Paper presented to the international conference on
Environment Vision and Strategy for a new Millenium„

of the Korean Association of Public Administration (KAPA)
on May 12, 2000 in Seoul

Prof. Dr. Jan C. Bongaerts
University of Maastricht (The Netherlands)
and
Technische Universitaet – Bergakademie Freiberg

1. Introduction

2. Trends in „classical„ management of environmental risks: Preparation of a new environmental action programme for the European Union

3. Integration of environmental interests in other policy areas of the European Union

4. The European Union and global environmental issues

5. Conclusion and outlook

Environmental policy making has come a long way in the European Union. At the outset, more than fourty years ago, when the Treaty of Rome was signed which established the European Economic Community (EEC) with six Member States, environmental protection was not on the agenda. [ The „Six„, as they became known, were and still are Belgium, the Netherlands and Luxemburg ( Benelux ), France, Germany (then West -Germany) and Italy. Efforts to win Great Britain as a member state failed because, at that time, Britain favoured a free trade area (and not a common economic community). ] In the original Treaty there is no mentioning of environmental protection as as political task for the (then) EEC. The main philosophy for setting up the EEC as a durable institutionalised solution for safeguarding peace in (Western) Europe consisted in economic cooperation. By linking and interlocking the economies of the states of Europe, interdependencies among those countries would emerge which would prevent their use for nationalistically oriented animosities or even wars. Time and space are lacking for further comments on this philiosophy, but one cannot deny that, from the day the original Treaty of Rome has been signed, it has worked in practice and (Western) Europe has enjoyed peace ever since. [ Other important institutional arrangements also play a role in this process, such as the Council of Europe (a supranational organisation of members of national parliaments with a specific dedication to human rights) and, of course, NATO. In a paper on environmental policy in Europe, there is too little scope for elaborating on this issue. ]

The first indications for a need for European Community legislation do not stem from environmental concerns at a supranational level in the first place, but from an interest in the proper functioning of the common market.. Hence, economic and trade issues dominated environmental legislation, as among Member States, fears arose that differences in national health and environmental standards would distort competition within the common market of the European Economic Community. The response to such fears (whether real or imaginary) consisted in setting up common standards according to the principle of harmonization.

This principle holds that the legal framework for economic agents and activities needs to be the same (or at least similar) in all Member States in order to allow for a competition among such agents which is fair irrespective of their nationality. Hence, if prior to the EEC, a system of a market economy based upon competition would prevail in each Member State, then within the EEC, this competitive level playing field would be extended to the territory of all the members states, as if internal borders did no longer exist. [ Hence, competitive advantages or disadvantages only result from natural conditions (such as geographic location and climatic differences), individual skills and talents and productivity levels but not from differences in regulations. The harmonization principle was strongly favoured by France, in order to safeguard French business interests against emerging West Germany. The French stressed that, only when national systems are harmonized, competition should be allowed. This view was rejected by Great Britain because of the necessary transfer of powers from the national to the supranational level. Moreover, in the British view, differences in the level playing field, including differences in regulation, were considered necessary in order to enforce competition among governments and states for the best economic conditions for their own economic agents. Since neither France nor Germany could accept this view, the negotiations on Britain’s entry into the EEC failed. ]

This explains why the first environmental laws of the EEC primarily dealt with products (and not with industrial installations) because products typically cross borders. An eminent example is automobiles, for which – among many other standards dealing with safety – emission limits for exhaust gases were set at EEC level as early as 1970. Actually, with regular amendments reflecting progress in exhaust gas treatment technology and the improvement of fuels, this law is still in place.

With the growing environmental damages caused by human activity which became apparent at the end of the sixties of last century, the need for an environmental policy in its own right was felt. In the European Community (EC) this need was formulated in the so-called European Single Act of 1987, an amendment of the Treaty of Rome in order to set the conditions for the completion of the Single Market. Since the entry into force on 1 July of 1987, the European Community is legally entitled and obliged to conduct a policy for the protection of the environment. It is based upon a number of principles, such as the polluter-pays-principle, the prevention principle, the principle of avoidance at source, the principle of scientific and technological evaluation, the principle of balancing ecological and economic objectives and the subsidiarity principle.

With the founding of the European Union in 1992 after the entry into force of the Treaty of Maastricht, the role of the common environmental policy became more prominent, among others with the introduction of the principle of sustainable development, the principle of cooperation and the principle of integration (of environmental interests into all other policy tasks of the European Union. [ The European Community (EC) is the economic part of the European Union, which constitutes the institutional platform for the common market and the so-called community policies (including protection of the environment). The European Union also contains a second pillar (on justice and inner security) and a third one on foreign affairs and security. The main differnce between the first pillar on the one hand and the two others on the other consists in the way decisions are being made. Actually, the principle of integration was not written into the Treaty at Maastricht for the first time. Already in the Single European Act one can read that „Environmental protection shall be a component of the Comunity’s other policies.„ But in Maastricht, and later on in Amsterdam, this obligation was given a separate article with more pronounced wordings. ]

Finally, with the signing of the Treaty of Amsterdam in 1995 (mainly with the purpose of preparing the extension of the European Union towards Central and Eastern Europe), the main objectives of the European Community were modified. No longer should there be just economic growth but instead, a balanced growth which takes social and environmental concerns into account. Moreover, all three pillars [ „Three pillars„: see previous note, just above. ] are now subject to sustainable development. This includes e.g. economic and development cooperation but also foreign (commercial) policy and even justice (cooperation among police corps of Member States to fight environmental criminality). [ For a detailed overview of the entire political and legal process of integration, see: David Grimaud: The integration of environmental concerns into EC policies and in particular in Agenda 2000 decisions, forthcoming in European Environmental Law Review ]

Practical policy making at the level of the European Union (mainly by the European Commission, the executive body, and the Council of Environment Ministers, the decision-making body, together with the European Parliament (whose role in decision-making steadiliy increases) has reflected this growing importance. European environmental directives not only cover products which cross borders but also industrial installations for productive purposes and for ecological activities (such as e.g. waste treatment). There is almost no type of environmental risks which is not covered by European Union law: hence there exist European Union directives dealing with endangered species, nature protection, water bodies, chemicals, genetically modified substances, air contamination, waste treatment, noise pollution, eco-products, and many more. In some cases, such as in the management of (toxic) chemicals, the European Union law even dominates national regulations of the Member States. [ Readers with an interest in more details may consult the home-page of the directorate general for the environment of the European Commission at http:europa.eu.int After clicking the welcome button, find your way via and to this home-page,. Or go straight to http:Europa.eu.int/comm/environment/index_htm Get a grasp of the complexity of the matter by simply checking the index. ]

