collapse. Shorttermism has been a particular problem for environmental policy as many environmental problems are not immediately visible, but it is also true in other policy areas. When spending must be reduced to balance the national budget the first item to be cut is usually investment. This is because cuts in everyday services are immediate and painful, whereas the deterioration of public infrastructure takes time and is not immediately noticeable. A root cause of short-termism in the design and implementation of policy is the nature of the political cycle. The gap of at most four to five years between elections naturally limits governments’ time horizons. In addition, one group that does not have a voice in these political choices is the future generation. In the absence of a coherent long-term vision, policy priorities may be influenced too much by short-term events. Policy responses then take the form of ‘quick fixes’, which themselves may make the problem more acute, or cause difficulties in other areas. Problems of short-termism are likely to be worse when the costs of doing something are up-front and highly visible while the benefits are difficult to quantify and spread over several years. Moreover, costs and benefits may be unevenly distributed: costs of change often fall on particular groups of producers or citizens, while benefits are more widely spread. As a result, the ‘winners’ from a policy change usually do not make themselves heard, whereas the ‘losers’ do. Short-termism can therefore be compounded by a highly sectoral approach to policy-making. At Community level, the regular six-monthly change in the Council Presidency induces a short-term perspective. New initiatives are often launched to take advantage of a politi-

cal window that becomes available while a particular Member State holds the Presidency. A Member State’s running of the Presidency tends to be judged by the amount of activity it generates — the number of regulations or directives adopted — rather than the quality of those measures.

3.4. Policy inertia The hardest innovation in policy-making is to stop old practices. Some unsustainable trends result from a failure to change or cancel policies which are past their ‘sell-by date’. These are measures which made sense when they were introduced, but which have not been changed in response to changing circumstances. For example: • When State pensions for all were first introduced, life expectancies were much lower, and working lives typically much longer than today. Early retirement schemes and the tax and benefit system have resulted in biases that favour early withdrawal from the labour market, leading to a fall in the average retirement age. Both need reform today, when skill shortages are emerging, and the shrinking working age population and increasing numbers of pensioners threaten the sustainability of public finances. • Town planning rules which imposed rigid separation between the location of housing and industry made sense when much industrial activity was very polluting. Now that industry is cleaner and services play a more important role in the economy, these zoning laws may no longer be justified. More than this, together with rising levels of private car ownership they worsen traffic congestion. 85

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• Our energy supply infrastructure is currently heavily dependent on the use of fossil fuels. This reflects investments made in the past when the impacts of burning fossil fuels on human health and the global climate were not as well understood. Changing our sources of energy supply is now a slow process as the infrastructure is long lived. • Public policy as well as case-law and political processes can, often for very good reasons, move much behind the pace of technological progress in areas such as genetically modified organisms, genetically modified food, and other innovations. The paradox of having both policy inertia on the one hand, and short-termism on the other, is more apparent than real. Both problems essentially arise from an excessively sectoral approach to policy-making. This enables sectional interests to prevail over the wider concerns of society, by preventing necessary reform to outdated policies needed to orient them towards the longer term.

3.5. Limited understanding We have a poor understanding of the causes and likely effects of several of the problems identified in Section 2 above. For example, the definition, causes and consequences of poverty are complex and controversial. There are competing explanations for why disparities in the distribution of income are widening in some places, and for changes in family structures and birth rates. There are large information gaps in many other areas such as the measurement of changes in biodiversity and their potential long-run effects. We face similar uncertainties about the precise impact of many policy responses. In 86

addition, in many cases inadequate attention has been paid to whether existing policy has actually been effective. Frequently, it is assumed that spending money on a problem is the same as successfully tackling it. In practice, we have often failed to assess whether a policy has achieved its objectives, how much it has cost, and what its positive or negative spillovers on other areas have been. This is complicated by the fact that policy objectives are not always well defined. In consequence, we often have an insufficient basis on which to assess what reforms might be necessary.

3.6. Inadequate communication and dialogue Arguably, many of the existing failures to tackle unsustainable trends reflect a policy process that is too fragmented, technocratic and distant from the real concerns of people. Alienation from the political process can also result from a perception that policy-making is excessively influenced by vested interest groups, to the detriment of the population at large. Whatever the truth of these views, it is undeniable that there is at the very least a strong belief that the average citizen has little scope for direct input into the political process, and that policy-making has become disconnected from their daily concerns. This is reflected in rising abstention rates at elections for all levels of government. These issues will be examined in more depth in the Commission’s forthcoming White Paper on governance. Scientists and policy-makers often communicate poorly with the public and with each other, and misconceptions are common on all sides. As a result public awareness of the long-term consequences of different policy

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options, consumption patterns and lifestyle choices is also limited. In part, this may arise from the increased complexity of the modern world and the corresponding complexity of policy responses. Recent health scares — such as those relating to BSE or phthalates — demonstrate the fragility of public confidence in the integrity of science and scientific advice about risks. This confidence is further undermined by the perception that the interpretation and dissemination of research results is sometimes subordinated to commercial pressures (45).

4. Common solutions: A toolkit for sustainable development in Europe 4.1. Introduction The previous section identified some common problems which have led to the emergence of the unsustainable trends described in Section 2. This section suggests how we can go about solving them. The analysis in Section 3 shows that better policy integration is needed at all levels, so that different policies complement each other instead of pulling in different directions. Policy integration should start at the outset of the policy-making process. Sustainable development should become an underlying principle in all areas of EU activity. However, joined-up thinking in policy(45) The success of the European research area will be judged partly on its ability to develop a common basis for assessing research results and to improve understanding between science and society.

making is not enough on its own. Better coordination and greater dialogue will not improve things if policy does not make full use of the right tools and ideas. Accordingly, this chapter not only sets out some ways to improve policy coherence, but also describes the most important tools that can and should be used as the building blocks of a strategy for sustainable development.

4.2. A common basis for policy design and implementation One of these building blocks is the principle that the costs and effects of all policies should be examined more systematically. This analysis should try to include not just the impacts in the area targeted by the policy, but also its spillovers — good and bad — onto other policy areas. Identifying spillovers and the sharing of expertise between different departments of government are important if we are to create the conditions for ‘win–win’ policies and improve the coherence of policy-making. Inevitably though, in some cases we have to make trade-offs between changes in economic, environmental and social assets. Careful assessment of the costs and effects of different policy options and their distribution is vital to ensure that these trade-offs are made in the interests of society as a whole, and that mechanisms are put in place to enable business and citizens to adapt to change. Good policy design should also consider the different instruments available to meet the policy objective. The aim should be to give policy-makers as full an assessment as possible of the costs and effects, the advantages and disadvantages of the different options, so that we can reach our desired objectives, 87

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whatever they may be, at least cost. This does not mean going for the cheapest or ‘do nothing’ option. It means doing things efficiently and effectively. The more cost-effective policy is, the more resources we have to devote to other priorities. This helps us get the most we can out of the available resources by avoiding waste and inefficiency. Climate change provides a very good example of the importance of cost effectiveness. Some policy measures — such as gradually removing subsidies for the use of fossil fuels — can reduce greenhouse gas emissions while actually raising economic performance. Still, meeting the targets in the Kyoto Protocol is likely to have some economic costs. However, the size of these costs and how they are distributed will depend very much on what policies are used. The Commission services have estimated that a policy of equal percentage reduction targets for different economic sectors would be nearly three times more expensive than a policy that encourages the biggest savings in sectors where emissions can be reduced at relatively low cost (46).

4.3. Long-term targets and intermediate milestones Sustainable development is a framework for policy that focuses on long-term management rather than short-term quick-fix solutions. Identifying concrete, ambitious, achievable long-term objectives is necessary to give substance to policies for sustainable development, and to develop popular understanding and support for these policies. (46) Green Paper on greenhouse gas emissions trading within the European Union (COM(87) 2000), European Commission, 2000.

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These objectives should lead to the establishment of clear — and preferably measurable — targets. Intermediate milestones allow us to judge our progress. When the policy target can be expressed in very precise terms, it may be possible to meet targets agreed at the European level through Member States applying their own, cost-effective solutions. Clear long-term targets also provide other important advantages: • Sustainable development means leaving an adequate legacy to future generations. Long-term targets are required to limit the scope for short-termism and to ensure this obligation is met. • Uncertainty and instability in the policy regime generate their own costs. Clear long-term signals can help companies and individuals plan better. This is particularly important as the capital stock of an economy turns over only relatively slowly. Investment decisions have long-lasting effects and are costly to reverse. • Provided targets can be clearly defined, it can make sense to delegate responsibility for meeting targets to those most closely involved with particular policy areas, or to an independent authority free from shortterm political pressures. The latter is the case of the European Central Bank, which has been given responsibility to provide stable prices. However, not all policy objectives can be defined in such clear terms, and there are limits to the extent to which it is desirable to devolve power to unelected, unaccountable bodies. • Implementing new policy measures can gradually reduce the costs of change considerably by allowing adequate time for businesses and individuals to change their patterns of production and consumption. For example, companies that have to adapt

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to new technologies to remain competitive generally have much less trouble adjusting if these changes can be made as part of the normal investment cycle. Taking a gradual approach avoids the unnecessary creation of unemployment and gives workers time to acquire new skills. A few policy initiatives have shown that it is possible to gather consensus around gradual but steady adjustment to long-term targets, which smooth the transition to sustainable policies. An example is the 10-year perspective for reform of economic and social policy agreed by the European Council at Lisbon.

