Part 1. Introduction
• Environmental challenges are intrinsically linked with economic activity
• Close connections with global drivers of change pose additional challenges
• Supporting a transformation towards a green economy
• Managing natural resources sustainably requires a green economy
• Ensuring ecosystem resilience to support sustained prosperity
• Improving resource efficiency to decrease environmental pressures
• A transformation to a green economy encompasses multiple dimensions
• Reliable information provides insight into natural resource management
• The EEA maintains a wide range of environmental indicators
• Environmental indicators can illustrate ecosystem resilience and resource efficiency
1. The European environment: state and outlook
Environmental challenges are intrinsically linked with economic activity
We depend on our natural environment to supply the natural resources and ecosystem services that sustain our health and well-being, and ensure that our economies prosper. Natural resources include both renewables, such as food and biomass, and non-renewables, such as fossil fuels, metals and other raw materials. Ecosystem services include providing clean air and water, fertile soils and a stable climate, as well as the capacity to absorb waste.
The supply of ecosystem services and natural resources, whether renewable or non-renewable, is limited. Over-exploiting them puts both human well-being and economic output at risk. In some cases, one type of natural resource can be substituted for another. More often, however, this is not the case and once lost a resource may be irreplaceable. This means that natural resources must be managed to ensure that they are utilised carefully and to preserve, or in some cases prolong, their collective potential to deliver ecosystem services.
This backdrop leads to three interconnected questions:
• are we currently using and managing these resources and services — materials, food, energy or water — within the limits that our planet and the European continent can sustain?
• how can we manage them more sustainably, including by using them more efficiently?
• how successful have environmental policies been in supporting the use of natural resources in a way that does not put the sustainability of our economies at risk?
The European environment — state and outlook 2010 (EEA, 2010a) provides a comprehensive report on the European environment's state, trends and prospects – to help answer the above questions. It shows that environmental policy has delivered substantial progress in reducing environmental pressures and improving the state of the environment. Yet it also stresses that major environmental challenges remain, which will have significant consequences for Europe's environment, society and economy if left unaddressed.
The key environmental challenges we face today do not differ substantially from those a decade ago — indeed, many of them, such as air pollution, water stress, nature protection and waste management, have been on the political agenda for several decades. These issues are intrinsically linked to how our economies have evolved over time, and result from how and where we use natural resources. While urgent action is needed in some cases to address imminent crises, solving many of today's environmental concerns will require rigorous, long-term efforts.
Close connections with global drivers of change pose additional challenges
While many of the environmental problems that we face are longstanding, our appreciation of their drivers and the links between them has changed. Decades of intensive use of natural capital stocks and ecosystem degradation to fuel economic development have not only created environmental pressures in Europe but have also contributed to global environmental changes. Climate change, loss of biodiversity, waste generation and various negative impacts on human health have impacts beyond European borders and have created potential risks for Europe.
Emerging and developing economies have replicated this trend in recent years but at a much faster rate, driven by increasing populations, growing numbers of middle class consumers, and rapid changes in consumption patterns towards levels in developed countries. Unprecedented global demand has chased scarcer energy and raw materials. And unparalleled shifts in economic power, growth, and trade patterns from advanced to emerging and developing economies have been accompanied by the delocalisation of production driven by competition.
Box 1.1 A selection of global megatrends
The SOER 2010 – Assessment of global megatrends (EEA, 2010b) focuses on the impact of major global trends on Europe. The assessment provides detailed analysis of social, technological, economic, environmental and political megatrends. Furthermore it summarises the links between megatrends and Europe's priority environmental challenges, and reflects on possible implications for policymaking at the European level.
• increasing divergence in population trends: populations ageing, growing and migrating
• living in an urban world: spreading cities and spiralling consumption
• changing patterns of global disease burdens and the risk of new pandemics
• accelerating technologies: racing into the unknown
• continued economic growth?
