INSIGHTS: Resource Efficiency: The Next Revolution

By Janez Potočnik, European Commissioner for Environment

{Commissioner Potočnik gave this closing address May 27 at Green Week 2011, Europe’s largest annual environment conference. In 40 sessions, workshops and special events over four days, some 3,500 participants sought ways to use Earth’s resources more sustainably.}

BRUSSELS, Belgium, May 27, 2011 (ENS) – Allow me – for the last time this week – to reinforce the idea of resource efficiency. I heard many of you saying that just being more efficient will not be enough given the trends in global resource use. I agree. Resource efficiency agenda for me is about real decoupling.

It is about reducing overall resource use and pollution from economic activity to sustainable levels. It is about implementing the aspiration of sustainable development. We see it as a way of reaching our economic, environmental, climate and social goals.

The latest results from a Eurobarometer survey show that 83 percent of Europeans agree that the efficient use of natural resources can boost economic growth. I believe there is a case for what we are trying to do that goes far beyond economic growth.

EU Environment Commissioner Janez Potočnik of Slovenia (Photo courtesy Greenweek)

It is clear that continuing our current patterns of resource use is not an option. But we have to use the same aspirations and resourcefulness – convenient word, isn’t it? – to change the equation and use the economy’s ability to bring about the change we need. So what have we learned about this change this week?

The one thing that really stands out for me is the potential for action on resource efficiency across the board. Almost every session, covering a huge range of sectors, has highlighted fundamental, institutionalised examples of resource inefficiency.

To change them we need to tackle the root causes of the problem, not just the symptoms.

What is it that we have to tackle, then?

There are policy and market failures. The design of the tax system is an example. What is the ratio of environmental taxes in total tax revenues? How does it compare to labour and capital taxes? Denmark should be praised for phasing in a major tax reform, which aims to shift the fiscal burden from labour to resources, which is less harmful to growth.

Failure to price ecosystem services is another. The Green Infrastructure session called us to value of ecosystem services properly. A great example is land use, which is becoming an ever scarcer resource in our highly fragmented and urbanised Europe.

And there are those where the prices of our products and raw materials do not properly reflect the costs to society and the environment. Coal is a classic example.

Water, is another. It’s liquid gold and perhaps should be priced with the same reverence!

Where are the price incentives to make people value water? This week we learned about a South African example, where the human need for water is fully accounted for by a system where people pay only after they get a certain amount for free.

European Environment Commissioner Janez Potočnik at a Green Week panel discussion (Photo by Friends of Europe)

Better implementation of the Water Framework Directive, which requires Member States to use water pricing policies, will have to be Europe’s answer.

Using waste as a resource is another example. The worst options to deal with waste – like land filling – are still too cheap. Many of you wanted economic instruments to encourage more waste prevention and recycling, or adapted EU financing, to stimulate it. And we heard about the ‘cradle to cradle’ approach, which takes the use of waste as a resource to an entirely new level.

Then there are those barriers caused by short-term cycles in finance, business and politics. We need a stable and effective policy framework to trigger the investments in a greener economy. Renewables have become a reality of our markets and political conditions are triggering the same effect in the field of energy efficiency, whose clean-tech venture capital investments share has been growing up 15 percent in 2010!

We saw brave pioneers who set out to prove that renewable technology and efficiency potential can take a [solar-powered] plane around the world. They called on governments to set the rules, the frame within which our brains and skills can develop the solutions we need.

At Green Week, from left, Karl Falkenberg, head of the EU Directorate-General for the Environment; Olaf Scholz, Mayor of Hamburg, Germany; Janez Potočnik, European Environment Commissioner (Photo by European Green Capital)

Then there are those that are the result of simple lack of knowledge. Green Week has shown us all too many of these. We throw away 20 percent of the food we buy because we don’t understand the difference between ‘use by’ and ‘best before,’ although this should be rectified in an up and coming Regulation.

The importance of seeing the whole life cycle of products – from extraction to end of life. The idea of ‘defragmenting’ our policies was highlighted: to better link product and waste policies.

On water, we need to link water, energy and climate change. A good example of this is leaks. Fewer leaks save not only water but also the energy needed to pump and purify it. By saving energy we reduce greenhouse gas emissions and consequently our impact on climate change.

On forests – trees are a slow-growing resource, which need planning. Compare this with modern demands from the bio-economy, and you see we have to tread very carefully.

And there is also the question of improving environmental governance. The best policies in the world are only as good as their enforcement on the ground and I was interested in the idea of how national ombudsmen could be our environmental watchdogs.

We need consistent governance – without it, we have what we have now – inconsistent policies.

It is clear that getting to the heart of these barriers is going to take a broad and bold policy agenda.

Subsides and taxation systems will need to be looked at in detail.

Comissioner Potočnik visits exhibits at Greenweek (Photo courtesy Greenweek)

Resource efficient companies – underpinned by new and green innovative business models – need to be encouraged and rewarded, not hampered.

And industries need to be able to talk to each other, for example to ensure that one company’s waste becomes another’s resource. There are many innovative business models out there that found a way to use resources efficiently and minimise impacts on the environment – and make money too. Industrial symbiosis, product service systems and cradle-to-cradle need to become widespread.

We also need to help companies to analyse and improve their environmental footprints. Not just a few interested companies, but most of them. These things will have to become standard practice by 2020.

And then there is the question of individual choice by consumers. There is still a huge lack of knowledge and information about the true impacts of the products we buy. We need people to choose products with the most resource efficient lifecycles and we need to re-use and repair like we used to.

There is a lot to do. And not only by the European Commission!

We have seen some great examples this week. We have seen many practical examples of success that work in some Member States. These can help us find the best solutions for the common European approach that we need to bring about the change.

We heard how the City of Stuttgart is using science to fight soil sealing by better land use planning – taking into account everything that soil does for us and truly valuing it as a resource.

Greenweek stand featuring Europe’s forests (Photo courtesy Greenweek)

This is the type of action that needs to become the norm, rather than just best practice. And this is what I want the upcoming Roadmap Towards A Resource Efficient Europe to help achieve.

Helping us tear down the barriers to resource efficiency in the market place and in our policy-making. Everyone who can be involved, from governments, to businesses, to individuals will have a role to play.

I have no illusion that it will bring about the changes we need overnight. But I want it to be another, important, step on our course that must become irreversible – if we don’t want it to run out.

One important question – and one that I take very seriously – is the question of whether we can change anything without firm targets or ways to measure whether or not we’ve achieved them. The answer probably has to be no. But from discussions this week on this question it is also crystal clear that any such targets and indicators have to be robust and defendable if they are to lead us to success. The next crucial step for us then will be to intensify our work in coming weeks to see what we can achieve in this respect.

Ladies and gentlemen, who doubts the benefits in the medium-term, and even in the shorter term, of an integrated and inclusive resource efficiency policy?

As I said on Tuesday, it’s no secret, it is just a common sense.

We save resources, save money and the environment we depend on for maintaining our quality of life.

We can build more resilient, efficient and sustainable businesses and consumption patterns. Then we can reinvest what we save back into society.

This is the real aim of becoming resource efficient and for me the meaning of green growth. It is true for Europe, for all countries and for the whole planet.

The change that is required is on the scale of a revolution. We have had several industrial revolutions in recent history of mankind.

Resource efficiency is the next revolution that the planet needs and the world can pull off. And yes, it is a common sense revolution. So, let’s use that common sense to embark on this revolution now.