Opinion of the Committee of the Regions on the 'Communication from the Commission on Environment and employment: building a sustainable Europe` (1999/C 51/07)

THE COMMITTEE OF THE REGIONS,

having regard to the Communication from the Commission on Environment and employment: building a sustainable Europe (COM(97) 592 final);

having regard to the Commission decision of 26 November 1997 to consult it on this subject, pursuant to Article 198c, paragraph 1, of the Treaty establishing the European Community;

having regard to the COR Bureau's decision of 12 March 1998 to refer the preparation of this opinion to Commission 4 for Spatial Planning, Urban Issues Energy, and Environment;

having regard to the draft opinion (CdR 75/98 rev. 2) adopted by Commission 4 on 22 April 1998 (rapporteur: Mr José Ramón García Cañal, subsequently replaced by Mr Leonardo Verdín),

adopted the following opinion by a majority at its 26th plenary session of 18 and 19 November 1998 (meeting of 19 November).

I. INTRODUCTION

The resources problem

1. The Committee of the Regions agrees that unemployment is currently one of the main challenges facing European economies, giving rise to underuse of available human resources.

2. The COR takes the view that after several decades of continued growth, problems of environmental pollution and depletion of resources are such that an overhaul of the economic growth model is now necessary. Natural resources are currently being overused to the extent that future economic growth may be jeopardized. This excessive exploitation of nature is closely related to production and consumption patterns in industrialized countries. Since European countries belong to this group, they are jointly responsible for the situation. The sectors contributing most to the environmental deterioration are industry, energy, industrial-type agriculture and transport, but also patterns of household consumption.

The political mandate

3. The Communication from the European Commission on Environment and employment discussed in this opinion is based on the conclusions of the European Council in Amsterdam (June 1997), incorporated into the recently signed Treaty of Amsterdam.

4. The COR is pleased that the new Treaty places special emphasis on the environmental and employment problems faced by the EU.

5. In keeping with the agreement reached in Amsterdam on employment issues, the Commission Communication on Proposals for guidelines for Member States' employment policies in 1998 (1 October 1997) set out several lines of action, providing a framework for the discussion in the Extraordinary European Employment Council held on 20 and 21 November 1997 in Luxembourg. The COR agrees that employment policy in the Member States should follow these lines of action, thus guaranteeing that the current economic recovery is accompanied in the long term by a high level of employment and a stable macro-economic environment.

6. The COR welcomes the fact that the new Amsterdam Treaty defines the achievement of sustainable development as one of the explicit objectives of the Union. It is also pleased that Community policy in this area is seeking to attain a high level of protection, bearing in mind the differences between various regions and municipalities, and based on the principles of caution and preventive action, on the principle of correcting damage to the environment, preferably at source, and lastly on the 'polluter-pays` principle.

II. LINKS BETWEEN ENVIRONMENT AND EMPLOYMENT

Economic growth and sustainable development

7. The COR believes that the solution to the resources problem highlighted in the introduction to this opinion lies in the establishment of a new model for growth that is compatible with protection of the environment and is capable of generating employment. This is in line with the provisions of the European Commission's White Paper on Growth, competitiveness, employment, which states that 'a major element of the new development model will be to decouple future economic prosperity from environmental pollution`. The aim would be to attain sustainable economic development that safeguards the environment and does not endanger future supplies of natural resources.

8. The development of new environmentally-friendly processes and products requires the introduction and use of cleaner technologies that are less intensive in their use of natural resources. This requires new investments to promote the creation of new jobs. The two objectives could therefore be met at the same time.

Towards a job-intensive and sustainable Europe

9. The COR is of the view that in order to build a sustainable Europe, the following objectives must be combined: a competitive economy, a reduction in pollution, more efficient use of energy and raw materials, and higher employment. Implementation of measures designed to achieve these objectives requires prior understanding of the relationship between the environment and employment.

10. This relationship was examined in great detail at the Conference on the Environment and Employment organized by the Commission and the European Parliament in May 1997. The conclusion was that the adoption of environmental measures can be both good and bad for employment.