• global power shifts: from a unipolar to a multi-polar world
• intensified global competition for resources
• decreasing stocks of natural resources
• increasing severity of the consequences of climate change
• increasingly unsustainable environmental pollution loads
• global regulation and governance: increasing fragmentation, but converging outcomes
Arguably more than ever, a range of long-term trends are set to shape the future European and global contexts. Many are outside Europe's direct influence. Several of these so-called global megatrends cut across social, technological, economic, political and even environmental dimensions. Key developments include changing demographic patterns or accelerating rates of urbanisation, ever faster technological changes, deepening market integration, evolving economic power shifts and climate change.
Population growth, urbanisation patterns and the emerging 'consumer middle class' in many developing countries, for example, are expected to result in continuous growth in demand for food, consumer goods and other resources. This markedly increases pressure on natural resources already under stress (such as fish stocks) or scarce (such as 'critical' raw materials), and it may put new stress on other resources. Already today international competition for resources risks causing geopolitical tensions.
In addition, the current financial and economic situation in Europe has driven urgent, short-term policy actions. In some instances this may make it more difficult to maintain a longer view on policy responses, which is often necessary when addressing environmental concerns. A key policy challenge is thus to reflect on and address potential synergies and trade-offs between the multiple economic, social and environmental goals that play out on different time scales — for example, the interplay between the urgent fiscal consolidation process in many European countries and the need to maintain ecosystem functions in the longer term.
Supporting a transformation towards a green economy
Against this backdrop of unprecedented change, interconnected risks and increased vulnerabilities of current environmental challenges, four key future environmental policy priorities emerge (EEA, 2010a):
1. better implementation and further strengthening of current environmental priorities (2);
2. coherent integration of environmental considerations across sectoral policy domains;
3. dedicated management of natural capital and ecosystem services;
4. transformation to a green economy.
The present environmental indicator report focuses on the latter priority.
Fundamentally, a 'green economy' is one in which environmental, economic and social policies and innovations enable society to use resources efficiently, thereby enhancing human well-being in an inclusive manner, while maintaining the natural systems that sustain us.
This report offers indicators and assessments to address a twin challenge at the heart of green economy: first, the challenge of finding ways to improve the efficiency of natural resource use in production and consumption activities and reducing the related environmental impacts; and, second, the challenge of maintaining a resilient structure and functioning of ecosystems, such that they continue to deliver the ecosystem services that support our economies and well-being.
2. Ecosystem resilience, resource efficiency and the green economy
Managing natural resources sustainably requires a green economy
The notion of a transformation to a green economy corresponds to a growing recognition that decades of creating wealth through a more 'conventional' economic model based on fossil fuels have not substantially addressed resource depletion, environmental degradation and social marginalisation (UNEP, 2011a).
While there is agreement that our economies will need to play an integral role in achieving sustainable development, what exactly a 'green economy' could or would look like is less clear. This chapter thus presents several key concepts — 'green economy', 'ecosystem resilience', 'resource efficiency' — that can help support the notion of what is involved in transforming to a green economy.
As noted previously, 'green economy' is here understood to be one in which policies and innovations enable society to use resources efficiently, enhancing human well-being in an inclusive manner, while maintaining the natural systems that sustain us. It is worth noting that several other definitions exist. These reflect different views on the relationship between a green economy and the broader concept of sustainable development (and the different implicit understandings of what constitutes economic development and human well-being).
The United Nations Environment Programme (UNEP), for example, defines a green economy as 'an economy that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities' (UNEP, 2011a). Meanwhile, the European Union (EU) considers a green economy one 'that generates growth, creates jobs and eradicates poverty by investing in and preserving the natural capital upon which the long-term survival of our planet depends' (EC, 2011a).
The term 'green economy' was coined in the late-1980s based on the reflection that environmental protection cannot be achieved unless an environmental perspective is integrated into economic and sectoral policies. A number of related terms, including 'green growth' and 'greening the economy' are often used interchangeably — although there can be appreciable differences between them.
