Annexes to COM(2023)376 - 2023 Strategic Foresight Report Sustainability and people's wellbeing at the heart of Europe's Open Strategic Autonomy - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2023)376 - 2023 Strategic Foresight Report Sustainability and people's wellbeing at the heart of Europe's Open Strategic Autonomy. |
|---|---|
| document | COM(2023)376 |
| date | July 6, 2023 |
4. Supporting shifts in production and consumption towards sustainability. On the production side, this entails reforms and investments across Member States to decarbonise and depollute the economy, especially industrial processes and energy intensive sectors, reduce impacts on biodiversity, and minimise the ecological footprint of consumption. Cutting red tape, speeding up administrative and permitting procedures, or increasing the accessibility and quality of local support are also key. Large-scale action is needed to strengthen EU’s water-resilience, by addressing pollution and the increasing demands by agriculture, energy production, industry, or households. Measures to improve the governance of water (including appropriate pricing and allocation mechanisms), its efficient use, the development of sustainable alternative sources, the elimination of water pollution, and ensuring equal access are key. Pursuing sustainability will also require shifts in people’s behaviours, in particular those with the highest carbon footprints, in order to minimise the ecological footprint of consumption. Ensuring the right price signals (e.g., through carbon pricing, green taxes, eliminating or reforming environmentally harmful subsidies, strengthening environmentally positive incentives) matched with safeguarding affordability and availability of sustainable products and services will also be key. To change companies’ strategies and business models, the EU should continue designing policies and regulations to further tackle planned obsolescence, and to promote repair in the after-sale context, and design for circularity. Based on appropriate analyses, measures could also include banning the advertising of the most environmentally harmful practices or services. Taken together, these elements could constitute elements for a future broader legal framework, taking into account the long-term global competitiveness of the EU economy Further analysing the distributional and territorial impacts in policy making and communicating more clearly the results could help to design new measures in a way that minimises possible negative impacts on poverty and inequality, and foresees accompanying policy measures that cushion such negative impacts. Finally, education and awareness raising on sustainable and healthy choices and lifestyles should be strengthened across all age-groups.
5. Moving towards a ‘Europe of investments’ by increasing private financial flows in support of strategic investments for the transitions. Making decisive progress on the Banking Union and the Capital Markets Union is key to unlock private finance needed for the twin transitions. Sustainable finance tools such as European green bonds will finance sustainable strategic EU investments. Setting up an agile, fast, and responsive framework for boosting private investments, as well as ensuring a positive business environment, will be key for ensuring that the EU remains an attractive place to invest in the net-zero and circular economy. In this regard, public funding should be better used as a catalyst for private investments, notably for riskier, breakthrough sustainability projects, including their scaling up, and related manufacturing capacities in the EU. In particular, the European Investment Bank, the largest public bank in the world, should provide stronger support to strategic investments relevant for the twin transitions, such as raw materials, green tech, or biotechnology, especially for cutting-edge projects. It is also important to continue efforts to ease access to relevant sources of EU funding for European start-ups and small and medium companies. Other tools can also help to increase private financial flows: tax incentives, green and sustainable public procurement, and public-private partnerships, incentivising suppliers to adopt sustainable solutions, pre-commercial procurement, collaborations with non-governmental organisations for public service delivery, or with citizens and stakeholders for participatory budgeting. Tighter collaboration between the private and the public sector could also be achieved by upscaling blended finance strategies, e.g. through better intermediation from concessionary finance providers and by increasing the role of EU and Member States’ development institutions. Finally, further efforts in incorporating climate-related risks into the assessment of financial stability will be important.