4.4. Creating markets and getting prices right ‘Getting prices right’ so that they better reflect the true costs to society of different activities would give everybody the right incentive to integrate the effects their behaviour has on others into their everyday decisions about which goods and services to make or buy. It is therefore one of the most important tools available to policy-makers. There are many different ways of changing the prices or other incentives that companies and consumers face so as to underpin sustainable development. Direct methods include the creation of tradable property rights (such as emission permits) that allow markets to set a price for pollution, eco-taxes that discourage over-use of environmental resources, and legal liability regimes (47). (47) Different instruments have different advantages and limitations. For example, legal liability is unlikely to be an effective approach in the case of climate change — who do you sue and for how much when there are many different sources of greenhouse gases? And how do you prove causation between a given emission source and a given effect? In other cases, such as oil tanker spills, it may prove a much more promising option.

Governments can boost markets for sustainable products and services through their public procurement policies (48). Clearer definition of property rights can also play a useful role in improving the management of natural resources where there is a risk of over-consumption. Subsidies can be an effective tool in some cases where behaviour has positive spillover effects. For example, there is some merit in the idea that companies should be paid a temporary subsidy to take on the long-term unemployed, as the social costs of long-term unemployment on individuals, their families and the public sector finances are very significant. Any proposal made in this respect would have to comply with the principles of EU and Member States’ legal systems. The ‘user pays’ principle is an important first step in improving incentives. It means simply that under normal circumstances those that benefit from the use of something should pay for it. This reduces wasteful consumption, and gives those who use a resource the right incentives to behave responsibly. Evidently, the ‘user pays’ principle cannot be applied indiscriminately — there are very legitimate exceptions to its application in modern societies, not least in aspects of social provision through the welfare state. Public subsidy is often necessary and justified. However, the ‘user pays’ principle is an important reminder that the rationale for subsidies should be clearly set out to avoid wasteful use of resources. The ‘polluter pays’ principle is an important extension of the ‘user pays’ principle to envi(48) Public procurement rules also have to be carefully designed to avoid them being used as a cover for protectionism. The Commission will shortly publish a communication on public procurement and the environment.

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ronmental policy-making. The underlying philosophy is that polluters do not have an inherent right to pollute. The ‘polluter pays’ principle has been defined in various ways, but the most important interpretation is that the polluter should pay for the costs his pollution imposes on others — for example through a tax on polluting emissions. This provides an added incentive to look for reductions in pollution. A more limited interpretation would be that polluters should pay only for the costs of any pollution control measures required by law. The ‘polluter pays’ principle is already part of the EC Treaty, but it is not yet widely enough applied at either EU level or in Member States. A much more rigorous and consistent approach is required. Significant improvements in both economic and environmental performance could be achieved without increasing the overall tax burden by gradual reform of existing tax structures and subsidy regimes, so that the prices paid by producers and consumers more accurately reflect the costs and benefits their activities impose on other members of society. Part of the difficulty in applying the ‘polluter pays’ principle is that it can be difficult to define who the polluter really is, as both producers and consumers bear some responsibility for the environmental impacts. For practical purposes, therefore, the responsibility for combating pollution should be assigned to those who are in the best position to reduce pollution at relatively low cost (49). In recent years, a number of initiatives by Member States have aimed to encourage producers to design products that are easier to

(49) See Council recommendation of 3 March 1975, OJ L 194 of 25 July 1975.

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deal with in the waste phase by making them responsible for the environmental impacts of products throughout their life cycle. Some recent Commission proposals have also been based on this idea of extended producer responsibility.

4.5. Sectoral policy coherence In order to try to redirect policy in individual sectors away from a narrow set of objectives there have been several efforts at Community level to ‘integrate’ broader concerns into the conduct of sectoral policies, such as employment promotion, regional development and environmental protection. The current efforts to integrate environmental concerns into other sectoral policies (the Cardiff integration process) have shown that some progress is possible through such initiatives. The Cardiff process has increased understanding of the issues and helped develop new policy approaches. However, there are also limits. Improved dialogue does not in itself solve all problems when there are unavoidable trade-offs between competing interests. Moreover, this type of policy integration is itself a sector by sector approach, so it is unable to guarantee that different integration initiatives take a consistent approach. It is therefore unlikely to produce the best overall balance between the interests of consumers, citizens and producers. Practical improvements to the sectoral integration approach would result from greater transparency — that is, a clearer presentation of the economic, social and environmental costs and benefits of different policy options. Consistent and rigorous evaluation should be conducted jointly and openly to ensure that

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the different objectives are given their appropriate weight in each sector. Improving our understanding of causes, effects and interlinkages between sectors is therefore critical to designing and implementing policies for sustainable development.

Beyond integration: improved coordination in Community policy-making Sustainable development implies a societywide approach to policy design. Sustainability must be placed at the core of the mandate of all policy-makers. This means more than tagging on environmental and social objectives to existing policies. Achieving these objectives should be as relevant to judging the success or failure of a policy as its sectoral targets. Otherwise, integration and sustainability risk becoming buzzwords to which policy-makers pay lip service only. Integration must mean something more than minor adjustments to ‘business as usual’ if sustainable development is to move from rhetoric to reality. This needs political commitment and leadership. As one part of the current internal reforms, the Commission has established a strategic planning and programming function to help improve coordination between departments. In addition, there is a need throughout the Community institutional structure for a practical political mechanism to arbitrate in a consistent and rational way across sectors when competing interests are at stake, and to provide clear long-term policy objectives. Moreover, consideration could be given to creating a ‘council’ for sustainable development with no direct stake in the policy process. Such a body may be better placed to provide objective critical reviews of existing policies. Several Member States have already established independent councils in order to

advise their governments on sustainable development issues.

Regular policy reviews Regularly and systematically evaluating policies to ensure that they are meeting their objectives, bringing benefits to society as a whole and are consistent with the overall objective of sustainable development should become a core element of policy-making. Such reviews should be undertaken in an open manner so that the views of all stakeholders can be taken into account. In addition, more use should be made of ‘sunset clauses’ in legislation that provides for it to be automatically ended or reviewed after a number of years. Not all policy measures need to last forever, but it is a rare — and brave! — regulator who will voluntarily declare that s/he is no longer needed.

4.6. Technology at the service of society In the context of sustainable development, technology can be a double-edged sword. Technological progress has enormously increased our material wealth and improved our quality of life in every area, from communications and transport to new foods and health. They can also offer major opportunities for more efficient use of resources through changes in production techniques and the way services are delivered. Moreover, technology can help us ease potential tradeoffs between competing ends. New technologies can often reduce pollution or risks for health and safety at work at much lower cost than adjusting existing technologies. Without further advances in technology and its wider use, the most challenging environmental problems, such as climate change, can only 91

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be tackled through painful changes in production and consumption patterns. Technology will therefore be at the heart of moves to sustainable development. However, technology also brings its own challenges, particularly when change is rapid. New technologies and working methods can increase competitive pressures and can force difficult adjustments. Emerging technologies create new opportunities but sometimes also new risks and in some cases — such as genetics — new ethical questions. The enormous effect of technology on the material productivity of our societies also raises the prospect that we increase the scale of output and consumption more rapidly than we can reduce pollution per unit produced, thereby increasing overall pressure on the environment over time — the ‘rebound’ effect. This means that technological progress has to be actively harnessed in the interests of sustainable development. The challenge for policy is to influence innovation so that the solutions chosen by markets are ‘winners’ for sustainable development. Market-based approaches that ‘get the prices right’ are important to stimulate the development of new and environmentally safe technologies and their rapid take-up. Public policy can also help to accelerate the diffusion of new technologies by benchmarking, demonstration projects and removing non-market barriers to their use, including regulations that unnecessarily hamper innovation. A clear, long-lasting commitment from governments to pursue sustainable development as a core policy objective will strengthen the signals coming from prices. This will help to give companies assurance about the stability of the policy framework and encourage a proactive approach by businesses during a time of rapid structural change. Credible 92

long-term policy commitments will give companies time to develop new techniques and adapt smoothly to the transition to sustainability. As well as aiming to provide the right framework conditions, public authorities can also fund basic and essential applied research where it is too costly or too risky for an individual company.

