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SOER workshop opening speech

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Dear participants,

First of all, let me express my warm welcome to all of you who decided to take part in the SOER2015 launch event at the European Parliament.

A special welcome to Mr Falkenberg and other representatives of the COM, Mr Bruyninckx and his colleagues from the European Environment Agency including Ms Fay, Mr Scoullos, to our knowledgeable expert speakers, the co-hosts and all MEP colleagues. Unfortunately, Mr Leinen could not join us but we very much welcome Ms Miriam Dalli as our co-host from the SnD Group, together with Mr Jose Inacio Faria representing the ALDE group. I am Benedek Jávor, Green MEP and first vice-chair of the ENVI Committee.

I feel honoured to co-host the event as the State and Outlook report is highly relevant for the work of the members of the European Parliament and other stakeholders as its serves as a key source of feedback for environmental policies in place in terms of their achievements and impacts. This is an essential element we crucially need for policy adjustment and improvement.

The flagship report of the Agency analyses the state of Europe’s environment every 5 years. It is not a simple study with standalone figures. Importantly, the 2015 report provides a state and outlook placed in the context of the 7th Environment Action Programme and its 2050 vision. The report clearly demonstrates that despite some positive short-term trends Europe is not on track to achieve long-term sustainability. Just to name a few areas where long term prospects are alarming: land use and soil functions, climate change and the associated health risks, energy consumption as well as transport demand. Biodiversity and habitat loss, land-take and overexploitation of resources continue despite existing policy targets at different levels. As the report itself stresses, in some cases the level of ambition of our existing policies seems inadequate. Current efforts will not be sufficient to achieve the 2050 vision set in the 7EAP.

As our speakers will also highlight, we urgently need to create more integrated, coherent and truly ambitious policies and actions. We need to further strengthen implementation and improve governance as well as our institutions. I believe that institutions should better reflect long term sustainability efforts and the needs of future generations. New approaches in governance could help us exploit synergies among policies and policy approaches. And above all, we need to bring about profound changes in practices and behaviour – taking into account possible lock-in effects and trade-offs as well. These aspects are all reflected in the SOER report. The report goes beyond the long-term vision and offers credible and feasible transition pathways.

Another asset of the SOER2015 report is that it is based on objective, reliable and comparable environmental information, and draws upon the evidence and knowledge base available to the Agency and the European environment information and observation network in 39 European countries. We need to further improve the knowledge base, to rethink some of our indicators and in more general terms, how we measure progress. I was also happy to find reference to the importance of giving full value to natural capital.

The report states that implementation of existing environment and climate policies resulted in improvement on the state of the environment and reduced health risks yet it also stresses that further implementation efforts by countries can reinforce these trends. I am convinced that governments and other actors need to be assisted, inter alia by providing room and level playing field for citizens` based initiatives, by ensuring that citizens are well-informed and have effective access to justice in line with the Aarhus Convention and by strengthening environmental inspections e.g. through extending the inspection requirements. These are of utmost importance when it comes to the effectiveness of our policies. As for better regulation and governance, I feel a bit concerned about some recent developments in this respect – e.g. in the 2015 work programme of the Commission there are a huge number of withdrawals or modification of pending proposals including crucial pieces of environmental and health legislation such as the circular economy package. I believe that the EU must prioritise legislation that serves the citizens’ needs and lead to the fulfilment of the 2050 vision of 7EAP ’living well, within the limits of our planet’.

To sum up, I would like to underline one of the key messages of the SOER2015 report, namely the need to recalibrate existing policy approaches. I truly believe that policy coherence, long-term thinking and sustainability should become the guiding principles for the revision and continuous improvement of European policy processes. I envisage a policy improvement process based on three distinct elements:

  1. proper signals on the state of the environment quality of life, well-being, progress and social cohesion, transition to a green economy as well as information on potential synergies and trade-offs of our policies..
  2. systematic evaluation of existing polices to assess the tangible effects, the actual added value as well as to point out the shortcomings.
  3. political willingness and stakeholder engagement, outreach to the general public to help them understand the various effects EU policies can have on their daily life

I believe that the reason the SOER reports are extremely valuable is because they contribute substantially to all three elements I just mentioned. I truly hope that the report will experience a broadening uptake reaching out to an ever-wider audience, including the Members of the European Parliament and all policy and decision makers at all levels. This could lay the foundations for reshaping European policies with holistic and long term approaches.

As for the format of the event, first the Executive Director of the European Environment Agency, Prof. Bruninckx will deliver his keynote speech on the main outcomes and policy-relevant messages of the SOER2015 report. Then our well-known and very knowledgeable experts speakers, namely Mr Luc Bas, Director of IUCN, Mr Ernst von Weizsäcker,Co-President of the Club of Rome, Ms Laura Burke,Director General of the Environmental Protection Agency of Ireland and Mr Janez Potocnik, co-chair of the UNEP International Resource Panel will respond from perspectives of the priority objectives of the 7th Environment Action Programme (natural capital, resource efficiency, human health and well-being, implementation) In the Q/A session we will open the floor for all participants to raise questions, give comments. This will be followed by reflections from Mr Falkenberg, Director General of DG ENVI. After the closing remarks by Mr Jose Inacio Faria we will have a short, technical break and a cocktail reception here in the room.