Moreover, European Union environmental laws now heavily influence the work of virtually all national, regional and even local administrations who assist with the implementation of the body of these laws. [ Readers with an interest in the texts of European Union environmental laws can check the Homepage of the directorate general for the environment at http://Europa.eu.int/comm/environment/index.htm Some of them, such as the Directive on free access to information on the environment have a direct impact on their workload. Others may lead to high investment costs. A good example is the Directive on urban waste water treatment 91/271 which forces member states either to up build or upgrade waste water treatment plants. An estimate of the investment costs caused by this Directive for Germany alone puts a figure of 40 billion Euro between 1993 and 2000. [ This high figure does not only result from the lack of waste water treatment installations in East Germany after unification. For East Germany, the estimated investments stood „only„ at 17.5 to 20 billion Euro. The remainder was spent in West Germany, which at the time of entry into force of the Directive, already had a very advanced system of waste water treatment. What the European Directive did, was severely thighten strenghten the standards for waste water. ] In this context, one should also mention that the European Court of Justice plays an increasingly important role in environmental policy, as national courts often ask the European Court to interpret and indicate the correct implementation of European Union environmental laws.

Going beyond the management of environmental risks, one should also notice that the European Union has a legal obligation to integrate environmental interests into all other areas of policy making, be they transport, agriculture, research and technological development, industrial policy, telecommunications, tax policy, competition policy, etc. Solving this immense task requires completely new approaches which cannot be wrapped up into specific laws, such as a directive on the emissions on exhaust gases from automobiles. The main difficulty is to reformulate the „other„ policy areas such as to make them „more green„. Since this process is fairly new, it will be one of the elements of future environmental policy making at the level of the European Union.

As a result of this integrative trend, the shape and character of the foreign policy of the European Union is also changing, when issues such as global warming, the protection of tropical rain forests, global biodiversity but also the issue of international trade and the environment figure on the world politics agenda. Typically in such international negotiations, the member states no longer present their own views but formulate the European Union view through the member state which acts as so-called presidency [ The presidency lasts half a year and starts at January 1 or July 1. The Member States rotate by alphabetical order, sometimes with minor amendments. ] .

Given these developments this paper on trends in European Union environmental policy developments contains three parts:

• Trends in „classical„ management of environmental risks
• The road to integration of environmental interests into other policy areas
• The European Union and global environmental issues

We will deal with them in this order.

2. Trends in „classical„ management of environmental risks: Preparation of a new environmental action programme for the European Union

One could also refer to this task as the management of „old„ environmental policy which defines ecological priorities and determines instruments for achieving certain objectives. In this context one should mention the Environment Action Programmes of the European Union. As their name suggests, these are policy documents containing intentions, objectives, tasks and responsibilities and, last but not least, assignments for the actors, such as the European Commission, the European Council of Ministers, the Member States, regional and local authorities, but also the private sector (industry and consumers and the public at large. At present, the Fifth Environment Action Programme, started up in 1992, is coming to its end.

This programme was much different from the earlier ones, because it explicitly focussed on certain aspects of environmental management, under the assumption that concentration of some key issues would improve the chances of success. Moreover, the Fifth Environmental Action programme (5EAP) also stressed the need for cooperation among the various actors. Table 1 contains a short summary of the 5EAP.

Table 1: Summary overview of the Fifth Environmental Action Programme

Main features of sustainable development:

• Maintain the overall quality of life;
• Maintain continuing access to natural resources;
• Avoid lasting environmental damage;
• Consider as sustainable a development which meets the needs of the present without compromising the ability of future generations to meet their own needs.

Two major principles:

• Integration of the environmental dimension in all major policy areas;
• Replacing the command-and-control approach with shared responsibility between the various actors, eg. governments, industry and the public.

Wide range of instruments:

• Legislation to set environmental standards;
• Economic instruments to encourage the production and use of environmentally friendly products and processes;
• Horizontal support measures (information, education, research);
• Financial support measures (funds).

Five Target Sectors:

• Industry
• Energy Sector
• Transport
• Agriculture
• Tourism

Seven Themes and Targets:

• Climate change
• Acidification and Air Quality
• Urban Environment
• Coastal Zones
• Waste Management
• Management of Water Resources
• Protection of Nature and Bio-Diversity

Three areas of specific attention with respect to Risk Management:

• Industry-Related Risks
• Nuclear Safety and Radiation Protection
• Civil Protection and Environmental Emergencies

Seven types of Policy Instruments:

• Improvement of environmental data
• Scientific Research and Technological Development
• Sectoral and Spatial Planning
• Economic Approach: getting the prices right
• Public Information and Education
• Professional Education and training
• Financial Support Mechanisms

Source: See http://europa.eu.int/comm/environment/

In November of 1999, at the request of the European Council of ministers and the European Parliament, the European Comission presented an overall evaluation of the 5EAP known as the Global Assessment. The outcome pointed more or less in the same direction as the intermediate evaluation in 1995. Since the beginning of the 5EAP, many new environmental objectives and many new instruments have been put in place, but in the end, there is no general improvement of the state of the environment in the European Union, with some remarkeable exception (e.g. the concentration of sulphur dioxide and aerosolsn in the ambient air has been reduced and in some areas, the water quality of rivers is much better.) In February 2000, Commissioner Ms Wallström said that, if business goes on as usual, the environment will even get worse after 2010.

There are three reasons for the lack of success. The first one deals with implementation. Many European environmental laws (Directives) are not implemented in the Member States even given the relatively long deadlines (usually five years or more). This situation is „chronical„ and the European Commission is constantly urging Member States to make progress and takes their governments incessantly to the European Court of Justice for violation of the European Union Treaty.

Second, there is no fixed set of environmental risks which can be identified and then remains unchanged for the future. In contrast, new issues arise, such as global warming, the management of bio-diversity, the integration of environmental considerations in world trade and the WTO, the problem of waste from electrical and electronical equipment (all our PCs, notebooks, palmtops, CD players, mobile telephone sets, etc. one day will become waste), the risks of genetically modified organisms (if any) or the spectacular, never ending growth of private road transportation. In some cases, even genuinely new problems are being discovered such as the management of environmental risks caused by endocrine disrupters.