A 'green economy' has often been viewed as a set of principles, aims and actions, which generally include most or all of the following (EEA, 2011, based on ECLAC, 2010; EEA, 2010; UNEP, 2011a; OECD, 2011a):
• equity and fairness, both within and between generations;
• consistency with the principles of sustainable development;
• a precautionary approach to social and environmental impacts;
• an appreciation of both natural and social capital alongside other forms of capital;
• sustainable and efficient resource use, consumption and production;
• a need to fit with existing macroeconomic goals, through the creation of green jobs, poverty eradication, increased competitiveness and development in key sectors.
Most interpretations of what is a green economy recognise that ecosystems, the economy, human well-being and their related types of capital are intrinsically linked (Figure 2.1). At the core of these links is the dual challenge of:
• ensuring ecosystem resilience of the natural systems that sustain us (and limiting pressure on natural systems so that their ability to function is not lessened);
• improving resource efficiency (and reducing the environmental impacts of our actions).
Source: European Environment Agency
Ensuring ecosystem resilience to support sustained prosperity
Ecosystem resilience can be defined as the capacity of an ecosystem to tolerate disturbance without collapsing into a (qualitatively) different state — the ability to withstand shocks or adapt when necessary. Human activities that adversely affect ecosystem resilience include those that lead to climate change, biodiversity loss, exploitation of natural resources, and pollution — or, more broadly speaking, the over-use of natural resources to fuel the economy.
Depletion of natural capital in Europe and elsewhere may jeopardise good ecological status and resilience. This can occur as a result of reduced natural resources or disruption of the relationship between the ecological components required to maintain stable environmental conditions. The impact of climate change and the adaption of ecosystems to these changes create additional uncertainty and risk. At the global scale, this risk has given rise to a discussion about global tipping points, and related environmental thresholds or planetary boundaries to avoid catastrophic environmental change (see, for example, Rockström et al., 2009).
The concept of ecosystem resilience is directly related to the notion of 'coping capacity' or 'adaptive capacity'. In environmental systems, adaptive capacity depends on factors such as genetic diversity, biological diversity and heterogeneity of landscapes. A society's adaptive capacity likewise depends on its readiness to respond to periods of change, relying on, for example, learning capacity, technological change and social fairness.
Box 2.1 What do we mean by 'resilience'?
Simply put, resilience describes the stability of a system. In an ecosystem context, this has primarily been interpreted in two ways, reflecting different aspects of ecosystem stability.
On one hand, resilience describes the time it takes for an ecosystem to recover to a quasi-equilibrium state following disturbance (this can be referred to as 'engineering resilience' or 'elasticity'). On the other hand, resilience denotes the capacity of ecosystems to absorb disturbance without collapsing into a qualitatively different state that is controlled by a different set of ecological processes (this can be referred to as 'ecological resilience').
In practice, ecosystem resilience builds on three characteristics: an ecosystem's capacity to resist change, the amount of change an ecosystem can undergo and still retain the same controls on structure and function, and an ecosystem's ability to reorganise following disturbance.
Resilience thus relates to characteristics that underpin the capacity of socio-ecological systems to provide ecosystem services. There is a growing recognition that diversity plays an important part in the sustainable functioning of ecosystems. However, as resilience in ecological systems is not easily observed there is often no agreed understanding of their exact relationship.
Resilience is used analogously in social sciences and economics. In social systems, resilience is also affected by the capacity of humans to anticipate and plan for the future. Similarly, in economics, resilience also refers to the inherent and adaptive responses to hazards that enable individuals and communities to avoid potential losses.
Source: Holling, 1973; Levin, 1998; Adger, 2000; Gunderson and Holling, 2002; Folke et al., 2004; Brand and Jax, 2007; Norberg et al., 2008; Campbell et al., 2009; www.resalliance.org.
