Timo Makela is Director of Sustainable Development and Integration at DG Environment of the European Commission. The Finn is pragmatic about the EU’s present economic and environmental challenges, but also clearly optimistic about the opportunities that these challenges offer.

A MATTER OF PERSPECTIVE: Makela hopes that the EU’s new member states will ‘trust the market opportunities for advanced technologies and eco-innovation.’ (PHOTOS COURTESY OF THE EUROPEAN COMMISSION)

Green Horizon: Your commission launched the International Panel for Sustainable Resource Management last November in Budapest, during the World Science Forum. What has happened since then?

Timo Makela: The panel meets for a second time in a couple of weeks in Rome, and then another meeting will be held towards the end of the year in Santa Barbara, California. The main topics that the panel is looking at are sustainability and biofuels—not only in a European context but in a global context—also, the global environment and sustainability challenges related to metal flows, raw materials, recycled materials, and the enormous overall increase in the need for natural resources.

GH: What sort of a future do you predict for biofuels?

TM: Biofuels are here to stay. We can’t really turn the clock back as far as they are concerned. The real issue is which directions biofuel policies will take. [Food production versus fuel production] is a big issue, but I don’t yet know how this has been scientifically analysed. Of course, price pressures are driving growing global demand for food. The Chinese are becoming richer and they want to eat meat as we do, and that increases enormously the need for cereals; but with biofuels it’s really about how to produce them in a sustainable manner. This issue is now being intelligently debated and discussed in Europe, and the debate is spreading globally.

GH: One of the issues debated at the World Science Forum was whether or not we already have the technologies needed to achieve sustainable development.

TM: Well, here perhaps one should differentiate three challenges. The first is to simply apply the existing technologies. One such example is a frequency regulator—a device used to switch ‘on’ and ‘off ’ switches to a regulator which automatically regulates energy flow, water flow, et cetera. And the payback periods on such an investment are just a few weeks to a few months—and industries still don’t apply the technology.
The second challenge is wide-scale innovation and finding newer, better solutions. It’s not only about technology; it’s about services, business models, products—all of which require further assistance and development. And a third challenge is to mainstream. [Eco-technology] needs to grow across all economic sectors—not just as a niche phenomenon. This process is already ongoing, but the challenges are deeper within the economy—challenges actually related to our lifestyle and throw-away economy, and in trying to change those things which have led to problems.

GH: What about your commission’s action plan for sustainable development?

TM: We’re now finalising the European Union Action Plan for Sustainable Consumption and Production, and also for sustainable industrial policy, which is another side of the coin. The debate is ongoing in terms of where the emphasis should lie and how robust the measures should be. This is going to be a set of both legislative and non-legislative actions—hard actions and soft actions. Both are needed because there’s a limit to what you can do with legislation.
On the soft side we’re finalising an agreement with the European with major retailers in Europe to make the retail sector more sustainable—more green. We can’t really prescribe too much here because we live in a market economy, but the retail sector is responding very positively. It realises its role.
On hard issues we’re going to focus very much on product policies—to improve the actual environmental performance of products and make sure that better products are available on the market.

GH: Where does eco-labelling fit into this picture?

TM: Europe has both mandatory and voluntary labelling schemes. An example of mandatory labelling is the A, B, C, D and E categories for home appliances, like refrigerators. All those products on the marketplace must have that label. And then you have voluntary labelling, like eco-labelling, which is even more ambitious. We also want to introduce incentive schemes, such as green procurement, to promote products across Europe.
As far as incentives are concerned, we’ve used VAT reductions for energy-efficient cars, or subsidy schemes for certain products—wind power plants, for example. Such schemes include public procurers that already favour better products, but this is very touchy and policies differ from one country to another. We’re not necessarily after harmonisation, but rather single approaches tying together incentives and public procurement to make better products.

GH: What are the greatest sustainable development challenges and opportunities from a Central and Eastern European perspective?

TM: Well, the classic answer would be: Don’t repeat the same mistakes that more advanced countries have made. But I think that debate has already moved on. I think the biggest task is to manage transport. Also, EU new member states need to trust the market opportunities for advanced technologies and eco-innovation. This is a big challenge, and the thing to do is to turn the challenge into an opportunity, but then you need to engage the business community. But, really, we now have one EU and common challenges.

GH: What will be the global impact of the EU’s sustainable development plan?

TM: First of all, there is increasing competition for sustainable technologies—green energy, recycling technologies and so forth; and here, European companies can offer good solutions. It will be interesting, for example, to see what China takes from the European experience. We also have examples of the EU introducing certain stringent requirements for products, such as phasing out hazardous materials from electronic equipment; and now, Japan, South Korea, some states in the US, and China have introduced similar kinds of legislation. This is because producers of these products are often multinational companies; they produce for all markets and simply cannot afford separate production lines—one production line for Europe, another for China, a third for the US. Competition is so fierce that they basically rely on one production line,meaning in practice that when European market requirements are introduced, companies adapt very quickly for global production. It’s actually a good, ‘soft’ way of spreading environmental policies. Japan, China and the US are also bringing their thinking and policies to European markets.

GH: What about Commissioner Verheugen’s recent proposal to change the EU’s patent scheme to ‘fast track’ green technologies?

TM: This is something we’ve been discussing internally and which will be part of our proposed action plan. And we’ve been working with the OECD on how patents could indicate the level of [environmental] innovation in different countries. But the problem here is the European patent system—particularly if you’re a small or medium-size enterprise, [in which case] you have an enormous administrative burden to get your patent in different countries—and this is what Commissioner Verheugen seems to be after. We need to find an easier and quicker way of getting patents for eco-innovations and environmental technologies.

GH: Does the EU have specific targets for environmental technology as a percentage of GDP?

TM: Germany made an assessment that the share of eco-industry and environmental industry is going to grow fourfold within the European economy by 2020. If we’re now at 2 percent, we’ll be at 8 percent by 2020. So, you see, it’s a big industry. The environmental technologies industry is understood in a rather narrow sense, but it’s a bigger industry than the pharmaceutical industry or aerospace industry; and it employs more people in Europe than the car industry. And there are many countries—France, for instance—where it is the only industrial sector generating new employment.

GH: Are efforts to improve efficiency standards at odds with attempts to reduce consumption?

TM: You might be referring to what is called the ‘rebound impact.’ You improve the efficiency of cars, but at the same time more and more cars are being used, and the overall impact is negative instead of positive. What we really need to do is to focus in a much more robust way on quality and environmental performance throughout a product’s entire life-cycle.
Experience shows that we can’t be successful if we start blaming the consumer. It needs to be made easier for consumers to choose [better products], and to remove from the market those products which are not performing well [environmentally].
We can’t really fight against economic growth, but there are ways to measure growth other than by GDP. Of course, we’re fooling ourselves a bit at themoment:We’re so proud in Europe about cutting greenhouse gas emissions and pollution, but at the same time we’re consuming more and more products produced outside Europe—China or somewhere else. Our consumption-related problems have merely been transformed.