6. Making public budgets fit for sustainability. Fiscal policies and taxation need to be adapted to the twin transitions, spare additional investment towards projects promoting them, and provide the right price signals and incentives to producers, users, and consumers, while improving fiscal sustainability. Implementation of the OECD’s reform of international taxation is the first step in this direction, limiting the race to the bottom in corporate tax rates and ensuring that multinational enterprises pay a fair share of tax wherever they operate. The EU should continue to pursue global anti-tax avoidance strategies that further support the fairness of tax systems. It should also consider how to reduce the tax burden on labour and to shift it to other tax bases less detrimental to growth, also to address inequality in a context of population ageing and new forms of work. Enhanced efforts to optimise public spending by improving the quality and composition of public finances and enhancing the efficiency and effectiveness of public expenditure will be crucial to making best use of public funds. This includes strengthening public capacities in data collection and analysis, so as to better design fiscal measures. Fiscal policy should continue to be focused on protecting vulnerable households and firms, while being affordable and preserving incentives for sustainable behaviour. Finally, given the uneven impact of fiscal challenges and the need to boost strategic investment and ensure appropriate financing for EU common goods, further avenues for common action should be explored.
7. Further shifting policy and economic indicators towards sustainable and inclusive wellbeing. Environmental and social aspects are already taken into account in the decisions of both public and private actors, but need to be further mainstreamed. In this context, beyond-GDP metrics should be further developed and progressively embedded into EU policymaking. This will help monitor progress towards wellbeing, facilitate the communication of political challenges, and design the strategies to address them in a people- and planet-centred manner, while ensuring that economic growth does not destroy its very foundations. Additional work should also be pursued to improve monitoring tools by developing robust model-based indicators (for instance on planetary boundaries or the social-environment-economy nexus), and better integrated assessment models for projections and scenario analysis. To further inform policies, statistical standards for national accounts need to be complemented by additional indicators to better reflect the interdependence between economic activity, people’s wellbeing, and the environment. This would address, for instance, the various ways in which resource depletion and environmental degradation undermine people’s wellbeing and economic security and, conversely, the various impacts of economic activity on the environment. The EU will continue contributing to the discussions within the international community on how the interlinkages between the economy and the environment can be accounted for in national accounts and in environmental-economic statistics in a methodologically sound way. In addition, it will continue promoting the use of existing environmental-economic accounting to inform policymaking in various fields, notably by boosting the integration of existing economic and environmental statistics, and social accounting to better address social inequalities in revenue distribution.
8. Ensuring that everyone can successfully contribute to the sustainability transition. Sustained efforts are needed to increase labour market participation among all segments of the population, notably women, persons with disabilities, the elderly, young people, and other underrepresented groups neither in employment, nor in education or training. Investing in early high-quality education should be encouraged to close inequality gaps. In addition to technical skills, sustainability, digital, civic, resilience, or entrepreneurial skills should be given increased attention. Encouraging lifelong learning, e.g. through greater on-the-job training and vocational training, or innovative ways of teaching would increase the flexibility of learning. This needs to be matched with adapting workplaces and working conditions to new types of jobs, generational expectations, and the needs of workers. Cooperation between public, private and civil society actors, through established mechanisms (e.g., Pacts for Skills or Skills Academies) should be strengthened. Digital technologies should be used to enrich and adapt education and training, and boost learning possibilities for all. To manage demographic change, the EU needs robust tools for granular forecasting of skills and workforce needs in key sectors. Talent development traps need to be addressed at regional level by stimulating the supply and demand for talent with targeted measures and in cooperation with employers and educational institutions. Finally, to address specific labour market gaps and demographic challenges, the EU needs to attract more global talent and support the creation of talent pools and partnerships with third countries. This needs to be coupled with supporting the communities of origin and adapting education and training to enhance the integration.
