Annexes to COM(2003)572 - Towards a Thematic Strategy on the Sustainable Use of Natural Resources

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agreements.

5.4. Policies that can help to reduce the impact of resource use

As well as policies, like the ones discussed in Chapter 5.2, that tackle environmental pressures directly, there are also a number, either existing or under development, that can help reduce these pressures. These include:

- the Cardiff Integration Process - this seeks to increase integration of environmental issues into other policy areas. The integration of resource concerns as underlined in Chapter 5.3 would be one of these issues;

- Research and Innovation Programmes [44] - parts of these attempt to find new environmental technologies and new approaches to production and consumption patterns that will help to alleviate the environmental impacts of resource use. Other programmes work towards a better understanding of the impact of resources use, in particular with respect to taking account of externalities;

[44] for example the EU's RTD Framework Programmes and the LIFE programme.

- the Environmental Technologies Action Plan [45] will attempt to dismantle the barriers to the application of new environmental technologies;

[45] COM(2003)131.

- the Integrated Product Policy - which aims to reduce the environmental impact - and hence the way in which resources are used - of products and services throughout their life-cycles;

- the new European Chemicals Policy - which will aim for a more sustainable use of chemicals, and thereby reduce their impact on the environment.

- Education and information on environmental resources policies.

5.5. A coherent approach to environmental impacts of resource use

While all the policies discussed in the previous chapters affect the use of resources, they have to be applied coherently. The Resources Strategy will facilitate this by taking a holistic view of how policy measures on the environmental impacts of the use of resources interrelate.

Examples of potentially diverging objectives within environmental policy:

- using bio-mass, including forest products, to produce energy can be an effective way of reducing greenhouse gas emissions, but must be managed in a way that avoids negative environmental impacts on land use and bio-diversity and avoids market distortions;

- the banning of CFCs under the Montreal Protocol led to the use of alternatives, which do not react with the ozone layer but have very high greenhouse gas potentials;

- the adoption of the urban waste water directive has led to a significant improvement of the waste water discharged into water courses. However, the disposal of the resulting sewage sludge can in itself have a significant environmental impact if not managed properly.

Examples of potentially diverging objectives between environmental policy and other policies:

- subsidies to coal mining may be regarded as falling within the social pillar of sustainable development, but must be managed in a way that does not create barriers to the introduction of new environmental technologies and renewable energy sources. Consideration should also be given to ways of achieving such social objectives in ways that would be more economically efficient and less environmentally harmful;

- reducing fishing quotas helps protect bio-diversity, but careful consideration has to be given to short and long term employment impacts in the fishing industry.

Balancing different objectives is a key element for sustainable development, so policy choices need to be supported by a proper understanding of potential trade-offs. Environmental assessments [46] and internal Commission procedures such as extended impact assessments [47] are increasingly used to assess policy options. However, there is currently no mechanism to relate policy-choices to the overall aim of decoupling economic growth from the environmental impacts of resource use. The Resources Strategy aims at giving decision-makers the means to make these assessments.

[46] DIRECTIVES 85/337/EEC AND 2001/42/EC.

[47] COM 2002/276 COMMUNICATION ON IMPACT ASSESSMENT.

6. WHAT NEEDS TO BE DONE?

6.1. Introduction

The aim of the Resources Strategy is to develop a Community approach that will provide policy makers and other stakeholders in the relevant policy areas with the necessary framework and information for:

- identifying and assessing the impacts of resource use on the various environment media (air, water, soil), on bio-diversity and on human health;

- addressing scarcity where relevant;

- preparing and reviewing policies that influence resource use and its associated environmental impacts.

This should also help the Commission to examine and define which measures might be necessary to enhance the coherence of existing policies in promoting a balanced approach to policy assessment, integrating economic, social and environmental objectives with regard to the use of natural resources. The long term goal of this approach is to achieve a reduction of the environmental impact of resource use and the use of scarce resources, in accordance with the aims of a general improvement in the environment, restoring and developing the functioning of natural systems and sustainable development of the EU as a whole.

6.2. Core elements of a future thematic strategy

(a) Knowledge gathering

To support policy decisions on the prioritisation of resource-related environmental problems, a sound understanding of the links between resources use and the associated impacts at each stage of the life cycle is needed. Without this, impacts that are highly visible, for example lead mining, may attract disproportionate attention when compared with impacts that appear to be more subtle or only make themselves apparent after a certain length of time, such as dispersal of lead from leaded car fuel.