I wish ourselves a fruitful workshop and a lively exchange of views.

Benedek Javor, MEP

Environmental alarm bell must be heard by Juncker Commission

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The European Environment Agency today released its five-yearly assessment of the state and outlook of the environment in Europe (1). Commenting on the outlook, Green environment policy spokesperson Benedek Javor said:

“The EEA has today sounded a clear alarm bell about the state of the environment in Europe. Across the broad spectrum of areas assessed – from biodiversity, to air and water quality, to climate change and beyond – it is clear that Europe is facing major challenges and will not meet the goals it has set for itself without a shift in policy.

“The European Commission and its president Jean-Claude Juncker must hear this alarm and shift tack. The worrying signals coming out from the new Commission, notably from its vice-president Frans Timmermans in presenting the Commission’s work programme, are that environmental policy will take a back seat and suffer from a regulatory roll-back. This outlook should force a fundamental rethink.

“If Europe is to have a chance of long-term sustainability, the ambition of our existing policies will have to be strengthened, as economic or technology driven efficiency gains alone will be insufficient. It is also clear that there are major economic benefits to be gained by prioritising sustainability. Instead of scaling-back key regulatory proposals, such as on the circular economy and air quality, the Commission should be giving ambitious policies top priority.”

(1) The EEA outlook can be found here.

How to sell a country? Some thoughts on Putin’s visit to Hungary

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Viktor Orban’s evolving relations with the oligarchs both in Hungary and the wider region are having serious effects on Hungary’s energy strategy. Now, Putin is in town for meetings that will no doubt result in a new contract for the supply of gas, a development which will be to the benefit of a minority and to the detriment of most of the population, and which could also lead to tensions arising with the EU. – Article in Green European Journal

On February 17, Vladimir Putin, the President of Russia is traveling to Hungary, as part of an official visit, to meet with the Hungarian Prime Minister, Viktor Orbán. According to official statements, they are going to discuss the two countries’ economic and political relations, as well as energy security issues.What should we expect from this encounter? One of the concrete goals of the visit could be to renew the long-term gas supply contract with Russia, and –although Hungary is not in a particularly bad negotiating position– the short-term interests of the government will force Hungary to renew this contract under very humiliating conditions. This would not be the first time for Viktor Orbán to take a decision in energy policy matters that goes against common sense, a decision, which enables a small number of people to make huge gains, while the rest of the population can only lose.

The Hungarian energy strategy has numerous controversial elements. What is most disturbing is the fact that, in the last few years, Hungarian energy policy wasn’t determined by internal capabilities, external constraints and by keeping pace with changes in energy technology. Instead decisions were based on choices made due to “superior” goals that had nothing to do with experts’ opinions: the government’s goal was to reward people loyal to Orbán, build a new clientele (using taxpayers’ money), and replace some people at the top of the pyramid of Hungarian oligarchs. These were supposed to strengthen the political power of Orbán.

Orbán and his oligarchs

The first two-thirds majority of Orbán (in 2010) would have been impossible without his long-time friend, and former treasurer of the Fidesz-party, Lajos Simicska. The political and the economic arm of the party were codependent at that time, and the support of oligarchs was necessary to receive the amount of votes needed for the kind of success Orbán was hoping for. The second two-thirds majority in 2014, however, was different: now keeping the oligarchs around was too costly, and by far not as helpful as before. Thus, it was about time to get rid of the boundaries and dependencies Simicska and other oligarchs meant to Orbán and his government. But creating a new clientele – one whose members don’t behave like the kinds of all-powerful oligarchs as Simicska, and are absolutely loyal to and dependent on Orbán – can be just as expensive. Thus, the energy industry is one of the few industries that can provide sufficient funds for this project.

In the past few years we have seen many obvious signs of the industry being corrupted and put under the direct influence of the government. A good example is the increasingly important role of MET Holding. MET is an energy trading company – owned by a number of off-shore firms, related to, among others István Garancsi, a businessman with close ties to Orbán – that is in a privileged position due to some well thought out decrees and contracts: the company can use the 2,2-2,9 billion square meters of gas coming from Austria, without competition, thanks to the state-owned MVM Electricity Ltd.

MVM earns nothing on transporting the gas from Austria to Hungary. MET, on the other hand, is getting richer and richer. The owners of MET’s Hungarian subsidiaries have earned millions of Euros in the last few years. In 2012, the owners have received dividends worth HUF 55 billion (approximately EUR 180 million). But MET’s activities extend to much more than just the import of gas, it has also bought a power plant, and is about to overtake the natural gas trading activities of GDF Suez, a French multinational electricity company, on the Hungarian free market.

The incredible success of MET, and Orbán’s close friendship with Putin is no coincidence.