9. Strengthening democracy, including by increasing citizens’ agency. Building broad public support for sustainability requires increasing the participation of European citizens in democratic deliberations and policy-making processes, complementing representative democracy84. Inter- and intragenerational fairness, inclusive participation, and the agency of all citizens should lie at the heart of policymaking. For instance, embedding strategic foresight into policymaking can help governments adopt public policies based on future distributional (including inter-generational) impacts, putting in place strategies to minimise the probability that very negative social outcomes materialise. Increased openness of decision-making and the capacity to better engage and communicate with citizens will therefore be key. The EU should continuously strengthen its capacity to defend democracy and the rule of law85. To counter mis- and disinformation, and foreign interference, more effective instruments and their proper enforcement are important. It is crucial to make social media platforms more accountable and to support independent media. The impact of digitalisation on democracy must be also optimised, while addressing possible negative aspects (cyber-security of elections, hate-speech proliferation, and radicalisation). Finally, open, efficient, interoperable, and accountable public services will be essential. Therefore, the capacity of local institutions and other actors, such as social partners and civil society organisations, needs to be strengthened. This requires vast action to ensure that such institutions have the necessary skills, as well as financial and technological resources to contribute to and reap the opportunities of the twin transitions86.
10. Reinforcing the EU’s toolbox on preparedness and response to complement civil protection with ‘civil prevention’. The EU needs to strategically anticipate potential disastrous events and prepare for their impacts, as recently demonstrated by the pandemic and Russia’s war of aggression against Ukraine. The continued development of strategic foresight and monitoring capacities, including Early Warning Systems, will facilitate the translation of early information into early action, and should provide a compass to guide Member States’ future investments and funding for better preparedness and prevention. European data spaces, digital twins, and new interaction modes will be crucial to better understand and use large amounts of complex information. The EU’s ability to react quickly and efficiently to crises should also be steadily reinforced. For instance, the Single Market Emergency Instrument will ensure the free movement of goods, services, and people, with greater transparency and coordination in times of crises. To address the resilience of critical entities, the implementation of resilience-related EU Directives and Council Recommendations will be key87. The Emergency Response Coordination Centre should be further developed to become a core node linking all relevant EU crisis management actors (e.g. HERA) and strengthen operational preparedness for future emergency situations88. Various existing tools and instruments that are key for resilience in areas such as civil protection, migration, health, food, or water should be bolstered and synergies and cooperation between them strengthened. The EU should be also better prepared to address disaster and climate-related displacements. In addition to resilience actions, the EU will need to assess, prevent, prepare for, and manage risks in a systemic, one planet and one health approach. In addition, the development of common procedures should be supported by reinforcing or establishing new cross-sectoral linkages with relevant authorities at all levels, as well as the private sector, including risk managers and insurers. Finally, ways to further increase the availability of disaster risk financing should be explored.
IV. Delivering on the promise of the sustainability transition
The sustainability transition is built on a triple promise: a healthy planet and thriving environment; economic growth that is decoupled from resource use and environmental degradation; and an assurance that no person or place will be left behind. As the EU proceeds with this historic transformation, building a positive vision and preserving the sense of opportunity and optimism will be vital to building broad democratic support for the necessary changes and trade-offs, in challenging circumstances. This report outlines the key areas in which action is highly needed, if we are to achieve the sustainability transition and strengthen links between its environmental, social, and economic aspects.
Placing sustainability at the heart of the EU’s open strategic autonomy is key to enable Europe to deliver on these promises. For current and future generations of Europeans, this will mean living healthier and longer lives, finding private and professional fulfilment, and having a greater say in the future they want. For EU business, using the first-mover advantage of a net-zero economy, with globally leading sustainable products and services. And for the other regions of the world, benefiting from cooperation and sustainable development.
1 This Communication builds on the Joint Research Centre’s Science for Policy Report, Towards a fair and sustainable Europe 2050: social and economic choices in sustainability transitions, based on a fully-fledged foresight process. It started with the creation of foresight scenarios describing alternative versions of the EU sustainable future by 2050. For each scenario, the sustainability transition pathways were derived using a co-creative backcasting technique. This allowed the identification of new, alternative practices and structures as well as the phasing out of existing unsustainable practices and structures by 2050, including the analysis of trade-offs, bottlenecks, and synergies along the transition pathways. A cross-cutting analysis of the diverse patterns of change identified critical domains enabling the transformational changes towards sustainability. The foresight process also included consultations with experts and stakeholders, discussion with Commission services, agencies and joint undertakings, publication of a call for evidence, discussions with institutional partners (European Strategy and Policy Analysis System) and Member States.
