2. Integration of sectors and the environment

2. Integration of sectors and the environment

At its meeting in Cardiff in June 1998, the European Council called for its respective Councils to develop strategies to integrate the environment into their policies and to develop indicator sets to support assessment of progress. Sectoral indicators can be used to describe progress made in individual sectors, but they also serve to compare sectors. The restricted selection of indicators used in the present report points to movements away from targets in the transport and energy sectors; in both sectors price incentives run counter to the targets. In agriculture, the indicators suggest continued intensification on the one hand and an increase in agri-environmental management (in limited areas) on the other.

Integration of the environment in sectoral policies was already mentioned in the fifth environmental action programme as a main policy concern. The European Council in Cardiff gave the impetus to the practical organisation of developing integration strategies and the related reporting on progress. Progress by sector is assessed in the following chapters, based on a restricted set of indicators. This chapter attempts to assess how the various sectors are progressing compared to each other.

Although the sectors differ considerably, some common features in the integration process can be identified (EEA, 1999a and 1999b):

• What are the determining characteristics in the size and shape of the sector with regard to the environment? How have these developed over time? For example, the main issue for transport is the development of total mobility and division between the various forms of transport; for energy, the concerns are the development of energy use and the choice between fossil fuels, renewables and nuclear energy; for agriculture, the main characteristics are the amount of agricultural production and the produc- tion system used.
• How have the sector's beneficial and harmful influences on the environment changed?
• How has the eco-efficiency of the sector developed, or in other words: is the sector delivering its products and services with less use of resources and
  energy and less pollution per unit of output?
• What has been the progress in implementing integration measures: market integration, management integration and institutional integration?

2.1. Progress towards integration

Developments in the size and shape of the sectors show a mixed picture. In transport, there is a clear trend away from policy targets: passenger and goods transport have increased steadily, with road transport increasing faster than other forms (see Figures 5.3 and 5.4). Energy shows a similar picture: the amount of energy used has increased, with fossil-fuel energy showing the greatest increase and use of renewables increasing only slowly (see Figures 3.3 and 3.4). In agriculture, the indicators suggest a split into areas with continuing intensive farming — with increased fertiliser and pesticide use per hectare (see Figures 6.3 and 6.5) — and more areas under special management contracts. For industry, there is insufficient data for such an assessment, which would need to take into account worldwide developments in trade and globalisation.

Progress in environmental efficiency shows common trends in all sectors. Little significant breaking of the link between developments in production and emissions has yet occurred, apart from sulphur dioxide emissions (Figure 2.1). Sulphur dioxide and nitrogen oxide emissions have fallen, but less progress has been made in reducing carbon dioxide emissions. The transport sector shows a strong link between transport, energy use and carbon dioxide emissions. In the energy sector, the slight breaking of the link between carbon dioxide emissions and output is mainly due to the shift from coal and oil to natural gas in power plants, and to increased production of nuclear energy. Eco-efficiency gains in the crucial sectors of transport and agriculture have been less than those in industry and energy.

Unfortunately, eco-efficiency assessments are currently limited to air pollution and a selection of inputs used in the sectors. Consistent and systematic data on waste production and other influences on the environment is not yet available.

Figure 2.1. Eco-efficiency in the four sectors based on emissions of major air pollutants

Source: EEA

Source: EEA

Reporting on progress in the implementation of typical integration measures is currently limited to the theme of `getting the price right', i.e. economic instruments. A more qualitative overview of progress in integration is in preparation (EEA, 2000b).

Although taxes are a large part of energy prices, the real price of almost all fuels has fallen during the past 10 years (Figure 3.5). There is therefore no economic incentive to save energy. A similar development has taken place in the transport sector. Data from Denmark and the UK (EEA, 2000a) shows that the price of public transport has increased more quickly, and to a higher level, than private transport. The incentive provided by transport prices thus also opposes policy aims. More policy initiatives are therefore needed for both energy and transport to reverse these trends.

In agriculture, economic instruments have been used for many years via management contracts for environment and landscape conservation. Compared with the total funds available for agriculture, these agri-environmental measures are small. There is far less experience in including the monetary costs of the negative environmental effects of agriculture in the price of agricultural products. Only three EU Member States and Norway have introduced pesticide taxes, and only two (including Norway) a tax on fertilisers (see Chapter 6). Given the possible trend towards local intensification of agriculture, taxes and levies on agricultural inputs and outputs may become more important in the future.

The industrial sector is mainly confronted with levies, which are not included in available statistics on taxes (see Chapter 15). Most of these levies are directed towards the outputs of industrial processes and, as in the agricultural sector, taxes on inputs (resource taxes) are not common.

EEA (1999a). Environment in the European Union at the turn of the century. European Environment Agency, Copenhagen.

EEA (1999b). Towards a common framework for the assessment of progress in environment-sector integration. (In preparation). Technical report. European Environment Agency, Copenhagen.

EEA (2000a). Are we moving in the right direction? Indicators on transport and environment integration in the EU. (In preparation). European Environment Agency, Copenhagen.

EEA (2000b). Monitoring progress towards integration. (In preparation). European Environment Agency, Copenhagen.