karmenuEvery now and then, with little fanfare, an economic trend is identified that might just have the potential to fundamentally shift perceptions.
The European Environment State and Outlook 2015 (SOER) has identified such a trend: What the report has discovered is that, from 2000 – 2010, Europe's green industries grew by 50 percent.





Now, this may seem laudable but hardly newsworthy. However the context of this trend is what really counts. Remember – this growth took place during the biggest boom to bust period of the last century. And while the bust hit practically every other sector of the economy, green industries continued to flourish.

The companies that have shown global leadership and embraced environmental concerns are the ones who have weathered the storm of recession.

Theirs is the lead we need to follow. Europe is a continent that is rich in skills but low in resources. The threat of being caught in the jaws of recession has proven to be a remarkable source of innovation. And so we, as a society are starting to learn to do "doing more with less".

But we are still far from a virtuous circle. Often the resources saved through smart techniques are then spent somewhere else, in what is known as the "rebound effect".  Sometimes efforts to green our industries have unintended consequences.

It's a common problem. In the transport sector, greater fuel efficiency has had only a limited impact on overall fuel use, as Europeans have chosen to drive more as a result.

Rather than relying on isolated improvements, we need to take a more systemic approach to these problems, and look for more integrated results. There are plenty of places where we can start.

More than anything, we need to find ways of keeping resources in the economy, instead of using and then throwing them away. We need a circular approach that reduces waste to the minimum.  When products reach the end of their first 'life', they should be immediately harvested for materials that can be reintroduced into a second 'life'. Only when that material spawns new products can we start talking about a genuine production life-cycle. This is the circular economy at work.

There are solid economic arguments. Industry studies show significant savings in material costs when circular economy approaches are used, pointing to a potential boost of 3% in EU GDP.  The question is not whether we should do it or not – it's how to scale up these approaches, and spread the good examples to the rest of the economy.

The success of European green industries should be the spur to the rest of the economy.  Before the end of 2015, the Commission will present a new and ambitious circular economy package, addressing the full cycle. This package will look into goals on recycling levels, smarter use of raw materials, intelligent product design, re-use and repair of products, and recycling. This is all designed to create a genuine production life-cycle.

I want to thank the authors of the SOER, published by the European Environment Agency (EEA). It is a treasure trove of information. As well as providing a compelling argument for the circular economy it has its findings that will inform EU policy for the next five years.

They include hard evidence that Nature protection areas (under the EU Natura 2000 projects) contribute EUR 200 billion to EU GDP. There is more good news – EU policies have delivered substantial benefits. Europeans enjoy cleaner air and water, send less waste to landfill and recycle more than they did five years ago. But there are also warnings that must be heeded if we want to prevent our environment from deteriorating.

The report shows that the European Union, and the Commission in particular, have an essential role in exploring ways to make sure we keep delivering good news. We must combine legislative action, market-based instruments, research and innovation. We must use incentives, information exchange, and support for voluntary approaches to promote this perception shift.  Where there is political will, legal certainty and public support, investment will follow.

Karmenu Vella (Environment, Maritime Affairs and Fisheries Commisioner)