2 The 2022 Strategic Foresight Report focused on the interplay between Europe’s twin transitions in a new geopolitical context. The 2021 edition evolved around important trends affecting the EU’s open strategic autonomy and freedom to act in the coming decades. The 2020 report analysed the EU’s resilience across four dimensions: social and economic, geopolitical, green, and digital.
3 Remarks by US National Security Advisor Jake Sullivan on Renewing American Economic Leadership at the Brookings Institution on 27 April 2023.
4 36% of the world’s population live in countries which actively condemned and imposed sanctions on Russia. Nearly one third in a country that has remained neutral. Finally, another 32% is in states where the government supported Russia’s actions or narrative. Howey, W. (2022), Russia can count on support from many developing countries, https://www.eiu.com/n/russia-can-count-on-support-from-many-developing-countries/
5 EDGAR - Emissions Database for Global Atmospheric Research, European Commission.
6 The G7’s Partnership for Global Infrastructure and Investment, of which the EU’s Global Gateway is part of, aims to respond to the demand for high quality infrastructure financing in low- and middle-income countries.
7University of Cambridge Institute for Sustainability Leadership (CISL), (2022) https://www.cisl.cam.ac.uk/competitive-sustainability-index
8 Net Zero Industry Act, COM(2023) 161 final.
9 European Economic Security Strategy, JOIN(2023) 20 final.
10 Investment needs assessment and funding availabilities to strengthen EU's Net-Zero technology manufacturing capacity, SWD(2023) 68 final.
11 Spain, together with other Member States, has developed under the framework of the EU-wide Foresight Network, a dedicated track to analyse current and future dependencies in four critical sectors (energy, digital technology, health, and food), also drawing on the methodology proposed by the Commission (see SWD (2021) 352 final, SWD(2022) 41 final, WP2023/14). This work provides recommendations on strengthening the EU’s open strategic autonomy, including its economic security, and global leadership by 2030.
12 Elderson, F., (2023), https://www.ecb.europa.eu/press/blog/date/2023/html/ecb.blog230608~5cffb7c349.en.html
13 Details of the applied methodology, data sources, additional results and a sensitivity analysis are presented in Health-adjusted income: complementing GDP to reflect the valuation of life expectancy, JRC Technical Report, JRC134152, https://publications.jrc.ec.europa.eu/repository/handle/JRC134152
14 Domestic footprint quantifies the environmental impacts caused by domestic production and consumption through a set of life cycle-based indicators.
15Consumption footprint and domestic footprint, European Commission, (2023), https://doi.org/10.2760/218540
16 Zero pollution – Outlook 2022, European Commission, (2022), https://doi.org/10.2760/39491
17 United Nation’s World Food Programme, https://www.wfpusa.org/drivers-of-hunger/food-waste/, version of 12 June 2023.
18 See for example: Versailles Statement: The crucial decade for energy efficiency, (8 June 2023), https://iea.blob.core.windows.net/assets/2de1ef68-c97a-4fdb-b8be-fb12b693893e/IEA8thGlobalConferenceonEnergyEfficiency_JointStatement.pdf
19 Intergovernmental Panel on Climate Change, (2023), https://www.ipcc.ch/report/ar6/syr/
20 Binder, M., and Blankenberg, A. K., (2017), https://doi.org/10.1016/j.jebo.2017.03.009
21 France Jagers, S. C., Martinsson, J., & Matti, S., (2019), https://www.tandfonline.com/doi/full/10.1080/14693062.2018.1470963
22 SWD (2023) 68 final and COM/2022/438 final. In addition, the Net Zero Industry Act requires in total EUR 92 billion over the period 2023-2030.
