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Green Growth: Promoting Solutions Towards Better Sustainability and Competitiveness

Patrick ten BrinkDirector of IEEP Brussels and Head of Green Economy Programme

With thanks for inputs by Jean-Pierre Schweitzer

Green Growth: Promoting Solutions Towards Better Sustainability

and CompetitivenessTuesday 29th November 2016

Thon Hotel Brussels City Centre,

Brussels

Green Growth Solutions: Presentation Structure

1. Building blocks from a Brown to a Green Economy

2. From a Linear to a Circular Economy

3. Instruments to bring Circularity

4. Innovation to support Sustainability and

Competitiveness

Green Growth (OECD, 2011) – “fostering economic growth and development, while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies”

Go

od

Go

vern

ance

& f

un

din

g

Current Situation

Declining Sustainability: Brown, Linear, Economy

Resource over-exploitation & pollution pressures

Climate Change

Biodiversity and natural capital loss

Critical ecological & resource thresholds passed or at risk

Resource scarcity and limited access to a clean

environment

Health impacts and man-made natural disasters

GDP growth driven

An economy that is not resource efficient, low carbon

and socially inclusive

Ambitions for the Future

A Green Economy

Improved human well-being & social equity, while reducing env.

risks and ecological scarcities

Staying within a ‘safe operating space’: resource use within the

planet’s regenerative capacities & avoid critical ecological thresholds

No net loss of biodiversity & ‘acceptable’ climate change

Sustainability for future generations & business: available natural capital, resources & clean

environment

Health and livelihoods for citizens and communities

Beyond GDP metrics

An economy decoupled from environmental impacts and

resource use

Building Blocks in the

Transition to a Green Economy

Business-as-Usual

Approaches

Avoiding Unsustainable Trade-offs

+ Environmental compliance &

infrastructure

Active environmental

managementActive Risk Management

+ Proactive Investment in Natural

Capital

Pursuing environmental

sustainabilityEco-efficiency

+ Circular Economy measures+ Decoupling via Radical

Innovation & Demand change

+

+

Source: Patrick ten Brink, Leonardo Mazza, Jean-Pierre Schweitzer - own representation

Building Blocks in the Transition to a Green Economy

Our linear economy

Source: Patrick ten Brink and Paulo Razzini

Limits of our linear economy: built in wastefulness

• Waste – significant economic losses, – average EU citizen 16 tonnes of material consumed, >60% to

landfill/incineration, 95% of material and energy value lost• Future trends – growing populations and consumption.

– 5 billion global middle class by 2030 increasing environmental & resource pressures

• Environmental pressure – over exploitation of natural capital threatens planetary boundaries and the economy

The economy is currently based primarily on linear production and consumption model. Consequently resource use and wastefulness are inherent. The economy is closely coupled with environmental degradation and advancing planetary boundaries.

ExtractionProduction processes

DistributionConsumption/

useCollection

The Circular Economy

Source: Patrick ten Brink and Paulo Razzini

Opportunities in a circular economy

• Reducing input – efficiencies, closing the loop, industrial symbiosis, diversifying streams

• Reducing demand – sharing/collaborative models, repair

• Innovative design – biological waste streams, intelligent/modular design

• Creating social opportunities – job creation, inclusion of minority groups in the development of this economic model

Circular economy approaches can reduce the extraction of raw materials, reduce the production of waste and reduce pressures on the environment.

More materials and their value can remain in the economy and out of the landfills and the wider environment – innovation for value retention.

Can create new markets, new products and materials, and jobs

This requires changes in both production and consumption systems.

Policy opportunities at the EU level not limited to CE Action Plan i.e. CP; CAP reform; Innovation via FP7/Horizon 2020; trade dialogues e.g. TTIP

Landfill Directive

EuP Dir

Landfill Tax

EHS reform

GDP & Env Accounting

Eco-label

ELV, WEEE, RoHS,

Batteries,Packaging

CAP: PES

CAP: Cross compliance

Education

VAT

Corporate accounting

& CSR

SCP/IPP

Extended producer responsibility

Full Cost Recovery; resource pricing

Waste Hierarchy

EU-ETS

CBA & discount rate

Polluter pays principle

Product taxes Bans

R&D

Pricing, charges,

Certification

Standards

Take back requirements

Renewable energy certificates

Taxes, liability, compensation for impacts

Resource stocks: Biotic and abiotic

Impacts: Environment, Social/Health, Economic Disclosure

Sou

rce:

Bu

ildin

g o

n f

igu

re 2

fro

m H

elen

Mac

Art

hu

r Fo

un

dat

ion

(2

01

2)

