Select Committee on Environmental Audit Minutes of Evidence

Memorandum submitted by the European Environmental Bureau


  This submission reviews the commitment to environmental integration made by all Member States of the European Community, culminating in the Treaty of Amsterdam. It goes on to analyse the current barriers to integration, citing the lack of provision for monitoring and target setting on the environment; the sectoral and vertical nature of policy making; and the lack of internalisation of environmental costs. Finally, it suggests how the UK Government could take a lead role in working through solutions to these issues, on procedural, institutional and political levels.


  In signing the Treaty of Amsterdam, Member States of the European Union strengthened the already-existing commitment to considering the environment in all policy areas. According to the Treaty, all EU policy must be contribute to the goal of sustainable development. In particular, the Treaty states that "The Community shall have as its task.... a high level of protection and improvement of the quality of the environment". This treaty requirement was enacted through the process leading up to the Cardiff Summit in June 1998, where the European Council consisting of the heads of state asked "all relevant formations of the Council to establish their own strategies for giving effect to environmental integration and sustainable development". Progress toward this goal will be reviewed at the Helsinki Summit in December 1999.

  The UK Government played a leading role in the political momentum behind the drive for environmental integration, particularly leading to the Cardiff Summit in June 1998. This, together with the example of good practice provided by the UK's Greening Government mechanisms and the White Paper A Better Quality of Life (see the section below on indicators and targets), gives the UK a strong basis for leadership on environmental integration. There is much political capital to be made in leading the Union on sustainable development, and the UK Government should provide strong political support for the Helsinki Process.

  Despite this process, actual achievement of integration to date has been slow. The commitments offered by Councils so far have been incrementalist in approach, lacking the more fundamental policy rethink which sustainable development necessitates. Within the other institutions, it remains an issue dealt with in large part only by the Environment directorate of the Commission and the Environment Committee of the Parliament. Overall leadership is lacking.

  In the UK's case, there is little explicit linkage between the national sustainable development strategy and efforts at European level - although the national strategy mentions the European process, the way in which the two interact and complement each other is not examined. This is a significant oversight, given the central importance of EU policy in many areas.

  The following section explains and outlines the reasons for some of these difficulties.


  European environmental policy has to date been seen as a sector-specific issue. Individual environmental problems—air quality, water, biodiversity—have been dealt with in isolation. There are advantages in taking such a focused, specific approach. It allows problems to be defined, with clear legislatory goals such as emission levels for air pollutants. This in turn makes implementation more straightforward. However, such an approach does little to change the underlying social and economic reasons for environmental deterioration. Setting emissions levels for air pollutants may eventually lead to a re-think of transport policy, but there is no direct policy linkage. The contribution to the shift toward a more sustainable economy and society is tangential at best. There is a strong case for working at both ends of this equation - setting emissions levels, but also proactively re-thinking transport policy to integrate environmental considerations.

  Moving away from this sector-specific approach, however, is problematic given the institutional structures in place. Policy is carried out in issue-specific departments. In the Commission, environment policy is managed by a different Directorate-General to transport. There is little horizontal linkage between the two, and "non-environment" Directorates-General have limited incentive to take the sustainable development message to heart. A similar situation arises with the Committee system of the European Parliament. Any attempts to integrate the environment must address this problem.

  Neither is there clear vertical linkage between the EU as a whole and individual Member States. Member States have a legislative responsibility to enact and enforce EU environment legislation, but there is no such clear-cut responsibility for them to address the wider issues of integration. This is complicated by the demands of subsidiarity, which give Member States control over sectors such as taxation, transport and housing policy, with limited involvement from EU institutions. As a result, national strategies for integration and sustainability have largely remained separate from initiatives at the EU level.

  To work toward integration, then, there is a need to develop explicit mechanisms and structures which delineate responsibility both horizontally—between directorates-general and committees at the European level, and vertically—between the EU, Member States and regions. This will not work without political commitment at each of these levels.

  The following section outlines some solutions to these issues, and next steps in the Helsinki process and beyond.


Indicators and targets

  Indicators of sustainable development provide a measure of quality of life which does not depend entirely on economic information. They also spread responsibility for sustainable development across policy areas, covering transport, energy and housing, for example. This helps the integration process, as it shifts responsibility from "environmental" policy-makers alone.

  Indicators also have an important public relations function. A subset of "headline" indicators, which provide accessible information on key sustainability issues, help to promote the sustainable development message. Europe-wide indicators, if linked to national indicators would reinforce this message. However, confusion over different sets of indicators at national and European level could have the reverse effect.

  The UK is in a strong position to lead the EU in the development of indicators and targets. The UK Government White Paper A Better Quality of Life, which sets out a range of 150 indicators, including 14 headline indicators, designed to measure quality of life in its widest sense, provides a good model. There has been little progress toward turning these indicators into clear targets. However, the Government's commitment to reviewing improvements or deteriorations in indicators, and adjusting policy accordingly, should provide a minimum standard for the EU.