Third, there are two contrasting developments within the economies of the European Union Member States. One the one hand, many activities, taken by themselves, have become much cleaner (e.g. the sulphur concentration in liquid fuels diminishes) but their number increases. Hence, cars become cleaner but the average mileage driven increases. In consequence, the qualitative environmental improvements are too small to compensate the quantitative negative impacts. Obviously, our life stiles are not very sustainable.

With the publication of the Global Assesment, work has started on a new environmental programme which will be the Sixt Environmental Action Programme (6EAP). It should be adopted by the end of this year. At present, there are only broad ideas about the content of the new programme. The following procedure is to be set. In the fall of 2000, a strategic document will be published which contains the main objectives and broad targets. In a second stage a set of thematic action plans with detailed targets and measures for their implementation will be presented.

This procedure was approved at the European environment ministers council on March 30, 2000 in Brussels. In their resolution the ministers emphasised the following priorities: climate change policy, rational use of natural resources, management of waste, promotion of biodiversity, environmental safety (i.e. risk management of chemicals and genetically modified organisms and industrial accidents), soil conservation and desertification, „eco-efficiency„ and integrated product policy.

As one can see from this rather broad list of priorities, some of them belong to what may be referred to as the „classical„ management of environmental risks. With „classical„ management I mean that a traditional approach is selected in terms of setting ecological targets, designing instruments for achieving them and identifying actors who are held reponsible for implementing the instruments, according to the triple question: What, how and by whom? Examples are the management of waste and the management of the environmental and health risks of chemicals. In particular with respect to chemicals, there is a general conviction among the European Commission and the environment ministers of the Member States that a new policy for chemicals is needed. [ There are two main problems with chemicals. First, because the European legislation distinguishes between „new„ and „existing„ substances – with much less stringent obligations for existing chemicals, there are literally thousands of such substances in use and on the market with little available information about their health and environmental risks. (One simply assumed at the time of entry into force of the legislation that all existing chemicals were safe.) Second, for „new„ chemicals, the burden of proof of their safety is not with the manufacturers but with the public authorities. This is not in line with the principle of producer responsibility. ]

But there are other environmental risks for which „classic„ environmental management practices are required. Table 2 contains a list of current and future issues.

Table 2: A selection of current and future issues for „classical„ management at European Union level

Environmental compartment / issue	Policy proposals
Water	Integrated management of water resources Establishing a list of priority substances in the field of water policy [COM (2000) 49]
Air	Setting national emissions ceilings for certain atmospheric pollutants Upgrading legislation for exhaust gases of road and off-road vehicles
Waste	End-of-life vehicle (EOLV) treatment Treatment of waste from electric and electronic equipment (WEEE) Review of the Packaging and Packaging Waste Directive
General(horizontal) issues	Increased efforts for better implementation of EU environmental law SEA Strategic environmental assessment of plans and programmes

Whilst the „classical„ management of health and environmental risiks will continue, the task of integrating environmental consideration into other policy areas will become more important. This issue is addressed in the next section.

3. Integration of environmental interests in other policy areas of the European Union

The integration of the environmental interests into other policy areas of the European Union is now firmly accepted in the Treaty of Amsterdam. Article 6 of the Treaty refers to this task and it notices that, in general, the European Union must strive for a sustainable development. In order to start up this process in a formal manner, the European Commission presented papers in which more and more „other policy areas„ were suggested for integration. The three early candidates were Agriculture, Energy and Transport. Later on, the Internal Market [ In the European Union context, this is an important issue because it enables the free access of products and services to the markets of all Members States.] , Economic cooperation and development, Industry [ Traditionally, this is a powerful area of policy making, dealing mainly with product quality management and technical standards for the benefit of the Single Market and the promotion of innovative industries (such as telecommunications, information technologies, etc.) ] , General Affairs, Economics and Finance [ ECOFIN serves the purpose of monitoring the eonomic and financial policies of the European Union and the Member States. The ECOFIN ministers also decide on the European Union’s budget. Their importance in the Union is on the rise.] and Fisheries were added. Hence, at present, there are nine areas for which the European Commission has received the approval by the European Council (of heads of states and goverments ) to proceed with integrative policies. [ The full story of all these formal steps and the list of all consultation papers which have been published on this issue can be found in the article written by David Grimeaud. (See Footnote 5 for the bibliographical reference.) ] In the framework of this paper, it is not possible to review them all. Hence, I restrict myself to Agriculture, Transport and Energy, since they were the first three issues opened up for integration.

Common agriculturural policy (CAP)

The case of agriculture is rather specific, because it is one of the few sectoral activities which is managed as a common poliy, hence the reference to the Common Agricultural Policy. This means that all decisions in the area of agriculture are taken at the European Union level and that European Union legislation with respect to the CAP is directly applied in the Member States without any need to create national laws.

Moreover, the CAP consumes the largest share of the European Union’s budget and, hence, integrating environmental considerations into the CAP certainly requires „greening„ the European Union’s budget for the CAP. First steps towards this objective were made in 1999 during the so-called Agenda 2000 procedure which settled the financial framework for the European Union from 2000 to the end of 2006. [ Since it would be too complex for the Member States to decide on the European Union’s financing on a yearly basis, at longer time intervals decisions on a framework spanning several years are made. The outcome is being implemented through annual budgets which are subject to approval (before and after spending) by the European Parliament. Needless to say that the finance ministers of the Member States keep an eye on the spending behaviour of the European Union as well. ] The debate around the agricultural budget within Agenda 2000 was particularly fierce as farmers‘ organisations tried to defend their interests.

What was at stake? Originally, farmers recieved a subsidy from the CAP budget in order to support their incomes under adverse economic conditions. The subsidy was closely linked with the development of the agricultural markets. If market prices fell below a certain level (called intervention price level) the Europan Community would buy at that intervention price whatever quantities of products were being supplied. It does not come as a surprise that this led to serious excess supply, hefty costs for intermediate storage of products, subsidised food exports throughout the world, even destruction of food stocks and, above all, a rapidly falling respect by the general public for the farming population and ever louder protests by the major trading partners of the European Union at world-wide level. Also unsurprisingly, in 1987 the European Community was virtually broke and had to be bailed out by the Member States.

