Towards an environmental union

When I was involved in the creation of CER in 1994 I hoped it would become an important source of ideas and debate about the future of Europe. Since then, although I have been more than inspired by the efforts of its staff, the EU’s reputation in the UK has not risen. Europe needs a new raison d’être. For my generation, the pursuit of peace cannot provide the drive and moral purpose that are needed to inspire the next phase of the European project.

The environment is the issue that can best reconnect Europe with its citizens and re-build trust in European institutions. The needs of the environment are coming together with the needs of the EU: one is a cause looking for a champion, the other a champion in search of a cause.

Across Europe, concern about climate change is growing fast. Citizens know this is a problem that crosses national boundaries. They also know that the actions of one country alone are worthless unless backed up by other nations acting together. Environmentalism and isolationism are incompatible values.

This demands a new role for the EU, which needs to create the institutions, rules and incentives to enable citizens and businesses to make the transition to a low-carbon economy. The 450 million people within the EU can make a major contribution to global emissions reductions. And by negotiating as one block, the EU could play a decisive role in securing the commitment of the US, China and India to tackling climate change.

Europe has a strong environmental record, from improving the quality of our air and water to raising standards in waste management. But the challenge of achieving deep reductions in CO2 and other greenhouse gas emissions, to a level the planet can sustain, is of another magnitude. We need to focus on four priorities.

First, the EU’s emissions trading scheme has a pivotal role to play. It is the most pioneering environmental policy in the world today, helping to transform the energy efficiency of products and services, and stimulating the development of new low-carbon energy sources. It works by setting a cap on the overall level of emissions but allows each business to find the lowest cost method of meeting its own target level. Thus the scheme regulates the ends but not the means. Our challenge is to adapt the scheme so that businesses have more certainty over the future of the carbon market, and so that sectors such as road and air travel are included.

Second, internationally, the EU must be active on several fronts. Through the UN Framework Convention on Climate Change and the Kyoto Protocol, we must continue to strive towards the long-term goal of stabilising emissions.

But we also need to work directly with emerging economies like China and India to develop the low-carbon economy that is necessary to avoid dangerous climate change. The report by Nick Stern to be published later this year will show that the cost of mitigating climate change globally would be far less expensive than dealing with the economic, social and environmental costs of failing to tackle climate change. We must take forward the debate about how we channel investment into developing economies, for instance through mechanisms such as the World Bank Clean Energy Investment Framework.

Third, the food and farming sector is so intertwined with the natural environment that it must be central to achieving our environmental objectives. In the UK, farming creates 7 per cent greenhouse gas emissions, though accounting for less than 1 per cent of economic output. We need to develop the sector so that it becomes a positive net contributor to the environment, including through the development of biofuels and biomass. When the Common Agricultural Policy (CAP) and the EU budget come up for review in 2008-09 we must build on recent reforms to make the CAP more sustainable with respect to economic development and environmental protection.

Fourth, the sustainability plank of the Lisbon reform agenda must be strengthened. The growth of environmental industries offers huge potential for new jobs. But with oil at $60 a barrel, all industries need to think seriously about resource productivity, and not just labour productivity, as a source of competitive advantage.

Climate change is the greatest challenge facing the world today. It cannot be met without the EU playing a leading role. The need to meet that challenge has the potential to bind European citizens together.

David Miliband  is Secretary of State for Environment, Food and Rural Affairs.  He co-founded the CER.