Back from the Brink

by David Baldock

As the environmental prospects for 2012 start to unfold, the mood has been more of apprehension than expectation. On several fronts there is concern that environmental ambition will collide with fears about economic competitiveness and that regulation in particular is potentially in conflict with enterprise. This is not surprising in the face of an economic downturn and in the aftermath of Durban where the major OECD economies outside Europe declined to participate in a new binding international agreement on climate change until 2015 or, effectively, 2020. Within the EU, the carbon market has been in disarray and the reaction of environment ministries to the Commission’s pivotal Resource Efficiency Roadmap in December was lukewarm, demonstrating little appetite to grasp what must be an inescapable agenda.

Negotiations on the proposed new Treaty on greater fiscal discipline have underlined a vision in which austerity and reduced public expenditure have eclipsed any recognition of sustainability as a long term necessity. This echoes experience in the tracking of reform programmes under the Europe 2020 process where environmental headline indicators, such as those for climate, have received short shrift. The EU has a number of levers at its disposal to lead a transition to a green economy, including the forthcoming budget for beyond 2014; it is not being bold enough to use them.

While these circumstances are far from ideal, at least the ground is cleared for a robust argument about the place of the environment in a new economic era. Reviews of EU environmental policy will come in quick succession, starting with the Water Blueprint this year and moving on to air pollution in 2013. The Resource Efficiency Roadmap has created a foundation on which half a dozen initiatives could be built quite rapidly. DG Clima is contemplating ways of re-launching the objective of a 30 per cent cut in EU emissions of greenhouse gases. The debate on what the EU should be aiming for in the next decade will need to be clarified as the foundations for the forthcoming Seventh Environmental Action Plan are put in place during the year. The focus on fiscal policy in the new Treaty raises questions about a fresh initiative on environmental tax reform as well as on environmentally harmful subsidies, both priorities where progress has slowed down in recent years.

The arguments will need to be strong and well articulated. The economic strands in the policy web are increasingly muscular but cut both ways. Some sectors of industry, such as renewable energy, depend on strong environmental policy to create opportunities and market shifts and argue actively for forward looking regulation. The environmental community needs to reflect on the new context and to develop a coherent narrative to energise the next stage in the debate. In this sense, 2012 provides a second chance to move forward from the current stasis.