4.7. Improving knowledge and understanding — sound science, risk and transparency Science and scientific research does not take place in a vacuum. The results of research can have important effects on the direction of public policy. This inevitably raises doubts about the objectivity and completeness of the research methods and results when commercial interests are at stake. To remove or at least minimise such suspicions, research results should be reported in an open way. New research should be carefully peer reviewed to ensure its credibility. Confidence in the use of scientific information would also be enhanced by independent synthesis of the evidence so that it can be communicated to and understood by a wider public. Given the speed and complexity of technological innovation, independent scientific research is essential to help us evaluate the opportunities and risks of new production techniques and new products. Risk is sometimes a necessary part of social progress — risk takers and innovators are essential for a dynamic economy. However, many risks are undesirable and have to be actively managed. For example, in the development of new medicines, a balance has to be struck between the potential benefits that the treatment offers, and the risk that it may turn out

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to have damaging side effects. Similarly, the risks posed by new synthetic chemicals have to be weighed against their benefits in use. Therefore, in the context of sustainable development, dealing with risk means carefully evaluating the economic, environmental and social effects of innovations and taking a balanced view of the likely positive and negative impacts. Inevitably, in some cases we do not yet have enough information about the existence or scale of a risk to properly assess its real importance. However, lack of proof that a risk exists does not provide an adequate excuse for ignoring it. This simple truth is at the heart of what is commonly known as the ‘precautionary principle’. But the precautionary principle in itself provides little practical guidance about how to manage risk and uncertainty (50). Risk-management decisions are inevitably a trade-off between the level of protection desired, the costs of reducing risk, and the weight of evidence that the risk is real. This is ultimately a matter for political judgment and responsibility. During the course of the last few decades many commonplace risks have been eliminated or reduced, thanks to improvements in systems of social protection, environmental and health improvements and higher standards of living. However, recent years have seen the rapid emergence of new problems, many unforeseen or unforeseeable. This calls for new institutional responses. We need to improve our capacity to respond speedily to emerging risks, to speed-up scientific assessment of risks (such as the risks posed by persistent pollutants or biotoxins), and to improve our capacity for dealing with crises. (50) The Commission communication on the precautionary principle (COM(1) 2000) provides a more complete discussion of the role and scope of the precautionary principle in EU policy-making.

Most importantly, decisions on how to tackle risks that we face as consumers and citizens must be made transparently, in an accountable manner, and with the public interest at heart.

4.8. Better information, education and participation Improved information for producers and consumers is important to enhance the effectiveness of policies that seek to encourage changes in behaviour. Consumers can respond better to price signals and other incentives if they have relevant information, such as the cost savings they can expect from using more energy-efficient domestic appliances, or the health improvements they can expect from better diet. Information gaps can undermine the effectiveness of policy. Moreover, if we are to exercise our personal freedoms wisely and take an active part in civil society, we need information about the wider effects of our choice of lifestyle on matters such as our health and on traffic congestion. The process by which policy is made should be transparent. An open dialogue about the costs and benefits of different options will help test the arguments that underlie different policy proposals. Establishing a dialogue between stakeholders can be time consuming, but is essential to building mutual trust and understanding and may increase the chances of finding mutually acceptable solutions. The current European climate change programme is a good example of a more open policy process. Sustainable development can thus become a way to revitalise the democratic process by involving citizens in decisions that affect their daily life and generating a real debate on society’s priorities. 93

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Access to high-quality education and training for all ages will enable citizens to take an active part in democratic society. Our behaviour as individual citizens is not determined exclusively by strictly financial considerations. It also reflects a sense of belonging to society, of sharing a common set of social values. Providing better information to citizens about the goal of sustainability and its importance is a way of strengthening this social capital and encouraging sustainable behaviour by all.

4.9. Measuring progress: indicators Indicators provide the basis for assessing progress towards the long-term objective of sustainable development. Long-term targets only have meaning as policy goals if progress towards them can be assessed objectively. This requires targets expressed in precise terms. Careful measurement will also improve our ability to identify interactions between different policies and deal with possible trade-offs. There are some cases when improvements in one area can only be achieved at the expense of deterioration in another. Such trade-offs are already a part of policy-making, but the advantage of measurement is that they are made explicit and transparent. This does not mean that everything must be quantified. Quantified and measurable targets are important, but must not become the exclusive focus of policy. Indeed, some elements of sustainable development are intrinsically hard to quantify. Not everything can be turned into numerical data. This is particularly true of some environmental and social assets. We cannot easily measure the value of biodiversity or the quality and quantity of 94

social relationships. To avoid neglecting them we must devise better qualitative indicators. Identifying an appropriate set of measures and indicators, both quantitative and qualitative, will not be easy given the scope of the issues addressed in this paper. Inevitably, not all the desired data will be available. It is a persistent temptation to measure what is easiest to measure rather than what is important. This has to be avoided if we are to develop robust indicators that provide accurate signals. It is more important to be roughly right (with imperfect indicators of what matters) than precisely wrong (with perfect indicators on developments of little importance). There are a number of current initiatives to measure sustainable development. These include the indicator set drawn up by the United Nations, which will be applied at the European level in a forthcoming publication by Eurostat (51), and a number of indicators for policy integration in sectors such as energy, transport and agriculture. Some local authorities are developing indicators which reflect local priorities. The World Business Council for Sustainable Development is promoting measures of corporate performance against the yardstick of sustainability. These initiatives all have their merits, but to measure progress on the themes identified in this paper will require a more tailored set of indicators. For each theme, a small set of indicators will be needed. These must take account, where necessary, of the differences in the nature of what is being measured. The set of indicators must be wide enough to capture the complexity of each area. At the same time, the indicators must not be so complex as to be incomprehensible to policy-makers and the public. (51) ‘Measuring progress towards a more sustainable Europe’. To be published by Eurostat in June 2001.

WORKING DOCUMENT FROM THE COMMISSION SERVICES

5. Conclusions This consultation paper is the first stage in the preparation of an EU strategy for sustainable development. In it, the Commission services have set out their views on the challenges and opportunities which would be presented by making sustainable development the overarching priority of Community policy. The paper focuses on problems of sustainable development within Europe. This approach is underpinned by a belief that to provide leadership in a global context, the EU has to meet its international commitments and reform its internal policies so as to make progress towards sustainable development. Of course, the EU also has to play its full role in international organisations, such as the UN, the IMF and World Bank and the WTO, as these bodies have an important contribution to make towards sustainable development. The international dimension of sustainable development will be fully addressed in preparations for the Rio + 10 Summit in South Africa next year.

To move the sustainable development debate from the realm of abstract discussion of definitions and concepts into the area of everyday policy-making, the Commission services have identified six key themes where current trends threaten the sustainable development of the European Union. These themes have been chosen because of the severity and the potential irreversibility of the issues identified, because they are common to several or all Member States, and because finding and implementing solutions will be eased by cooperation. Analysis of these topics has shown that many of the problems have their origins in a small number of shared failures. These include distorted market prices, insufficient knowledge, information and communication, and an inconsistent sectoral approach to policymaking which takes too little account of linkages and spillovers between sectors. In the light of this analysis, the Commission services have proposed (in Section 4 of this consultation paper) a ‘policy toolkit’ which the Community and Member States could use to address the unsustainable trends described in Section 2.

95

Joint public hearing organised by the European Commission and the Economic and Social Committee Brussels, 26 and 27 April 2001

Shaping the strategy for a sustainable European Union — Views from civil society and public authorities

Proceedings in brief (*)

(*) Extracts of main speeches, key points raised from the floor and rapporteurs’ summaries.

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The hearing provided an opportunity for stakeholders (businesses, trade unions, NGOs, academia, etc.) and public authorities to express their views on the Commission consultation paper on the EU strategy on sustainable development published on 27 March 2001 and to contribute to shaping the Commission’s final proposal and the Gothenburg European Council conclusions on the strategy.

Opening session Mr Göke Frerichs, President of the Economic and Social Committee We in the Economic and Social Committee — an interdisciplinary, consultative body made up of representatives of different, and not always concurring interests — routinely seek consensus and coherence in a bid to find sustainable solutions that promote European integration. The Economic and Social Committee sees itself as the home of EU organised civil society — and that in turn means representing civil society interests. We endeavour to meet this ambitious objective not least by raising awareness of the sustainable development issue among the many organisations, associations and trade unions represented in or by the Committee and harnessing their support. Legislation and politics are certainly not the only points at issue. Sustainable development is also a matter of lifestyle and culture. In social terms, for instance, sustainable development undoubtedly concerns people’s working lives, but also involves the family, the neighbourhood, local authorities and government. What we are dealing with here is, in fact, one of the new values of which our society has been growing ever more aware over the past few decades. It is a question of responsibility — our responsibility for future generations

and, in the final analysis, our responsibility for creation. Sustainable development is thus also a key dimension of solidarity, which is one of the core values of European integration.