11. The COR considers that the range of activities producing environmental goods and services, usually referred to as the environmental industry or eco-industry, is good for employment. There are also activities in the sector of clean technologies, renewable energy sources, waste recycling, protection of nature and landscapes, and renewal of dilapidated urban areas. These sectors generate direct employment and also have a knock-on effect on other sectors of the economy, as the environmental companies purchase intermediary goods and services, and the employees of the sector spend more on consumer goods.

12. The COR is aware that the implementation of environmental legislation may have a negative impact on employment in the regulated sectors, resulting in competitive disadvantages, plant closures and industrial relocation.

13. The COR would point out that a negative impact on competitiveness depends fundamentally on the type of sector or company concerned. The cost of complying with environmental legislation is greater in polluting sectors and in those reliant on natural resources. It is also higher in sectors and companies that already have a competitive weakness. In such cases, problems of competitiveness cannot be ascribed exclusively to compliance with environmental requirements.

14. In the COR's view, it is debatable whether the adverse effects on employment resulting from plant closures or cuts in industrial production can be attributed solely to environmental policy, since such decisions are usually taken in response to an accumulation of negative factors.

15. On the basis of studies carried out on industrial relocation decisions, the COR highlights that environmental requirements are not a crucial consideration in the decision to relocate, except in very specific cases of highly polluting industries, which are usually in decline.

16. Given the need to design environmental policies to enhance their positive impact and reduce their negative impact, the COR agrees with the three aspects highlighted by the European Commission Communication on Environment and growth in relation to the preparation of such environmental policies: the use of economic instruments, investment designed to improve the environment by using new and less polluting technologies that would come to replace end-of-pipe solutions, and boosting the competitiveness of the companies concerned.

Managing the transition

17. The COR considers that special efforts should be made to seek a strategy that encourages the transition towards a model of sustainable development, minimizing possible adverse effects on the international competitiveness of certain sectors, regions and municipalities that may be more vulnerable to the development of a more strict environmental policy. Specifically, it proposes gradual implementation of the policy, as well as a significant degree of international coordination and targeting of environmental spending at regional and sectoral level.

III. POLICIES IN SUPPORT OF THE ENVIRONMENT AND EMPLOYMENT

Urgent tasks

18. The COR shares the Commission's view that sustainable development requires combining environmental considerations with the above mentioned support policies in those sectors most responsible for environmental pollution in the EU. Such a strategy will secure benefits not only for the environment, but also for job-creation as part of a process of structural change and overall improvement of European competitiveness. The COR would emphasize that investment in environmental protection cannot be motivated purely by employment considerations; it should be made primarily for the sake of environmental protection. It is also necessary to promote a change in European consumer behaviour, something which will, in turn, influence the changes that take place in the following sectors.

Manufacturing industry

19. The COR insists that the implementation of stricter legislation, the introduction of cleaner and more efficient technologies, the development of more environment-friendly products and the consolidation of quality control policies in companies, provide significant growth potential for many industrial sectors by improving competitiveness and broadening markets. Moreover, all of these factors will serve to consolidate sectors offering environmental goods and services.

20. The COR agrees with the Commission that the expected changes in the organization of work and companies and, in particular, the changes resulting from more subcontracting, will have a considerable impact on job-creation in SMEs.

Transport

21. The COR considers that the sector's main problems stem from intensive use of road transport, with its clearly adverse effects on the environment, and from the current inefficiency of European rail and inland waterways networks. On this point, the Committee would refer to the principles for a progressive and sustainable transport policy as laid down in its resolution of 14 May 1998 on a European Charter of regional and local authorities for a progressive and sustainable transport policy (). Every effort should be made to achieve the goals set out therein.

22. Consequently, the COR supports the measures being implemented in the EU in this area: the development of the rail, river and maritime transport systems, the promotion of intermodal systems, the use of urban and inter-urban public transport, the use of new and less-polluting transport systems, the introduction of intelligent transport support systems, and innovation and technological development in the car industry. All of these factors will provide more sustainable transport and involve initiatives that contribute to job-creation.

Energy production

23. The COR considers that it is necessary to seek an energy model that is less polluting, more efficient in its use of resources, and that involves developing activities designed to conserve energy and use renewable sources. It is also pleased at the initiatives already taken in Member States that are particularly active in this field (such as Denmark and Germany), and which offer considerable job opportunities.

