Technology and Policy for Sustainable Development
1. The mandate given by the European Council (Chapter 1).
At the European Council in Göteborg in June 2001 a strategy for sustainable development
was agreed, completing the Union’s political commitment to economic and social renewal by
adding a third, environmental dimension to the Lisbon strategy and establishing a new
approach to policy making. The European Council stated that clear and stable objectives for
sustainable development will present significant economic opportunities. This “has the
potential to unleash a new wave of technological innovation and investment, generating
growth and employment”. The European Council invited industry to take part in the
development and wider use of new environmental technologies in sectors such as energy and
transport and in this way decouple economic growth from pressure on natural resources.
The Commission committed itself to present to the Spring European Council 2002 a report
assessing how environment technology can promote growth and employment. This report,
assessing how technology for sustainable development can promote growth and employment,
is one contribution to the follow up by the Commission of the mandate from Göteborg
2. The role of technology for investment, growth and employment (Chapter 2).
The report takes the broad view of Agenda 21 on technology as a starting point. The
integration of environment policy into a strategy for sustainable development and the
broadening of the measures from regulations to more of market based instruments, leads by
necessity to a situation where more and more of the technologies will be regarded as
mainstream technologies, rather than regulation-driven eco-technologies. As a consequence of
this choice of a broad definition of technology the report has the title “Technology and Policy
for Sustainable Development”.
The report confirms and elaborates on the main message from the Göteborg European Council
that new technology offers a strong growth dividend, through investment in which new
technologies are embedded. To attain a GDP growth rate of 3 per cent per year – in line with
the Lisbon strategy - a rate of investment growth of about 4 to 6 per cent over several years
seems necessary, which represents a significant acceleration from the 2 per cent average over
the 1990s in the euro area. A higher rate of investment will create room for a faster
replacement of old technologies. In addition, a strategy for sustainable development –
including policies “to get prices right” – will make the introduction of new technologies more
profitable and contribute to stimulate investment. Consequently, the EU strategy for
sustainable development can both build on the macroeconomic efforts to stimulate investment
and give a strong contribution to such an investment strategy.
3. The potential of new technologies for sustainable development (Chapter 3).
Technology is a double-edged sword. It is both a cause of many environmental problems and
a key to solving them. It is a matter of fact that the technologies of the past, still dominating
in transport, energy, industry and agriculture, are undermining our basic life supporting
systems – clean water, fresh air and fertile soil. However, in each of these sectors there are
new technologies available or emerging, that may, if widely used, essentially solve the
environmental problems. Thus, new technologies have the potential to contribute to a
decoupling of economic growth from pressure on natural resources. The fact is that we face a
choice between technological change at historically unprecedented rates or a change in
atmospheric composition unlike any experienced since the dawn of humanity.
During the 1990s we have seen a substantial diffusion of renewable energy and transport
technologies and further progress in industry and agriculture technology, not least
biotechnology. The most promising for immediate investment is energy saving technologies
in housing and the tertiary sector. A systematic introduction of best available technology
could reduce the use of energy with 20-50 per cent. New technologies for waste management
offers a great potential; the most recent investment in this sector shows a utilisation of more
than 90 per cent of the energy content of waste. Even more fundamental are new technologies
for “up-stream” resource management in industry, offering strong synergies for productivity
in production, quality in goods and services and efficiency in the use of natural resources. In
this way a dematerialisation can be brought about in a larger scale. In agriculture organic
farming is increasing with 20 per cent a year, in spite of subsidies to traditional, nonsustainable
Yet, in other cases the growth is not self-sustained. There are still significant obstacles to be
overcome to reach the stage where the diffusion of renewable energy technologies is
independent of government interventions and where these technologies have made a major
inroad into the energy market. The extent to which more efficient technologies will be
adopted by the market depends largely on the relative future price relations between different
sources of energy, government policies to benchmark or to set standards for eco efficiency
and voluntary commitments by industries. It is also of vital importance to consider
consumer’s preferences for eco efficient products as well as consumer protection.
4. EU policies of importance for new technology for sustainability (Chapter 4).
The European policy initiatives in the main policy areas are discussed in Chapter 4. Such
policies can – if forcefully implemented by the Member States – have a strong effect on the
demand for new technology in general and could give a strong push for investment. Of
fundamental importance is the recommendation in the Broad Economic Policy Guidelines on
a gradual but steady and credible change in the level and structure of tax rates until external
costs are fully reflected in prices, to cope with the most fundamental structural problem in all
developed countries, the unsustainable patters of production and consumption. There is a
substantial scope for a rebalancing of prices, particularly on energy markets in favour of
renewable energy sources and technologies by using both taxes and other market instruments.
The implementation of the European Climate Change Programme (ECCP) and the directive
establishing an EU framework for emissions trading will act as a strong driving force towards
more sustainable price relations.
The setting of good environment standards to prevent the worst cases and measures to
stimulate best practice, Integrated Product Policy (IPP), for the whole EU area will have a
similar stimulating effect on investment in new technology. The European Single Market is
the biggest market in the world for technology, and will become even more important through
enlargement. The practices developed in this market will become global standards for all
enterprises that wish to compete on this market. Thus, the integration of sustainable
development in all policies, not least in research and development, can make the EU the
leading global actor in the renewal of products and processes, unleashing a new wave of
technological innovation and investment, generating growth and employment.
This makes the Member States’ sustainable development strategies, and a decisive
implementation of these strategies, a matter of fundamental importance for growth and
employment in the whole Community.
5. Enlargement and technology for sustainable development (Chapter 5).
The review of the situation in the candidate countries highlights the role of technology and
investment as key to the EU strategy for sustainable development. Enlargement of the EU will
create strong incentives for the candidate countries to speed up the modernisation process,
phasing out old investment and technologies from the command and control period and
phasing in the most recent technologies. The energy sector is the most prominent example,
where the candidate countries need to increase their capacity substantially and, at the same
time, replace old outdated plants with new eco-efficient technologies.
6. Policy conclusions (Chapter 6)
The integration of environment in the Lisbon strategy and the emphasis on new technology
for sustainable development, agreed by the Göteborg European Council, will make the
policies of each of the three pillars of the strategy mutually supportive:
• To attain a GDP growth rate of 3 per cent a year and to bring about a decoupling of
economic growth from pressure on natural resources, a rate of investment growth of about 4
to 6 per cent seems necessary, increasing the investment share of GDP from around 20 per
cent to 24-25 per cent.
• This higher rate of investment should be utilised to phase out old technology and
phase in new technology, contributing to productivity, quality and eco-efficiency for health,
prosperity and environment; to achieve these objective a forceful implementation of a strategy
to “get prices right” is necessary to make the value of natural resources and eco-systems
visible to the agents in the economy
• Economic growth and investment should be utilised to create more and better jobs and
be made sustainable by policies, that facilitate participation in working life (see Guidelines for
Member States Employment Policy 2002); in this way the EU should reach the employment
rate of 70 per cent, agreed in the Lisbon strategy, making Member States’ social protection
systems, in particular their pension systems, more sustainable.