Ms Anna Diamantopoulou, Commissioner with responsibility for employment and social affairs Sustainable development required mutually supportive economic, social and environmental policies. Win–win situations must be created and, when trade-offs were necessary, the situation and what is at stake must be assessed transparently, with the help of indicators and data. The European sustainable development strategy would not breed additional processes or procedures in Europe but orient existing ones towards building more integrated approaches, with the contribution of all stakeholders. In this last respect, the Commissioner stressed the role the Economic and Social Committee had to play. The European strategy must be compatible with, and complementary to, the global development of sustainable development strategies and therefore support global agreements on the environment, trade, development, labour standards. It must focus on issues with the most scope or potential for effective action within Europe. To put that into practice, three selection criteria had 99

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been used, as follows: — the severity of the problem and cost of doing nothing; the lasting character of damage including transmission from one generation to the next and the time needed to put matters right; and third the extent of the problem at European or even world level. Applying these criteria six priority topics, all inter-related to some degree, were selected: — climate change and clean energy; — public health; — management of natural resources; — poverty and social exclusion; — ageing and demography; — mobility, land use and territorial development. The strategy should dovetail and put in longterm perspective the commitments made by the European Councils in Lisbon, Nice and Stockholm, notably the full employment target and that of higher quality social and employment policies, so that all could benefit from enhanced economic efficiency. To achieve and maintain this, science and technology has to find ways to reduce pressure on natural resources, as instanced by the sixth environmental action programme. Ms Diamantopoulou pointed out the special sensitivity of women to sustainability issues, made clear in a 1999 Eurobarometer survey. Closing, the Commissioner stressed the relevance of sustainable development for the countries planning to join the EU for economic but still more for democratic reasons. Failure to make long-run decisions and set long-run goals would let down not only our100

selves but all those who look to Europe to set an example, including those who wish to join us soon.

Mr Jos Chabert, President of the Committee of the Regions The open method of coordination (e.g. the Cardiff or Lisbon follow-up) needed to be matched by adequate procedures for consultation. A strategy for reaching specific objectives and methods was not the same as ‘hard’ legislation and would therefore not follow normal procedure where for example the Committee of Regions and the Economic and Social Committee are consulted under the Treaty. New hearing procedures had therefore to be invented and conferences like this were part of that process. But sufficient time for response also needed respect and recognition. That would ensure that the stakeholders felt ‘ownership’ of proposed methods and targets. Almost all the themes set out in the Commission’s paper were the daily responsibility of local and regional authorities all over Europe. It was they who would be faced with putting most of the future EU sustainable development strategy into effect. So the Committee of Regions was not happy to see the role of local and regional authorities ignored in the Commission paper. Just look at information, training and awareness-raising, help and advice for individuals and families, for all of which local and regional authorities play an irreplaceable role. These activities form a major part of the toolkit presented by the Commission and local and regional authorities are ready to perform them in partnership with others.

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Session 1 sketched the historical background of the EU sustainable development strategy (from ‘Helsinki’ to ‘Lisbon’ and ‘Gothenburg’) and examined a number of general horizontal aspects. Chairman: Mr Ulf Svidén, Environment Counsellor, Swedish Permanent Representation.

Mr Antti Peltomäki, Finnish UnderSecretary of State for EU Affairs Mr Peltomäki set out the role of the Finnish Presidency in furthering of the strategy for sustainable development. Although Helsinki did not spend much time on environment and sustainable development, Mr Peltomäki expressed satisfaction with the results which were as follows. Firstly, the Council was asked to finalise the strategies for integrating the environmental dimension into all policy sectors and report to the European Council in June 2001. Second, Commission and Council were urged to develop adequate instruments for monitoring, adjusting and deepening sectoral strategies. Third, the Community and Member States were urged to continue preparations to establish the prerequisites for ratifying the Kyoto Protocol before 2002. Fourth, Helsinki asked the Commission to prepare by the end of 2000 a proposal for the sixth environmental action programme. Last but not least, the Commission was invited to prepare a proposal for a long-term strategy dovetailing policies for economically, socially and ecologically sustainable development to be presented to the Gothenburg European Council in June 2001. The Feira European Council confirmed the political pressure by asking the European Council to adopt the strategy in Gothenburg.

He added some general observations. The sustainable development strategy should be truly operational and for that integrated into Lisbon’s strategic objectives — at the latest in Barcelona next spring. The strategy had to constitute EU’s contribution to the Rio + 10 Summit. It should also take account of EU enlargement. It should lay down general qualitative objectives for sustainable development in the long term. Environmental objectives should be based on the sixth environmental action programme. The relation between the sustainable development strategy and sectoral strategies should be clear. The strategy should provide the overall guidelines, while more detailed sector-specific objectives should be left to the sectors concerned. Pursuant to the conclusions of the Stockholm European Council, trends in sustainable development were to be examined at the spring meetings. The Commission’s role seemed to be in place, namely monitoring, the development of indicators for the sustainable development and presentation of an annual synthesis report within the Lisbon process. The role of the General Affairs Council in preparing the spring meetings of the European Council should be re-assessed. The European Council should not be a mere coordinator — it has to be responsible for political guidelines. Prof. Augusto Mateus, former Portuguese Minister for Economic Affairs The transition to sustainable development meant more than integrating environmental concerns into other strategies; it was about re-redesigning current policies. We will, he said, see a new paradigm, where technological modernisation will no longer focus on equipment, but on knowledge. 101

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Sustainability was not about preserving an economic model with known negative longterm effects on nature, people and markets, acting through partial adjustments imposed by a short-term response to scarcity, crisis and need. Sustainability was about changing the economic model to control and manage long-term effects on nature, climate and people through structural reforms to markets, States and institutions, using intelligence proactively to prevent scarcity or crisis, to use science and knowledge efficiently to meet even more demanding human and social needs from a strategic approach. Long-term vision was crucial, a platform to give life to new ideas and innovation, for ecoefficiency. This was a challenge for the market to develop new business, and a political challenge to create a new policy platform. The most unsustainable trends were due to human concentration in urban areas, regional disparities in development, and transportation. The real issue was how to change current behaviour in a proactive way, intelligently. Sustainability could be reached if we create a new economic model, new sets of policies, and new sets of institutions. The new policies should be horizontal instead of sectoral, and we need to create strategic market regulations which leave opportunities for innovation to business. The Lisbon strategy was a bit like Lisbon — sunny with low visibility. It lacked a specific link to sustainable development. The challenge was to take the next steps towards sustainable development, for which one had to be humble to face reality in an honest way, and bold to create the new policy. Comments from the floor H. Mullet, Friends of the Earth Europe

• There was need for a strong vision of EU sustainable development. Important build102

ing blocks were innovation and eco-efficiency, which if used rightly also create new jobs. • Clear goals and targets would help to make the vision more concrete. • Existing programmes like the common agricultural policy and the Structural Funds needed to be revised. G. Deuchars, Eurolink Age

• Sustainable development strategy based firmly on fundamental social rights was very welcome. Social policy was not to be relegated as a part only built into economic policy. • Win-win solutions might very often be found, but when there was a cost, this must not fall upon the weakest; this would lead to social exclusion. The strategy must respect social fairness. • The crucial gender issue was not in the consultative document, but should belong to the strategy. B. Gabellieri, CEEP

• The consultative document was very much based upon an analysis of the present situation, but we had to foresee all possible situations and solutions. • It was important to include those responsible for local policies and to develop instruments for State actors. D. Simionescu, Permanent Representation of Romania

• It was important for accession countries to be part of the process. The consultative

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document failed to provide active participation from accession countries. Special paths had to be set out for the accession countries to follow. A. Grof, Eurochambre

• Accession countries must be included. • What Commissioner Diamantopoulou and Professor Mateus had put forward was supported: a goal-oriented policy, horizontal policies and a new fiscal system based on free market mechanisms. • If there was a consumer information campaign, business community support would be offered for it. Rapporteur: Mr Henning Arp, Cabinet Commissioner Wallström He summarised what had been said in the session and instanced the following highlights: • The local level offered opportunities and could mobilise different actors, for instance to raise awareness among consumers and develop voluntary agreements with different actors. • At the same time, the international perspective was stressed. Enlargement created a special challenge and had to be addressed in the strategy. • The strategy should also include social rights and the gender dimension. • The sustainable development strategy was an opportunity to reform common policy in the European Union, to show strong political leadership, to develop vision, clear objectives and concrete proposals.

