Environmental policy

Key questions Impact of green policy and initiatives on business: o cost and bureaucratic burden o stimulus to innovation and greater competitiveness? Role of EU?

Business and the environment Question of corporate social responsibility Question of reputation Need to comply with regulations: o specific – e.g. chemicals, end-of-life vehicles o general – environmental liability, etc. Need to secure flexible regulations Impact on competitiveness

Early attitudes to the environment 1950s – little environmental awareness Early 70s – changing but ‘limits to growth’ o i.e. growth and environmental protection incompatible Environmental policy seen as cost burden to business

Emergence of ecological modernisation Early 1980s – ideas from Netherlands and Germany Environmental policy not a cost burden but → commercial gains: o reconciles environment and growth, encourages innovation (Porter hypothesis) and boosts competitiveness o shift to policies that use market mechanism o ‘first mover’ advantages o growth of eco-industries and related jobs

E.M. ideas increasingly influence EU policy “Environmental action can generate benefits in the form of economic growth, employment and competitiveness” European Commission, Global assessment: Europe’s environment, 1999 “High environmental standards are an engine for innovation and business opportunity” 6th Environmental Action Programme, Exec. Summary

Creation of eco-industries Air pollution control, waste water management, solid waste management, soil remediation, renewables, recycling Over 2% of EU GDP and almost 4m full- time jobs in EU eco-industries EU – a major player on world stage in in eco-industries

Why EU environmental role? Pollution knows no boundaries Trade reasons: o different regulations as protectionism? o environmental dumping and ‘race to the bottom’

Environment – a ‘core’ EU objective directives/regulations Understanding of national policy needs reference to EU Policy tension – leaders and laggards o leaders – pull others along o laggards – environmental policy unlikely or much less developed without EU rules o new member states

Evolution of EU policy No direct environmental reference in Rome Treaty 1972 Paris Summit decision to establish EC environmental policy o First Environmental Action Programme o Subsequent action programmes build on each other – now on 6th (2001–10)

1987 Single European Act First explicit environmental legal base Establishes key principles: o preventive o damage rectified at source o polluter pays o policy integration Member states allowed to take stronger measures provided compatible with Treaty

Maastricht Treaty – two new principles: o high level of protection o precautionary principle Amsterdam Treaty: o sustainable development becomes a core EU objective o extension of co-decision procedure → greater role for European Parliament Nice Treaty – no significant change Lisbon Treaty – clearer international environment role for EU

Current themes and approaches Integration – environment at the heart of policy making – a continuing theme o Some successes (shift from producer to income subsidies in CAP) but little change in some trends that damage environment, e.g. transport and energy growth Continuing emphasis on market-based measures, e.g.: o continuing development of emissions trading o green purchasing by public sector o work with financial sector to develop criteria for ‘green’ lending and investment o incentives to business for ‘green’ behaviour o help with environmental management

Instruments of EU environmental policy Successive Environmental Action Programmes o Currently on 7th (runs to 2020) Funding – LIFE+, regional and agricultural funds Market based – emissions trading, taxes and charges, targeted subsidies Voluntary instruments o Ecolabel and EMAS Voluntary agreements – CO 2 in cars

Policy examples: voluntary Own initiative – e.g. ‘Responsible Care’ chemical industry Eco-labelling – national and EU (‘The Flower’) schemes Environmental management schemes – EMAS – review, audit, statement and verification

Policy examples: compulsory Environmental liability (polluter pays) – from 2007 o operators responsible for damage pay for it rather than society o incentive for precaution and prevention Emissions trading (from 1 January 2005 and later extended) o to help meet international climate change commitments o applies to power stations, oil refineries, coke ovens, iron and steel, pulp and paper, building materials, ceramics (aluminium and chemicals excluded) and civil aviation o effective scheme ensures cheapest emission reductions made first Limits on the sulphur dioxide emissions from shipping (in force since 1 January 2015)

The 7th EAP – runs until 2020 (1) Organised within three types of objectives Thematic objectives o Protection, conservation and enhancement of the EU’s ‘natural capital’ o Transformation of the EU into a resource-efficient, green, competitive, low-carbon economy o Protection of EU citizens from environment-related pressures and risks to health and well-being The Enabling Framework o Improved implementation of EU environmental legislation o An increase in environmental knowledge and evidence for policy o Greater integration of environment policy with other policies

The 7th EAP – runs until 2020 (2) Meeting local, regional and global challenges o More sustainable EU cities o More effective approach to international environment and climate initiatives Existing and new policies are grouped under each objective and sub-objective as contributors to overall objectives Individual initiatives can and do interact and relate to more than one objective

Summary EU environment policy has grown in range and complexity over the years – shows no sign of changing Environment issues cut across many policy areas Policy is a mixture of voluntary and compulsory measures, Cont…

Summary Cont. 7th EAP sets out current priorities – continuity with past Environment policy increasingly not regarded as a threat to business