  Much discussion about the merits of various different indicators has taken place, and we do not propose to rehearse these arguments once more. We draw the Committee's attention to the set of indicators developed by the European Environment Agency, as well as the EEB's suggestions for a set of headline indicators, attached as an annex to this document. These indicators measure air quality; water quality; climate change; hazardous substances; land use; biodiversity; water use; materials use; transport; and agriculture.

Several general points are important:

    —  Although discussion on the precise nature of indicators and targets is ongoing, the Helsinki process should agree a basic set of headline indicators and targets, which can subsequently be modified. A more detailed set of sectoral targets should follow. The political leadership is equally, or arguably more, important than detailed negotiation over the precise nature of indicators.

    —  Targets and indicators should be a mixture of cause and effect, depending on the nature of the environmental issue measured. For example, biodiversity is an "effect", an outcome which has various natural, social and economic causes. Carbon dioxide levels are a "cause" indicator—reductions in carbon dioxide are necessary to prevent climate change (the effect). Concentrating on "cause" alone would mask the important message of environmental deterioration whereas a focus on "effect" would not provide a clear link to the policy changes necessary to prevent the "causes".

    —  Indicators should be closely linked to targets. As with the climate change process, targets should be short, medium and long-term—short-term achievable targets and longer-term aspirational targets.

  Clear division of responsibility between regional, national and European authorities should be allocated to targets. This is important, because as an inevitable consequence of subsidiarity, national, regional or local governments have control over many policy areas which affect the achievement of targets. For example, carbon dioxide emissions are largely influenced by national industrial, transport and energy policy; but European policies in this area have an impact too. The protection of biodiversity is both a national issue and a European issue - the EU Common Agricultural Policy in its current form encourages farming patterns that reduce biodiversity. The EU's contribution to the achievement of targets is twofold:

    —  EU policy, as agreed by the EU institutions in areas such as energy and transport, must contribute toward the improvement in indicators and the achievement of targets. EU policies must be reviewed in the light of their contribution to these targets. (see below, under "horizontal measures", for details of assessment methods).

    —  EU policy in areas such as competition and harmonisation must not compromise individual Member States' attempts to achieve targets. Environmental measures must not be seen as barriers to trade. For example, a tax on packaging which aims to reduce resource use must be allowed under competition law.


  Sectoral strategies should be seen as part of an integrated approach towards sustainable development. We comment here on the three sectors for which a strategy is to be finalised for the Helsinki Summit. However it is also important that cross sectoral environmental problems are not forgotten in this process. We need clear targets for burden sharing to make sure that overall targets are reached.


  To date, European policies have aimed to increase transport as much as possible so as to increase trade within the internal market and add to European economic activity. However, over time it has become apparent that increasing transport for the sake of economic growth has led to both economic inefficiency and large scale harm to human health and the environment. The response to the damage this transport has wreaked has thus far been limited to mitigating the damage transport causes, rather than tackling the underlying cause. This has prevented the development of a truly sustainable transport policy which would de-couple economic and transport growth. This is most clear in the case of transport CO2 emissions where the sector is predicted to contribute the vast majority of EU CO2 sectoral increases.

  To reverse this trend the following first steps are essential :

    1.  External costs of transport must be internalised (eg via electronic road pricing and fuel duties)

    2.  EU policies (eg regional policies) must promote local or regional production and consumption patterns in order to reduce the need for transport. Furthermore, other policies reducing demand for transport and de-coupling transport from economic growth must be advanced eg planning policies bringing working, recreation, and living areas closer together.

    3.  Direct and hidden subsidies for road and air transport must be stopped. This would necessitate a re-appraisal of TERN.

  Sustainability in the transport sector will require better technology, greater efficiency, modal shifts and improved performance—both environmental and social. But it will also crucially depend on successfully tackling the growth in transport demand. A transport policy will deliver a triple dividend of less pollution, greater economic efficiency, and lower CO2 emissions.


  EU energy policy rests, in theory, on security of supply, competitiveness and environmental protection. In practice, the policy framework is centred on liberalisation, which alone addresses only competitiveness, and then only partly. For the wider goals to be met, energy efficiency and the use of renewable energy must be key priorities.

  A clear commitment to renewable energy and energy efficiency should be the explicit core of EU energy policy. To ensure that the necessary changes are made a number of key policy priorities need to be achieved in the short to medium-term.

    1.  External costs of energy consumption must be internalised through a European energy tax. Ideally this should be applied to all sectors, to all sectors since making exemptions undermines the effect of such a measure. Even more importantly, it must contain a progressive element—ie a ratchet effect signalling a steady increase. This will send a clear and reliable signal to the market, encouraging timely and cost-effective investments in efficiency.

