January 30, 2008
Reducing the environmental impact of consumer products – from the provision of raw materials over the production phase to consumption and disposal – is a challenge the Commission sought to address in its 2003 Integrated Product Policy (IPP) proposal.
This European Business Summit workshop will discuss how Sustainable Consumption in the EU can be brought forward. The EBS organisers welcome comments and contributions: use the comment form, below, or write your own post on this or any other “Greening the Economy” issue. More: see About this blog, or go straight to the ‘Submit A Post’ form.
The IPP has been criticised both by NGOs, who argue the policy lacks teeth since it contains no legislative provisions, and businesses, who say its focus on the environment is too narrow and that it should be up to business rather than public regulators to ensure the sustainability of products.
Partly in response these criticisms, the Commission has consulted stakeholders and is formulating an action plan on SCP as part of the EU’s Sustainable Development Strategy (EU SDS).
Much like in the case of the IPP, the main challenge of SCP is to find ways to decouple the resource intensity and environmental impact of consumption-driven economic growth.
In its first report on the EU SDS, the Commission notes that in the EU’s average material intensity is “approximately 1 kg/EUR, which is slightly less than in the United States, but twice as high as in Japan. The EU could save at least 20% of its present energy consumption in a cost-effective manner, equivalent to €60 billion per year, or the present combined energy consumption of Germany and Finland.”
What to expect from the action plan
To date, the Commission has been somewhat vague concerning its approach to SCP, putting a wide range of options on the table and leaving many stakeholders scratching their heads about what to expect from the action plan.
In a presentation on the preliminary outcomes of the SCP consultation, the Commission points to three challenges for SCP, providing several options (listed below in alphabetic order) for addressing them:
1. Creating a dynamic internal market for ‘better performing products’
a. Framework for Eco-design of products
b. Strengthening the EuP (Energy using Products) Directive
c. Dynamic Performance Requirements
d. Environmental Product Declarations
e. More dynamic standardisation
2. ‘Leaner and cleaner’ production
a. Targets: resource & material efficiency, eco-innovation
b. Reinforce eco-innovation & eco-technologies (ETAP)
c. Boost Eco-Management & Audit Scheme (EMAS)
d. Sustainability labelling of imported products
e. SMEs support and advice
3. Changing behaviours towards ‘smarter’ consumption
a. Environmental performance agreements with retailers
b. Market-Based Instruments
c. EU Eco-label overhaul
d. Misleading advertising/false environmental claims
e. Green public and private procurement
f. Education/awareness raising campaigns
The presentation notes that a priority list of products should be established, and that any new EU measures should build on, and be coherent, with existing ones.
The Commission also seems to have taken into account some recommendations made by the Centre on Sustainable Consumption and Production (CSCP) in Wuppertal, Germany, which calls for varying VAT rates according to eco-efficiency of products as well as “clear sustainability targets, concrete steps to internalise environmental costs into prices and a [new] Directive on green public procurement”.
In a reflection of the IPP debate, many industries argue that any SCP policy would need to be flexible enough to accommodate the vast diversity of products on the EU market, and that a voluntary, case-by-case approach is more appropriate given the different challenges faced by individual sectors.
But given the increasing pressure on ecosystems, scarcity of raw materials and resources, as well as the imperative to address climate by reducing CO2 emissions, a voluntary framework in which each sector chooses its own goals and means to achieve them may no longer be appropriate.
Rather a sound policy framework with clear incentive structures appears necessary so that businesses can proceed with the necessary investments to correct or adjust production practices.
Consumers also need to be educated about – and be able to trust – any future labelling schemes, for example, so that they can make informed purchasing decisions based on the environmental impact of products on the market.
Weighing the incentives – question for debate
But what incentives are best suited to foster more sustainable consumption and production patterns?
To fuel discussion and debate, the following (non-exhaustive) list provides some examples of potential incentive measures:
- Tax policy revision, including preferential VAT rates for ‘green’ products and services;
- Preferential loans and financing conditions for sustainable production;
- State subsidies (opportunity for participants to discuss recent proposed revision of environmental state aid rules);
- More support for SMEs;
Further questions for debate
- Is the CO2 output of products – either during production or during their entire life-cycle – a reliable and transparent indicator of sustainability?
- What other indicators would be useful? Are there any indicators – water quality and usage, waste by-products, chemical content, etc – that should be absolutely mandatory in any scheme that measures the sustainability of products?
- What is the best driver for the creation of ‘better’, ie more sustainable, products? Sound regulation with proper incentives? Or should the market be left to decide?
- EurActiv.com: LinksDossier on EU Integrated Product Policy (IPP) and 29 October article ‘Food industry rejects carbon label idea’;
- Commission: Website on Sustainable Consumption and Production Policies;
- Commission: background document for SCP consultation;
- Commission: presentations on outcomes of SCP stakeholder event on 02 October 2007;
- Commission: first progress report on the EU Sustainable Development Strategy (October 2007 – includes reflections on SCP);
- Centre on Sustainable Consumption and Production (CSCP): website with recommendations from a 27-28 September conference on SCP
- EU Joint Research Centre (JRC): background document on carbon labelling
- TED talks: William McDonough ‘The wisdom of designing Cradle to Cradle’