The Dominant Economic Model and Sustainable Development : Are they Compatible?
Executive Summary
European Ecumencial Commission for Church and Society
The Full 80 page Report is available from Church and Society Commission of the Conference of European Churches website.
This is the executive summary of a benchmark submission to the European Commission, made on behalf of a representative body for European protestant churches. Its message is the urgent need to rethink both economic policies and environmental practice if the countries of the Europe Union are to have any credibility in claiming to pursue a policy of sustainable development. It was prepared by an expert working group of the European Ecumencial Commission for Church and Society, in 1994-5, and submitted in September 1995 as a critical contribution to the mid-term evaluation of the EU's fifth "Community Programme of Policy and Action in relation to the Environment and Sustainable Development"
Contents
Underlying Theological and Ethical Principles
The Concept of Sustainable Development
Obstacles to Sustainable Development
Miminum Economic Recommendations for Sustainable Development
Sustainable Energy for Europe
Transport and Sustainable Development
Sustainable Trade
Conclusion
Further Information
Links to SRT's Environment and Energy Pages
Links to other SRT Project Pages
The Dominant Economic Model and Sustainable Development : Are they Compatible?
On behalf of its member churches, the European Ecumencial Commission for Church and Society (EECCS) established an expert working group on economics and ecology in 1993. In accordance with the mandate of EECCS, its brief was to examine and report on the implications of sustainable development to the economic, energy, transport and trade policies in the European Union, and well-being of both its citizens and its environment. In particular, we wished to consider to what extent the prevailing models assumed in EU economic policies were compatible with environmental sustainability, and what changes to them and in key sectors would be necessary to achieve a significant reversal of the state of environmental degradation . We found a tension between the EU's economic and sectoral policies, and the EU's own evaluations of the need for environmental policies following the Earth Summit.
The churches of Europe chose to look at this issue because, in addition to having many experts within our membership, we are aware also of the wider significance of these issues for European society. Underneath the mechanics of specific policy areas are some fundamental and neglected questions of relationship and responsibility, which are theological at root. In the plural, individualistic and fragmented post-modern society of the 1990's, the Christian tradition offers afresh its spiritual, holisitic and long term vision for society, which unites economic and ecological, individual and communal, political and spiritual, and is as relevant today as it ever has been in history. At a time when implementation has emerged as one of the prime environmental issues, the churches have a vital role as partners in dialogue with the European institutions.
Amongst the principles which we would offer to the present debate are
- To affirm the createdness of nature, and with it the intrinsic value of all created things.
- To acknowledge our responsibility of stewardship and companionship of the natural order, which is not ours to do with as we please, but given to us on trust by God, answerable to him.
- To recognise of the brokenness of human beings and human society with a spoiled relationship with God, one another and the creation.
- As a result of these three notions, to declare the necessity of a balance in which the economic and technological are not to have automatic and unchallenged precedence over the social, environmental, health and safety.
- To challenge the assumption of unlimited growth, in favour of a balance of sharing and a recognition of the limits of the economic exploitation of any given resource.
- To challenge the level of consumption of resources which most people in Europe take for granted, and the inequities this sets up vis … vis the developing world.
- Our responsibility to plan in the long-term for the generations which will follow us, and to exercise precaution and prudence in our technological and other developments,
- The need to build in a rhythm of rest and reflection, implicit in the biblical Sabbath, to balance the pace and stress of life, and the incessant pressures of global economic mechanisms.
- The need to build in a system by which injustices and inequities of human economic and environmental behaviour are counterbalanced by restitution, especially for the poor but also towards the biosphere as a whole, implicit in the biblical idea of "jubilee",
- The need to integrate policies such as energy, transport, housing and land development, as an expression of the connectedness and interdependence of human living,
- That we in the churches have much to do in setting to rights our neglect and mistakes of the past, as well as providing a focus for a vision for a sustainable society for Europe.
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After summarising the EU's treaty and policy commitments to sustainable development, our report asks what is meant by this concept. Systems analysis is a common approach to both economic and ecological spheres, where the inputs, outputs and risks of a particular course of action can be assessed. It can be used for sustainability by applying the following conditions :
- where "inputs" - such as fuels and energy sources, land and raw materials - are non-renewable they should be used up only as far as they can be substituted in future
- where they are renewable they should be used up at a rate within which they can be renewed,
- "outputs" - in production and consumption - should not overstrain ecosystems or the assimilation capacity of the ecosphere.
In contrast, we see in the level of degradation of the life support systems of the planet, and the balances on which these depend, how far we are failing to manage our affairs. The quality of human life is impaired; natural ecosystems are damaged and destroyed. This is not sustainability.