Session 2 focused on three priority themes identified in the Commission consultation paper: ‘Public health, management of natural resources and ageing’. Chairman: Mr Allan Larsson, Chairman of the Board of Swedish Public Television (SVT) and former Director-General of the Employment and Social Affairs DG of the European Commission.

Ms Teresa Presas, Corporate Director of Environmental Affairs, Tetra Pak Group Innovation was a key tool not sufficiently recognised in the Commission’s approach: innovation in new materials, in sorting technologies, in recycling technologies, in new incentives. But improving scientific knowledge for policy-making was not enough. Improving understanding on how business works was also important. Steps forward would come by working closely with the private sector. Many industries were prepared to develop voluntary agreements within stakeholder dialogue. However, assigning to industry sole responsibility for managing waste from the products they put on the market was not efficient. The consumer played a key role. Sending the wrong signals to the consumer, that he or she has no responsibility, would not lead to change in behaviour. Education, transparent information and effective communication would progressively make consumers more like responsible citizens, both in purchasing patterns and in domestic and community behaviour. The toolkit in the Commission’s document did not emphasise this enough. Waste management was handled by local authorities or their subcontractors, the waste 103

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managers. They both operate on the basis of different conditions that vary substantially from one community to another. Municipal authorities should also be involved in the promotion of tools to improve waste management. In setting objectives for recycling, it was necessary to realise that recycling also often increases transport; it was important to optimise these issues. It was important also to take into account recycling costs. Some materials and products were very expensive to recycle and efforts should be placed elsewhere. Energy recovery should sometimes be considered as a recycling option. The Commission’s toolkit was a good basis for action. Great efforts must be made to reach key audiences. The sustainable development concept must be capable of moving decision-makers and leaders, be it at political or business level. The sense and implications of a sustainable development strategy must be accessible to everyone. Communication was the key! Dr Wilfried Kreisel, Executive Director WHO and Head of the WHO EU Office The needs and different dimensions of sustainability should be defined. A particular problem was the failure to resolve the relationship between, and relative status of, the economic, social and environmental dimensions. Thus, while the need to make tradeoffs between the three dimensions of sustainable development was recognised, an operational framework was lacking. The three dimensions play very different roles in the concept of sustainable development — in essence, economic performance was seen as a means towards the end of improving social 104

conditions within the constraints imposed by environmental considerations. Many public health problems were created through specific sectoral policies, e.g. the common agricultural policy (CAP) and transport. These policies had many positive aspects but they also impinged profoundly on the big problems of food-borne hazards, dietary problems, tobacco and alcohol issues, on pollution and loss of biodiversity, are major instances. The paper did not tackle the obvious possibilities for food industry and agriculture to develop production in line with demands of health and sustainable development.

Mr Daniele Franco, Research Department Bank of Italy The consultative paper outlined a comprehensive strategy and several possible solutions. Public policies related to the ageing issue were affected by most of the problems indicated in the consultative paper. Several of the solutions mentioned would greatly improve the capacity to deal with ageing. But certain issues should be stressed more forcefully. The budgetary implications of ageing was the driving force for policy changes. Recent projections pointed for most EU countries to substantial increases in pension outlays. Additional budgetary pressures — more difficult to quantify — would come from healthcare and long-term care. These trends called for large increases in tax levels, which would affect negatively the performance of EU economies and conflict with the trend towards lower tax levels stemming from greater economic integration. For pensions, the most viable solution was to increase average retirement age. There was need for substantial increases in the employment rates of workers in the 55–65 age bracket, pension reforms should provide incentives to stay longer in labour markets.

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The consultative paper should also briefly face the budgetary issues raised by ageing for healthcare and long-term care. The control of health expenditure would need a wide range of policy action. The design of incentives for consumers, producers and insurers was especially important for the efficient provision of health services and long-term care. Medical, social and budgetary issues should be considered jointly. Social protection policies as well as health policies were typically matters for national governments and policy changes to deal with ageing were mostly the responsibility of Member States. The EU could support adjustment by providing a forum in which views about solutions and experiments were exchanged. Moreover, cooperation at EU level could exert peer pressure for structural reform. Mr Michel Rocard, Member of the European Parliament Two elements are, I feel, essential: 1. The importance of the firm commitment from the Heads of State or Government who, at the Helsinki Summit, highlighted the challenges faced by the EU in forging a sustainable development agenda quickly. The need to take environmental considerations into account in the economy in an allembracing bid to promote growth and jobs has thus been officially recognised. 2. The excellence of the adopted approach, which makes for a wide-ranging debate on the key issues by encouraging (i) input from the EU institutions, (ii) the involvement of the Member States and (iii) consideration of the views of civil society. This is, I feel, the only legitimate approach to an issue which affects the future of the world we live in.

People have become aware of the need for twofold solidarity — that is, solidarity between generations and towards the most disadvantaged, including, I would stress, the developing countries, which are often left out of our discussions. This awareness has shown that social issues are one area on which to focus. If they want to bequeath a viable world to future generations, rich countries must set in motion a genuine cultural revolution. They must rethink the factors underpinning their wealth. Poor countries still lack the prerequisites for a decent standard of living — the capacity to feed, house and clothe themselves. To attain acceptable levels, they must leave behind the solutions extolled to them for centuries and seek out different strategies. And I am not talking here about the essential need for peace, which is the precondition, the sine qua non, for the survival of the world. I do not think that nations have ever asked themselves — in these specific terms — what conditions have to be met if their future is to be secured. Sustainable development means thinking ahead, adapting; above all, it means a desire to live. Comments from the floor J. Hontelez, European Environment Bureau

• The concept of producer responsibility as presented by Ms Presas was too simplistic. • There was a need to develop a concept for an enlarged EU. C. Puppinck, CEEP

• Joint efforts by Member States should be made to prepare for the accession of the candidate countries. 105

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• There was a need to incorporate health issues.

• Our forms of education and training needed changing.

G. Deuchars, AGE — European Older People’s Platform

• There was scope for companies to promote healthy lifestyle of employees.

• There was a need to develop a more positive way to view ageing (alarming and negative impression from the Commission document). • There was also an urgent need to increase the level of employment among older people. • Firm action against discrimination and unemployment was important. S. Näslund, Administrative Director of the Swedish Environmental Advisory Council

• The use of natural resources should be given stronger emphasis: energy, material, soil, terrestrial and maritime systems. • Decoupling the use of natural resources from economic development was needed urgently. • A new concept of development should be developed. B. Gabellieri, European Association of Joint Institutions (AEIP)

• There was a need to establish a link between companies and requisite investments. I. Graenitz, Global Legislators Organisation for a Balanced Environment

• The chapter of health should be integrated into the other chapters. 106

Rapporteur: Mr Ernst Erik Ehnmark, Director for International Affairs at the Swedish Trade Union SACO and Member of the Economic and Social Committee Sustainable development was very much a matter of making rational choices based on knowledge, on hard facts, on not being in a situation where decisions are taken by necessity, but where we have intellectual capacity and time for analysis and for making rational choices. To do this, a lot more knowledge and much more research and development was needed. A large number of technology leaps and many more investments in human capital were essential. A society marked by sustainable development was a knowledgeintensive society. To develop a genuinely knowledge-intensive society took time. Industry’s participation was highlighted in the discussion. Earlier industry was very often the villain in this context. But today, industry’s active participation, active commitment, to be part of a movement for sustainable development, was often emphasised. It showed that the number of active stakeholders in the work for sustainable development was in fact growing and industry could play a very important part. To create a sustainable society, public finances must be in such good order that sudden economic crises could be tackled. The need for sustainable public finances was especially pressing in the perspective of population ageing. Age discrimination at the work place was one issue in this context to be addressed.

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Attention was drawn in the discussion to the linkages between various policies and policy sectors, e.g. between transport and health. These linkages had absolutely to be taken into account when a sustainable development policy was outlined. The need to mobilise public opinion was obvious. Also, solidarity — between generations, people, regions — was an essential part of a policy. One question was conspicuously missing in our discussion about the ageing population: why do we have so few children? It was not possible to discuss this problem without examining this question. Therefore, an active family policy should be part of a sustainable development policy, a family policy with real economic and social opportunities for parents to choose children and career.

Session 3 focused on three priority themes identified in the Commission consultation paper: ‘Climate change and clean energy, poverty and social exclusion as well as mobility, land use and territorial development’. Chairman: Mr Jorgen Henningsen, Principal Adviser, Energy and Transport DG, European Commission.