This event led to a complete revision of the CAP, initially started in 1992 and continued with the Agenda 2000 decision making procedure. The philosophy is to remove the incentive towards excess production by lowering the intervention price levels and replace the subsidies which are „production related„ by subsidies which are „not production related. This mode of operation is also part and parcel of the European Union’s position in the negotiations on trade and agriculture within the WTO. In principle, one system of subsidies is replaced by another, but in reality the grants are decreasing, due to pressures from the ministers of finance of the Member States. Table 3 contains an overview of the expenditures for the CAP

Table 2: Expenditures for the Common Agricultural Policy (Million Euro, prices of 1999

Year	Total CAP expenditure	CAP expenditure (excluding rural development and accompanying measures)	Rural development and accompanying measures
2000	40.920	36.620	4.300
2001	42.800	38.480	4.320
2002	43.900	39.570	4.330
2003	43.770	39.430	4.340
2004	42.760	38.410	4.350
2005	41.930	37.750	4.360
2006	41.600	37.290	4.370

Source: European Commission, Agenda 2000 at http://europa.eu.int/SCADplus/leg/en/

Hence, the agreement on agricultural reform marked a major turning point in the shape of the Common Agricultural Policy. While part of the approach behind the various elements of the agreement is to make European agriculture more competitive on the world stage, the European Council has also put in place an environmental underpinning to agricultural support. Typically, farmers are not only seen as producers of bio-mass (for food and non-food applications) but also as managers of landscapes and of natural resources in general. Since the latter type of activities have a so-called public good character, they cannot be sold on markets at market prices which are established through demand and supply. As a result, alternative ways of providing finance for these services need to be assured. This is where the new CAP comes in.

This new CAP policy should not be confused with the polluter-pays-principle, which is also established in the Treaty. As a matter of fact, farmers are expected to observe all basic environmental standards without compensation and the subsidies are meant to pay for environmental protection measures which go beyond these basic eco-standards. Moreover, the European Council also decided to dedicate part of the budget of the CAP for development measures other than for farming in rural areas in order to stimulate alternative activities in these regions. Box 1 contains an assessment by the European Commission of the outcome of Agenda 2000 with respect to the CAP.

Box 1: an assessment by the European Commission of the outcome of Agenda 2000 for the CAP

The Council has established a link between basic environmental protection requirements and direct support payments to producers. Member States are required to take appropriate environmental measures in view of the agricultural land used or the production concerned. They have a series of options in relation to the measures they take and shall have the power to apply sanctions to producers for non-respect of those requirements, including cancellation of support payments. Support not paid to producers in this way shall be channelled into the Member State's rural development programme. Additional environmental services are to be remunerated through reinforced agri-environmental measures. In its decision on the Agenda 2000 reform package, the Council agreed upon the establishment of a strong new rural development pillar to the CAP with environmental respect at its centre. Member States will have to draw up comprehensive national or regional programmes from a menu of possible measures of which agri-environment is a compulsory element. Among these measures are enhanced environmental possibilities for the training of farmers, for support in less favoured areas and notably for forests of high ecological value.

In addition, within the market regimes more support for extensive beef production is envisaged and there are opportunities for Member States to use some funding in the milk and beef sectors to favour more environmentally beneficial production methods.

Hence, at least one can notice that first steps towards the „greening„ of the CAP are being taken. Their overall environmental impact cannot be assessed at this moment. More precisely, we do not know to what an extent the reduction of the intervention price levels improves the state of the environment.

First, from an environmental point of view excess supplies constitute a waste of resources and, as a result, they are contrary to sustainable development. Hence, balancing supply and demand can be considered as a first objective for sustainable development. In this context, however, one should take into account that agricultural sectors do not operate in isolation. To take an example, inasmuch as cereals serve as food stuff for cattle. lower prices decrease the costs of inputs of cattle farming and dairy farming and farming in these sectors will intensify. Hence, their impact on the state of the environment will get worse.

Second, lower prices set incentives to cut costs. This may result in lower environmental impacts because farmers reduce the use of mineral fertiliser and plant protection products, specifically in less favoured areas. [ Less favoured areas are more difficult to cultivate, because of climate conditions, low soil qualities or adverse production possibilities (e.g. hills and mountains). In such areas, farmers have incentives to use extensive practices. ] However, there is also a risk that the contrary will happen through intensification in appropriate areas (e.g. which are close to large markets). Simultaneously, given the lack of scope for productivity increase in less favoured areas lower prices may induce farmers to give up farming alltogether. In that case, irreversible changes of landscapes through spontaneous afforestation will occur, often with an accompanying loss of biodiversity. Hence, the overall impact on the environment of the new CAP is not well known.

Transport

As in all industrialized parts of the world, and, actually also in the other parts of the world, the transport sector plays a critical role in modern economies, enabling mobility of both people and goods. In the European Union, transport is said to make a major contribution to the full achievement of the Single Market. However, this sector also accounts for an increasing share of energy end use and gaseous emissions.

Over the last 20 years, car travel (vehicle-km) in OECD countries has grown at a rate of 3.3% per year, slightly under the rate for car ownership (3.5% p.a.) but faster than growth in GDP (2.8% p.a.) The main underlying factors for this growth are rising incomes, changes in lifestyle, declining fuel costs, and also national policies encouraging mobility.

Road freight (vehicle-km) has been growing at an even higher rate of 4.8% p.a. The reasons for this growth are manifold: economic globalisation induces longer journeys to access new and distant markets; manufacturing changes, such as "just-in-time" delivery, require smaller and more frequent shipments; centralisation of warehousing which leads to longer distribution runs.

As a result of these mobility trends, energy consumption in the transport sector has experienced rapid growth. In the European Union the percentage of final energy consumed in transport (in all modes) accounts for some 290 million toe (tonnes of oil equivalent) which represents a total of 29%, whilst industry consumes 32%; and residential and other sectors the remaining.

According to IEA (the International Energy Agency) statistics, the breakdown of transport energy use between road, rail, air and inland water modes for the 20 countries with the highest transport energy consumption in 1990, is as follows: 80% for road traffic, 13% for air transport, 4.4% for rail transport and 2.6% for inland water transport. In the EU, land transport (road and rail) accounts for 86% of total consumption in the transport sector. For land transport, almost all the energy used (98%) is in the form of oil products, accounting for 55% of the EU total oil consumption. This presents a challenging problem in respect to security in energy supply. Considering the low potential in the short term to substitute fuels, transport will remain dependent on oil, thus being the main cause for the rigidity of demand for imported crude oil.