Such a knowledge base will need to include information on data like material flows, the state of ecosystems, land use and marine resources. Many bodies exist, both at the national and EU level, which could contribute the necessary knowledge if asked the right questions. The Resources Strategy will initiate and monitor work on the knowledge base needed for the development and implementation of action. This can then feed into the policy-making process, which will need to decide which impacts to focus on and to decide which options are most appropriate, while maintaining economic growth.

In this context it is important to note that in a knowledge society, education and information of citizens and other stakeholders about the knowledge gathered will help to support the implementation of environmental policies in the field of resources use.

(b) Policy assessment

Any policy to reduce environmental impacts, such as by shifting the demand pattern, or using more eco-efficient technologies, is likely to have impacts on other policy areas or on technologies. Therefore it is necessary to undertake an assessment of the likely impacts on the environment (both inside and outside the EU) of any such policy measure. This assessment will examine whether the likely environmental effects are compatible with the objective of the Resources Strategy. In this assessment the likely socio-economic effects will be taken into account. By doing this it will make policy-makers and other stakeholders aware of potential trade-offs - with other environmental and non-environmental policies - and stimulate the development, where possible, of alternative measures.

(c) Policy integration

Concrete actions will need to be taken on the basis of the information generated by the previous two activities. This will require political decisions to be made that take into account the role of natural resources within the wider context of sustainable development. For example, while it is generally acknowledged that there is a need to get the prices right [48] there has often been only very limited progress in this direction. [49] Likewise, from an environmental perspective, further progress towards the elimination of environmentally negative subsidies could be made. The "policy integration" element of the future strategy will assist in addressing key issues while considering all aspects of sustainable development. This element will also meet the need for permanent monitoring of progress so that any initiatives of the strategy can be reassessed and revised if necessary.

[48] For example, in the Conclusions of the Gothenburg European Summit in 2001.

[49] For example, the overall share of revenue from environmental taxes in total revenue from taxes and social contributions in EU Member States is between 5 and 10 % (Environmental Signals 2002, Benchmarking the millennium, European Environment Agency, p. 125) and the six years delay to reach a political agreement on the Commission's proposal for a directive on taxation of energy products, which was presented in 1997 (COM(97)30 of 12.3.1997).

6.3. Work under way

According to the Sixth Environmental Action Programme, the Resources Strategy should include five elements, or tasks.

Task 1: An estimate of materials and waste streams in the Community, including imports and exports, for example by using material flow analysis

Work on the quantification of material and waste streams in Europe is already being conducted by the Commission (EUROSTAT), the European Environment Agency and the European Topic Centre for Waste and Material Flows. The Commission has recently reported on material flows in Europe [50] and has published the results of a wider analysis of this subject in direct response to the request of the Sixth EAP [51]. Furthermore, it has launched the development of a methodology for assessing the patterns of use of individual resources. [52] The objective is to understand the relationship between the use of selected resources and the environmental impacts created at various stages in their life cycles. Depending on the results, further work on a wider range of resources and the refining of such a methodology may be carried out. These activities serve the immediate purpose of collecting data on specific material streams and related environmental impacts. However, in the longer term, they will serve to prepare the "knowledge gathering" required for the thematic strategy itself.

[50] Material use in the European Union 1980 - 2000: Indicators and analysis. EUROSTAT, 2002.

[51] Resource use in European Countries. European Commission, December 2002.

[52] Resources - a dynamic view. European Commission, in progress.

Task 2: A review of the efficiency of policy measures and the impact of subsidies relating to natural resources and waste

The Commission has begun to prepare an overview of commonly used policy measures and how they affect the use of resources in EU Member States and Acceding and Candidate Countries. [53] This will be followed-up in the second half of 2003 by a more detailed investigation in connection with Task 3 below. The results may also help to point out trade-offs between environmental concerns and other areas of sustainable development involved in selecting different policy measures. As an immediate result these investigations will help to define concrete tasks for the work programme that will be proposed for the Thematic Strategy. In the longer term they should be seen as pilot projects in preparation of the proposed strategic "policy assessment".

