E3G

Keynote Address to European Environmental Bureau

By Chris Littlecott

Building a World Safe for Europe

But it is not enough to change policies inside Europe, we all know we must drive change globally to achieve sustainable development.

Taking interdependence seriously requires the EU to create the international conditions for its own future prosperity, as well as addressing internal economic challenges. This is the natural evolution of the core European project.

Economic interdependence also means that the EU must help create the conditions for others to manage these common challenges successfully. Global economic and political disruption will have increasingly large impacts on the EU; as recent energy security issues have shown. Europe cannot isolate itself from these effects, but must work with others to tackle problems at source.

Managing Scarcity by Building Sustainable International Rules

Europe will remain one of the major economic players on the global stage for the next 20 years. In this period, Europe has the opportunity to shape the international legal environment to promote the type of sustainable development it aims for at home.

Current EU policy in on trade, investment and other rules is still focused on short term economic gains and fails to support Europe’s long term strategic interests, because of this often lacks broad international support. However, Europe has the ability to build a wider coalition for stronger international economic governance. 

The alternative to a rules based system is a situation where a number of “great powers” attempt to compete strategically for global market share and access to resources such as oil and gas; using financial, diplomatic and military power to secure their aims.

However the danger of falling into such a world is real. For example, as demand grows global energy markets are becoming less market driven as state energy companies aggressively buy up resources, and countries such as China, India and the US form strategic alliances with oil and gas producers to secure supplies. These alliances are destabilising parts of Africa and Central Asia and helping strengthen autocratic and repressive regimes. History has shown repeatedly that while buying your own dictator may lead to short run stability, it also usually results in medium term instability.

Europe cannot – and should not – compete in this way. Instead it must work to forge agreement to an open market basis for accessing energy supplies. This must provide security for emerging powers such as China and India that they will not be denied energy by military means, and stimulate an environment where producer countries are both open to pressures for political reform and helped to maintain legitimate stability. Such a cooperative approach is in the interest of all energy importers, but needs European leadership to make it a reality.

Europe’s interdependence with China, and other emerging economies, is growing fast. The downside of this interdependence is that it exposes Europe to instability in other economies. In the next two decades Europe will become increasingly reliant on economic and political stability in China, and to a lesser extent India, Brazil and South Africa. This is a change from when Europe was mainly trading and investing with other developed countries.

Though China is becoming increasingly important for the European economy, it remains a developing country with immature and fragile social and political structures which are suffering from immense stress from the pace of economic growth. Many of these stresses stem from natural limits in the supply of water, soil, land and environmental degradation, and result in political and social tensions due to poor governance, corruption and inequality.

RAND Corporation estimates that significant crises in any of these areas are highly likely and could derail Chinese growth for several years. China also faces growing impacts from climate change which are estimated to be highly negative in the next decades.

The EU should invest in helping create the conditions for a stable China, by helping China manage the tensions its unprecedented growth generates; in particular reducing its impact on global climate change and helping improve energy and water security.

As part of this cooperation, Europe would ask China to play its part in creating robust rules-based systems to manage the global economy and provide the stability needed to ensure sustainable development in other regions. For example, empowering the UN to take a stronger role in conflict prevention and crisis intervention and implementing global rules on corruption and illegal natural resource trade.

Finally, expanding markets and innovation for efficient products helps spread the risks and benefits of technology development, and increases the likelihood that real markets will grow fast and barriers to trade (especially due to national standards) will be minimised.

Europe should take the lead in establishing an international clean transport agreement, firstly with China and California but open to others, with the aim of creating a dynamic single market in highly efficient cars and freight vehicles.

Conclusion: Sustainable Prosperity?

Any set of policies aiming to reverse Europe’s crisis of economic confidence needs to focus on how to use Europe’s strengths to generate sustainable well-being, not appear to constantly look to other countries and regions for blueprints for higher growth.

Europeans need to be given a compelling offer as citizens on the benefits they will gain by taking greater risks and funding necessary public investment. The challenge of intergenerational equity needs to be faced, not least by avoiding a new generation of wasteful resource intensive investment.

Europe is well positioned to drive action towards a sustainable and innovative economy because of its historical strength in building the political coalitions around the provision of public goods. Europe is also the only area with the political will and power to lead the development of the necessary agreements at the global level.

This is the heart of the political dilemma of Europe. Without economic prosperity and confidence Europe will not be able to take the global leadership needed to build the conditions for sustainable development. If Europe does not play this role the current security and stability of Europe - which many use as an argument against economic reform - will be swamped by larger external forces.
Europe needs to recover its economic confidence and dynamism, not because it is obsessed with becoming wealthier, but because in an interdependent world this is necessary to underpin the political action needed to preserve the fundamental security, values and choices of Europeans.