EU to set resource productivity target
The outgoing European Commissioner for the Environment, Janez Potočnik, has proposed setting a non-binding European resource efficiency target (part of the EU’s recently revealed Circular Economy package) measured through ‘resource productivity’.
Speaking to the Environment Committee of the European Parliament on Wednesday (3 September), Potočnik said that based on current policies, by 2030, resource productivity would be ‘around 15 per cent’ higher than today (as businesses improve their efficiency in response to rising resource input prices), but that if this were boosted to 30 per cent (as recommended by the European Resource Efficiency Platform) the EU’s Gross Domestic Product (GDP) would rise by up to three per cent and create around two million more jobs.
As such, he is proposing that the EC introduce a resource productivity target to “ensure that the links between environment and growth and jobs are better exploited in the Europe 2020 Strategy and its governance process”.
However, Potočnik suggested that target be ‘non-binding’, to leave member states “free to set their own individual objectives and decide on an optimal policy mix to achieve them”.
Resource productivity calculation
Potočnik said that resource productivity could be measured by GDP divided by Raw Material Consumption (RMC), as “this is the best available indicator and the most able to convey the importance and relevance of resource efficiency”.
He explained: “Raw Material Consumption (or RMC) is relevant for all sectors of the economy. It takes into account the full value-chain, including imported goods and materials, and is strongly linked to our energy use. By ensuring that similar products, whether produced in the EU or imported, carry the full 'rucksack' of materials needed for their production, it is compatible with our re‑industrialisation goal. It is the most robust and representative proxy for overall resource efficiency, yet it is simple enough to enable us to communicate clearly.
“Indicators for land use, water use and greenhouse gas emissions provide a more complete picture, but as a proxy, Raw Material Consumption divided by Gross Domestic Product (GDP) provides the best indicator for setting a target.”
According to the Environment Commissioner, such a target would “help focus political attention on the opportunities coming from higher resource efficiency and will prompt vigorous and effective strategies to be implemented by the EU, member states and business to improve their performance”.
It would form part of The Circular Economy package proposed by the commission in July, and would offer “a major conceptual contribution to the shift in the direction of improving resource productivity”.
To ensure that the package targets are reached, Potočnik added that the commission should seek to implement “a monitoring and early warning mechanism”, which would ‘build on the help and advice [the commission has] already started to give to those Member States who need it most”.
‘Growth path we are following is not the right one for Europe’
Reaffirming his wish to create a European growth agenda “on a strong foundation of sustainability and resource efficiency”, Potočnik highlighted that targets such as this were necessary as currently, the “growth path we are following is not the right one for Europe in the 21st century”.
He said: “We are locked into the linear economic model that developed over centuries of abundant resources. We extract resources, only to discard them as waste, without realising their full potential value and use.
“If we want to maintain our quality of life, but we do not want to lower our wages and social standards, we have no other option but to increase the value-added through improving the productivity of both, labour and resources.
“The EU's future industrial competitiveness will depend not only on using fewer raw materials, less energy and less water, but also on our ability to replace raw materials and imports with supplies of secondary raw materials, where they are available, and to produce goods that can be re-used, repaired, refurbished and recycled…
“I encourage you to actively support a Resource Productivity target in the review….Without boosting resource efficiency, the competitiveness of European industry is at risk, and without a political target at EU level we will never create the framework conditions and incentives needed for this transition.”
Potočnik closed the meeting by expressing his “deepest appreciation and gratitude” for the cooperation he had received from the Environment Committee during his tenure as Environment Commissioner and wished his successor the “same trust and support”.
The decision whether or not to adopt the resource productivity target will be taken in the context of the mid-term review, taking into account the results of the on-going public consultation, together with the recommendations of the European Resource Efficiency Platform.
Find out more about The Circular Economy package.