    2.  Explicit targets must be set for improvements in energy intensity (energy used per unit of output.) Annual improvements (ie reduction) of 2.5 per cent in energy intensity are essential if the Kyoto target is to be kept in reach. This target must be accompanied by a clear action plan for its implementation.

    3.  Subsidies for fossil fuels and nuclear power must be phased out by the year 2005. In any case, there must be an explicit guarantee that these reductions will precede any reduction in support for renewable energy technologies. The historical subsidies for conventional power sources, especially in R&D, will be borne in mind in allocating R&D funding to the newer renewable energy technologies.

    4.  The target for renewable energy (12 per cent of energy supply) must be put into legally-binding renewables targets for the Member States. These binding targets must include interim targets for 2005 (totalling 8 per cent of EU energy supply), and appropriate penalties in place for failure to meet these targets.

  These targets must all be considered interim objectives. An overall energy strategy must also address the issue of how to build on these targets and further increase the sustainability of EU energy policy.

  To date little or no progress is visible on these themes. For a serious sustainable energy policy to emerge in the EU these policy measures must be seen as crucial items on the political agenda, both at EU level and among the Member States.


  The Common Agricultural Policy (CAP) of the EU is the main driving force for agriculture intensification, resulting in environmental degradation, loss of biodiversity, loss of jobs in rural areas and loss of traditional landscape. The recent reform of the CAP, has only partially begun to address some of the general environmental issues, with the approval of the cross compliance regulation, area payments in Less Favoured Areas, national envelopes and the creation of the Rural Development Regulation.

  However, the success of these new measures will largely depend on the extent and ways in which these measures will be implemented. Therefore Commission and the Council should pursue an effective implementation of the current legislation to maximise the integration of environmental considerations into the agriculture sector.

  To achieve this:

    —  The Commission should give clear guidance and make sure that full application and monitoring of a mandatory Cross-Compliance measure in Member States is achieved.

    —  Member States should implement the Rural Development Regulation, allocating appropriate economic support to the co-funded measures and ensuring a balanced allocation of funds to different measures within the plans.

    —  Member States should make effective use of the National Envelopes to support extensive farming systems which go beyond basic environmental conditions to deliver real additional environmental benefits.

    —  Member States should increase the funding of agri-environmental measures, to rebalance the unfair competition with compensation payments, and give more support to conversion to organic food production.

    —  The Commission should enforce the full implementation of the Nitrates, Habitats, & Wild Birds Directives as required by the EU environmental legislation, with no further delays.

  As many opportunities to promote environmental integration have been lost in the last reform, a new one is urgently needed in the near future. The next stage of reform of the CAP should give priority to:

    —  de-coupling agricultural support from production, shifting funds to a new integrated rural policy to address the decline of rural economies, promote sustainable forms of agriculture, creating jobs and safeguarding the environment. Economic support should promote diversification of sustainable rural activities to benefit the whole rural community, including farmers;

    —  increasing the level of funding and expanding the coverage of agri-environmental measures to address specific environmental needs, and the creation of an effective monitoring system on the environmental benefits of the schemes;

    —  including strategic environmental assessment of policy reforms: future reforms of the CAP should have a thorough assessment of the environmental impact on biodiversity and landscape, as well as on the socio and economic aspects, of proposed changes.


  Sectoral strategies and targets must be complemented by horizontal mechanisms that address the cause of environmental problems. For example, a Europe-wide CO2 reduction target must be accompanied by horizontal mechanisms that will ensure CO2 reduction across sectors, such as a European energy tax. Possible horizontal mechanisms include:

    —  Ecological tax reform: increasing the cost of resource consumption, while decreasing labour costs will induce a new type of productivity increase - focussing more on productivity and less on labour. It will increase efficiency in resource use and create jobs.

    —  Targeted reforms of VAT schemes and other indirect taxes: Promote environmentally friendly products and services with lower rates. For example, allow a reduced rate for products and services that have been awarded with European Ecolabels and official national ecolabels.

    —  A systematic review of subsidy policy, which is damaging to the environment, such as price intervention in agriculture or coal subsidies in many Member States.

    —  Intensification of the EU's "greening the budget" initiative—with sustainability assessments explicit in all budget proposals put forward both by the Commission and the Parliament.

    —  Environmental Liability as a means to internalise the social costs of risk in order to correct market failure by risk externalisation.

The following are methods of assessment, auditing and reporting. All these techniques should refer to established indicators and targets (see section on indicators and targets, above):

    —  Strategic Environmental Assessment for policies, plans and programmes in order to make strategic sectoral planning environmentally more accountable, as proposed in the draft directive currently awaiting adoption by the Council.