Orbán obviously needs Putin – a person who has great influence on his country’s energy exports – in order to make the corrupt Hungarian energy system work, and in order to make profits on the country’s natural gas transactions. From this meeting with Putin, he expects a political deal that can further increase his share of profits in the energy sector, and will thus help him further pursue his power interests.

A top priority

Not so long ago, Orbán has called the new, long-term gas supply contract with Russia a top priority of the country. Assigning it such a high importance, however, seems to be irrational: a 2013 study by the Regional Centre for Energy Policy Research (commissioned by the government) has shown that a new contract, right now, would not make too much sense, unless it would require Hungary to buy a much smaller amount of gas than before, and to do that for a much lower price than it currently does. This is not the case: the contract will be about an increased amount of gas, which means that Hungary has to buy more gas than it would normally consume. And it will also pay a higher price than necessary.

Given that the surplus of the previous years will be able to cover the energy needs of the next few years, Orbán is wrong to say that the new long-term contract is badly needed.

On the contrary, in the light of the current natural gas market developments, Hungary could have relatively large margin of maneuver. The Russians would benefit from a long-term gas contract, since the revenue would improve their unstable budgetary position and improve their regional position. The gas market is currently supply-driven and in the coming years is likely to remain so. In a supply-driven gas market the customer is the one who’s in a good bargaining position, this is what Orbán is giving up for pennies in his oligarchy fighting spirit.

Don’t trust the short-term benefits

The Orbán-Putin meeting is likely to yield a more political bargain and as a result – according to internal sources – Hungary will receive Russian gas cheaper below market price, at least in the short term. You can cut utilities in the coming years and possibly provide for the 2018 election campaign financing. In addition, the price difference between the contracted and the marketed price enriches the new oligarchs. However, the agreement does not serve a healthy functioning energy market or the long-term interests of Hungarian consumers.

Russia will, for sure, ask a high price for this deal. There are two possible scenarios:

(1) In exchange for the current short-term reduction, we might, in the long-term, be forced to buy natural gas for a price above the market price. If we look at the neighbouring countries, it becomes quite obvious that all the countries who have signed long-term contracts with Russia, around 2005, are now paying a much higher price for gas as does Hungary at the moment.

(2) Putin might as well ask for a political favour: a consistent pro-Russian stance in the EU. The Russians badly need a disagreement inside the EU, so that it cannot act in a unified manner when it comes to Russia. A veto on sanctions against Russia can be very valuable for Putin.

Angela Merkel has visited Budapest less than two weeks prior to Putin. During her visit she made it clear to Orbán that Hungary cannot have a Russia policy that is not in line with the EU stance: the Union has to act in a unified way when it comes to Crimea or the conflict in Eastern Ukraine. Orbán, however, defended Hungary’s relations with Russia, on their press conference. This lets us infer that he won’t say no to Putin. He will rather pick a fight with the EU. Especially when the EU’s warnings seem to be so distant for Orbán. Russia in the meantime seems to be quite sure that Hungary can be the partner it is looking for, in order to mess with European unity.

I believe that nothing will stop Orbán from selling the country and the future of its people to Russia.

 

Changing EU-Russia relations and their consequences for energy security in Europe

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The aftermath of the Ukrainian crisis, the Russian military intervention and undeclared war in eastern Ukraine brought about a crucial change in EU’s foreign affairs. Russia can no longer be regarded as a fully reliable partner to the EU. The issue is highly relevant today as the city of Mariupol in eastern Ukraine were recently assaulted by pro-Russian separatists, using weapons obviously supplied by Russia. The new understanding of a conflict-oriented and imperial rationality based attitude of the Russian leadership caused a substantial shift in the EU’s Russia-politics substantially – and raises security questions not only at European level but also at the global scale. The military conflict also brought to the forefront the issue of energy security, the need to reduce all forms of energy dependency from Russia and it underlines the importance of the EU speaking with one voice in energy policy as well as in its foreign policy. (Benedek Jávor’s article in Green European Journal)

The Russian-Ukrainian crisis, which unfolded after the Ukrainian revolution in 2014 and resulted in the Russian annexation of the Crimea and the destabilization of Eastern Ukraine largely affected the EU-Russia relations.

Russia is the EU’s biggest neighbour and its third biggest trading partner. In the last decades, the EU’s Russia-politics have been characterized by mutual recognition and increasing cooperation, which was evident not only in the fields of trade and economic cooperation. The so-called common spaces cover aspects such as research, culture, education, environment, freedom and justice. Moreover, negotiations have been on-going since 2008 to further strengthen the partnership and have legally binding commitments in all areas including political dialogue, freedom, security and justice, research, culture, investment and energy. After 2010 the Partnership for modernization has become the focal point for cooperation, reinforcing dialogue initiated in the context of the common spaces.

The role of Russia in the Ukrainian crisis, however shed light on the fact that Russia is not on the perceived track in the process of democratization and modernization, that is to say, Russian politics did not become more moderate through the cooperation with the EU, on the contrary.