Cir

cula

r Ec

on

om

y Ex

ecu

tive

su

mm

aryRecycling targets

Benchmarking

Targets & timescales

Leakage targets

Investment / expenditure

Compost and energy recovery

targets

Resource Efficiency Flagship

7EAP

Accounting Regulation

Life Cycle Assessment

Monitoring/Metering

Biodiversity Strategy

Thematic Strategies on Waste/Recycling and

Natural Resources

Raw materials initiative

Sewage sludge Directive

Waste Framework Directive

Sustainable Industrial Policy

Sustainable construction

Eco-innovation Action Plan

GPP

Unsustainable Production – Microbeads

Plastic micro beads in cosmetics (EU wide) – plastic beads used as an abrasive in cosmetics

Policy: USA ban on micro beads from June 2017, EU only voluntary agreements

Impact: estimate more than 4,000 tonnes of microbeads used in 2012, straight into the ocean as not captured in water treatment facilities.

Sustainability: lesser impact on marine environment & human health

Competiveness: opportunities for alternative products and materials

https://www.ellenmacarthurfoundation.org/assets/downloads/publications/EllenMacArthurFoundation_Growth-Within_July15.pdf Plastic Soup Foundation (2016) Companies that have pledge to stop using microbead. Beatthemicrobead. Available online (21st June 2016) at: https://www.beatthemicrobead.org/en/industry

Unsustainable Consumption – EHS

Tax reduction for diesel fuel – lower tax on diesel intended to favour commercial vehicles. Example :

Policy: 47.04c/l compare to 65.45c/l for petrol (2010)

Impact: concession for diesel of EUR 6.15 bn/yr, diesel 10x more nitrogen oxides, & 13% more CO2

Sustainability: lesser impact on air pollution & human health

Competitiveness: Reform pricing can encourage lower emissions vehicles

https://www.umweltbundesamt.de/sites/default/files/medien/publikation/long/3896.pdfOosterhuis F. and ten Brink P. (Eds) (2014) Paying the Polluter. Environmentally Harmful Subsidies and their Reform. Edward Elgar 2014) http://www.e-elgar.co.uk/bookentry_main.lasso?currency=US&id=15338http://www.e-elgar.com/shop/paying-the-polluter?___website=uk_warehouse

Sustainable Consumption – GPP Denmark

Green Public Procurement (national, Denmark) – public procurement is equivalent to EUR 2 trillion in the EU (19% of GDP), EUR 38 bn in Denmark Policy Mix: Partnership for GPP with

Ministry of Environment and Food. 14 partners integrate greening across 11 product groups.

Impact: total procurement value now EUR >5 billion

Sustainability: lesser impacts from product production, use and disposal

Competitiveness: GPP can finance sustainable products, increasing their competitiveness

https://www.ellenmacarthurfoundation.org/case-studies/denmark-public-procurement-as-a-circular-economy-enabler

Green Growth: Promoting Solutions Towards Better Sustainability and Competitiveness

• There are many building blocks to catalyse the transition from a brown to green economy.

• Circular economy solutions are at the heart of the transition

• Need to fast track circular economy measures to keep resources and their value in the economy and out of the environment

• These can support sustainability while improving competitiveness

• Range of tools that address each – from fiscal reform, to standards, product design, information provision, enabling civil society action, assessment tools, investment….

• Requires all stakeholders to engage

• EU, Member States and industry has self-interest in progress & responsibility within global context

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IEEP is an independent, not for profit institute dedicated to advancing an environmentally sustainable Europe through policy analysis, development and dissemination.

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Recent and ongoing work at IEEP

Analysing new areas of policy …

• e.g. The optimised cascading use of wood– for DG Growth

Assessing socio-economic costs…

• e.g The Socio-Economics of Marine Litter – for UNEP

Assessing socio-economic benefits …

• e.g. Health and Social Benefits of Biodiversity and Nature Protection – for DG Environment

Presenting the evidence base and innovative solutions …

• e.g. Paying the Polluter book edited by Oosterhuis and ten Brink

Reviewing stakeholders roles …

• e.g. Building the Europe we want: Models for Civil Society Involvement in the Implementation of the SDGs

Engaging stakeholders and capacity building …

• e.g. Capacity building in environmental taxation reform (ETR) to address resources & pollution – for DG Environment

Disseminating best practice …

• e.g. Beyond GDP Service – for DG Environment

Pooling knowledge …

• e.g. ACES: Alliance for Circular Economy Solutions – for the MAVA foundation, with the Green Alliance and partners:

Aldersgate Group (UK), De Groene Zaak (NL), Ecologic Institute (DE) & UnternehmensGrün (DE) - e.g. links to plastics, marine litter and the circular economy.

IEEP aims to make the value of the environment better understood and to better integrate it into policies in Europe and beyond. Work on the SDGs and supporting SCP, decoupling and the circular economy are priority areas for IEEP. Our activities include: