Europe’s sustainability puzzle — time for systemic change
By: European Court Of Auditors
Tags: European Union, United Nations, Sdgs, 2030, Sustainable Development

EPSC publication of 8 April 2019. Source: EPSC.

The UN 2030 Agenda, adopted by 193 countries in 2015, not only presents 17 goals, 169 targets and indicators to measure progress but also a clear deadline for reaching them. What kind of challenges does this pose to the EU and which scenarios can we identify in order to address these challenges? Saïd El Khadraoui, Advisor at the European Political Strategy Centre (EPSC), looks ahead, building on the key foresight scenarios presented in the EPSC’s note Europe’s Sustainability Puzzle.

By Saïd El Khadraoui, European Political Strategy Centre, European Commission

Sustainable development: everyone’s concern

Not so long ago, ‘sustainable development’ was considered exclusively an environmental issue or an agenda primarily targeted at developing countries. The adoption of the 17 Sustainable Development Goals (SDGs) in September 2015 by the member states of the United Nations was a collective recognition of the need for a new approach in the face of the megatrends that are reshaping the world. For Europe, the SDGs offer an opportunity for profound economic and societal transformation. In our recent publication Europe’s Sustainability Puzzle, we zoom in on the pressing and sometimes sensitive choices that Europe faces, posing questions and exploring solutions to some of the paradoxes that lie at the heart of its current socio-economic model and its long-term sustainability.

The starting point for the EU should be to recognise that any strategy for the SDGs must reflect Europe’s unique characteristics as a highly advanced economy in which citizens have become accustomed to high levels of social protection and private consumption, but which today faces significant structural challenges that are becoming increasingly intertwined and dependent on each other.

Growth, but not at the detriment of the planet

One initial dilemma is that, so far, high growth and prosperity have tended to come with higher levels of pollution and unsustainable resource use. Europe has already shown itself capable of decoupling GDP growth from emissions growth, thanks to significant progress on energy efficiency and investments in the clean economy. Yet decoupling remains a challenge as current efficiency gains are outweighed by increasing consumption levels or material extraction enabled by economic growth. In addition, the viability of our planet is endangered by other developments such as the loss of biodiversity.

Europe’s economy will therefore have to be much more ‘circular’ or resource-efficient. This will imply investing massively in sustainable physical infrastructure. Attracting sufficient levels of private investment will require putting in place sustainable finance systems that fully factor in environmental, social and ethical risks and opportunities.

Such transparency is critical to mitigating the risk of greenwashing, to allowing investors to make refined choices and reorient capital flows, and to triggering a change in corporate behaviour. It also implies that in a sustainable future, GDP growth or short-term profitmaking will no longer singularly define progress. Instead, measures can focus on rising wellbeing and fully integrate environmental and social impacts.

Fair burden-sharing and fair employment conditions

A second challenge is that although policies intended to curb climate change and environmental degradation will pay off in the long-term, they come with short-term costs that are burdensome for lower-income individuals, businesses in particular sectors, or regions. In some cases, this may spark strong social contestation.

Europe needs a systemic policy mix that takes into account pre-existing inequalities when imposing new costs on citizens, but also makes sure that sustainable alternatives are accessible and affordable in line with the expected consumption change. It also requires anticipatory measures to help regions to develop new growth strategies or workers to be reskilled for tomorrow’s economy.

Another challenge relates to the changing labour market and its impact on Europe’s social model. Forms of employment other than full-time, open-ended contracts have grown to encompass 40% of European labour market. This in itself is not necessarily undesirable as it may give some workers much-valued independence and autonomy while also potentially enabling a more flexible workforce to respond to the needs of new industries and emerging services.

However, non-standard work and social protection systems are currently not fully compatible, leaving people without full access to training opportunities and basic requirements, and giving rise to new inter- and intra-generational inequalities between those who are employed under contracts with full social rights and those who are not. All in all, this means that social security contributions need to be harmonised across different forms of employment as far as possible, and education and lifelong learning need to be shaped to facilitate effective skill use and match skills to evolving labour markets.