European Environment Agency (EEA)

Resource‑efficient green economy and EU policies


Courtesy of Courtesy of European Environment Agency (EEA)

Green economy as a strategy
Originally seen as a useful policy approach to tackle the economic and financial crisis that began in 2008, the green economy is, today, seen as a strategic way of delivering a fairer society living in a better environment. Three objectives underly the green economy approach: improving resource efficiency, ensuring ecosystem resilience, and enhancing social equity. This report addresses the first of these objectives from a primarily macro.economic perspective.

Within the EU, acceptance of the concept of a resource.efficient green economy is gaining momentum. Policy initiatives can be found across the EU's Research and Innovation programme . in the Innovation Union Initiative together with the Eco.innovation Action Plan, the EU's Seventh Framework Programme for Research (FP7) and Horizon 2020. It is also articulated across major EU strategies, including the Europe 2020 Strategy and its Resource Efficiency initiative, the 7th Environment Action Programme as well as a large number of specific environmental, energy, and resource policies.

Further, policy recommendations on environmental fiscal reforms (3) to foster the resource.efficient green economy are articulated in fiscal and budgetary policies of the EU, in the European Semester process of the Europe 2020 strategy, and explicitly in the Country Specific Recommendations of the Annual Growth Survey. Green orientation is also emerging in EU strategies for international cooperation for development, in particular through the role of the EU and individual Member States in the fast growing area of 'climate finance'.

This report highlights the major forces fostering the shift to a resource.efficient green economy in Europe, including the role of EU policies. It examines trends in major environment and climate areas, which show that the underlying economic and technological changes leading towards green economy objectives are weak, slow, or, in many cases, have ground to a halt.

Current trends
Changes in resource efficiency, often in the form of 'relative decoupling', indicate significant environmental improvements but such decoupling of resource use from economic growth will not guarantee long.term sustainability. The slow pace of change observed means that the major EU environment and climate objectives and targets for 2020 and beyond are unlikely to be met without additional effort and more radical re.orientation of the European economic system. Trends also suggest that the global economic and financial crisis have not resulted in improvements in resource efficiency; in some areas it has led to a decrease in efficiency.

The change in the sectoral composition of the EU economy, in particular the growth of services, has not lowered its impact on resources as was expected, belying optimistic evaluations. Instead, it is more associated with changing trading patterns and 'trade.embodied emissions', as well as an increase of the global consumption footprint above that of the EU.

Recent EU strategies to effect an 'industrial renaissance', include the policy objective of 're.manufacturing', accomplishing a 20 % share of manufacturing industry in the EU's GDP by 2020. Given the present state of resource efficiency in manufacturing, 're.manufacturing' is unlikely to improve the resource efficiency of the EU economy, and major objectives, including those for climate, unless innovative and selective green re.manufacturing are pursued; EU funding of research and development of new materials including nano. and bio.based applications shows some promise in this regard.

Currently, though, change in resource efficiency across the EU economy is proceeding too slowly; what is required is a much bigger, deeper, and more permanent change in the EU economy and society to create both new opportunities and substitution processes across the economic structure. To bring this about, it is important to study and understand enabling factors and mechanisms at the crossroads of policies and real economy dynamics that could accelerate and direct the transformation.

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