We recognise the complexity of balancing the many different risks, environmental and economic, but at present this is weighted heavily to minimising the latter at the expense of the former. It is also clear that economics itself has failed to produce the necessary warning signals to prevent the damage. The need to internalise environmental and other costs is urgent and immediate. Although it may not be possible to assign all such costs accurately, a start can already be made, with improvements as methods are tried and developed. Moreover, to put sustainability into practice requires an "efficiency revolution" not only in energy use but in our whole pattern of economic development. In place of the present growth-oriented, throwaway pattern of consumption, new models are required. Recalling the efficient ecological paradigm of a mature rain forest, the outputs and wastes of one sphere of economic activity need to become inputs to another. For true sustainability, this difficult transition needs to go hand in hand with the social dimension, which addresses not only the level of development but the inequity of distribution of its benefits to all the world's people.
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We assessed some of the obstacles that exist within the economic system and within the EU in translating these concepts of sustainable development into economic policy. Within the economic model these include narrow beliefs in material and technical "progress" (without regard to other aspects), in utilitarian ethics, and in the notion that free market automatically resolves social problems. General institutional barriers include : wrong incentives because the wrong indicators of economic health are used, especially in the failure to internalise external costs; vested interests in the status quo; lip service to sustainability because of a fear of being the one to make the first step. Within the EU itself, as well as these general barriers, we see insufficient possibilities to correct the disfunctioning of the market, insufficient use of sustainable market instruments (e.g. energy taxation), and an exaggerated influence of economic over environmental factors.
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We have drawn up a catalogue of minimum recommendations on sustainable development for evaluating EU policy, as the basis of a dialogue between churches and policy makers :
- We need to forge new alliances, in which all sectors of our societies play a part in sustainable development, in place of the confrontations we have grown used to, enshrined within existing structures. On issues such as global warming, the partnership includes poorer nations.
- Traditional "quantitative" economic growth is unsuitable to finance the repair of environmental damage, and should not be used to direct decision making on economic allocations.
- Increases in labour productivity should only be matched by a reduction in average working hours; as long as unemployment remains a problem, wage increases should only match the rate of inflation.
- An energy tax on businesses should be combined with allowances for wage payments, transferring the burden of taxation away from labour and on to resources.
- An ecological re-orientation of the tax system to use taxes raised on pollution, fossil fuels, etc. to pay for measures such as environmental clean up, energy efficiency and renewable energy, and the promotion of environmentally sensitive technology in the developing world.
- Sectoral policies should be implemented in line with the above, as set out below in our detailed case studies on energy, transport and world trade, as well as in chemicals and agriculture.
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Energy is one of the cornerstones of the European economy, vital to national and Community life at every level of society. But it also causes some of the heaviest damage to the environment, representing one of the greatest biggest challenges for sustainable development in Europe, especially in global warming. In relation to its share of world population and land area and the environmental damage we are causing, we believe Europe is using far too much energy per capita and has far too great a dependence on fossil fuels, and presents an unachievable target for the developing world. If Europe's energy consumption were made global, catastrophic environmental damage would ensue. Fossil fuels are finite and dwindling, and are the prime causes of some of our most serious environmental problems, including global warming, acid rain and atmospheric pollution. A range of criteria commonly used in energy policy are listed and critiqued. A balance of these has to be found which places less emphasis on short-term economic returns.
Above all, there is an urgent priority to reduce energy consumption, promote energy efficiency and switch to renewable alternatives. This makes both strategic as well as environmental sense, since the EU has a vulnerable supply position for the fuel it most relies on. This could be progressively decreased if both a sustained reduction of energy use and a determined switch towards indigenous renewable resources became its top energy priorities. In contrast, the current EU goal of a free and competitive internal energy market is seen to be in conflict with the goal of minimising the negative environmental impact of energy. The market framework fails to address adequately how the potential for renewables and energy efficiency can be fully developed within a market dominated by cheap fossil fuels. It also encourages consumption and is based on prices which do not adequately account for environmental costs.
The EU should as a matter of highest priority introduce policies to internalise the environmental and safety costs of fossil fuels, regulating carbon emissions and taxing fossil fuel use, and to direct the revenues into offering additional R & D subsidies for renewable energy and energy efficiency development. For the EU environmental goals to be taken seriously by its citizens, there has to be an urgent political will to address it.
Opinions are sharply divided on the role of nuclear fuel in a future energy policy. For some people the potential damage of an accident is too great to consider the use of nuclear energy. For others nuclear power offers a viable method of reducing fossil fuel pollution, with risks which are not considered unacceptable. The medium term goal should, however, be to switch reliance to an overall renewable energy, while recognising that this also carries risks and problems.