23 Combined figures for the EU and the UK; Naumann, G., et al., (2021), https://doi.org/10.1038/s41558-021-01044-3
24 Combined figures for the EU and the UK; Dottori, F., et al., (2023), https://doi.org/10.1038/s41558-022-01540-0
25 Only about a quarter of climate-related catastrophe losses are currently insured in the EU. See European Central Bank, EIOPA, (2022), https://www.ecb.europa.eu/pub/pdf/other/ecb.policyoptions_EIOPA~c0adae58b7.en.pdf
26 World Bank, (2021), http://hdl.handle.net/10986/35686
27 Europe’s moment: Repair and Prepare for the Next Generation, COM(2020) 456 final.
28 European Defence Agency, (2022), https://doi.org/10.2836/97270
29 Based on a joint assessment by the Government of Ukraine, the World Bank Group, the European Commission, and the United Nations. Source: World Bank, Ukraine Rapid Damage and Needs Assessment: February 2022 - February 2023.
30 The 2021 ageing report, European Commission, (2021), https://doi.org/10.2765/84455
31 Business Taxation for the 21st Century, COM(2021) 251 final.
32 European Investment Bank, (2023), https://doi.org/10.2867/307689
33 Source: Eurostat, balance of payments (BPM6), current plus capital account. Reference period: 2013-2022. Data extracted on 28 June 2023.
34 Bank for International Settlements, Credit to the non-financial sector (bis.org), updated 27 February 2023
35 See the ECB’s composite cost of borrowing indicator, which increased by 1.83 percentage points year-on-year in April 2023.
36 Schnabel, I., (2023), https://www.ecb.europa.eu/press/key/date/2023/html/ecb.sp230110~21c89bef1b.en.html
37 European Institute for Gender Equality, (2017), https://doi.org/10.2839/538402
38 European Investment Bank, (2023), https://doi.org/10.2867/307689
39 The strategic energy technology plan, European Commission, (2018), https://doi.org/10.2777/04888
40 The underachievement PISA scores in reading (22.5%), maths (22.9%) and science (22.3%) remain far above the EU 2030 target of below 15% and have increased when compared with the 2015 round. See: European Commission, (2022), https://www.doi.org/10.2766/117416
41 Covid-19 learning deficits in Europe, European Commission, (2023), https://doi.org/10.2766/881143
42 Harnessing talent in Europe’s regions, COM(2023) 32 final.
43 Eurostat, (2022), https://ec.europa.eu/eurostat/web/products-eurostat-news/-/ddn-20220330-1
44 Sustainability competences refers to the interlinked set of knowledge, skills, attitudes and values that enable effective, embodied action in the world with respect to sustainability problems, challenges and opportunities, according to the context. See: European Commission, (2022), https://doi.org/10.2760/13286
45 European Investment Bank, (2023), https://doi.org/10.2867/307689
46 Education and training monitor 2022, European Commission, (2022), https://www.doi.org/10.2766/117416
47 Eurostat, https://ec.europa.eu/eurostat/databrowser/view/HLTH_SILC_17__custom_6521084/default/table?lang=en, data from June 2023.
48 World Happiness Report, Helliwell, J. F. et al. (Eds.), (2023), ISBN 978-1-7348080-5-6.
49 The future of food and agriculture, FAO, (2022), https://doi.org/10.4060/cc0959en
50 In 2021, the energy rate, measured by the inability to keep home adequately warm, affected 6.9% of the total EU population and is likely to increase. See Eurostat, https://ec.europa.eu/eurostat/databrowser/bookmark/8f6604d8-6581-4f7b-adde-7a9e53a28caf?lang=en, data valid as of June 2023.
51 Eurostat, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Quality_of_life_indicators_-_natural_and_living_environment, data from September 2022.
