Wednesday, July 2, 2008

ABC of Sustainable Development

My last speech during the Slovenian EU presidency at the European Sustainable Development Network Conference in Paris, June 30th-July 1st, 2008.

Excellencies, ladies and gentleman,

It is a real pleasure to be here in Paris on the last day of the Slovenian presidency of the EU. The European Sustainable Development Network is a valuable actor for promoting the kind of development that is future proof. The presence of highly ranking politicians from Slovenia and France demonstrates the importance we attach to your network.

I am convinced that sooner or later the internal issues related to our institutional setting and the Lisbon Treaty will be behind us. My message here today will be focused on the importance of this network for the role that Europe needs to assume on the global stage. This role is to care [1]!

In a complex world of today, there are fewer and fewer issues that are limited to one scientific discipline, one industrial sector or a single ministry and working across these borders is extremely important. Slovenia has clustered the responsibility for the Lisbon Strategy for Growth and Jobs, for Sustainable development and Competitiveness under one office - the office for growth that I lead. I also chair or co-chair the related Councils that provide the platform for communication on these topics with the civil society, social partners and the NGOs. It is about these cross cutting issues related to sustainable development, but also vital to all other challenges that Europe is facing, that I would like to address today.

I like to summarize the challenges of the developed world, including Europe, as A-B-C.

A stands for abundance. In rich European countries there is an increasing problem as to what to produce, what to manufacture. The stuff that we actually need to live comfortably is getting more and more inexpensive and the marketing needs to keep coming up in inventing needs so that factories can keep the people busy. We are spending less and less money on things that we really need for survival and more and more of stuff that means something to us or makes us feel good. And this is a chance for sustainable production. We can feel good with a new car, a new suit, a new set of dishes or we can feel good by buying a piece of art, a fair traded shirt produced in the third world or an environmentally friendly alternative to a product. It is only a matter of our culture, our values and our ethics. Values and culture are the keywords I want to revisit later.

B stands for BRICS. Brasil, Russia, India, China. Since the communication revolution that brought us cheap paper and print, the West had a monopoly on science and technology and translated that into a political and economic leadership as well. This monopoly is now shrinking. Singapore has the best education system in the world and the listing of worlds top universities in produced in Shanghai, not in Bologna, Oxford or at Sorbonne. Innovation and R&D too is being outsourced into these economies so where does our competitive advantage lie? May I offer values and culture again?

C stands for Climate Change. So much has been said about the related inconvenient truths that it would have been boring had it not been so serious. The key issues is that the world must reduce its greenhouse gas emissions. We know how to do so. We lived in an almost carbon neutral way only a 100 years ago, but nobody wants to go back to this kind of living. We must solve the problem without wrecking the economy. We need to put a monetary value to environment but we must also reshape the values of the citizens, so that they behave and act differently.

Where are the solutions to the A-B-C challenges? We must rely on the two renewable resources that we have at disposal.

The first is the sun. It will play a vital role in 20-20-20 goals the EU adopted in 2007 and is now struggling how to make it happen.The Slovenian presidency kept the momentum, coherence and ambition of the 2007 decisions by working towards a workable Energy and climate change legislative package to be adopted by the end of this year. A public policy debate was held extensively and the main outstanding issues have been identified. The Slovenian presidency provided for smooth continuation of negotiations on third package of legislative proposals for the internal energy market. The Energy Council in June reached broad agreement on the essential elements of the package which makes the promptly adoption of the package possible.

Reaching the 20-20-20 targets will not be easy, but we have the second renewable resource to figure something out - the human mind. And there are two sides to this mind.

The left, rational half deals with science, technology, research and development. Indeed, to make the transition into a low carbon economy we will need the third industrial revolution. This revolution is about a transition from below ground to above ground energy, from chemical to physical energy. The outlines for this revolution are defined in the Strategic energy technologies plan that was adopted under the Slovenian presidency.

But there is another part of the brain I want to talk about. It is the right hand side, the emphatic, intuitive, conceptual brain - the part of the mind that falls in love, gives meanings, defines values, tells us right and wrong. We will need this creative brain to think of (remember the ABC!)
  • (A) new products, rich in design and cultural values.
  • We will need it (B) to compete with technically excellent, cheap products from the BRICS countries that may fail to address our habits, our culture, our expectations of design, trust or environmental friendliness.
  • And we will need it (C) to change the habits, the values, the behaviour of the consumers towards consumptions patterns that are more sustainable.