Agricultural practices

24. Since the 1992 reform, the CAP has included measures designed to incorporate environmental considerations into the agricultural sector. This objective is re-stated in Agenda 2000 when it recognizes the need to strike a better balance between the supply of high-quality agricultural products and the protection of nature and its resources (water and land).

25. The COR agrees that the following four areas highlighted by the European Commission Communication on Environment and growth are particularly important for job-creation: the conservation and protection of landscapes, high value nature areas and habitats; sustainable forestry; development and use of new non-food crops and the development of organic farming.

Consumption patterns and households

26. Consumer behaviour is shifting towards more environment-friendly products. This change has direct repercussions on the above-mentioned sectors as companies must adjust production to meet the changing demand.

27. The COR agrees with the Commission that measures designed to alert and inform consumers and producers as to the need to use 'green` goods and services and adopt environment-friendly behaviour will strengthen the effect of support measures implemented in the different sectors.

Territorial aspects

28. Since environmental damage has immediate repercussions on specific geographical locations, the COR wishes to place special emphasis on the spatial dimension of this problem. Although environmental damage is not uniform in all European regions and municipalities, there are two factors that are common to all: the need to renew urban areas and to preserve the natural environment and the population level in rural areas. These two factors could in turn provide considerable job opportunities.

Efforts to correct the adverse effects of environmental taxes should also take account of national, regional and local conditions such as, for example, the climate, soil and hydrological conditions, the flora and fauna, the geology, etc., particularly where the natural geographic conditions have specific features that differ from other EU regions.

Urban development

29. Most urban areas in Europe are faced with the need to undo the damage caused by an economic growth model that failed to take account of environmental impact. The renewal of urban centres and buildings, the development and improvement of infrastructures, the social crisis in some housing developments and possibly their necessary regeneration, the necessary renovation of old industrial areas, use and conservation of historical heritage, and the urban population's growing interest in green areas, have prompted many cities to review their urban policy.

30. The COR agrees with the Commission on the important job-creation potential of urban renewal policies.

Efficient use of land

31. The continuing 'consumption` of land, the finite land resources available and the damage done to soil all require that land be used more efficiently in future (land recycling, redevelopment and regeneration). These measures usually have a high employment potential.

Rural development

32. Environmental damage to many rural areas in Europe stems from the rural exodus that prompted the desertification of land that was previously in agricultural production and the consequent disappearance of traditional maintenance techniques. The damage also stems from the increasingly intensive agricultural practices implemented in the last twenty years, which have caused a loss in bio-diversity, soil erosion, and nitrate and pesticide pollution of water. There are also natural habitats whose ecological balance has been endangered as a result of intensive tourism, as is the case in some coastal and upland areas.

33. The COR agrees with the proposals put forward by the Commission in Agenda 2000 insofar as they will provide employment for farmers and in rural areas by encouraging labour-intensive activities like organic farming, forestry, environmental conservation and the development of new services such as rural tourism.

Support policies

34. The European Commission Communication on Environment and growth, in step with the guidelines of the fifth European Community programme of policy and action in relation to the environment and sustainable development, proposes the implementation of measures guaranteeing effective enforcement of environmental legislation. It places emphasis on the development of fiscal policy designed to jointly achieve environmental and employment objectives. It also stresses the need to incorporate environmental considerations into other policies (research and technological development policy, public procurement, trade policy, and employment and training policy).

Implementation of the Community acquis regarding the environment

35. The Commission Communication on Implementing Community environmental law () specifies how to improve and strengthen implementation of environmental legislation in the EU Member States. The COR agrees with the Commission that it is necessary to take a step further and introduce mechanisms that guarantee not only legal compliance, but also effective practical implementation. Given the greater lack of resources faced by the less developed countries, regions and municipalities of the Union, the COR believes that a considerable proportion of Community funds should be channelled into promoting the investment necessary for effective implementation.

