Educate. Connect. Inspire

Educate. Connect. Inspire

May 24, 2012

Green Economy in Europe (part 1)

European Union

Over the past decades, sustainable development has been promoted by a number of EU policies. For example, the EU has adopted binding climate targets together with the EU Emissions Trading Scheme, as well as range of legislative instruments on biodiversity, waste management, water and air quality. This has encouraged the growth of EU eco-industries, which now correspond to over 2.5% of EU GDP and provide jobs to over 3.4 million people. In 2001 the EU adopted an EU Sustainable Development Strategy (EU SDS), renewed in 2006.

Since the most recent EU SDS report in 2009, progress towards achieving sustainability in the EU has been assessed in various ways, including sustainability indicators and the State of the Environment Report of the European Environmental Agency. These publications show that while progress has been made many challenges still exist, in particular to make growth more sustainable.

A key policy development has been the adoption of the Europe 2020 Strategy in 2010. This aims to transform the EU into a knowledge-based, resource efficient and low-carbon economy and provide a sustainable response to the challenges facing the EU up to 2050. The Strategy seeks to mainstream and reinforce the role of sustainability in policy development by establishing the mutually reinforcing priorities of smart, sustainable and inclusive growth which are driven by five headline targets and seven flagship initiatives.

For example, the flagship initiative on resource efficiency aims to decouple the use of natural resources from economic growth and envisages a range of new policy measures including action on raw materials, energy efficiency, biodiversity, as well roadmaps to decarbonise the economy, energy and transport. It also advocates the stepping up of the use of market-based instruments, phasing out environmentally harmful subsidies and the "greening" of tax systems.

Twenty years after the Rio Summit, the world is still facing two major and interlinked challenges: meeting the demands for better lives for a global population set to grow by over a third by 2050, and addressing environmental pressures that if not tackled, will undermine the world's ability to meet those demands.

Responses to these challenges will not come from slowing growth, but rather from promoting the right kind of growth. There are compelling reasons to fundamentally rethink the conventional model of economic progress: simply working at the margins of an economic system that promotes inefficient use of natural capital and resources, will not be sufficient to bring about change. What is needed is an economy that can secure growth and development, while at the same time improving human well-being, providing decent jobs, reducing inequalities, tackling poverty and preserving the natural capital upon which we all depend. Such an economy – a green economy – offers an effective way of promoting sustainable development, eradicating poverty and addressing emerging challenges and outstanding implementation gaps.

Moving towards a green economy necessitates preserving and investing in the assets of key natural resources. This is essential for all economies, but applies in particular to developing countries, which have the opportunity to grow their economies, by building on the sustainable management of their natural capital. It also means making use of low-carbon and resource efficient solutions and stepping up efforts to promote sustainable consumption and production patterns. All this involves establishing the right regulatory frameworks, creating strong incentives for markets and innovation, leveraging financial resources, and promoting entrepreneurship and greater private sector involvement. It also involves the proper valuation of natural capital, and, in more general terms, a revision of the way in which we measure growth and progress.

In a green economy many challenges can be transformed into economic opportunities, not only reversing negative environmental trends, but also driving future growth and jobs. For instance, experience shows that market-based approaches such as emissions trading are not only cost effective tools to address environmental problems but are also a source for investment.

The green economy offers opportunities to all countries, irrespective of their level of development and the structure of their economies. While in many cases investments to move towards a green economy can result in short-term win-win solutions, in other cases a medium term perspective will be needed, and transitional costs will have to be addressed, including through "pro-poor" policies. Even though there is no "one-size-fits-all" model, there are common challenges and solutions, and countries will benefit from exchanging experience and improved international cooperation.

At the same time, moving towards the green economy does not start from zero. There are already a number of strategies in place that countries can build on, such as: climate change, biodiversity, sustainable consumption and production, research and innovation, all of which can contribute to enabling a green economy. Future national and international green economy strategies should build on and strengthen these, as is happening in Europe 2020 Strategy, and recently in the roadmap for moving to a competitive low carbon economy by 2050.

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