In this context it is interesting to note that there has been a long term trend for making cars more energy efficient (i.e. fuel consumption in litres declines per 100 km). During the last decades, official fuel consumption in new cars fell by about 20%. [ This is the fuel consumption certified by the manufacturer.] But the reality is different and the official indications are not always met. There are several reasons: First, car drivers have driving behaviours which are not properly accounted for in official test cycles. Second, the use of energy consuming equipment such as air conditioning, electric engines for window pane carriage, etc. is increasing. Third, the market is moving towards larger cars, increasing engine size and new vehicle types (minivans, sport utilities, four-wheel drive and off-road vehicles). In other words: the energy savings which have been realized through technological improvements are „compensated„ by new energy consuming devices.

With respect to energy intensity in road freight transport we notice a slight decrease in the last twenty years, though information is scarce and average figures only have a limited significance. Hence, „normal„ energy intensity ranges between 0.7 and 1.4 MJ/tonne-km for heavy trucks but may amount to as much as 5 MJ/tonne-km for light duty freight vehicles. [ In reality the two types of trucks are not comparable, because heavy duty trucks usually peform long-distance trips with full cargos, whilst small vans provide for retail distribution with speed and deadlines as the main quality characteristics. ]

With respect to atmospheric pollution, the position of the transport sector in photochemical pollution production has grown by 1.5 times within the last ten years, while its contribution to acid pollution now accounts for 75% of total emissions. Moreover, its share in global warming potential has increased from less than 20% to more than 25%.

The main problem with transport in the European Union is that the general pircture is not subject to change and that, according to all forecasts, things will only get worse. Both passenger and freight traffic are expected to continue increasing in the future. OECD estimates that the likely impacts of present policies, if continued, will produce an increase of 50% by the year 2015 in total road traffic (vehicle-km), 40% in city-region traffic, 20% in town centre traffic, with a decline of 20% in public transport and cycle/walk use. As a consequence, total fuel consumption in road transport is expected to increase by 40% by the year 2015.

In the Member States of the European Union, the situation is somewhat less dramatic but it remains tense. It is expected that by the year 2010 total car mileage should increase by 25% and road haulage by 42%, with rail freight increasing by only 33% during the same period. European Union estimates of future transport energy consumption amounts to some 335 Mtoe (million tonnes of oil equivalent), representing 32% of the total final demand by the year 2020. According to these forecasts, the transport sector will be the major single contributor to incremental growth in the EU final energy demand and CO₂ emissions in the next 25 years.

The problem becomes more aggravating when one considers that these hefty increases will take place at a global level. The World Energy Council (WEC) forecasts future energy consumption for eight world regions (OECD Europe, North America, OECD Pacific, Central and Eastern Europe, the CIS, South and East Asia, Africa and Latin America). Two scenarios have been developed by WEC: the "market rule" (market and global competition trigger technical development and keep oil prices low), and the "muddling through" scenario (where market barriers induce countries to turn inwards failing to co-ordinate energy policies), which predict substantial growth in energy demand to 2010.

The WEC estimates increases in transport energy consumption ranges from 23% to 62% in Europe and 22% to 48% in North America, these regions being the greatest consumers. WEC also predicts an enormous increase in energy consumption in the CIS region (so-called Community of independent states) somewhere in between 140% and 515% by 2020. [ See: Global Transport Sector Energy Demand Towards 2020, Project 3, Working Group D., World Energy Council, London, 1995] Since fossil fuel will remain the dominant fuel for the transport sector, one may raise the question how the countries of the world will manage this increase of energy consumption and, more importantly, whether they will do so peacefully.

The reaction to this pessimistic outlook by the European Union has been compiled into an integrative transport policy approach under the name of „sustainable mobility„. The purpose of this policy is to meet all objectives simultaneously: completion of the single market, safety issues, environmental protection, fair and efficient pricing and economic and social cohesion. Completion of the Single Market refers to the objective of lowering as much as possible any barriers to trade within the European Union (and to a growing extent, also in the direction of the future Member States in central and Eastern Europe.) Whilst safety issues and environmental protection may be self-explaining, the issue of fair and efficient pricing is a diffficult one, to which I return below. Social cohesion refers to the objective of lowering social (and even cultural) discrepancies among the regions of Europe, in particular remote regions.

The main problem with this integrated policy is that it makes more progress in terms of the completion of the Single Market than in the other areas, in particular in terms of the environment. One commentator went as far as saying that transport is the ugly face of the internal market [ See Jochem Wiers: Transport and the Environment: The Ugly Face of the Internal Market, in European Environmental Law Review, Vol. 8, December 199, pp. 332. ] . Truly enough, the national markets for transportation (noticeably by air, road and inland ship) have been opened for EU-wide competition. Hence, prices have fallen considerably, competition was intensified and transport volume increased.

The policy point of view is not to fundamentally change this development, but, in the wordings of the European Commission, „to make transport environmentally friendly, safer and socially acceptable. In other words, the common transport policy must, more than ever, offer a framework for „sustainable mobility„. The instruments designed for this purpose include traffic management systems, more integrated transport systems, particularly the trans-European transport network [ The TEN-T (Transeuropean network for transport) is a set of „sub-networks„ (one for each transport mode) which is given European priority and for which Member States are to provide preferential funding with limited European Union aid. Most of the projects are not on schedule and some might never be finalised. An example of a TEN-T project for the latter seems to be the case is a high-speed railway from Berlin through East-Germany to Munich. ] ., promotion of intermodality [ Intermodality implies that each transport mode is used whenever it suits the task at hand best. Hence, ideally, large volumes travelling over long distances should be carried by train, small parcels for distribution should travel by light truck, etc. In practice, this requires cooperation among various transport modes. Often however, every operator see all others as competitors and is unwilling to share routes. Moreover, unloading and loading (onto other transport modes) is time-consuming and costly. ] and best practices in (public) local and regional passenger transport [ Looking for best practices implies that public transport companies and their suppliers engage in a European-wide contest for the best possible technologies and management and operation systems in order to lower the costs and improve the quality of public transport, and, as a result, increase ridership.The European Union has little legislative powers in this matter, except for setting technical safety standards and for general rules on competition between operators. The Commission supports this work with research money. ] , improvements in safety, development of research activities, environmental protection and enhanced relations with third countries, particularly Eastern and Central Europe.