Even if we accept the experts’ argumentation for the need for a ‘buffer zone’ between the EU and Russia, illegal annexation of the Crimea by Russia and the continuous destabilization of Eastern Ukraine including aggression by Russian armed forces on Ukrainian soil cannot be considered acceptable in any sense and give a clear indication of the unchanged aggressive nature of Russian politics and leadership. It became clear that Putin is primarily led by imperial rationality and now it seems that Putin’s Russia is no longer interested in a trustworthy and functional relationship with the EU.

The question is highly relevant today after a series of rocket attacks in Mariupol by pro-Russian separatists. Against this background, the current EU presidency has called a council of EU foreign ministers to prepare the ground for a summit of EU leaders on the crisis with Russia and the role the EU should take.

Indeed, the developments over the past two years call for a new interpretation of Russian-EU relationship as they demonstrate that Putin’s Russia is impossible to handle with peaceful approaches and methods based on seeking consensus.

It is all the more important that the EU speaks one voice and acts in a united manner. And this is exactly what is missing.

Some EU member states including Poland and the Baltic states regularly use a strong anti-Russian rhetoric, while others, such as Hungary take political decisions showing an opening towards Russia. These seeming contradictory attitudes expressed in the rhetoric and concrete choices, however, might stem from a common fear from growing Russian influence- partly due to historical reasons. The only difference lies in the role these national governments attribute to the EU (or the US) in handling the conflict, depending on the extent they believe that the EU is willing and able to send clear signals to Russia.

Germany itself, having a huge influence on EU politics, has recently re-evaluated the Russian relationship. Before, Germany had the standpoint that a close economic cooperation can have a stabilizing effect on Russia and reduce the possibility of aggressive geopolitical measures. They hoped that this cooperation might also further the modernization of the Russian economy and thus it can contribute to the creation of a Russian state that is linked to the world economy not only through its energy export, but with many other ties and which has its interests in sustaining the balance of international relationships. Germany, however, has realised that these presuppositions and hopes were wrong. Chancellor Merkel placed harsh measures and persecutes consistently the sanctions that the EU adopted in response to Russia’s military intervention in the Ukraine.

The sanctions in place include the suspension of most cooperation programmes, suspended talks on visas and the new EU-Russia agreement as well as restrictive measures targeting sectorial cooperation in the fields of defence, sensitive technologies including those in the energy sector. Russian access to capital markets is also restricted. The European Investment Bank and the European Bank for Reconstruction and Development have suspended the signing of new financing operations in Russia and a trade and investment ban is in force for the Crimea region.

These sanctions, however, are somewhat questionable in their effect and will expire in the course of 2015 unless all 28 Member States of the EU agree to renew them. Chancellor Merkel called for joint European action and during their December Council meeting various EU leaders stressed that the EU should maintain the sanctions until Russia changes its behaviour and stops the aggression in Ukraine.

Thus, the EU must again discuss economic sanctions against Russian, as well as how to ensure aid and protection for the civilian population in eastern Ukraine. In this respect, again, speaking with one voice is essential.

Finding a new balance in the EU-Russian relations is key in the broader context, for the sake of a global equilibrium as well. Russia might opt for building stronger links to China.

These recent developments with Russia have also point the attention to issue of energy security in the EU, which is very high on the political agenda now.

However, the impacts of Russia’s nuclear investments in the EU are not seriously considered.

We are all aware that the EU is extremely dependent on external energy sources, mainly coming from Russia. (And vica versa, supplies of oil and gas make up a large proportion of the Russia’s exports to Europe which are crucial for the Russian economy. The recent collapse of the Russian economy due to the rapid fall of oil prices is a clear proof for this, which has also shown that the country’s self-confidence was merely stemming from high oil prices.)

The dependency on Russian fossil fuels, the lack of diversification of energy sources have been widely recognised in the EU’s energy policy. However, these are only part of the whole picture. The impacts of Russia’s fossil or nuclear investments in the EU are hardly considered in the energy-related acquis, even though it is obvious that through its energy corporations, the Russian government has means of influence far beyond the mere business transactions.

Energy dependency can appear in multiple forms including financial, technology or fuel dependence in the nuclear and fossil sectors, acquisition and ownership of strategic energy infrastructure as well as investments in energy projects by Russia in EU, in particular the Baltic and the Central-Eastern member states.

Here again, we see no unified behaviour from EU member states. Some EU member states have reconsidered their cooperation with Russia, or Rosatom in particular as a consequence of the crisis in Ukraine, e.g. Germany refused to sell the gas storage capacities to Russia, Bulgaria refused a second Rosatom nuclear plant, Slovakia stopped negotiations with Rosatom, and UK suspended its negotiations with Rosatom. At the same time, some EU countries such as Finland or Hungary still consider building new nuclear power plants partly using Russian financial sources, technology, fuel and waste management facilities. It is the responsibility of EU bodies is to ensure that decisions in any Member State do not undermine the energy security of the EU as a whole.

Equally importantly, the EU should think out of the box and look beyond route diversification and new infrastructure projects, when it comes to improving energy security.