The Rt. Hon. John Gummer MP (former UK Minister for the Environment) The heart of the problem was that we do see this huge issue of sustainable development, we spend a great deal of time defining it and then remark on how big it is, how huge the problems are, how enormous the steps which should be taken and how difficult it is to start. We need to recognise that big targets are met by a host of small steps and we do no good by trying to find the big answer.

We need a large enough Union to be able to make the real decisions which make a difference. We also rely upon the willingness of Member States to take action and on individuals and communities to recognise their role as well, but all within the context of the Union. The first category of action was to start being prepared to set clear targets for change. It was a scandal that at a time when Coca-Cola had committed itself not to purchase any HFC-driven refrigeration after 2005, the EU had not done the same. In many areas, business was driving the sustainability cause. The refrigeration industry would be different after 2005 because Coca-Cola had made that decision; the world’s biggest user of refrigeration could change an industry. If we set the standards well enough in advance we could make industry the driver of what it had to do. The second area of action was how to change individual decision-making. ‘You cannot make a man good by an act of Parliament’, but it was perfectly easy to make good easier than bad. His biggest complaint about the EU was that it was too often prey to prescription. We believed that bureaucrats and politicians knew the answer but often they did not. Say what people have to achieve; they will know how to do it. Finally, he chose to refer to procurement policy. Governments and the EU drove many of the decisions made by industry because they procure buildings, materials, services, etc. And yet they did not do so in a green way and that could so easily be done. Belfast City Council was an exemplary exception. It managed to decrease costs by over 20 % at the same time as it actively promoted the environment and sustainable development. 107

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Mr Henry Malosse, Director European Affairs, Assembly of French Chambers of Commerce and Member of the Economic and Social Committee

staunch advocate of a broad approach to development, which should be harmonious and soundly based.

In many countries, including France, the idea of sustainable development is difficult to understand. Taking the dictionary — and my own conviction — as a lead, I would define it as a ‘soundly-based Europe’. A soundlybased Europe — how is that to be achieved? First of all, the various stakeholders involved — both inside and outside government — and the public themselves should be called upon to demonstrate a greater sense of responsibility. Education and training are key aspects.

Mr Anders Wijkman, Member of the European Parliament

People can only exercise this sense of responsibility, however, in a Europe that fosters cooperation and the active involvement of civil society. It is essential to underscore the role of economic and social stakeholders. Their primary task is as consultants, intermediaries and experts. Beyond that, however, civil society organisations have also taken on a specifically regulatory role, involving coregulation, self-regulation, codes of conduct, mediation, arbitration, etc. The example of the European Automobile Manufacturers’ Association which managed to head off regulation by a contractual commitment (to cut CO2 emissions) should be publicised and promoted more widely. As a body representing organised civil society — and the European economic and social players of which it is composed — we would advocate a more inclusive Union strategy, so that we do not compartmentalise or superimpose priorities but endeavour to see them as one single policy, expressed in a variety of different ways and drawing on a variety of different tools. In this way, the Economic and Social Committee would see itself as the 108

He deplored that time was so limited for discussion and dialogue on the strategy before the Gothenburg Summit. The central goal of the strategy had to be to set the framework for a new model of development, where social and environmental objectives were balanced with those of economic growth. The task was not only one of bringing harmony between different objectives. The natural environment had certain values that cannot be substituted. The way conventional economics treated these values was totally inadequate. Hence, the need for a new economic paradigm, where measuring wealth, the quality of growth, the short-term versus the longterm, etc., were given priority. Against this background and the challenge involved, it was even more regrettable that only a few weeks were set aside for dialogue with major stakeholders on the discussion paper and that there was even less time for consultations once the strategy was presented. In the consultative paper, a more in-depth discussion would have been desirable as regards the limitations of the neo-classical economic model in dealing with the challenges of sustainability. There was a general perception in society that economic growth is positive for the environment (the so-called inverted Kusnetz curve). However, for some environmental problems, like the carbon cycle, the nitrogen cycle, biodiversity, fresh water scarcity and waste generation, the opposite seemed to be true. The strategy had to address this.

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A comprehensive strategy had to integrate the various sector strategies and deal with cross-cutting issues. It could not be developed in a vacuum since EU policies in many areas had consequences far beyond Europe’s boundaries. Prominent examples were export subsidies in agriculture, fisheries policy and activities of the national export credit agencies. The EU had to ensure coherence between its internal policies and their impact on the rest of the world, notably on developing countries. Comments from the floor Mr J. Wriglesworth — BP / UNICE

• The long-term strategy set out by J. Gummer was very good. • It was true that big targets are met by small steps. • Better cooperation between authorities and industry on the use of market knowledge would help sustainable development. • New technologies should be mobilised to solve problems (the EU could learn from the United States). J. Hontelez — Secretary-General, European Environmental Bureau

• Prices had to rise to bring consumption down. • It was not true that energy taxation was always ineffective (e.g. Denmark and the Netherlands). J. Henningsen, Principal Adviser, Energy and Transport DG, European Commission

• The Commission’s view was that energy taxes would have a strong impact on man-

ufacturing and power generation but a very small one on transport. S. Näslund, Executive Director of the Swedish Environmental Advisory Council

• Perverse subsidies should be eliminated and right incentives for business introduced. • There was much scope for dialogue with industry. • In Sweden, energy efficiency had grown but energy use had increased even more (the rebound effect). H. M. Lent-Philipps — ACEA

• Indicators or targets for energy intensity were important. • Whatever form it took, transport would need energy but maybe not fossil fuel based. J. Henningsen, Principal Adviser, Energy and Transport DG, European Commission

• Of course renewable energy was essential in the long term, but in the short and medium term, focus should be on energy efficiency. • Concerning taxes, a key factor was demand elasticity and therefore better understanding of each sector was needed. • One had to be aware of the possible rebound effect after making energy more efficient. The solution to that was better education. 109

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D. de Juncker — COPA (Committee of Agricultural Organisations in the European Union)

• The creation of enterprises had to be easier, the entrepreneurial spirit favoured and this started out from education itself.

• COPA held that primary recyclable materials (particularly bio-mass from agriculture) can play an important role in the fight against climate change.

B. de Galembert — Organisation Européenne de la Propriété rurale

• Targeted policy to promote the use of these materials and provide a more coherent link between agricultural and environmental policies was needed. W. Schmidt Küster, Trade Association of Nuclear Industries — Foratom

• Different policies had to be made more compatible. Energy and environmental policies were not really consistent, as for example in Sweden, where taxes are levied on nuclear carbon-free electricity. P. Lorenz, Friends of the Earth Europe

• It was unlikely that nuclear energy would solve climate change as for the last 50 years nothing had been solved and the problem of waste was still there. • One had to internalise external costs and avoid energy that with waste lasting for 1 000 years was not sustainable at all. B. Ollier, Head of Department Business-friendly environment — Eurochambers

• The creation of new market opportunities would drive a virtuous circle developing cleaner technologies; if the customer rewarded such technologies, the producer would respond; so the price and incentive had to be right but so did the climate for innovation. 110

• The rural world had not waited for the EU to apply sustainable solutions; forests were an example. • Such efforts should be further acknowledged and encouraged. D. Cloquet — Director Industrial Affairs Department — UNICE

• Good management was essential at all levels, one had to look at the big picture. • Fiscal instruments were not right for all cases. • Emissions trading was another possibility. • Company competitiveness and capacity to invest had to be preserved. G. Sklavounos, ESC member

• With little scope for new policies, existing ones should be saturated with sustainable development. • How could synergies be maximised? To what extent was regulation needed worldwide? What was the EU/Member State division of tasks? The new economic model needed definition but how? • A new view of man’s relation to nature and other generations was needed. R. Becker — European Bishops Conference

• This document focused on sustainable development in Europe but how could pol-

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icy help to achieve sustainable development world wide? • Post-Rio, one should not see sustainable development devoid of social coherence; sustainable development meant north– south cooperation removing differences between the two. • The EU should avoid harm to developing countries by imposing trade barriers and raise development aid to 0.7 % of GDP. If we really wanted sustainability, these issues were unavoidable. J. Henningsen

• The priority was to put our own house in order first. • There was currently a lack of consistency within the EU and between certain of its policies.

P. Vanderlayen — Policy Officer at the European Anti-Poverty Network

• At the Lisbon Summit, it was said that eradication of poverty was a priority. This needed a very broad approach. • Fundamental rights were also an important issue. J. Henningsen

• The second version of this document would be very different and focus on policy actions for sustainable development. • The important phase is not Gothenburg but what will happen after Gothenburg. O. Gerhard — Mouvement International ATD Quart Monde

• Sustainable development and human rights were indivisible.