Making taxation more employment- and environment-friendly

36. The COR considers that in recent years there has been an increase in fiscal pressure on labour input in the EU, thus burdening employment with prohibitively high costs. The COR therefore agrees with the communication on the need to correct this situation by relieving the fiscal pressure on labour while at the same time increasing other taxes - environmental and energy taxes among others - so that the effect on overall tax receipts will be zero.

Technology assessment and development

37. Together with the European Commission, the COR acknowledges that the development of an environmental R& D policy does not only serve to improve and protect the environment, but also gives a competitive advantage to the environmental sector in those countries involved in the research effort, which in turn will lead to increased growth and job-creation.

38. The COR is pleased that the Commission Communication on Inventing tomorrow () highlights sustainable development and employment among the other key issues to be considered by the EU's Fifth Framework Programme for Research and Technological Development. This demonstrates the clear importance attached to these areas in European research and technological development policy.

39. The COR strongly supports the Commission idea of developing a flexible information system to disseminate more innovative and job-creating environmental technologies. Such a system would enable public and private companies and institutions to have an up-to-date knowledge of such technologies.

Dissemination of information

40. The communication highlights that many initiatives have already been introduced to distribute information to investors and consumers on more 'environment-friendly` production methods, products and services in the form of manuals, databases, conferences, 'eco-labels`, etc.

41. The COR is pleased that the Commission nevertheless highlights the need to maintain and develop these information activities even further in the future. It thus recommends a greater exchange of information between the European Environment Agency and local and regional authorities.

Domestic and external markets

42. The Committee stresses that the European internal market gives European companies an historic opportunity to improve their services, capitalize on economies of scale, and, in general, obtain a competitive advantage on world markets. The EU environmental sector could capitalize on this advantage, which would be further enhanced by the development of targeted policies designed to increase the use of environmental processes, goods and services. An effective means of achieving this would be to incorporate environmental considerations into public procurement. The COR encourages the Commission in its plan to draw up a communication on this subject in the future.

43. The COR also recognizes that given the economic significance of public procurement, its liberalization could mean substantial savings for government, releasing resources that could be used to boost public demand for environmental projects, goods and services.

Reviewing labour market policies

44. The COR believes that labour market policies (education and training) must be designed to meet any growing demand for environmental activities and technologies.

Financial support

45. The COR notes with satisfaction that both the Commission and the European Parliament have publicized the need to increase the environmental component of Community spending.

46. The COR agrees that the Structural and Cohesion Funds should allocate a proportion of their resources to environment-related projects and that the Structural Funds should specify an environmental impact assessment, in accordance with the provisions of Directives 85/337/EEC, 96/61/EC and 97/11/EC () in recipient regions and municipalities as a pre-requisite for assistance. It is also important to pursue the already established strategy of supporting projects that facilitate the implementation of environmental directives in recipient Member States.

47. The COR welcomes the incorporation into the CAP of specifically environment-oriented flanking measures seeking to support the sustained development of rural areas and meeting a growing demand for environmental services.

48. The COR is very pleased to see that in Agenda 2000, the Commission has specified the need to incorporate environmental objectives into the proposals for regulations on the new Structural and Cohesion Funds and into the future development of the CAP, particularly in terms of rural policy.

49. The COR supports the proposal in the communication to use the charges paid by the users of environmental services as an alternative source of funding. This would relieve pressure on national and regional budgets for this type of spending. Similarly, the penalties and fines imposed for infringing environmental legislation could also be used to benefit the area where the infringement occurred.

IV. THE WAY FORWARD - KEY ACTIONS

50. The COR would make the following comments on the five key actions set out by the communication.

1st key action (Environmental and social benchmarking)

51. For this action, the COR urges the Commission to highlight the need to improve environmental statistics in the EU and in the Member States; to incorporate ecological considerations into sectoral statistics - industry, energy, agriculture and transport; to align the data on environment-related spending in the Member States; and to establish the computer and telematic infrastructure needed to produce and disseminate information on the environment, in particular regarding experience with the best available technologies and benchmarking.

52. The COR wishes to stress the need to circulate information to local and regional authorities. To do so, it calls on the Commission to support the development of projects in this area.

53. The COR also considers that special attention should be paid to developing physical benchmarks and extending the concepts of national accounting, compiling satellite environment accounts.