Empathy, care is also controlled by the right hand side of the brain. Europe has always been a continent that cared. And Europe cares for its people, it cares for (1) nature, (2) cares for the less fortunate on the planet and (3) cares for nature.
  1. The care and dignity for the human individual has been both the baseline of European thought since the ancient Greeks and Christianity and has taken formal and legislative shape in the French revolution of 1789. It was that French revolution that placed the care for people, their equal rights and consequently open access to personal freedom, education, and healthcare high on Europe's political agenda.
  2. But a similar revolution is needed to extend these rights to all living beings on the planet. First, to the poor billion. Slovenian presidency has insisted that highest attention be given to the implementation of Millenium Development Goals, particularly noting the new dimensions generated by the climate change policies and the rising food prices. The issue of biofuels was suddenly catapulted to the top of political discussions, involving arguments ranging from biodiversity, protection of habitats, social implications, implications of food prices, technological dilemmas concerning the future of wining technologies in transport et cetera. Biofuels are an example how government distortions of the markets - over subsidized agriculture is meeting overtaxed fuels - can have negative impact. It is only with even more legislation - the firm commitments to develop, respect and monitor sustainability criteria for production of biofuels - that the issue could be resolved. The EU recommitted its leadership role in supporting the millennium development goals in the June council. EU remains firm to radically reform its aid policies in terms of effectiveness and to remain a main donor allocating 0,56% GDP by 2010 and 0,7% do 2015. And for this aid to be effective, the EU must tear down market barriers and provide assistance to the poor countries to establish law, order and good governance, a stable business environment in particular for small enterprises, and investment in human resources, in terms of healthcare and education.
  3. Finally the care needs to extend to nature. The venue for this thematic conference– a museum celebrating biodiversity – is symbolic as well: while we are loosing thousands of species on the planet each year, we need to adjust the economy, the production and consumption practices to protection of primary habitats and species. This is a vital message important for the quality of life of all future generations.

In common to all these efforts is an increasingly dominant role of values. Not only economical, but moral as well. But a winning combination is a combination of economic incentives and a change in values. The world will probably explore many ways to build environmental principles into the heart of economic policies, but sooner or later a price will need to be placed pollution. A single, uniform price on carbon embedded in products would create economic incentives for industry to look for ways to reduce it, it would motivate it to find cheapest and most economic ways, and would discourage the consumers to buy such products. Today, for example, some carbon is overtaxed, for example in fuels, and some is undertaxed, for example that in coal.

To do that, we need life cycle assessment of environmental impact, including CO2 footprint of all key products and services. We need to study this carefully. Literature today is offering very diverse results for items as simple as a kilogram of beef. And finally, we must give the consumer the information so that she can exercise the care for the environment when shopping. We must develop and standardize EcoLabeling of products in our stores.

As to the corporations, there is one mantra sweeping through the business would since Google coined it. Don't be evil! By adopting the Don't Be Evil culture, the corporation establishes a baseline for decision making that can enhance the trust and image of the corporation that outweighs short-term gains from violating the Don't Be Evil principles. The don't be evil principles were originally related to how a company treats its customers. It should be extended to how a company treats the other stuff that we care about - all the people and the nature.

Many of the principles I talked about have been included in the updated Lisbon strategy that was adopted in March. It provides a balance between economic growth and care. It introduces creativity, the importance of European culture, open innovation and the change of values into a top level EU political document. Yes, it calls for governments and EU institutions to set an example by reducing the use of energy in protocol car fleets and in buildings. It maintains the coherence of the energy and climate change package with the growth and jobs strategy.

But Lisbon strategy is expiring in 2010. We were convinced that Europe needs a coherent strategic framework beyond 2010 bringing together the strategy for growth and jobs, sustainable development strategy and the social agenda. I quote from the conclusions:
The European Council furthermore stresses that a continued EU-level commitment to structural reforms and sustainable development and social cohesion will be necessary after 2010 in order to lock in the progress achieved by the renewed Lisbon Strategy for growth and jobs. The European Council therefore invites the Commission, the Council and the National Lisbon coordinators to start reflecting on the future of the Lisbon strategy in the post-2010 period.
So lets start working on it - the first discussion took place in Brussels in May. There are some good baseline documents on the table, like Cohen Tanugis. Things are connected and interdisciplinary. This strategy should provide a baseline for the new financial perspective that should support it.

Ladies and gentleman,

The unique characteristic of Europe has been that it cares. That it values the human, the human life and nature. We know that care for environment must be global. We must do all that we can to win the rest of the world to join us. In time for Kobenhavn meeting in December 2009, the EU needs to finish its homework on Energy and climate change package and win other rich and poor countries to join the effort. The effort will not be worth much if they don’t.

But we can also provide an example on other issues. Sooner or later European policies on eradication of poverty, on social justice and welfare will become the worlds as well. The world needs Europe to lead, with example, the way into peace, prosperity and care. Care for our people, care for the poor billion and care for nature. And Europe needs leadership as well. The good thing about the rotating presidency is, that for half a year there is an ambitious, energetic lead that goes beyond what bureaucracies in Brussels can think of. Let's be ambitions and lets show to the world, how one can have a good living and remain caring for people and nature. This is what Europe can and should offer to the world. Good luck France in taking this forward!

[1] Jan van den Biesen of Philips made a good point on this at the Future of Europe Summit last year.