C. Roumet — European Social Platform

G. Gourgeochon — Union of the Finance-Personnel in Europe (UFE)

• The Commission paper suggests rightly that one can find win–win policies but since that was not always possible one must try to avoid the cost of sustainable development falling on those least able.

• Policies should create incentives to redistribute profits from sustainable development to end social exclusion, i.e. a more ‘voluntarist’ approach.

F. Usscher — Forum for the Future

NN, European Federation working with Homeless People

• It was hardly mentioned, but it played a vital role. A common IT literacy across the EU was needed and the EU had to take responsibility to promote it. There were several ways, for example networks of online services and free software. The Europa web site could be a platform for that. The EU had to use the latest information-sharing technologies.

• To raise standards of housing quality was positive for the environment and employment. R. Lax — European Union Road Federation

• The consultative document focused on inter-urban projects but urban transport had the greater impact on the environment. 111

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Rapporteur: Mr Hanns R. Glatz, Delegate of the Board of Management, DaimlerChrysler There was clearly full agreement on the desirability of sustainable development. But as a speaker pointed out, one big difficulty with this concept is that its sense is very difficult to render in all languages. Linked to this may be the question of the place for ethical values, which were briefly mentioned. Clearly, a lack of shared ethical values makes it difficult to define common objectives. Everyone agreed that there is no single solution that can solve all the problems at one stroke. At best, one should fix performance standards and abstain as far as possible from prescribing precise measures; leave the individual actors to work out how to get there, for example through popular campaigns, voluntary agreements, self-regulation, a whole range of possibilities. Education, as all agreed, was crucial, but education without ethical values did not work. Government had both direct and indirect responsibility. It had direct responsibility for public procurement, export subsidies, etc. and indirect responsibility, e.g. through the impact of EU policies on the developing world. The idea was mooted that the EU could set a blueprint for the rest of the world, but sustainability, particularly in relation to climate change, required global solutions. Clearly, the EU could do very much by itself and create this blueprint for the rest of the world. But it would still need to persuade others; maybe exclusion could be a good field for such an approach. The scope for a new economic model and the relevance of some artificial elements added to the standard market economy needed to be discussed much further. But the question of priorities and how to reach them could not 112

be dropped. Priorities had to be set between the various absolutely legitimate objectives, otherwise the targets were impossible to achieve. Governments pursued different policy objectives, coal promoted to preserve jobs and security of energy supply, for instance, or nuclear energy promoted as clean energy instead of CO2-emitting fuels. Without clear prioritisation, conflicts would arise. As illustration of these quandaries the advantage of repressive as against persuasive means was discussed. Several speakers pleaded for persuasive means, positive incentives, while others argued that raising energy taxes or fixing strict limits was the best way to achieve effective results. An interesting aspect was the rebound effect: once substantial progress in relative energy efficiency was achieved, the relative cost relaxation might not produce the desired drop in overall consumption and thus cut emissions of CO2 or a dangerous product. There was strong regret expressed that the environment and climate change was a global problem but that there was no global governance. This took us back to the Kyoto Protocol discussion. On poverty and social exclusion, different objectives were pursued by different groups. There were different objectives in domestic and in foreign policies. There was a need to really help the developing world. Direct action was important but indirect implications must be considered. It was pointed out that the gender issue is largely missing in the consultative paper. The same was true for the very important area of ICT: the digital revolution must be inclusive, but the question was how to achieve that. Social exclusion was a multi-dimensional problem and must not be looked upon only

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in the context of economic implications. Education and training as responsibilities for government and for the private sector was mentioned again. In conclusion, one had to look at all aspects — cultural, environmental, societal, educational, etc. — for society to develop a sustainable future.

Session 4 aimed to provide input to the Commission’s final proposal on the sustainability strategy and the Gothenburg European Council conclusions. Chairman: Mr Josly Piette, Secretary-General of the Belgian Trade Union Confederation CSC and member of the Economic and Social Committee.

Mr John Hontelez, Secretary-General of the European Environmental Bureau (EEB) For environmental organisations, there was much at stake in Gothenburg. Environmental organisations had successfully campaigned for inclusion of sustainable development in the Amsterdam Treaty and since then continued to make proposals and create pressure leading to the Helsinki initiative. The EEB had, mostly in cooperation with others, tried to stimulate the work within the Commission. The EEB had organised discussions with the Swedish Presidency, national governments, stakeholders on what the strategy should look like. Most recent was a publication with 17 contributions from different stakeholders. It showed remarkable agreement amongst people with different backgrounds and interests. Today, we would like to present some common conclusions of

stakeholders, including environmentalists, church representatives, trade unions, industry, agriculture, etc. We propose an overall objective: ‘To become the most resource-efficient economy in the world, combining high standards of living, good public health, strong social inclusion and cohesion and a high-quality environment with the long-term objective of reaching levels of resource use and environmental impact in line with the carrying capacity of the European and global environment — taking into account the need to share environmental resources equitably to allow sustainable development for all the world’s people.’ We also formulate specific long-term objectives for each of the six areas in the Commission document. We have also added two objectives concerning global interdependence and accountability to citizens. We furthermore insist on the leadership of the EU combined with active involvement of civil society.’ He concluded with personal comments, not necessarily shared by other organisations. It was important that the Commission adopt not just the nowadays-popular three-pillar image of sustainability, but also recognise that resources and services offered by the environment cannot be traded for the economic or social products of civilisation. There was also another important dimension, the cultural one. We cannot let our cultural values be hijacked by commercial interests. Gothenburg should present at least one bold and concrete programme, which was ‘greening the economy’, including a review of present subsidies and taxes. Gothenburg should also start a discussion, leading to pertinent results during the Madrid Summit before Rio + 10, challenging the dominance of trade lib113

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eralisation over other interests. Finally, politicians and business should stop resisting decisions on environmental targets and timetables with arguments about scientific uncertainty and lack of cost–benefit evidence. Mr Claude Fussler, Director at the World Business Council for Sustainable Development First, he stressed the importance of the global perspective. The consultative paper took a view that it was best for the EU to put its own house in order first and on track towards sustainable development. But, Europe could only succeed in a world that succeeds. Europe was responsible also for the transition of developing economies towards sustainability. The impact of its trade, people and investment flows was so large that any policy change in Europe would affect the developing world. On the positive side, foreign direct investments and imports created jobs and wealth. Immigration to Europe provided job opportunities and education. On the negative side, our agricultural subsidies, the protection of textile and other primary sectors prevented or taxed imports depressing prices, income, labour standards and employment in many producing countries. Secondly, innovation was a key issue. The Lisbon Summit declared ambitiously to make Europe the ‘the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion’. Innovation in technology, social relations, consumer behaviour and policy framework would be intense if we were to succeed in this. Yet, the consultative paper made a cautious and reassuring case of the transformation required. It played to the 114

classic wish for careful cost–benefit analysis of every policy measure. This was hardly conducive to innovation. Finally, the usefulness of simple indicators. The euro convergence criteria — inflation, budget deficit and debt levels — covered economic complexity with powerful indicators. Yet, every one who runs a chequebook knows that deficit demands control of not one but a host of economic variables. This was the same for eco-efficiency. In a recent resource productivity conference, convened by the British Department of Trade and Industry, all participants agreed that if they had to measure progress by one single indicator they would pick green house gas emissions related to GDP, clearly an eco-efficiency type of ratio. An economy that creates more wealth while drastically reducing its output of greenhouse gases was bound to create better urban air quality, domestic heating and lighting efficiency, a shift away from fossil energy sources, etc. It did so through innovative solutions, new skills and knowledge. Ms Martine Buron, Member of the Committee of the Regions The most important part of a strategy for sustainable development was reform of working methods. To create a good quality of life and to find innovations in rural development were essential elements. The six priorities in the consultative document formed a good basis. But it was evident that there were conflicts of interest. To find good solutions to such conflicts, we had to work together from a local and regional perspective. Public services to the citizens had to work and this was mostly the responsibility of local communities. The EU strategy dealt with European institutions but it was also most important to