[53] Public-private interface. European Commission, in progress.

Task 3: Establishment of goals and targets for resource efficiency and the diminished use of resources, de-coupling the link between economic growth and negative environmental impacts

This encompasses the overall objective of the future Resource Strategy which is to de-couple the negative environmental impacts of resource use from economic growth, so it can not be a one-off activity.

The Commission will launch this task by further assessing the resource efficiencies of individual countries, building on the results of recent analyses mentioned under Tasks 1 and 2 above. It will investigate the reasons for any differences found and their implications for the state of the environment. For this the Commission has initiated work to clarify how benchmarking between countries could help to establish goals and targets. The most problematic findings as well as best practice will then be investigated through follow-up studies so that a first set of resource specific targets will be available towards the end of 2004. In the long term this type of benchmarking should become one of the routine tasks of the Resource Strategy's "knowledge gathering".

Task 4: Promotion of extraction and production methods and techniques to encourage eco-efficiency and the sustainable use of raw materials, energy, water and other resources

and

Task 5: Development and implementation of a broad range of instruments including research, technology transfer, market-based and economic instruments, programmes of best practice and indicators of resource efficiency

Community environment, research and innovation policies contribute to this task, for example through the IPPC Directive, the Environmental Technology Action Plan, the Community Research and Development Framework Programmes and the LIFE programme. They contribute to developing more knowledge based and less resource intensive products and processes and can become key factors to support transformation of resource use patterns in the European industry. International technology and environmental partnerships, like those mentioned in Chapter 6.5 of this Communication, will also contribute to these tasks. Furthermore, new community policies, such as the Integrated Product Policy, the Thematic Strategy on Prevention and Recycling of Waste and the EU follow-up to the 10-year Framework of Programmes decided at the World Summit for Sustainable Development in Johannesburg will help by fostering technology transfer and economic instruments. The strategy will also look at the use of market-based and economic instruments, including optimal use of fiscal instruments to create incentives for sustainable resource use.

Indicators of resource efficiency are being considered in the context of the European Union's Sustainable Development Strategy and of the Johannesburg commitments. [54] With the build-up of knowledge the Resource Strategy will attempt to go beyond quantitative efficiency and pressure indicators and define its specific needs for indicators of aggregated environmental impact . The Commission will work on their development in co-operation with the EEA and other institutions. This activity will have close links to the indicator-related work of the Integrated Product Policy and Community recycling and waste policies. However, large parts of Tasks 4 and 5 require the integration of the environmental aspects of resources management into other policy areas. The Resource Strategy should contribute to this integration by providing data, proposing actions and ensuring that they are properly considered. In order to do this effectively, the three strategic core elements described in Chapter 6.2 need to be operational on a permanent basis.

[54] COM(2002)524 final of 20.09.2002: Report from the Commission to the Council: Analysis of the open list of environment-related headline indicators looks at the feasibility of producing such indicators.

In parallel to these tasks, information should be made available in order to communicate environmental policy messages regarding the use of natural resources effectively to European citizens. Member States should be asked to provide adequate information and education on these policies. Suitable ways of achieving this, including for example programmes for education, training and diffusion in the European Research Area, can be explored in detail when developing the full strategy.

6.4. Time-scale

Consideration also needs to be given to the appropriate time scale for achieving the strategy's objectives. There is general consensus that the full implementation of new policies and the adaptation of existing concepts will require a long time period. The World Bank, for example, advocates a long-term perspective for natural resources management as it "is almost always related to long-term problems". For the Resources Strategy, the Commission believes that 25 years is most appropriate because:

- achieving the necessary decoupling of the environmental impacts of resource use from economic growth and the necessary further improvements in resource efficiency will require a significant change in production and consumption patterns and in the way we manage our natural resources, and institutional changes too. This can not be done overnight;

- there are already policies that address the short and medium term, but they lack an overall framework for shaping future policies. For example, the Kyoto objective to reduce CO2 emissions by 8% by 2008-2012, when compared with the 1990 level, has to be related to the long-term objective to stabilise CO2 concentrations in the atmosphere, which may require a reduction of more than 50%. The Fifth EAP even mentioned a "long term target of 70% cut".

- businesses need public policies with clear long-term objectives in order to plan investments and innovate.

