July 2005
EU PRESSES AHEAD WITH SUSTAINABLE ECONOMIC GROWTH
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EHJ July 2005, pages 30-31

EU NewsOne of the EU's greatest challenges is to ensure that economic growth can be fostered throughout the community without degrading the environment. Tina Garrity looks at the environmental technologies action plan, one of the main initiatives to assist in this process

With all the recent talk about the European Union facing a crisis of confidence and governments having to re-think its future direction, it is worth stepping back for a moment to reflect upon why the EU exists. Perhaps the simplest answer is the one put forward at the Lisbon Summit in March 2000. It was here that the participating governments came together to declare that their overriding purpose was to make the EU "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". In achieving this vision, there has to be a high degree of protection for the environment and for human health. It is a vision which is hard to argue with and over the next six months the UK gets its chance to influence how that vision is taken forward.

On the environmental front, the key challenge is to meet the fundamental objective set out in the sixth environmental action plan of decoupling economic growth from environmental degradation. This means putting pressure on other member states to step up their activities on things like climate change and sustainable development. However, there are several more tangible initiatives which the UK has said it wishes to focus on. One of these is the EU environmental technologies action plan (ETAP).

OVERALL PURPOSE OF THE PLAN

Adopted in January 2004, the aim of the plan is to exploit the potential of environmental technologies to improve both the EU's environment and its competitiveness. This means encouraging technologies and processes, which help to manage pollution, developing products and services that are less polluting and less resource-intensive and inventing methods of managing resources more efficiently. Europe is already a leader in many environmental technologies such as wind energy, but the competition is growing. Japan has set out to become a world leader in energy-saving technologies and Canada too has announced an ambitious strategy on environmental technologies, backed with a billion dollar budget. At a global level, increases and fluctuations in oil prices have helped to focus attention on the EU's need to reduce its dependence on oil and to boost support for policies aimed at energy efficiency, renewable energies and low carbon energies. There are a number of barriers to progress, however, which the plan considers in detail. These include things such as high initial up-front costs in switching to new technologies, the lack of R&D funding for projects and poor linkages between research programmes and demonstration/diffusion programmes.

SPECIFICS ACTIVITIES ENVISAGED

In order to address these problems, one of the mechanisms envisaged under the plan is the establishment of technology platforms and testing networks in areas such as photovoltaics. This will show how public/private partnerships can be established and how research can be brought closer to the market. Another tool envisaged to help convince the market of the merits of environmental technology is a mechanism similar to the USA's "environmental technology verification" system, which develops testing protocols and verifies the performance of innovative technologies that have the potential to improve protection of human health and the environment. Such an approach could benefit technologies such as on-site soil remediation, says the plan.

On the financial front, the plan calls on the EU to improve the effectiveness and efficiency of its existing funding mechanisms. It outlines a number of innovative financial mechanisms that could help increase funding and support for environmental technologies. These include providing assistance for countries, such as those in the new member states in the east, which are currently replacing ageing industrial infrastructures. Work in this area has already begun with the European Investment Bank establishing a facility that supports private investments related to the EU Emission Trading Scheme while preparatory work under the Dutch presidency has paved the way for action regarding risk-funding schemes. A report covering the plan's first year, produced in January 2005, called on member states to mobilise additional risk funding for eco-innovations and environmental technologies, and cited the Green Investment Fund in the Netherlands and the Investment Fund for Environment and Energy Management (FIDEME) in France as good examples.

The plan calls for a catalogue of existing directories and databases on environmental technologies to be established and for the Commission to encourage more standardisation so that technologies in fields such as wastewater re-use become more attractive to industry. Work to identify environmentally harmful subsidies, which favour more polluting processes, based on a methodology developed by the OECD is also envisaged. Member states will then be expected to reduce or remove any negative effects, for example by introducing new taxes or tax incentives, combined with harmonised performance targets. The plan gives the example of the energy taxation directive, which allows for lower tax rates on biofuels.

On the legislative front, the plan considers increasing the use of performance targets such as those that already exist for cars and fridges. One approach suggested is to take the best available performance today and set that as the target for 10-15 years' time, giving industry time to comply voluntarily but with the prospect of the targets eventually becoming compulsory.

Another target for action is the field of public procurement, which accounts for around 16 per cent of the EU's GDP. Public purchasers could produce technical specifications that challenge suppliers to go beyond current best available technologies, says the plan.

Last year, the Commission produced a handbook on green public procurement aimed at public authorities across the EU. Here in the UK, Defra has indicated that green public procurement (GPP) is an area it wants to focus in during the UK presidency, for example by establishing an EU-wide GPP benchmark target. Also envisaged under the plan is better training for professionals such as architects who have the power to influence the types of products or technologies used by business, along with the introduction of life-cycle costing for long-term investments such as buildings and energy supply systems.

NEXT STEPS

The Commission has set up a European panel on environmental technologies to assist it in implementing the ETAP. The plan stresses, however, that many of the actions outlined in it need to be developed and undertaken by member states and other authorities closer to the citizen. Considerable experience of these actions already exists and the plan envisages using something called the "open method of coordination" to help disseminate and exchange information and good practice. This concept was adopted at Lisbon as a new technique of governance. It circumnavigates traditional forms of EU policy formulation by rejecting binding rules in favour of common targets which are set for the whole of the EU but which leave each country free to decide how best to reach these goals.

The first year report on the plan calls on the member states to set national roadmaps by the end of 2005 for the implementation of ETAP. Such roadmaps should build on existing strategies and action plans, and indicate concrete measures and deadlines. The UK plans to host an environment technologies workshop in October.