A systemic, long term solution for the problem is increased energy efficiency with special attention to the transport sector, residential buildings and industrial sites and the wide-scale use of local, renewable energy sources building upon, inter alia, novel financial solutions and community-based models.

Energy efficiency and renewables projects could contribute to reducing all forms of energy dependencies.

To conclude: even if the hopes of the EU for the stabilization and democratization of Russia have failed to come true, geopolitical realities are given. The EU has to reassess its relationship with Russia, to act firmly in a united manner and to tackle security threats at all levels, including in the field of energy policy. The EU should work for a healthier relationship with Russia in this regard as well, by systemically reducing its dependency, wherever possible – yet acknowledging determinations, long-term mutual dependencies which can be used as a basis for the new balance.

Accession of the EU to Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)

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I highly welcome the proposal for the accession of the EU to Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), which is one of the world’s most powerful tools for biodiversity conservation.

However, as I see it, this step is only a drop in the bucket.

Let me remind you that despite the EU’s (renewed) commitment to halt the loss of biodiversity in the EU by 2020 and to restore biodiversity wherever possible in the longer term as well as out long-term vision for biodiversity for 2050, the natural capital and the ecosystem services are being continuously depleted which will have profound consequences for our well-being. As stated the European Commission itself, over half of the habitats and species covered by the EU Habitats Directive are considered to be in an unfavourable conservation status and there is evidence that the status of many ecosystems is reaching or has already reached the point of no return. It is estimated that, each year we lose 3% of our GDP due to the loss of biodiversity! Besides undermining the economy, biodiversity loss and changes in the habitats and ecosystems also erodes social cohesion in (and outside) the EU.

Thus, we must step up efforts in Europe to achieve our biodiversity targets (and to reach international biodiversity goals set within the CBD framework). We must ensure that none of the EU and MS policies (covering fields such as agriculture, forest management, fisheries and other resources, spatial planning, climate and energy, transport and products) have harmful impacts on biodiversity. We must reinvest in natural capital, construct green infrastructure and ensure that all spending under the EU budget (including CAP, ERDF, EMFF, Cohesion Fund, Connection Europe Facility, Horizon 2020 and LIFE) is supportive of halting the loss of biodiversity.

I therefore urge the European Commission and all European decision makers to set their priorities and structure their work mindful of the biodiversity targets and not to compromise biodiversity as it is key to sustaining the ecological systems and their services we all depend on.

 

UN deal key to climate fight

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A new international climate agreement in Paris is key to keep the world on track for a sub-2°C climate warming scenario, as the European Parliament stressed in a resolution voted 26 Nov 2014.

The resolution is largely in line with the draft resolution of COP 20 adopted by the ENVI Committee of the Parliament stating that the 2015 agreement needs to meet the goal of reducing global emissions in a way compatible with the 2°C carbon budget and should also aim at phasing out global greenhouse gas emissions by 2050.

A year ahead of the Paris, COP 20 conference in Lima should make progress in order to make the Paris agreement as ambitious as possible. Delaying action would increase costs and reduce options.

To structure negotiations for Paris, key elements of the draft treaty should be ready in Lima including main goals for mitigation, adaptation, capacity building as well as means of implementation to meet the goal of phasing out carbon emissions by 2050.

Clear and ambitious national contributions are also fundamental. In the last climate conference in Warsaw, there was a call to put forward intended nationally determined contributions (INDCs) by Q1 2015. COP20 meeting in Lima should provide guidance on the format of INDCs to ensure that contributions are quantifiable and comparable.

Besides, MEPs reiterated the pledge made by EU and its member states to step up contributions to the UN’s Green Climate Fund. Funding is crucial, indeed. I argue for allocating sufficient funds inter alia for renewables, energy efficiency and security measures addressing social challenges, too.

Equally importantly, MEPs reiterated the need for binding 2030 targets for emission reduction, energy efficiency and the use of renewable energy sources. I personally believe that the targets agreed at EU level for 2030 are not enough to keep us on track for the 2050 target and to avoid possible environmental or climate tipping points. Climate and energy relevant challenges should be addressed in a comprehensive manner with special attention to the energy-intensive sectors.

These clearly show that the EU needs to step up its own efforts. In this regard, citizens must hold governments accountable.

At the same time, as the EU is accounting for only around 10% of global GHG emissions, we should also look beyond our own borders and enable global partners to make their own commitments. The recently made joint announcement on new climate policy targets by the US and China provides practical and political momentum and boosts the prospects for a meaningful, forward-looking and legally binding international agreement.

 The Parliament Magazine, 1 December 2014

Democracy in Hungary

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Thank you, Madame President!