Resilience is thus also central to social systems, especially during transition processes, as it describes the degree to which societies can build capacity for learning and adaptation. This, in turn, is directly related to the ability for self-organisation in the pursuit of long-term objectives — whether environmental, economic or social goals. Building resilience at all levels, for example through sound social safety nets, disaster risk reduction and adaptation planning, is key in any effort to achieve global sustainability (UN Secretary-General's High-Level Panel on Global Sustainability, 2012).
Improving resource efficiency to decrease environmental pressures
'Resource efficiency' is quite a broad concept. In the European context it is understood to require 'that all resources are sustainably managed, from raw materials to energy, water, air, land and soil'. A resource efficient economy 'is competitive, inclusive and provides a high standard of living with much lower environmental impacts' (EC, 2011b).
The term 'resource efficiency' as currently used widely in the policy debate often reveals a straightforward link to an economic interpretation of efficiency. Resource efficiency involves the relationship of resource inputs to economic outputs — reducing resource use and impacts while generating greater returns.
It is important to note that increasing resource efficiency is a necessary but not sufficient requirement for a green economy. Natural resource use may continue to increase in absolute terms despite increased resource efficiency. A relative decoupling of resource use from economic growth of this sort will not guarantee long-term sustainability. For this reason, the notion of absolute decoupling is central to the discussion of resource efficiency as it is also a precondition for achieving environmental impact decoupling.
Resource efficiency is nevertheless fundamental to a green economy. Any improvement in resource efficiency may also contribute to achieving wider policy objectives such as resource security and poverty eradication.
Box 2.2 What do we mean by 'decoupling'?
The term 'decoupling' is extensively used in the context of resource efficiency. An important distinction exists between two forms of decoupling: 'relative decoupling' and 'absolute decoupling' (Figure 2.2).
Relative decoupling is achieved when the growth rate of an environmental pressure (as measured, for example, by resource use or emissions) is lower than the growth rate of the related economic activity (as measured, for example, by a sector's gross value added or an economy's gross domestic product). Absolute decoupling is achieved when the related environmental pressure either remains stable or decreases while economic activity increases. In addition, 'impact decoupling' presents an enhanced form of absolute decoupling, and relates to the decoupling of environmental impacts from both the related resource use and economic activity.
Indicators such as 'resource productivity' (as measured, for example, by gross domestic product per unit of resource use) can be used as a measure of resource efficiency and to indicate decoupling. It is important to stress, however, that increases in resource productivity do not necessarily indicate absolute or impact decoupling, as they may be offset by increased economic activity.
Figure 2.2 Relative and absolute decoupling
Source: Based on EEA, 1999; UNEP, 2011b and OECD, 2011b.
A transformation to a green economy in Europe encompasses multiple dimensions
At the core of a transformation to a green economy is the integration of economic and environmental policies in a way that highlights the opportunities for new sources of economic development, while avoiding unsustainable pressure on the quality and quantity of natural capital. At the same time, such a transformation has the potential to enhance social equity and fair burden-sharing in policy design, the sharing of environmental costs and access to environmental benefits. It directly influences three main dimensions of human well-being:
• Social equity in today's Europe: for example, ensuring fair access to the benefits of nature and protection from the impacts of pollution and health risks;
• International burden-sharing: for example, by addressing hidden ecological costs in trade, fair shares in carrying environmental burdens, and environmental footprints of consumption;
• Intergenerational aspects: for example, by addressing the natural and social capital stocks that we pass on to future generations and the discount rates used in the context of long-term economic projects and environmental policies.
It is worth noting that a transformation to a green economy implies a departure from the 'business as usual' economic paradigm, which is socially and economically unsustainable. A green economy can create new opportunities, in particular related to new jobs across many sectors of the economy or through a substitution process by shifting jobs from industries that rely on non-renewable resources (such as fossil fuels) to those that rely on renewable resources (such as recycling industries).