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The problem of transport and mobility has emerged as one of the central issues in sustainable development for Europe. The reports of the UK Royal Commission on Environmental Pollution and the Enquˆte Kommission of the German Bundestag, both indicate that the European transportation system needs a fundamental re-orientation from its current unsustainable policy, dominated by private passenger and freight road traffic. We believe this change must proceed simultaneously at four levels : an overall reduction in traffic, a transfer from road and air to more ecologically sustainable modes of transport (rail, water, public transport), the further development of optimised technologies, and a general deceleration.
Transport is the fastest growing source of CO2 emissions in Europe, as well as being the primary source of nitrogen oxides, particulate and other pollutants, the major cause of the degradation of both urban and rural air quality and possibly of the large rise in respiratory disorders. "End of pipe" actions taken to curb emissions, such as more efficient engines and catalytic converters, are insufficient measures which will be overwhelmed early next century if the predicted traffic increases are allowed to occur. 50,000 people in Europe die every year in road accidents and 1.5 million are injured, with a huge economic penalty in health insurance costs and lost work time, quite apart from the scale of human tragedy. New road developments also damage the natural environment in many ways, and are increasingly a focus for civil disobedience.
Mobility is seen as a fixation of our age. It brings many undeniable benefits, but also exacts heavy costs, both to the environment and to humans. Another hidden cost is the progressive acceleration of our life style, fixed by economic and technological imperatives, rather than human or environmental criteria, with speed and efficiency as "idols" of our time. A fundamental task of sustainable transport is thus to develop strategies to make transport less essential. At the most basic level, this means cutting the link of the transport of people and goods from the indicators of economic prosperity, and developing regional economical structures which require less movement. Hitherto, the EU market has been built around the unsustainable assumption of cheap transport which does not pay for its wider costs. New patterns are now required. Working patterns, land use management and urban planning policies should be implemented so that facilities for business, leisure, shopping and education are based primarily on local areas, public transport, cycling and walking, and the minimum of road freight. This requires integrated policies for the collaborative operation of all modes of public transport, and not "leaving them to the market". To optimise rail use greater effort needs to be taken in provision of imaginative services.
Major steps can be taken through economic and fiscal policy. The "polluter pays policy" needs to be applied seriously, but combined in a package of penalties and incentives. As with fossil fuels, there is an urgent need that the environmental, social and health costs of road transport should be included, and also charged at the point of use, to make them transparent to the user. This will allow market mechanisms to aid environmental implementation. The economic advantages of transferring freight from road to rail are currently masked, and passenger train use is artificially disadvantaged.
With the EU's priority of the development of the Trans-European Network, concrete steps need to be taken to ensure that this done according to clear sustainable mobility principles, with rail as its backbone. The environmental impact of the rapid growth in air traffic also needs urgent EU attention. We propose that Europe needs a new "concept of mobility education", which could begin with the introduction of the European driving license in 1996, so that driving schools also become schools in how to use our mobility. It is clear that there are conflicting objectives and interests. The recommendations in this case study seek to stimulate discussion, illustrating steps which could help bring about the necessary fundamental changes, both in a social and environmental terms. They can be seen as elements for developing a coherent policy programme aiming at sustainable transport.
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Trade can play a role in the sustainable management of the environment, but in the present economic outlook, it is viewed primarily as an instrument of economic growth, regardless of its environmental impact. The environmental costs associated with trade, including those involved in transport, need to be internalised, and included comprehensibly and equitably in multilateral trade rules. Attention should also be given to policies which distort trade and adversely affect the environment, including the question of intellectual and other property rights. We call for a regional orientation of trade, in the direction of self-sufficiency. As a major trading power, the EU puts pressures on the environmental resources of the developing world, but under-utilises its own potential. Now that trade has become a sixth area of concern in the EU Fifth Environment Programme we pose questions for further discussion on the imbalances in internal supports for production, import protection and export subsidies; the incorporation of environmental standards in trade regulation; and how the policy objective of making trade and the environment "mutually supportive" will be pursued in international instruments.
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There are many issues on which the churches represented in this study see the need for more action on the part of the EU and its structures, if they are to be taken seriously by the citizens of Europe in meaning what they say with regard to sustainable development for the future of Europe and the world. As partners in that vision, aware and concerned at the difficulties in implementing sustainability, the churches of Europe see much scope for fruitful dialogue and co-operation with the EU, to carry forward this process.
European Ecumencial Commission for Church and Society, Brussels, 1996.
The Full 80 page Report is available from Church and Society Commission of the Conference of European Churches website.
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