Originally, I was going to talk about something else; however, fellow representatives Mr. Szájer and Mr. Kósa laid false accusations against Hungarian NGOs; therefore, I must respond. The charges involved in the investigation against Hungarian NGOs change on a weekly basis; neither the prosecutor nor the police, nor even the government knows what they are looking for; they are just desperate to find something. Only one thing is certain in connection with these investigations, my fellow representatives; namely, that the KEHI-investigation against NGOs was unlawful; the KEHI did not have the authority to conduct an investigation in these organizations. The Hungarian government’s violation of the law is the only evidence. And this proves, better than anything, how democracy functions in Hungary and how the Hungarian government operates. And respected colleagues, let me call your attention to one more thing: this debate is not about the Hungarian government or about Hungary exclusively. What is currently happening in Hungary, and what the European institutions do not act upon, can serve as an example for the aspirations of other political forces in other member states, as well. Respected Fidesz representatives, this includes political forces that you might not agree with, either.

Thank you!

Moving beyond GDP in European economic governance high level expert conference

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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

Accelerating renewable energy development for reduction of energy dependence of Europe

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organised by the Innovative Business Centre in cooperation with the Energy Watch Group at the European Energy Security Forum 2014

 

26 September 2014

Session 1

SPEECH BY MEP BENEDEK JÁVOR

 

We have seen that several support mechanisms and forward looking initiatives exist in the diverse fields of renewable energy, yet, there are still substantial obstacles and barriers for further development of renewables both in financial terms and attitudes.

In my short presentation I look at some of the challenges and give a few examples to show the need for re-contextualization of the renewable energy agenda and making clear links with various issues like energy efficiency, energy security, environment, climate change mitigation, not to forget energy poverty and wellbeing.

I point to some of the interlinkages, highlight possible synergies and call for establishing or reinforcing the policy links among these issues. The geographical scope of the paper is mainly Europe with an outlook to regional (Eastern-Central Europe) or country level aspects.

 

The EU has committed itself to a low carbon economy, which implies a much greater need for renewable sources of energy. The use renewables is also crucial for reducing the EU’s dependence on energy imports (EU dependency increased from less than 40 % of gross energy consumption in the 1980s to reach 53.4 % by 2012), and its vulnerability to price increases. According to the Commission estimates, by moving towards a low carbon economy EU could save € 175-320 billion annually in fuel costs over the next 40 years.

However, we all see that the current energy and climate framework with 3 interlinked targets on energy efficiency, greenhouse gas reduction and renewable energy) is at risk of being consolidated into a single emission reduction target. This would likely result in an uncertain future for the EU’s renewables sector and other low-carbon technologies. These projects in general face a danger of cost overruns, operational and regulatory risks, problems of carbon price and weather variability, public acceptance. Renewables are associated with very significant investment needs and long payback times. Besides, these projects have the added risk of uncertain load factor due to grid integration challenges. Hence, spreading renewables is highly challenging from a policy point of view.

Focus of my speech is on a coherent policy framework and appropriate financing.

I argue that the foreseen reform of climate and energy policy in itself would not provide sufficient motivation to all member states, business, households and other actors for a wide-scale sustainable energy use.

To give you 2 examples from my country, according to a recent study, 75 – 85% of households in Hungary do not have any savings; 80% of those households planning energy related investments would not take a bank loan to cover the investment costs.

If we look at the allocation of renewables-related development funds in the country, mayor distortions occur, as well.

The link between renewables, climate change mitigation and energy efficiency is obvious. There are other, seemingly unrelated aspects, too. Here I would like to highlight the importance of combining green energy efforts with the alleviation of energy poverty. To put it simply, energy (or fuel) poverty occurs when a household is unable to heat its home or afford to use energy services at an adequate level which hampers the fulfillment of other basic needs of individuals. Based on estimates from EPEE (European fuel poverty and energy efficiency) project, 50-125 million EU citizens are affected.

 

As the map below shows, a main aspect of energy poverty is manifest across the EU.

% of households unable to afford to keep their home adequately warm

eu-inability-to-heat-home-map-031013

Source: EU Fuel Poverty Network

To flag some of the multiple consequences of energy poverty: across the EU as a whole, 9.8% of the population are unable to keep their home adequately warm, 15.5% live in homes that are damp, rotting or leaking, and 8.9% are behind on payments for utility bills (results of recent Fuel Poverty research based on 2011 data from the Eurostat SILC survey). In addition, energy poverty is associated with a wide range of physical and mental illnesses. According to a recent study, only in Hungary, 5000 deaths per year can be associated with non-adequately heated homes.
If we take a closer look at the characteristics of energy poor households (regardless of the exact definition or threshold) we can see that – besides other features – these households usually inhabit buildings with bad energetic characteristics (including panel blocks in Eastern-Central Europe).

If we look at former energy poverty alleviation strategies across Europe based on income or energy prices (subsidies, tariff policies) have often turned out to be contraproductive and become a burden for public budgets.

It is only when synergies between building efficiency, social welfare and climate mitigation was recognised that the policy efforts have accelerated in parts of Europe (e.g. Energy Performance of Buildings Directive, energy-efficient refurbishments). Studies focusing on Eastern Central Europe show that efficiency improvements and sustainable energy investments would enable many households to escape energy poverty, yet due to their unfavourable financial situation households cannot take the necessary investments and thus this potential synergy remains unexploited in the region.