Achieving success in such a transformation will require a mixture of measures including economic instruments (such as taxes, subsidies and trading schemes), regulatory policies (such as standard setting) and non-economic measures (such as voluntary approaches and information provision). In particular, the internalisation of environmental costs, including through more widespread application of the polluter pays principle, and reduced environmentally harmful subsidies, must be part of the policy mix. Alongside these policy instruments and measures, additional public and private action is needed to speed up the transformation. A green economy is likely to depend crucially on innovation (in particular eco-innovation), investments (for example, in green technologies) and information sharing (especially to engage citizens).
Fundamentally, moving towards a green economy in Europe necessarily requires recognition of the region's uniqueness and environmental assets (or lack of such assets). For example, the European Union is one of the world's biggest trading blocs and consumers, driving natural resource opportunities, dependencies and vulnerabilities globally. The Europe 2020 strategy for smart, sustainable and inclusive growth (EC, 2010), and the related 'Roadmap to a resource efficient Europe' (EC, 2011b) and the 'Roadmap for moving to a competitive low carbon economy in 2050' (EC, 2011c), already reflect some of this broader green economy perspective.
3. Environmental indicators for ecosystem resilience and resource efficiency
Reliable information provides insight into natural resource management
Reliable, relevant, targeted and timely environmental information is an essential element in implementing environmental policy and management processes. Such information can come in different formats. Broadly speaking information can be distinguished according to its level of aggregation: monitoring, data, indicators, assessments and knowledge(3).
In this context, 'monitoring' provides observations or measurements of environmental parameters. 'Data' and 'data sets' refer to the record of measurements, structured in a manner that allows further processing and comparisons. 'Indicators' can then be derived by further selection, aggregation and interpretation of multiple data, with a view to communicating the state and trends clearly and answering specific policy questions. Indicators underpin 'assessments' and result in 'knowledge', which supports policymaking.
Environmental indicators thus play a crucial role in policymaking by providing selected, aggregated and interpreted information at different stages in the policy cycle, with three major purposes (Stanners et al., 2007):
• supplying information on environmental problems, in order to enable policymakers to evaluate their seriousness (this is especially important for new and emerging issues);
• supporting policy development and priority setting by highlighting key factors in the cause-effect chain that produce environmental pressures and that policy can target;
• monitoring the effectiveness of policy responses.
Box 3.1 What is an environmental indicator?
An environmental indicator is a measure, generally quantitative, that can be used to illustrate and communicate complex environmental phenomena simply, including trends and progress over time — and thus helps provide insight into the state of the environment (EEA, 2005).
Environmental indicators may play very different roles depending on which environmental challenge they address and which stage of the policy cycle they aim to inform. It is useful to distinguish indicators that simply describe trends ('what is happening?') from those that assess progress in performance ('are we reaching targets?'), efficiency ('are we improving?'), effectiveness ('are measures and policies working?'), or total welfare ('are we on the whole better off?') (EEA, 2003; Stanners et al., 2007).
Indicators play a particularly important role in assessing the 'distance-to-target' where quantifiable policy targets have been established. Setting environmental targets and identifying appropriate indicators to monitor progress towards these targets over time are closely linked. It is difficult to implement policy and management measures if they cannot be associated with corresponding indicators.
It is worth noting, however, that while indicators can provide an accepted yardstick for benchmarking between different countries, regions, or municipalities, they can also be misleading in their simplicity. The basis for indicator selection, computation and communication must therefore be continuously kept under review to capture current developments and maintain policy relevance.
The EEA maintains a wide range of environmental indicators
Over the past two decades, the European Environment Agency (EEA) has published assessments and indicators on most European environmental issues. Today it maintains an extensive set of over 200 environmental indicators across 12 environmental themes (see Annex). Most of these indicators are explicitly designed to support environmental policies, based on data compiled by EEA, as well as statistics from other international organisations (Figure 3.1).
EEA indicators are developed against the driving force, pressure, state, impact, and response (DPSIR) assessment framework. This framework helps to structure thinking about the interplay between the environment and socio-economic activities. It is used to help design assessments, identify indicators, and communicate results and can support improved environmental monitoring and information collection (Stanners et al., 2007).