2nd key action (Technological assessment and development)

54. For measures designed to promote the development and application of cleaner and more efficient technologies, the COR suggests that the Commission stress two further aspects. Firstly, measures to support innovation and technological development in companies should be strengthened by providing financial and tax incentives. Secondly, the dissemination and transfer of these technologies to the less developed regions and municipalities of the EU should be promoted. This would avoid further widening the gap between these areas and the more dynamic ones in which research activities have traditionally been concentrated.

3rd key action (Building upon Agenda 2000)

55. The COR believes that the Commission should consider the fact that, although environmental measures may have a positive net impact on employment in the EU as a whole, benefits and costs may well be unequally distributed between the different regions and municipalities.

56. The positive effects will be concentrated on those countries/regions which have a longer tradition of environmental protection and so have a head start.

57. The negative impact on employment will have the greatest impact on highly polluting, and usually basic, industries in traditional and declining sectors. Countries/regions specializing in these activities will be hardest hit by environmental protection measures. If, in addition, the environmental industry has not developed there, these countries/regions will become net importers, which will aggravate the employment problem. Environmental legislation may not only have a negative impact on existing employment, but may also fail to compensate by creating new employment, as jobs would be created outside the country/region concerned.

58. To ensure that this does not occur, the COR recommends combining the implementation of stricter legislation with increased Community financial support through the Structural and Cohesion Funds, bearing in mind the current budget restrictions in the Member States. With the future EU enlargement towards Central and Eastern Europe, this support may turn out to be insufficient if the Community budget remains at a similar percentage of GDP.

4th key action (Taxation and pricing)

59. The COR wishes to highlight this key action as one of the most important ways of achieving the twin objectives of creating employment and preserving the environment. In this respect, the COR would argue that the Commission should bear in mind that to be effective, such a tax should be implemented progressively and not across-the-board, taxing companies in the highest polluting countries/regions more heavily.

60. The COR also suggests that the Commission, in cooperation with the Member States, further develop market instruments, which could be used on a European level for environmental purposes. The solutions considered most efficient and suitable should then be introduced.

61. The COR urges the Commission to review the environmental aspect of legislation governing trade between third countries in order to bring the quality, health standards and food safety of raw materials, natural and processed products into line with those obtained, produced or processed in the EU.

5th key action (Environmental training and education)

62. The COR considers that although training in the environment and natural resources is becoming increasingly important in the EU as a whole, it could be of particular interest to the older industrialized regions. Not only do these regions suffer from serious environmental damage that needs to be set right, but they also have an industrial base that is generally a heavy polluter, in crisis and experiencing drastic job losses. Renewal of the environment, technological change in existing industries, particularly in moving towards cleaner technologies, and the need to diversify their productive structure, suggest that the development of environmental sectors provides a solid alternative for the future. If this is the case, the environmental qualifications of employees will be a crucial factor. It would be useful to promote beginners' and particularly intermediate and higher level courses in this area, as well as continuous training and re-training for workers both in employment and those who are out of work.

V. FINAL COMMENTS

63. The COR stresses the need to consider the following factors in addition to the measures proposed by the Commission:

- Given the importance of tourism in many regional economies, special mention should be made of this sector. The development of tourism is affected by environmental measures adopted in other sectors of the economy. Furthermore, these measures have a geographical impact both on rural and urban areas. At the same time, however, it is important that the tourism sector considers specific environmental measures that guarantee genuinely sustainable tourism.

- Since SMEs have such a large employment potential and find it most difficult to introduce clean technologies, emphasis should be placed on the need to institute support and assistance programmes to overcome any technical and financial obstacles they may encounter. Implementation of these programmes should be facilitated at EU level.

- Finally, in order to modify consumer behaviour in line with the environmental objectives pursued, the cost of taking account of environmental considerations should be included in the market price at which goods are sold.

Brussels, 19 November 1998.

The President of the Committee of the Regions

Manfred DAMMEYER

() OJ C 251, 10.8.1998, p. 7.

() COM(96) 500 final.

() COM(96) 332 final.

() OJ L 175, 5.7.1985, p. 40; OJ L 257, 10.10.1996, p. 26; OJ L 73, 14.3.1997, p. 5.