Another striking example is that while in many countries households are incentivised to use sustainable energy, in my country, the payment of the utility bills are subsidised – mostly providing a driver for higher consumption of imported gas instead of shaping attitude towards energy savings, improved efficiency and greener sources.

This brings me to the issue of financing low carbon investments.

 

Renewable energy investments, according to recent data from Hungary, are mainly concentrated to upper middle class living environments, as they need a remarkable contribution from the households themselves. This characteristic cuts off low income households from being beneficiaries of renewable subsidies, as well as from harvesting the energy and cost advantages of such investments. Very simply we can say, that most of the public money spent on household energy efficiency and small-scale renewable investments is finally allocated to, and supports middle or high income households, and thus these subsidies are widening the gap between low and high income groups.

 

The presentation does not allow me to address the issue in its complexity, yet I see an opportunity for vulnerably groups in mainstreaming the ESCO (Energy Service Company) financial model. An other important issue is creating specialized programmes for low income households, marginalized groups – like the Roma community in Central and Eastern Europe, or immigration groups in the West – and financially extremely fluctuating and vulnerable families. In this environment very often the simple electrification of the buildings is not established yet, so cheap, affordable and low tech renewable solutions might move those households from the 19th to the 21st  century.

 

In my presentation I argued that separate energy policy goals might not lead to wished results. There is a need to show co-benefits of renewables in terms of social and economic aspects. I used energy poverty as an example show that linking different policy goals is likely to tip the cost-benefit balance and help mobilise efforts of the stakeholders in all fields.

As for renewables, possible directions, steps include:

  • developing a common understanding of related concepts, indicators
  • further improving relevant research and establish a proper science-policy interface
  • developing methodologies to quantify co-benefits and co-costs
  • establishing specified, well targeted programmes for disseminating the benefits of energy efficiency and renewable investments for our most needy fellow citizens .

On that basis, further and better targeted incentives can be drawn for the wider use of renewables, which not only help boosting the economy and improving employment in the EU, but also brings about substantial benefits for the environment and the whole society.

To conclude, I argue that the new climate and energy policy has to be comprehensive combining renewable energy target with further aspects in order to bring a socially just transition.

 

 

LINKS, REFERENCES:

http://ec.europa.eu/economy_finance/publications/occasional_paper/2013/pdf/ocp145_en.pdf

http://www.eea.europa.eu/publications/towards-a-green-economy-in-europe

http://energiaklub.hu/sites/default/files/energiaklub_poverty_or_fuel_poverty.pdf

http://www.fuel-poverty.org

http://fuelpoverty.eu/wp-content/gallery/fuel-poverty-maps/eu-inability-to-heat-home-map-031013.jpg

http://www.ieep.eu/work-areas/climate-change-and-energy/transport/2014/01/important-decisions-on-future-eu-energy-and-climate-policy-ahead

http://www.sciencedirect.com/science/article/pii/S0301421511009918

https://www.shef.ac.uk/cees/pgfuelpoverty/presentations

http://www.map.ren21.net

Conference on the role of renewables for EU’s energy security

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organised by AEBIOM

22 SEPT 2014

KEYNOTE SPEECH BY MEP BENEDEK JÁVOR

 

Being personally committed to the energy transition issue, it’s a pleasure to join you at today’s conference. Europe’s energy policy has seen profound changes in the last decades, but it is currently facing a new situation with multiple challenges. Although energy mixes and choices around energy in member states may vary, we have three common and distinct policy objectives: limiting the environmental impact of energy production, transport and use, ensuring a reliable and uninterrupted supply of energy as well as making energy affordable for every citizen and fighting against energy poverty. In my speech I will focus on this threefold challenge that Europe’s energy policy needs to tackle and argue for a need to smartly reframe the renewables agenda by closely linking sustainability, energy security and social aspects.

First, lets have a closer look at the sustainability and climate change aspects of the energy policy agenda. I quote the Intergovernmental Panel on Climate Change (AR5): “The world now has a rough deadline for action on climate change. Nations need to take aggressive action in the next 15 years to cut carbon emissions, in order to forestall the worst effects of global warming.”

This means that the world is (again) being warned of an ecological or climate tipping point by the UN. I say, it might be already late or we might delay too long in reacting to these risks and may see irreversible changes in all parts of the environmental system. Hence, its time for urgent action at all levels (from governments to individuals). We need substantial and sustained reductions of GHG emissions and other environmental impacts related to energy.

If we look at the level of ambition of the EU’s 2030 Climate and Energy Package as it stands, even if discussions are on-going on its details, it is clearly insufficient.

We need more. (Of course, we also have to look beyond Europe’s borders and prevent outsourcing carbon emissions and footprint to other parts of the world.)

 

However, this is only part of the overall picture. We all sense that energy security and is now higher and higher on the agenda, an issue that has clear linkages with renewables.

Yet, even if there is currently much political will around energy security, providing clear opportunities for you, renewables stakeholders, there are also some threats that I would like to point out.