52 ESPON (2022), CLIMATE, Updating and integrating climate data sets and maps.
53 European Commission, Knowledge Centre for Biodiversity, (2023), https://knowledge4policy.ec.europa.eu/foresight/who-can-afford-digital-green-transition_en
54 France Stratégie, Pisani-Ferry, J. and Mahfouz, S., (2023), https://www.strategie.gouv.fr/publications/incidences-economiques-de-laction-climat
55 Cohesion in Europe towards 2050, SWD(2022) 24 final.
56 Fairness, inequality, and intergenerational mobility, European Commission, (2023), 2652 / SP529.
57 Eurostat, (2022), https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Living_conditions_in_Europe_-_income_distribution_and_income_inequality, data from November 2022.
58 Fairness, inequality, and intergenerational mobility, European Commission, (2023), 2652 / SP529.
59 Eurofound, Darvas, Z. and Midões, C., (2021), https://doi.org/10.2806/129514
60 Lipps, J. and Schraff, D., (2021), https://doi.org/10.1111/1475-6765.12430
61 Eurostat, (2022), https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Living_conditions_in_Europe_-_income_distribution_and_income_inequality&oldid=528159, data from November 2022.
62 France Stratégie, Pisani-Ferry, J. and Mahfouz, S., (2023), https://www.strategie.gouv.fr/publications/incidences-economiques-de-laction-climat
63 Future of Europe, European Commission, (2022), 2554 / SP517
64 OECD, (2020), https://doi.org/10.1787/c3e5cb8a-en
65 OECD, (2015). https://doi.org/10.1787/9789264235120-en
66 Thiery, W. et al., (2021), https://doi.org/10.1126/science.abi7339
67 Distress felt by people whose direct environment is negatively affected by environmental change.
68 Marciano, L. et al., (2022), https://doi.org/10.3389/fpubh.2021.793868
69 Hickman, C. et. al., (2021), https://doi.org/10.1016/S2542-5196(21)00278-3
70 Future of Europe, European Commission, (2022), 2554 / SP517.
71 See among others Lipps, J. and Schraff, D., “Regional inequality and institutional trust in Europe”, European Journal of Political Research, Vol. 60, No 4, (2021).
72 V-Dem Institute (University of Gothenburg), (2023), https://www.v-dem.net/documents/29/V-dem_democracyreport2023_lowres.pdf
73 Sitra, Dufva, M., and Rekola, S., (2023), ISBN 978-952-347-302-7.
74 RECONNECT EUROPE, Briatte, F. et. al., (2020), https://reconnect-europe.eu/wp-content/uploads/2020/05/D6.1.pdf
75 Future of Europe, European Commission, (2022), 2554 / SP517.
76 Biased algorithms refer to the tendency for algorithms to produce outputs that lead to disadvantage for certain groups, such as women, ethnic minorities. See European Union Agency for Fundamental Rights, (2022), https://doi.org/10.2811/25847
77 The geography of EU discontent and the regional development trap, European Commission, WP 03/2023.
78 Report from the Commission on the implementation of the Council Recommendation on access to social protection for workers and the self-employed, COM(2023) 43 final.
79 Eurofound, (2023), https://doi.org/10.2806/715002
80 Fit for Future Platform Opinion on Ensuring a future-proof regulatory framework for the Single Market.
81 The Single Market at 30, COM/2023/162 final.
82 EU Voluntary Review on progress in the implementation of the 2030 Agenda for Sustainable Development, COM(2023) 700 final.
83 Setting out a New Agenda for Relations between the EU and Latin America and the Caribbean, JOIN(2023) 17 final.
84 European Group on Ethics in Science and New Technologies, (2023), Opinion on democracy in the digital age.
85 Later this year, the Commission will put forward a defence of democracy package to deepen the action under the European Democracy Action Plan to promote free and fair elections, to step up the fight against disinformation and to support media freedom and pluralism.
86 E.g., provided for by a forthcoming initiative, the ComPAct, to enhance the European Administrative Space.
87 Directive (EU) 2022/2557 of 14 December 2022 on the resilience of critical entities and repealing Council Directive 2008/114/EC, ELI: http://data.europa.eu/eli/dir/2022/2557/oj
88Strategic crisis management in the EU, European Commission, (2022), https://doi.org/10.2777/517560
EN EN