Greening the Economy

The opening plenary session of the European Business summit (EBS 2008) workshop will feature speakers as diverse as the European Commissioner for Environment, the Director General of the WWF and the President of Microsoft International.

This post sets out the scope of this EBS 2008 plenary (see EBS ‘08 programme). Everyone interested in the topic, whether they’re coming to EBS 2008 or not, is welcome to use this blog to comment or submit their own ideas – see About this blog.

A. Several global trends that will shape the future

  • Increasing global population, and an ageing Europe.
  • Accelerating demand for energy worldwide.
  • Energy price increases causing inflationary pressure.
  • Climate change imposing low carbon constraints.
  • Large R&D and capital investments required at a time of regulatory uncertainty.

B. Innovation, Energy and Environment on the European political agenda.

  • In 2000 the EU stimulated a shift towards sustainable development, with the pro-growth Lisbon strategy aiming to make Europe “the most dynamic and competitive knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion, and respect for the environment by 2010”.
  • Between 2000 and 2006 EU Directives have been ratified for
    (i) the promotion of renewable energy production for electricity provision (96/61/EC)
    (ii) improved energy performance of buildings (2002/91/EC),
    (iii) use of biofuels and renewable fuels for transport,
    (iv) common rules for the liberalized electricity market (2003/54/EC) and
    (v) gas market (2003/55/EC),
    (vi) the European (GHG) Emissions Trading Scheme (2003/87/EC),
    (vii) promotion of cogeneration (2004/8/EC),
    (viii) eco-design of energy using products (2005/32/EC) and
    (ix) energy end-use efficiency and service actions (2006/32/EC).
  • In 2006 the Expert Group on R&D and Innovation led by Mr. Esko Aho highlighted the importance of the creation of innovative products and services, providing sufficient resources for R&D and innovation; and improving structural mobility and adaptability.
  • Berlin 2007, the EU outlined the need for a Strategic Energy Technology Plan (SET-PLAN) to accelerate development and deployment of cost-effective low carbon technologies and complement policies and measures to achieve 20% reduced GHG emissions, 20% renewable energy sources (RES) by 2020 compared to 1990; through carbon pricing and the ETS; energy taxation, the competitive Internal Energy Market (IEM); and international energy policy.
  • Recognizing the lack of measures of eco-innovation in Europe, in 2007 the Commission funds the Measuring Eco-Innovation (MEI) Research Project to define and develop indicators and statistics on eco-innovation to provide a rationale for future policy initiatives.

C. Challenges

  • To foster and adopt near-term, cost-effective, profitable “win-win” technologies (such as cogeneration) and business models (such as energy service companies) leading to increased energy efficiency and reduced GHG emissions.
  • To create a stable and consistent European sustainable innovation system (SIS) and policy framework that supports the development of promising technologies from invention through to full maturity.
  • To define and implement the correct mix of harmonized market based instruments, regulations, and networked communities (of business, knowledge and regulatory networks.), creating demand for more efficient products and services.
  • To ensure supplies of public and private finance and talent to invest in R&D, test and disseminate new technologies and business models for eco-restructuring at an unprecedented scale.
  • To create and enhance strong minimum best practice standards; support networks to facilitate transfer of best practice; lobby to develop a level playing field through global harmonization of dynamically improving standards and regulations.

D. Possible questions for the thematic session

  • How can “free markets” generate useful business models, products and services? If so at what point do profit incentives lead us in the wrong direction?
  • Which there policy initiatives that could fix the conflict of incentives? Should business actively support e.g. a carbon tax or cap and trade system?
  • How is the failure to move to foster and adopt truly innovative new technologies due to technical risk? To what extent is institutional inertia responsible? To what extent is regulation (e.g. utility regulations) actually responsible for maintaining the status quo?
  • Can R&D investment in existing technologies, such as nuclear power, or in new ‘back-stop’ technologies such as carbon capture provide the same potential for knowledge spin-offs as investment in truly innovative technologies? Moreover will this type of investment ‘crowd out’ and diminish efforts to promote eco-innovation?
  • To what extent can a knowledge based service economy decouple itself from energy and material requirements?

F. Further Reading

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