In the 2030 Climate and Energy Package we have to thrive for much more (at least a 45% share for renewables) than the numbers currently discussed and I will only support a deal that has this ambition.

Beyond ambitious and binding goals at the European level we have to define specific targets at the level of member states, together with well designed, result-oriented and conditional support schemes.

 

Besides, energy security as a new buzzword and umbrella concept might provide an opportunity for the fossil fuel (e.g. shale gas) or nuclear lobby, which, if successful, can delay the genuinely sustainable energy transition alternatives in the EU. I personally am fully convinced that energy efficiency in combination with a nuclear free energy supply and a rapidly growing share of renewables is the direction we should move towards.

This would also make national and European energy systems less dependent on external sources, less vulnerable and more resilient in an energy crisis situation.

 

Furthermore, I warn decision makers not to throw out the baby with the bathwater and let go the achievements the EU has made in environment and climate-protection. Sustainability goals and new investments (physical and intellectual) in climate-friendly technologies using energy from various renewable sources need to remain an inherent part of future energy policy in the EU.

In some regions of the European Union (mainly in Eastern-Central Europe and the Mediterranean member states), the issues I have mentioned are accompanied by a third challenge, namely the extensive problem of energy poverty.

 

Hence, making energy affordable for each and every member of the European society and making sustainable technologies available for all are of utmost importance. (This is also valid at global scale – according to the International Energy Agency estimates provided in the World Energy Outlook, 1,8 billion people lack access to electricity and in some regions, particularly in sub-Saharan Africa and developing Asia, energy poverty either stagnated or worsened as population growth outpaced energy access efforts.)

 

In Europe itself, it is estimated that 50-125 million EU citizens are affected by energy (or fuel) poverty meaning that these households are unable to heat their home or afford to use energy services at an adequate level. Many households are unable to escape energy poverty and are basically excluded from existing energy modernization programmes (e.g. insulation and improving heating efficiency of homes) due to their unfavourable financial situation.

In my view, at the European level, efforts should be concentrated on providing programs for low-income households to reach energy savings and to help them to get access to renewable energy investments. The latter would allow them to diversify their own energy sources and to build energy autonomy at household level.

We need programmes that do not require an own contribution from disadvantaged households, as savings that they will be able to achieve via energy modernization will cover their loan instalments. We also need low-cost micro projects targeted at the most vulnerable groups.

 

 

To sum up, I am convinced that the future European energy policy can only be successful if it integrates and provides solutions for all the above challenges.

Based on our geopolitical position, we, member states and stakeholders in Europe need to deepen our cooperation, aim at an energy transition along the lines of improved affordability, security and sustainability of our energy system.

Energy savings, efficiency and sustainable sources have to be fundamental elements of a renewed, common European energy policy. Here I stress the need for strong cooperation with the energy efficiency community. Supporting each others’ ambitions and exploiting synergies are crucial.

 

I also argue for a decentralized energy system which requires clearly different developments, investments and infrastructural priorities than a traditional energy network. We have to apply a participatory approach, as vast local use of renewables turns consumers to “prosumers”.

It’s essential to give regional answers for system regulation challenges in order to open up the possibility for higher shares of renewables in some Member States.

We also need to look beyond our borders. Creating linkages, better integration with our neighbors would be a chance of spreading renewables technology and know-how, in addition to helping the sustainable development of these regions.

 

In conclusion, we need to build on the momentum of the energy security efforts, and we definitely need to a more ambitious Climate and Energy Package that provides proper incentives, brings about behavior change and at the same time, provides benefits for the widest public. Mainstreaming sustainable technologies, new solutions should follow with a view to reducing disparities in the EU.

We should look far beyond progress in terms of infrastructures, systems, technologies and also aim for providing better services and beyond all, improving accessibility to these in the widest sense.

These are the preconditions for boosting investments in renewables.

 

As a member of the European Parliament I wanted demonstrate that in the EP we have forward looking ideas. As for the next steps (e.g. upcoming decision on energy policy priorities and short-term measures) the European Parliament wishes to play an active role and be as much involved as possible. Here I would like to mention that we are currently working on a European Energy Security Strategy where I act as shadow rapporteur and I aim for integrating the above thoughts and elements into this Strategy.

Nevertheless, I am here also to hear your opinion, your contributions and to gain new insights.

I wish ourselves a fruitful conference, a lively exchange of views. I hope we keep looking for new solutions together.

 

 

Ref:

Carbonbrief.org – tipping elements 

IPCC AR5

http://www.ipcc.ch/report/ar5/

http://www.climatechange2013.org/images/figures/WGI_AR5_FigSPM-1.jpg

COM paper http://ec.europa.eu/europe2020/pdf/energy2_en.pdf

EEA Technical report No 5/2013 Achieving energy efficiency through behaviour change: what does it take?

http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/137433.pdf

http://www.worldenergyoutlook.org

http://www.carbonbrief.org/blog/2014/01/in-brief-the-eu’s-new-2030-climate-and-energy-package-(1)/