Competitiveness and environment: Two sides of the same coin?

In a ‘Green Week’ debate, the Commission made the business case for sustainable development but admitted it had some way to go before fully integrating competitiveness into environmental policy.

The two objectives of competitiveness and environmentally
sustainable economic growth have often been portrayed as
contradictory. The Commission’s proposed chemicals policy review,
REACH, has embodied this contradiction with environmental NGOs, the
Commission and industry skirmishing over impact assessment methods
and the anticipated costs and benefits on jobs, competitiveness,
health and the environment.

Speakers at the conference indicated that the expected economic
benefits of environmental legislation have hardly filtered through
to industry. Conversely, legitimate business concerns are not
always fully considered in the environmental policy-making


The Director General of the Commission's Environment DG,
Catherine Day, made a business case for
sustainable development. She said the view that one cannot have
high level growth and competitiveness while at the same time
securing high environmental standards was "a completely false one".
"There can't be one without the other," she insisted. "Companies
which are environmentally responsible perform just as well as those
who do not". She went on to defend the case for
regulation: "There is a tendency to think of
environmental policy as regulation, and businesses don't like
regulation". But she said regulation was looking from a long term
perspective. "From a business point of view, regulation can
stimulate innovation," she said. She added that regulation was not
the only component of environmental policy. The two sides of the
coin, she said, mean that environmental policy and economic
competitiveness "complement each other".

She then turned to what she terms the anticipatory function of
environmental policy: "If there are no fish to process, there's no
fish processing industry," she stated. On REACH, she believes
business attitudes are changing and that "the scaremongering which
went on last year" was "unfounded". "I do believe that businesses
start to see the benefits of REACH," she said. Reacting to concerns
about the fragmentation created by environmental legislation in the
internal market, she conceded "the Commission has got some way to
go to reflect integrated policy decisions" which take both
environmental and business aspects into consideration.

The President of the World Business Council for Sustainable
Development (WBCSD), Mr
Bjorn Stigson, supported the case for the
eco-efficiency of products and industrial processes as a "win-win
situation" for both the environment and competitiveness.
Eco-efficiency, he said, make businesses
environmentally sustainable through market forces by optimising
industrial processes, encouraging recycling of waste and fostering
'eco-innovation'. He said 'eco-innovation', helps shift business
focus from physical assets (land, raw materials, buildings, etc.)
to intangible assets (reputation, brand, ability to innovate and to
adapt to society). He then argued that a sustainable use of natural
resources implied that businesses should integrate environmental
costs into prices (internalising externalities) and political
decision-makers cutting subsidies to uncompetitive industries.

Wolfgang Sachs, from the Wuppertal Institute in
Germany, took the opposite view. He said the idea that
eco-efficiency can change the economy was "misleading" and that its
limits were starting to show. He said eco-efficiency was "good for
innovation and the image of corporations" but that it had not
stopped the consumption of natural resources from increasing. He
illustrated his point with paper use which was supposed to decrease
with the widespread introduction of computers and the concept of
the 'paper-less office'. In fact, he said, even since then, paper
consumption has continued to rise. He insisted on the
volume effects of consumption which leads to
demand growing faster than eco-efficiency gains. He cited the car
industry as an example, saying the considerable energy-efficiency
gains made on cars' oil consumption were being eaten up by volume
effects: "You can forget about eco-efficiency [of cars] if China's
demand continues to grow," he pointed out. Instead, he supported
the concept of eco-sufficiency which advocates an overall reduction
in consumption of non-renewable resources.

Darcy Nicolle, Chair of the Environment Committee
at AmCham EU (American chamber of commerce), recalled that US
companies in Europe employ 4 million people. To him, the internal
market, understood as a uniform set of law enforceable throughout
the EU, is "under growing pressure from environmental legislation".
He said the consequence was a fragmentation of the European market
in distinct national markets to which companies have to adapt. "The
internal market is being ignored in the heat of the debate on
environmental legislation," he said. Taking the example of EU
consumer electronics legislation (WEEE and RoHS directives), he
said the bills "create new barriers in the single market because of
stricter environmental laws in several Member States". This, he
pointed out, "weakens the competitiveness of the EU" by creating "a
patchwork of legislation" across the Member States. He also rather
ironically wished the Commission good luck with the Environmental
Technologies Action Plan (ETAP) because he thinks "the market is
too fragmented and complicated" for it to run effectively. The aim
of ETAP, he said, is to make the market feasible for environmental
products. To achieve this, he supported the view of a strong
Commission with broader powers to make proposals and enforce
legislation across the whole of the EU.


As part of Green Week, the European Commission's annual event
dedicated to environmental issues, EURACTIV moderated a debate
entitled "Two sides of the coin". The two sides of the coin refer
to the EU's twin commitment to boost economic growth and
competitiveness - the Lisbon agenda - while integrating
environmental concerns into economic policy to ensure that growth
is sustainable in the long run.

The debate coincided with the publication on 1 June of a
Commission report taking stock of the process endorsed by the
Cardiff European Council to integrate environmental aspects into
other EU policy areas.


The Commission is currently preparing its 2004 Environmental
Policy Review.


Subscribe to our newsletters


Want to know what's going on in the EU Capitals daily? Subscribe now to our new 9am newsletter.