6.5. Enlargement and the international dimension

As a result of its forthcoming enlargement, EU support for environmental protection will increase threefold through structural and rural development instruments, plus the transitional institution building facility. The Acceding Countries' priorities will be to build up their economies and infrastructure. The Resources Strategy will take these needs into account while, at the same time, guiding these countries away from unsustainable paths of resource use and resource intensity.

The EU's approach to resources management is also likely to play a major role in other neighbouring regions, such as Eastern Europe beyond the Acceding Countries and Central Asia. EU legislation is likely to become the principal means of international law-making for most countries in the region. This approximation of legal frameworks will affect the management of natural resources through environmental policies, as well as through possibilities for strengthened economic links that will have implications for many other policy areas.

Clearly a European resources strategy has to take full account of these developments. The strategy will have to explore how it can contribute to the European Commission's goal of pursuing concrete and differentiated environmental objectives with neighbouring countries, for example, in bilateral mechanisms or sub-regional co-operations like the EU Northern Dimension, the Danube-Black Sea Task Force and the Regional Environmental Reconstruction Programme in the Balkans.

The strategy should also take account of the new dynamic of EU participation in international co-operation in the environmental field following enlargement, as well as the impact on the various organisations involved, and should strive to develop synergy and complementary actions, where these provide added value.

In addition to the above, the EU's Resources Strategy has to take account of Europe's interdependent trade relationship with many other regions outside Europe and its global trade and development policies. Resources flow over the whole world and are subject of extensive trading. For example, the EU is one of the world's greatest users of metals while less than 5% of the world mining production comes from its own territory. Other examples include the dependence of parts of the European livestock industry on imported cattle feed, as well as large imports of seafood products and commodities that are often produced in non-sustainable ways in countries outside the EU. Moreover, although in the EU the total forest area is rather stable or even expanding, deforestation in developing countries for export purposes is continuing. At the same time the desire to subordinate such trade flows to principles of sustainable development raises difficult questions of extra-territoriality and development of the world trading system rules. An EU resources strategy should therefore be set in a global context, as many solutions (and measures to stimulate their implementation) will only be coherent and effective if developed and implemented taking account of global considerations including the international division of labour. A life-cycle approach to the sustainable use of natural resources should cover the entire supply chain.

While natural resources provide significant sources of income for many countries, there exist also important links between poverty and the use of natural resources in developing countries, both as a side effect of unsustainable resource use along the entire value chain as well as through their economic dependence (and therefore their vulnerability) on natural resources. Also, purchasing policies at least cost, which frequently do not include the long-term sustainable costs of resource use may lead to unsustainable use of soils, forests and oceans, and should in some way be addressed in the appropriate policy areas.

Clarifying the role of these equity issues in a European Resources Strategy, including the unequal division of resource use, will demand substantial work in the process of developing the final strategy.

7. FUTURE DEVELOPMENT OF THE RESOURCES STRATEGY

This Communication confirms that the aim of the future Thematic Strategy on the Sustainable Use of Natural Resources is to develop a framework and measures that allow resources to be used in an environmentally sustainable way, while achieving the objectives of the Lisbon strategy. The strategy will build on existing EU policies, as well as on national policies and the various sector policies that influence the ways resources are used.

The publication of this document marks the first step in the development of the Resources Strategy. With this as a starting point, the strategy will be developed in an open and collaborative process involving the Community institutions and public and private stakeholders. An Advisory Forum, chaired by the European Commission, will be established to steer the policy development process. Working Groups will be established to address specific resources or key issues and analyse them from the three - environmental, economic and social- perspectives of sustainable development. The European Commission will invite different services and stakeholders to chair and co-chair these working groups.

On the basis of the analyses developed in this Communication, other thematic strategies and the outcome of the consultation process that will follow the adoption of this Communication, the Commission will in 2004 propose a comprehensive Community strategy on the sustainable use of natural resources. Furthermore, stakeholders are invited to look at the Commissions web page on the Resources Strategy (http://www.europa.eu.int/comm/environment/ natres/index.htm). Comments and input to the development of the strategy can be submitted to the e-mail address mentioned on the web page.

The Commission requests the Council and the European Parliament to endorse the approach outlined in this Communication.