In terms of environmental instruments, three types are being used (or under consideration).

Table 3: Environmental instruments in European Union transport policy

Type of instrument	Examples
Environmental standards	Environmental quality standards for fuels, for emissions from road and off-road vehicles, noise standards for vehicles and aircraft, eco-labelling of fuels, ambient standards and targets for clean air and climate protection
Transport management instruments	Stimulating telematics, promoting intermodality, promoting intercompatibility*, promotion of „alternative„ transport modes**
Economic incentives and disincentives	Eco-taxes on vehicles and on energy°, differentated taxes on fuels, Eurovignette°°, Road pricing°°°

Explanations:
*: This means that transport equipment is made suitable for use in the entire European Union. Examples are „clean„ fuels everywhere in all Member States and, very specifically, electric trains which have transboundary access to rail networks.
**: An example at hand is the promotion of short sea shipping within the European Union as an alternative to road and rail transportation.
° The legal competences of the European Union are limited in matters op taxation, but the Member States agree on common frameworks which they use for national policy measures such as taxes discriminating between „clean„ and „dirty„ cars and „clean„ and „dirty„ fuels.
°° The Euro-vignette is as special annual tax applied by some Member States (Germany belongs to this group) and which is levied upon every truck en route within their territory. Its ecological effect is rather limited.
°°° Road pricing is explained in the text.

Commenting upon Table 3, two issues need to be mentioned. The first one is the European Union’s commitment to a reduction of CO₂ emissions in agreement with the so-called Kyoto Protocol of December 1997. The European Union has pledged to reduce the CO₂ emissions by 8 % (as measured in 1990) between 2008 and 2012. Clearly, this target will not be achieved if transport keeps developing the way it is. With the present and future policy of the European Commission focussing on the instruments listed in Table 3, it is not clear whether there will be an impact. Whilst technological breakthroughs (such as alternative fuels and propulsion systems) cannot be put in place „by command and control„, increasing the cost of transport (through transport ralated taxes) at European Union level may stimulate a more rapid introduction of such new technologies. But, since European environmental tax proposals must be agreed upon unanimously by all Member States, there is little hope for them.

Second, both from the point of view of competition and from the ecological point of view, the pricing of transport infrastructure has come under scrutiny. In 1995, the European Commission published a „Green Paper„ entitled Towards Fair and Efficient Pricing in Transport [ The bibliographical reference is COM(95) 691. ] and triggered off a fierce debate about the subject. The paper addresses the fact that the various transport modes pay differently for the use of infrastructure, usually (but not always) with railway operators being the worst off. It proposes similar (i.e. harmonized) common rules for pricing for the use transport infrastructure which apply to all modes and are based upon the concept of marginal social cost. From an economic point of view this is seen as efficient (because every operator pays his bill and optimizes his transport activities in line with it) and fair (because no operator receives a hidden subsidy). If the ecological damages are included in the social costs, the instrument is also environmentally efficient. Opposition to these plans is, however, very strong and only a very gradual approach will be possible, if ever. [ See the follow-up „White Paper„: Fair payment for infrastructure use: A phased approach to transport infrastructure charging in the European Union . COM (98) 466. ]

Energy

Three important factors determine the energy policy of the Europea Union. First, the Single Market is to be completed. This means, in particular, that regional and local monopolies are to be abolished. In the electricity sector, work is in progress and in the natural gas market, it will begin very soon. [ The relevant Directives were adopted in 1997 and 1998 respectively. Given the delays to transpose them into the national law of the Member States, it takes some time before they are fully implemented.] The immediate consequence of this so-called „process of liberalisation„ has been a strong decline of prices and a restructuring of the electricity industry in those Member States in which liberalisation was seen as an opportunity. Second, the dependency of the European Union from fossil energy sources from outside is increasing year after year. [ At the level of the Member States, this is, of course, different. Luxemburg depends completey on imports of fossil energy sources, Italy, Belgium and Portugal have import rates of about 80 %, Austria, Ireland and Spain score at around 70 %, Germany stands at around 60 % Finland at 55 %, France at 50 %, Sweden at 40 % and Denmark at 30 %. The Netherlands import about 20 % of their fossil fuels and Great britain is a net exporter with more than 10 %. See World Energy Council, German national committee, Energie fuer Deutschland, 1999. E-mail dnk@vdi.de ] Hence, the European Union developed an international energy policy in order to help to secure future supply. Third, the European Union’s energy policy focusses on safety and high quality. In terms of the environment, the latter refers also and in particular to nuclear installations in the countries of Central and Eastern Europa and in some of the CIS states.

Integrating environmental aspects into the energy policy of the European Union seems to be somewhat less problematic than in the cases of Agriculture and Transport. [ Notice, however, that environmental policy in the transport sector is closely related to energy policy as well. See the former section for some data and trends in respect of energy consumption. ] First, with the exception of transport, past experience shows that it is possible to have economic growth without accompanying increases in energy consumption. In some Member States and in some years, one notices an increase in economic growth and even a small decrease in energy consumption. This also holds for industry sectors across the entire European Union.
[ Readers with an interest for energy statistics will benefit from the excellent compilations published by the European Commission on the Internet. It just takes some time to download.
See: http://europa.eu.int/comm/eurostat/ and follow further instructions. ]
The phenomenon is known as „decoupling„ because economic growth and energy consumption are no longer tied to each other. Nevertheless, energy consumption is supposed to increase in the future. One estimates that this increase takes place at a rate of 0.6 to 0.9 % per year. This forecast takes into account that energy efficicency (i.e. „Do more with the same energy input!„) improves with 1.1 to 1.8 % per year. In other words, taking 2000 as the base year, by 2020, energy consumption would be up by 15 % if things go on the way they are going (business as usual).

For the European Union, this may sound pretty gradual, but it also sounds alarming because the extra fossil fuels all need to be imported, and, by 2020, about two thirds of all fuels need to be imported. Table 4 shows some growth rates for selected fuels. .

