Green growth begins tomorrow, not in 2020, European Commissioner says

20 Nov 2012

Dr Janez Potocnik, the European Commissioner for the Environment, speaking at the IIEA yesterday. Photo by Andrew Hegarty, IIEA

Ireland needs to add a 41st shade to the famous ’40 Shades of Green’, and that is the green economy. That was the conclusion of Dr Janez Potocnik, the European Commissioner for the Environment, speaking in Dublin yesterday.

Potocnik was addressing the Irish Institute for International and European Affairs and laying out his vision of green growth, ahead of Ireland’s hosting of the EU Presidency in the first half of 2013. In an address entitled Green Growth for Ireland and Europe, Potocnik asked, “Can ‘green’ and ‘growth’ really go together? I want to explain why I believe that they can, and indeed they have to.”

He acknowledged the challenges of getting the public and private sectors alike to focus on sustainability in tough economic times. “It is hard to find a politician who was re-elected for defending longer-term interests over short-term benefits; or a manager who was rewarded because the profits of the company were lower but more sustainable in the longer term. Long-term thinking is not often rewarded in business and politics, and that is particularly true in today’s economic climate.

“But to those entrepreneurs and politicians that are looking more to tomorrow than 2020, I would just point out that employment in the green sectors in the EU has been growing by 3pc a year during the crisis,” he continued. “The global market for eco-industries is estimated to be at least a trillion euro, and is expected to almost double over the next 10 years.”

Potocnik said we had do away with the thinking that makes a zero-sum game of our present and our future. “It is those fast-growing green sectors that will be the enablers for us to green the whole economy in the future,” he said. “Green growth begins tomorrow, not in 2020.”

Shift in emphasis

He explained that when he became European Commissioner for Environment some three years ago, he had taken a conscious decision to make resource efficiency the core and guiding principle of his mandate.

“It was a shift in emphasis designed to put environment policy fairly and squarely at the centre of our policy agenda – on the desks of ministers for economy, agriculture, energy and transport – and indeed of prime ministers,” he said. “Not only environment ministers.”

“Modern environment policy is not an obstacle to economic growth or a constraint on business,” he explained. “It is not about only using legislation to punish polluters once the damage has been done. On the contrary, our future growth and competitiveness will fundamentally depend on our ability to respond to the challenges of resource scarcity and environmental degradation. These challenges will inevitably put a brake on growth unless we tackle them now.”

We have to get ready for a world of 9bn people by 2050, said Potocnik – “a world where, on the business-as-usual scenario, we will need three times more material resources by 2050, and 70pc more food, feed and fibre.

“The days of growth based on intensive use of cheaper and cheaper resources are over,” he continued. “The commodity price reductions of the last century were already wiped out in the first decade of this century. Competition for resources among nations and economic actors is increasing. They constitute a high and increasing proportion of the input costs for business. And for many of these resources Europe is highly dependent on imports.”

This leaves us with little choice, according to Potocnik. “The choice we do have is whether we prepare for a managed transition now – through smart investment and innovation – or whether we continue with that business as usual scenario: and wait for supply shocks to bite, with the disruptive consequences that will surely have.”

While much work has been done at European level, Potocnik said, the question is, will this be enough as we transition from a growth model based on intensive use of cheap resources, to one based on getting more value from expensive resources?

Three key challenges

Potocnik said we face three particular challenges if we are to deliver that transition: “We must mobilise at the national level, we must invest and innovate, and we must create a circular economy.”

First, national governments have to play their role. “Most of the relevant policy tools are not in Brussels, they are in the 27 national capitals,” he said.

And he had positive things to say about Ireland when it came to “the fields of energy, climate change, but also research and development, and employment”.

“The priority that Ireland is giving to targeting research and innovation, demonstrates very well the thinking that future competitiveness and sustainability go hand in hand,” he said.

The second challenge is investment, said Potocnik, who described himself as an “innovation optimist” rather than a “techno-optimist”. “For it is innovation – through the application of existing and new technologies, through new business and market systems, new behaviour and through design – that has the possibility to break us out of our locked-in ways: to move us onto a different growth paradigm.” And he said it will be the private sector that drives these improvements.

“Encouraging investment in areas with the highest potential for our future competitiveness is the logic behind the revised industrial policy that the Commission adopted a few weeks ago, and we put the circular economy and resource efficiency at the heart of it,” he said.

The third challenge, said Potocnik, is that resource efficiency alone will not be enough. He cited McKinsey, which has estimated that the key improvements in resource efficiency it identified could provide for about 30pc of the increased demand we can expect by 2030.

“So it is clear that we need more than just increases in resource productivity, we must also use those same resources again and again. That means moving away from a linear economy – extraction, production, use, and throwing away – to a circular – or ‘closed loop’ – economy, where once a product’s life is over those resources are pumped back into the economy.”

Potocnik wrapped up by saying he was confident that the Irish Presidency will be a strong ally in keeping up the momentum on environment policy. “Resource efficiency, green growth and jobs for the EU are essential objectives that we can only achieve if we all pull together,” he concluded.

On the morning of 25 January 2013, Silicon Republic, in association with the Green IFSC, will host the Green Growth Forum 2013, where high-profile international keynotes will be joined by local experts and leaders in finance, technology and policy, and take part in mediated panel discussions. The theme of the forum is: Fostering and Financing Green Innovation.

Ann O’Dea is the CEO and co-founder of Silicon Republic and the founder of Future Human