Simply put, following the DPSIR framework, social and economic developments drive (D) changes that exert pressure (P) on the environment. As a consequence, changes occur in the state (S) of the environment, which lead to impacts (I) on, for example, human health, ecosystem functioning and the economy. Finally societal and political responses (R) affect earlier parts of the system directly or indirectly.
From a policy perspective, there is a clear need for information and indicators on all parts of the DPSIR chain (Stanners et al., 2007):
• Driving force indicators describe the social and economic developments in societies and the corresponding changes in lifestyles and overall levels of consumption and production patterns. Primary driving forces are demographic changes and economic activities.
• Pressure indicators describe developments in the release of substances (e.g. emissions to air or water), physical and biological agents, the use of resources and use of land. The pressures exerted often manifest themselves in changes in environmental conditions.
• State indicators provide a description of the quantity and quality of physical phenomena (e.g. temperature), biological phenomena (e.g. species and habitat diversity) and chemical phenomena (e.g. nutrient critical loads) in a certain area.
• Impact indicators are used to describe the relevance of changes in the state of the environment, as well as the corresponding implications for ecosystems, the economy and human well-being and health.
• Response indicators refer to responses by society and policymakers that attempt to prevent, compensate, ameliorate, or adapt to changes in the state of the environment. Examples include recycling rates of domestic waste or use of renewable energy sources.
Source: European Environment Agency.
The complete set of EEA indicators can be interpreted according to different types of reading or mapping, depending on the purpose to be achieved. For example, for this report the existing indicators have been considered through the lens of the green economy.
Environmental indicators can illustrate ecosystem resilience and resource efficiency
To support reflections on a green economy in Europe, this report showcases indicators relevant to the twin challenge of ensuring ecosystem resilience and improving resource efficiency (as described in Chapter 2). In view of the many different dimensions a transformation to a green economy aims to address, reliable information about these two aspects is of paramount importance.
With this in mind, the subsequent chapters of this report present an indicator-based assessment building on a selection of EEA environmental indicators for six environmental topics: nitrogen emissions and loss of biodiversity, carbon emissions and climate change, air pollution and air quality, water use and water stress, use of maritime resources and the marine environment, and use of material resources and waste.
These topics are selected to illustrate aspects that are both directly and indirectly relevant to the four priority areas of the EU's Sixth Environment Action Programme: climate change; nature and biodiversity; natural resources and waste; and environment, health and quality of life (EC, 2002; EEA, 2010). The six topics assessed here do not map directly onto these four priority areas but do address key environmental pressures related to each of them.
For each of the six topics, this report focuses on two types of indicators in a green economy context:
• First, indicators that illustrate threats to ecosystem resilience. Usually such indicators will relate to environmental thresholds or political targets. In the absence of dedicated resilience indicators (4) this report uses either state or impact indicators that are related to resilience. This reflects the assumption that an environmental system under stress will have less ability to adapt to additional pressures, thus displaying low resilience.
• Second, indicators that illustrate progress towards improving resource efficiency in the context of the respective environmental topic. Usually such indicators will relate directly to sectoral activities and belong to the group of pressure indicators. Ideally, resource efficiency indicators can be related to their key driving forces, and measure whether the environmental pressure per production unit or per economic activity is increasing or decreasing.
In addition, for each topic, developments in a key associated economic sector are illustrated using response or driving force indicators as available. These indicators illustrate specific trends within a key related economic sector and how these trends link to the overall ambition of transitioning towards a green economy in Europe.
(2) Particularly in, but not limited to, the current policy priority areas climate change, nature and biodiversity, natural resource use and waste, environment, health and quality of life. > back
(3) Also referred to as the MDIAK reporting chain: monitoring-data-indicators-assessments-knowledge (EEA, 2011). > back
(4) Note that a key reason for this absence of dedicated indicators is that 'resilience focuses on variables that underlie the capacity of socio-ecological systems to provide ecosystem services, whereas other indicators tend to concentrate on the current state of the system or service' (Folke et al., 2002). > back