Moving beyond GDP in European economic governance high level expert conference

organized by DG ENVI in cooperation with the Italian Presidency of the Council

10 Oct 2014

 

Expert debate – input from MEP Benedek JÁVOR

 

Thank you for giving me the opportunity to contribute to this important discussion.

To reflect on the debate’s main question, not only do I think that the beyond GDP agenda may help improve policies, but in my presentation I would like to demonstrate why I believe it is an essential element for reformulating EU policies. I envisage a policy reform process integrating beyond GDP approach based on three distinct building blocks:

  1. We need proper signals not only on the performance of our economies, but also on social aspects, state of the environment and the citizens’ well-being, as well as information on potential synergies and trade-offs of our policies.
  2. We need systematic evaluation of existing polices covering all the above aspects to be able to assess the real effects, the real added value as well as to point out the shortcomings allowing us to improve our policies.
  3. By improving I mean making our policies more forward looking and more sustainable, incorporating the needs of future generations as well.  In this respect, political willingness and citizens’ involvement are essential.

Thus, I will present my ideas around these 3 blocks, which I call the 3 ‘S’s: signals, systematic policy evaluation and stakeholders engagement.

First, let’s discuss the issue of sending the right policy signals. I highly welcome the European Commission’s efforts in compiling information on the existing initiatives to go beyond measuring economic growth. As previous speakers pointed out, measurement of social development and environmental issues are essential to sound and long-term policies. What we need, is to bring the above elements together. We need signals and answers around the questions of quality of life, well-being, progress and social cohesion as well as transition to a green economy.

Let’s have a look at the European Semester as an example. The Semester is not merely a mechanism of economic and fiscal policy coordination. It offers a potentially powerful tool by which we can monitor Member States’ progress on various issues, including environmental ones, in the context of the Europe 2020 Strategy. The iterative working method and the country specific recommendations of the process which help us better align national efforts with EU policy objectives.
However, as for the implementation, the process lacks comprehensive consideration of environmental (as well as social) measures, only a few environmental issues are covered (e.g tax reform, transport infrastructure, better energy market design, renewable energy) while others, such as biodiversity, air pollution, water and waste management, resource efficiency and eco-innovation are side-lined or entirely absent.
With regard to the economic and financial context of recent years, the dominant focus of the Semester process, namely resolving the economic crisis is perhaps not surprising. However, let me remind you that European Semester is a tool to implement the Europe 2020 Strategy which has wider objectives embedded in the EU environmental acquis, including inter alia climate change, energy and resource efficiency related objectives.
In order to improve economic governance and to successfully leave the economic crisis behind, longer term perspective is of fundamental importance.  In terms of monitoring we should go beyond refining the macroeconomic imbalances scorecard, and complement it with social and environmental, natural resource indicators.

Here I would like to mention a policy-oriented  exercise that I was involved in: a complex, Green Scorecard was drawn up for Hungary, www.greenscorecard.hu, attempting to give an overall picture of various challenges ranging from resource use and climate change to state of human capital (education, health) and state of democracy. The idea was to go beyond single indicators (reflecting silo-thinking) and give an overall assessment of the performance of policies from sustainability point of view. We wish to further develop the scorecard and it would be useful to make it for other EU Member States as well.

This brings me to my second point, the need for evaluation, and if necessary revision, of all EU policies with the help of the ‘beyond GDP’ agenda.

As I said, the European Semester process should better support sustainability objectives by further integrating these considerations and by supporting the implementation of these wide-scope recommendations.
We must make the best use of the mid-term review of the Europe 2020 Strategy and ensure its better alignment with wider EU strategic documents including the 7th Environment Action Programme and the Resource Efficiency Roadmap.
Policy coherence, long term thinking and sustainability should be guiding principles for the revision and improvement of other European policy processes.
In more general terms, we need green investments and actions that have an effect on our everyday life by contributing to the creation of jobs, combatting poverty and rebuilding social justice.