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analyse how the proposals met the existing structure of community services. A report from the Committee of Regions would shortly address this issue. The inter-linkages between EU level and regional/local levels were important in many areas, for instance waste management, resource efficiency and food safety. The strategy had also to take into account the situation of older people, not only a matter of providing services to the elderly but also of integrating them into making society more dynamic. To sum up: • Regional and local perspectives should be taken into account at an earlier stage in the decision-making process for EU policies, since policies very often were applied at local and regional level. Local and regional levels should therefore play a role upstream in the decision-making process, how to implement and assess the costs of proposals. • Structural funds should also take account of the accession countries. To this end, inter-regional cooperation should be encouraged. A broad approach was needed at all levels of decision-making. • Information to citizens very often went through regional and local levels. This was another argument for involving them in the decision-making process as early as possible. Mr Marc Pallemaerts, Cabinet of Belgian State Secretary, Mr Olivier Deleuze Work on sustainable development showed the need to go beyond existing institutional

frameworks to new structures where all aspects of sustainable development could be considered. The work underlined the acrossthe-board structure. In 1997, a new federal law in Belgium set the platform for sustainable development work. An interdepartmental committee was set up to propose a federal plan for sustainable development. One important aspect was the involvement of civil society. Thus, the Federal Council on Sustainable Development was created with all interests in society involved. A public hearing was held as part of the work on the sustainable development plan. The Belgian Government intended to back the Commission initiative and was prepared to continue the work during its Presidency. But the Belgian Government regretted the late arrival of the consultative document and stressed the importance of public participation. The fact that the political view from the Commission was not yet available and that the specific targets had not been presented was a further problem. Thus, the Belgian Presidency would contribute during its Presidency and promote stakeholder participation. The Belgian Government considered the domestic emphasis in the EU strategy justifiable at this stage. The global perspective was necessary and could be added, as Johannesburg was the next step in the Rio process. The Commission communication on a strategy for the preparation of the next global summit in 2002 was an additional element. A final comment related to the toolkit proposed in the consultative document. The toolkit described the available tools and instruments but one important tool was missing, namely legislation. Law-making was one of the fundamental processes in the work of 115

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the European Union and should continue to be so. EU law should be used in future development of the strategy. Comments from the floor L. Mills, Consultant

• There should be more of an analytical background in the consultative document, and the objectives for the strategy should also be presented. • The regional and local dimensions were left out in the document. She gave an example from a local Agenda 21 project, with EU support, where the objectives had been the starting point in the project. It was important to recognise all the work that had already been done, for instance within local Agenda 21, different Interreg projects, sustainable cities and other urban projects. M. Insausti, World Wildlife Fund

• The EU strategy must have a global view, the EU was not a fortress. Both aspects were needed in the same document, the internal for the EU to put its own house in order and the external for the EU as a member of global society.

within the Rio framework, and contained a holistic, global vision. • The global dimension was important. • The EU strategy should also aim to support work at regional and local level and provide an example. I. Niestroy, European Environmental Advisory Councils

• The decision in Gothenburg should include objectives, set the overall strategy, recognise the need to continue and thus decide to return to the issue at the Barcelona European Council. K. Bradley, Alliance for Beverage Cartons and the Environment

• The paper presented by John Hontelez was very good. If these were the objectives in the EU strategy, his organisation could sign up to the strategy. • The strategy should set the targets, fix the numbers and industry would then find the solutions.

S. Blau, Member of the European Parliament

C. Puppinck, CEEP

• Which were the steps after Gothenburg in work on sustainable development?

• It was important to include not only environmental but also economic and social dimensions. It was all about daily life and solidarity.

Mr Becker, European Bishops Conference

• He stressed the north–south dimension. Even though it was important to focus, it was vital to have a global approach. I. Ripa Julia, Environmental consultant

• She gave an example of a strategy from the region of Rioja. It had been developed 116

M. Buitenkamp, Consultant

• We had to be aware that it took time to understand sustainable development, it was not possible to move too quickly if people were to be involved and find good solutions.

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Rapporteur: Marc Vanheukelen, Head of the Commission’s Sustainable Development Task Force • Everyone seemed to agree that the EU strategy needed targets and indicators. • We needed to learn from one another, maybe create peer pressure by publishing indicators. Points were made on the necessity to develop regional and national indicators and also some general convergence indicators. • The importance of the local level was stressed, local authorities were often the bodies responsible for implementation. • Several speakers stressed the importance of global perspective. • Several speakers commented on the greening of the economy as a major policy instrument. Several of the unsustainable trends were deeply anchored in today’s structure of our economy. • The need for the Commission to provide leadership was also emphasised, leadership to review common policies and develop new policies of cohesion. He concluded with some personal responses to what had been said during the session. The first point was that law and regulation were of course part of the toolkit; this was self-evident. The work at local level with local Agenda 21 had been extremely useful for mobilising different groups, but the EU strategy would focus on measures at EU level and recognise the principle of subsidiarity. Maybe a fourth pillar could be added, the pillar of participative democracy. The challenge was to create processes that allowed us to rethink jointly.

Closing session Mr David O’Sullivan, Secretary-General, European Commission The Commission was very pleased at the level of interest this public hearing had generated. Although the period of public consultation on the Commission services’ consultative document was shorter than it would have liked, sustainable development had to be a ‘bottom-up’ as well as a ‘top-down’ activity. Our societies would not be able to make the changes needed unless society at large felt that it ‘owns’ the strategy. And this would not happen unless we had mechanisms which allowed ordinary Europeans to give their views. This was the purpose of this public hearing and why, in the consultative paper, comments from everyone were expressly invited. And indeed, many private citizens had taken the opportunity to give their opinions. He was grateful for those opinions as for the views expressed by many during the hearing. The strategy for sustainable development, which the Commission would propose to the European Council in Gothenburg, would focus on the six themes identified in the consultative paper. In each area, we will set a small number — perhaps two or three — clear, ambitious, but achievable headline objectives, backed by an indication of the main measures seen as necessary to reach them. Our belief in the importance of changing the way policy was made to achieve consistent policies would be stressed. Policies had to pull together rather than in opposite directions and we would set out the steps that we think were needed. Many had criticised the emphasis placed on putting our own house in order. Some had 117

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even accused us of a ‘fortress Europe’ approach. Nothing was further from the truth. The Commission was fully committed to global sustainability. Of course, development policy had to support efforts by developing countries to achieve more sustainable development. Of course, trade policies and the international trading system in general should not place barriers in the way of the legitimate needs of developing countries. But how could we credibly make the case for change at international level if we did not demonstrably improve the way we conduct our own affairs? And, he said, let me be clear, when we propose reforming our ‘internal’ policies to make sustainable development their goal, that means taking full account of their effects beyond the borders of the European Union.

achieved. And these long-term objectives must be achieved all together, in an integrated process. This was the background to the very clear linkages between the two summits during the Swedish Presidency. In Stockholm, decisions were made mainly related to the economic and social aspects of sustainable development. In Gothenburg the environmental aspects of sustainable development would be discussed, in order to bring all three dimensions together into an integrated process for the future.

Finally, he expressed special thanks to his colleagues in the Economic and Social Committee for their help in organising this hearing. In its strategy proposal, the Commission would stress the importance of transparency in policy-making and of widespread stakeholder consultation and involvement. As this hearing showed, the Commission was at least trying to practice what it preached.

One of the themes, climate change and clean energy, raised a crucial — and in its essence ethical — issue for the future development of the globe. Europe had to act now. It was not possible to wait for others. We needed to tackle the emissions of greenhouse gases and review the policies for energy and transport. We needed to review use of renewable energy and energy efficiency. Transport systems had to be reformed. The railways in Europe had to make rail more competitive to road transport. Climate change would be one of the main issues in Gothenburg. The EU had to be prepared to discuss and to accept longterm commitments to reduce the emissions of carbon dioxide for the period even after the Kyoto Protocol.

Ms Birgitta Boström, State Secretary, Swedish Environment Ministry She thanked the Economic and Social Committee for arranging this hearing, and for giving an opportunity to express the views of the Swedish Presidency. Sustainable development was really at the centre of political debate. A sound economy, responsible and stable welfare systems and an ecologically sound and sustainable use of natural resources and the environment had to be 118

The work within the Commission and a broad consultation process would help to build general support for the decision. The Commission had chosen a number of themes as a basis for its proposal. These themes covered very well the main problems we had to tackle.

Another important theme was public health. It was a very central issue today, when food safety was intensely debated. At the same time, this theme gave the opportunity to deal with the risks related to persistent and bioaccumulative chemicals. A third theme was the use of our natural resources. In a time

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when the common agricultural policy and the common fishery policy within the European Union were intensely debated, it was important to stress also the need to protect biodiversity. The Swedish Presidency had three goals for the Gothenburg decisions on sustainable development: firstly, to decide on an EU

strategy and to establish a handful of objectives and targets for the environmental dimension — this would complement the objectives and targets that follow from the Lisbon strategy; secondly, to create a strong link between the strategy and the EU commitments under the Kyoto Protocol; and thirdly, to lay the foundation of a successful process to implement the EU strategy’.

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European Commission A European Union strategy for sustainable development Luxembourg: Office for Official Publications of the European Communities 2002 — 119 pp. — 17.6 x 25 cm ISBN 92-894-1676-9

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