Table 4: Growth of import dependency of three fossil fuels in the European Union (%)

Type of fuel	1997	2020
Mineral oil	80	97
Natural gas	38	74
Coal	42	64

In the view of the European Commission, this increase of the Union’s dependency on imported fuels constitutes a risk which is determined by geopolitical conditions. From this gloomy foreign policy perspective one understands the other aspects of energy policy. Even the liberalisation part may contribute to the reduction of this risk, because competition not only lowers prices, it also „punishes„ wastes of energy, such as running energy-inefficient plants, for which energy monopolies did not have to fear any sanction. [ Evidence on this restructuring of the electricity industry was extremely remarkable in Great Britain which privatised and liberalised its industry long before the European Union followed suit. ] Hence, the first remedy for an increased dependency on imports consists in energy conservation and the rational use of energy. Clearly, this also has a benifical environmental impact.

Other measures towards a rational use of energy go in the same direction and, indeed, explain part of the so-called decoupling effect. The instruments used for this purpose consist in regulatory measures and research and development support. European Union laws regulate the energy efficiency of electric appliances such as washing machines, dryers, refrigerators and freezers, hot water boilers and even lamp bulbs. Moreover, European legislation also forces manufacturers and importers of such products to clearly label their energy efficiency according to a standardized format which, as a result, is easily recognized by potential buyers. [ This example incidentally also illustrates that the environmental policy agenda is never „finished„. Just think about the myriad of electronic devices from PCs, palm tops, cellular telephones, etc. and their energy use.] For PCs, the Council of ministers adopted criteria for an „eco-label„, containing, among others energy consumption requirements.

Research and development aid is canalised via various programmes which are dedicated towards studies on related issues, such as the energy savings potential under specific scenarios but also practical technology demonstration projects and energy management schemes. [ Lack of space does not allow more information about these programmes. Readers with an interest are referred to the homepage quoted in Note 29. ] Whether the Commission always gets value for its money is not clear but attempts are made to monitor the quality of projects. Potential applicants are usually „coached„ and monitored by national coordination centres who assist the European Commission in selecting the most promising candidates and projects. In terms of policy making (i.e. proposals for legislation). These research and demonstration projects can lead to the adoption of certain technologies which are favourable in terms of energy conservation. Hence, in this context CHP (combined heat and power) is now accepted as a technology which Member States may give a favourable treatment in the course of implementing the liberalisation. In other words, notwithstanding this liberalisation with free choice for electricity suppliers and buyers, Member States may rule that power from CHP plants must be bought by grid operators first.

Another instrument which sets incentives to energy conservation and the rational use of energy consists in energy taxes. In this context, the European Commission proposed a uniform framework for taxation of energy products in 1997, including some rules and exceptions and exemptions. [ Again. The Website quoted in Note 29 contains more information. ] The difficulty with this proposal is to be seen in the lack of competence in matters of taxation of the European Union, where Member States insist upon an unanimous voting rule. Hence, as long as this voting rule stays the same, there is little hope for such a uniform system of taxation of energy products which will be strong enough to bring about real changes. Even so, one notices that some Member States are increasingly taxing energy products (in order to relieve social taxes or taxes on labour) in the realm of what is called ecological tax reform. As usual, this process is characterised by leaders and laggers. Depending on the success of the leaders (which, at least from the point of view of the present, is not impossible to happen), the laggers may follow. At that time, some coordinating work on such a matter by the European Union may be more appropriate than coming out with a proposal for a uniform framework which – at that time – was not based upon any real world experience.

Finally, the fear for increasing dependency also stimulates the role of energy from reneweable sources (or REN - renewable energy sources). Practically, REN are the only ones which can expand within the European Union without any help from outside. It goes without saying that the favourable ecological properties of REN are taken into account. Either, as in the case of photovoltaics and solar thermal energy, they are CO₂ free or, as in the case of biomass, they are CO₂ neutral in the sense that every CO₂ molecule set free will be captured by plants at a later stage. In this context, there is no doubt that REN are considered as a valuable contribution to the integration of environmental interests in energy policy, noticeably in the framework of the commitments of the European Union to the Kyoto protocol of 1997. This also explains why the proposal by the European Commission [ In 1997, the European Commission presented a Green paper on REN. See the Website quoted in Note 29.] to double the share of REN in the next coming years was accepted by the Energy Council of Ministers with a request to the European Commission to produce a strategy for achieving this goal.

Moreover, the European Union Directive on the liberalisation of the electricity market singles out REN for which Member States may determine rules for preferred treatment. The European Commission itself has specified procedures for such a preferred treatment in terms of subsidies or other financial benefits (such as guaranteed prices in connection with feed-in laws or so-called „green„ power certificates) to operators of REN plants. Even so, one should not completely leave out the strategic thinking behind the promotion of REN technologies, both in terms as a substitute for the importation of fossil fuels and – in some distant future – as a new series of export opportunities, in particular to countries in which electricity grids do not yet exist or, for economic and demographic reasons – are unlikely to ever be built. Especially in such regions, reliable and inexpensive REN technology may be appropriate for the improvement of the conditions of daily life. [ When (photovoltaic) electric light came to remote villages in Latin America, social life changed completely. People were even able to learn how to read and write in their evening hours. ... ] In sum, the geopolitical, economic and technological reasons seem to explain why the integration of environmental interests into the energy policy of the European Union meets with a high degree of acceptance and, henceforth, has made some progress.

4. The European Union and global environmental issues

With the internal growth from – originally six – to fifteen Member States and prospects for at least another ten new Member States joining in the next decade, the European Union will become a more and more important player at the level of global politics and policy making in any field of interest. With the entry of the new European Commission, this view was given some impetus by an internal restructuring of the services of the Commission. At present, there is just one Common service of the European Commission and only one Member of the European Commission with responsibility for external affairs. [ In the past there were at least three directorates general and as many members of the Commission with such responsibilities. ] Hence, the European Commission gives the impression that there exists something like a European „Ministry„ of external affairs.

In order to give a visible shape to these external relations, the European Union has set up both formal and informal platforms for multilateral exchanges with regions in the World. As an example, one may notice the so-called ASEM conferences which gather the heads of state and of governments of the Member States of the European Union and the heads of state and of governments of the countries of South East Asia. (The third ASEM meeting is scheduled for October of 2000 in Seoul.) Finally, the European Union has become one of the largest donors of financial support for development purposes in countries of the so-called third world but also in some countries in transition in Central Europe and Asia.