To give you a timely example, the EU is formulating its future energy policy where currently we see problems both in terms of the level of ambition and comprehensiveness. I have always stressed the need for a new Climate and Energy Package with 3 intertwined, ambitious targets (on GHG emissions, energy efficiency and renewables) both at EU and Member States level. Our renewed energy policy, should be addressing the issues of affordability, accessibility, security and sustainability of the energy system at the same time.

Within this framework, security is again a highly complex issue. The European Energy Security Strategy (to which I act as shadow rapporteur) in its current form has an extremely narrow focus, aiming only at diversification and improvement of the infrastructure and not leaving the fossil fuel domain.

In my view, the strategy should take into consideration the potential security gains from energy efficiency and renewables measures. It should help combatting energy poverty, help households reaching energy savings and energy autonomy. It should also result in a decentralisation of the energy systems (bringing a new balance between consumers and providers and improving system resilience).

This example clearly demonstrates the need for holistic and long term approaches in policy making, which could be facilitated by beyond GDP efforts. A consistent follow-up process which reflects lessons learnt from previous policy cycles is also indispensable.

However, there is still a third, equally important component for successfully improving our policies: political willingness, ownership and engagement of our stakeholders.  To succeed in the above mentioned cases, or in any other policy field, we obviously need bold action by policymakers and a stakeholder engagement. The first two building blocks, signals (information on economic, societal, environmental processes) as well as systematic assessment of the effectiveness, efficiency and added value of our policies can help creating political will and mobilize citizens. We need to reshape our policies and reach out to the general public, help them understand the various effects EU policies can have on their daily life. We also need to build alliances between all actors.

And when I talk about stakeholders, I also mean future generations. For improving our policies, we should also guarantee that intergenerational justice prevails and is an integral and formalized part of the policy processes.

Here I would like to refer to a project when we created a complex indicator regarding the pressure on future generations, encompassing inter alia environmental, demographic, health, pension data. I call for the strengthened use of similar measures and indicators.

 

To sum up and conclude

In my speech I touched upon 3 particular areas where I see the merit and potential of beyond GDP thinking and initiatives.

First, beyond GDP indicators can provide the right policy signals. Currently, we have far too many descriptive indicators and the information silo thinking still prevails.

Here I argue for integrated (partly complex, aggregated) policy relevant indicators. We have to develop more indicators on efficiency, policy effectiveness and well-being.

As for the topics, (global) resource flows, value and degradation of natural capital, intergenerational aspects of life have to be covered much better. Existing practices and ongoing initiatives in the field of indicators, accounts and assessments (SEEA System of Environmental-Economic Accounting, indicator activities of European Environment Agency including the revised core set, natural capital assessments, etc) should be further developed.

Secondly, future EU policies require a broad and long term perspective, which can also be facilitated by beyond GDP thinking.

I showed that there is a scope for greening the European Semester and in more general terms I argued for reshaping concepts like sustainable development and green economy and for recontextualizing our policies to provide solutions to real life challenges. Sustainable solutions (e.g. in the fields of energy, but also food, transport, housing, etc.)  make our life cheaper, more efficient, more convenient.

Thirdly, beyond GDP initiatives can raise awareness and mobilize efforts of policymakers and citizens. Actors should be well-informed and enabled to opt for genuinely sustainable solutions, take win-win steps towards an environmentally and socially just transition which includes respecting the needs of (and measurement of pressures on) future generations.

As a Member of the European Parliament, I will work towards these goals, by raising these issues during exchanges of views with relevant representatives of other EU institutions, by helping to create the necessary links among stakeholders and by encouraging my colleagues so the Parliament can play a more proactive role in the process.

 

Ref:

http://ec.europa.eu/europe2020/pdf/2014/ags2014_en.pdf

http://ec.europa.eu/environment/beyond_gdp/indicators_environment_en.html

http://ec.europa.eu/economy_finance/economic_governance/macroeconomic_imbalance_procedure/index_en.htm

http://www.eea.europa.eu/publications/digest-of-eea-indicators-2014

http://greennewdeal.eu/what-is-the-green-new-deal.html

http://www.greens-efa.eu/environmental-policy-in-the-european-semester-assessing-progress-to-date-11518.html