    —  Appraisals of each Commission policy proposal and budgetary proposal, in the form of a statement on its contribution to sustainable development, including details of its effects on the environment.

    —  Transparency and public participation.

    —  And, as endorsed by the Fifth Environmental Action Programme, modify GNP so as to reflect the value of natural and environmental resources in generating current and future incomes and to account for environmental losses and damage on the basis of assigned monetary values.


  Our analysis of the EU's institutional structures (see the "barriers to integration" section above) shows that there will be a need to modify institutional structures to promote integration. The forthcoming Intergovernmental Conference provides an opportunity to look at this. Priorities for institutional reform are as follows:

    —  At present, the Council of Ministers is the only institution required to produce sustainability strategies. This requirement should be extended to the Commission Directorates-General, who will be called upon in any case to implement the proposals of the Council. The European Parliament should scrutinise the process.

    —  The European Parliament should be asked to consider how to promote integration within its committee structures, and to establish more efficient systems of horizontal linkage between committees.

    —  The Parliament could take a lead on integration by refusing to consider Commission proposals unless accompanied by an environmental appraisal and a statement of how the appraisal has been incorporated into the proposal.

    —  Neil Kinnock, Vice-President of the European Commission with responsibility for institutional reform, should be mandated by the Council to consider the integration issue when drawing up his proposals.

    —  The European Spatial Development Perspective could prove useful in encouraging horizontal integration by injecting a sense of geography into EU policy and programmes.

    —  The UK's "Greening Government" initiative, the Green Ministers system, the Cabinet Committee on the Environment, the Sustainable Development Unit and the Environmental Audit Committee, could be provide a useful model of institutional structures for integration to be adapted for the European situation.


  The EU's Fifth Environmental Action Plan, Toward Sustainability, was an important step in the process of integration, as it laid down the principle of sustainable development in the European context. Its success has been limited, however, partly due to the lack of political commitment to it, and the consequent leadership vacuum (see below). Ownership of the Plan has remained with the Commission's DG XI, without buy-in from the other Directorates-General, the Parliament or indeed civil society.

  Discussions on a replacement for the Plan are under way. EEB supports the proposal for a Sustainable Development Strategy for Europe, going beyond environmental considerations and being led from the centre.

This would fulfil the commitment that the EU made in 1997 to UNGASS, to report to the 2002 special UN assembly. The following elements of the plan are crucial:

    —  The plan needs clear leadership from a senior, "non-environmental" figure, such as the Commission Vice-President, who should be known as Commissioner for Sustainable Development, and a champion of the cause. It should not be the Environment Commissioner who takes responsibility, as this negates the very idea of integration.

    —  It must contain a clear vision of a sustainable European Union, with short-term achievable goals and longer-term objectives.

    —  It must be explicit in its linkages with national sustainable development strategies of member-states.

    —  It must incorporate a sustainability plan for relations both with accession countries and with third countries, particularly those in the developing world.

    —  It must be legally binding, with updates and revisions by future European Councils.

    —  The Council should aim to adopt the Strategy during the Swedish Presidency.


  The drive for sustainable development and integration requires political leadership, in as well as the structures and mechanisms listed in this evidence. In addition to the proposal for a "Commissioner for Sustainable Development", (see previous section) each new Commissioner should be made aware of their responsibility under the Treaty to ensure integration, and to oversee this work within the Directorates-General of the Commission.

  The clearest sense of leadership must come from the Council itself. Governments with solid experience in the integration agenda, such as the UK, are in a strong position to lead the agenda.


  Based on the above analysis, EEB-UK calls on the Environmental Audit Committee to support the following recommendations to the UK Government:

    —  Provide strong leadership on sustainable development.

    —  Promote the UK's greening government initiative as a model for institutional structures promoting integration which provides useful lessons at the EU level.

    —  Capitalising on the UK's authority on sustainable development indicators, ask for political agreement on a set of headline indicators at Helsinki, and give a clear mandate, with timescale, for the development of a single set of more detailed proposals, rather than the conflicting range of initiatives currently on the table.

    —  Use indicators to establish targets for the short—and medium—term, with clear responsibility for achievement of the targets allocated horizontally (between sectors) and vertically (between the EU, member states and regions).

    —  Call for a Sustainable Development Strategy for Europe, under the leadership of a Commissioner for Sustainable Development.

    —  Make explicit the linkages between our national strategy, A Better Quality of Life, and the European process.

    —  Call for the continuation of the process of drawing up sectoral sustainability strategies for each Council, with ongoing revisions to ratchet up standards; and ask the Commission to go through the same process with its Directorates-General.

    —  Call for environmental appraisals from the Commission of policy proposals in all Council meetings and refuse to consider proposals which do not include an appraisal of environmental effects.

    —  Support the Finnish Presidency initiative to reach agreement on the Directive on Strategic Environmental Assessment (SEA).

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