At the same time, more and more environmental issues are seen as global issues, which require an international cooperation, even a cooperation by all nations of the planet, as a prerequisite for achieving a solution. The number of international (multilateral) conventions on environmental protection is steadily on the increase and their implementation is based upon commitments and mutual support from the states who sign such conventions. In some cases they even imply financial transfers from so-called „rich countries„ to „poor countries„. In many such conventions the European Union appears as a formal signatory and hence, as a big and important player.

One example is the implementation of the Kyoto Protocol, for which the European Union has committed itself to reduce its CO₂ emissions by 8 % in the period until 2008 – 2012. At present, there are serious doubts that this goal will be met if no new instruments are being put in place. Hence, the European Commission is considering to introduce CO₂ emissions trading. [ For this purpose, a Green Paper was published (a so-called discussion paper) containing questions for answering by interested parties. The deadline for any written ractions is September 15, 2000.] The idea is to start trading so-called rights for CO₂ emissions by a limited set of industrial and energy firms as of 2005. This is three years ahead of the Koyoto Protocol which has a clause that trading in (all) green hous gases (not just CO₂) emissions rights will begin in 2008. The European Union scheme is seen as an experiment for learning by doing and if put to practice, it would cover 50 % of all CO₂ emissions in the European Union. Clearly, if this European Union experiment meets with success, it might constitute an example for others.

Another example with very complex points of debate concerns the issue of international trade and the environment. At least since the fall of 1999, when a public „outcry„ by environmentalists, human rights representatives and other interests groups prevented the kick-off meeting of the Members of the World Trade Organisation in Seattle for their next round of negotiations, this complex issue which was largely hidden, was released to the media at large. Difficult questions are to be addressed, such as restrictions on imports of products which were produced „in a dirty manner„, restrictions on imports of products which maybe environmentally harmful during use, preferential customs duties for „clean„ products [ At present, the European Union import duties on tropical wood coming from „sustainable„ plantations is only 50 % of the duty of other tropical woods. ] , the trade impacts of so-called eco-labelling programmes and schemes, the impacts of trade of obligatory Life-Cycle-Analysis tests for products, [ Without entering into too many details, such measures are referred to as as Trade Related Environmental Measures (TREMs).] the issue of so-called Multilateral environmental agreements (MEAs), the legitimacy of subsidies (in particular for agricultural exports [ See the section of the Common Agricultural Policy above. ] ), the role of the dispute settlement procedure within the WTO in the case of conflicts, etc. [ In this context, one should also notice the impact on trade patterns taken by Non-governmental organisations „campaiging„ for their trade policy objectives in the importing countries of the industrial world.]

Since the European Union is one of the biggest trading partners in the world, its position on these issues is of importance, not only for the citizens and the economies of the Member States but also for those of the trading partners. At present, the European Union sees the WTO as the appropriate organisation for a discussion of and an eventual decision-making on these issues. A pledge is made for openness and mutual understanding and, if possible, mutually beneficial arrangements, preferably in the framework of a MEA. But reality also shows that, in some cases, a strategy of conflict is managed up to the point where sanctions and retaliations are being taken into account. [ The best known example with an environmental aspect is the refusal of the European Union to allow imports of beef which contains growth hormones (or their metabolites), in particular from the USA. At present, the USA is declining on which countervailing measures (retaliations) to take, e.g. against imports of French cheeses and wine. ]

A third area of external policy making with a strong environmental deals with the European Union’s development policy. In recent years many large international and national donor organisations and development agencies - after having met with serious criticism from similar groups present in Seattle in November of 199 – are commencing a policy of sustainable development within their own guidelines and conditions for financial aid. Similary, recipient countries are studying the possibilities to set up national plans for sustainable development in order to become or remain eligible for such funding. The European Union is formally linked to a large set of them throug the so-called Treaty of Lomé, which has been reviewed several times and is up for revision again. The members of the Lomé Treaty (besides the Member States of the European Union) are the so-called ACP states (Africa Caribbean and Pacific states, typically former colonies of the Member States of the European Union). As things stand, there is a general will to continue the special relationship between the ACP states and the European Union. Given the fact that „Development„ is also up for an integrative approach, this means that the future funding programmes will have to take environmental issues into account (if this was not already the case.) [ Typical shortsighted projects – also with European Union funding - deal with e.g. strenghtening the market protential of local fruit and vegetables growers by better packaging and modern logistics for transport to larger areas than those one can reach with traditional logistics. Little attention is paid to the environmental impact of the extra transport efforts this requires and even less to the packaging waste, which ends up as littering. ]

5. Conclusion and outlook

What is the environmental future for the European Union? Will it take the route of sustainable development? What will be the appropriate way to do so? What would be an appropriate deadline? [ In this context, it is interesting to note that in Sweden, a general review of existing environmental policy concepts has taken place and that as an outcome, the government is now set to solve the environmental problems in one generation . ] Who would have to be involved?

On the basis of the present work and outcomes, one cannot say that the European Union has made large progress towards this objective. At present, there are few indications that this trend will drastically change. Moreover, politicians with a sincere interest in these matters meet with resistance and skepticism since environmental issues are no longer at the forefront of the political agenda and – more importantly – if they really go for a sustainable development, they have to become very creative innovators, who also work for industrial restructuring. Hence, in terms of energy policy it is not a matter of fighting against windmills [ As did the famous Don Quichotte, a European-wide known noble hero from a novel written by Spanish writer Miguel Cervantes de Savedra. ] , but fighting with windmills against traditional energy industry interests.

At the time being, one can conclude that the European Union has chosen for the integration approach. Its formulation into greater detail and its implementation will therefore remain on the political agenda. It will certainly bring new arrangements, such as shared responsibility for environmental dossiers. All members of the European Commission and all ministers of the Council of ministers will become involved in shaping environmental policy issues at the European level. This is new, but one cannot say whether this will be successful.

In relation with this integrative approach, the Commission will have to present (and. likely defend) the draft for the Sixt environmental action programme which is up for decision by the end of the year. Too little is known about the contents in order to make any assessment about its adequacy, etc. One can expect that the debate will pick up in the second half of the year, and one may speculate that the work will not be finalized under the French Presidency (in the second half of 2000). This would give Sweden a good chance to have it adopted during her first ever Presidency period in the spring of 2001.

Thirdly, one may expect that the European Union’s role in the international and global environmental debate will be crucial, since no other large wealthy countries act at the forefront in the framework of this agenda. In this respect, the Union bears a responsibility for which it should be supported by other parts of the world. Since such support is far from evident, the job will not be easy.