Working Report, 23/2006 – Strengthening Environmental Integration in the EU

The 1997 Amsterdam Treaty, which entered into force in May 1999, increased the profile of the principle of integrating environmental concerns into other policies, as well as making an explicit link between integration and sustainable development. Article 2 of the Treaty places sustainable development among the EC’s primary objectives, and Article 6 specifically requires that:

There are a number of strategic EU policy processes, which should reflect environmental concerns, and more specifically, IPP thinking. To ensure a coherent and consistent approach, however, further synergies need to be made between existing policies and processes.

The following sections give an overview of the state of play on the Cardiff integration process and the EU Sustainable Development Strategy (SDS) – two key processes for environmental integration.

2.1 The Cardiff Integration process

The so-called ‘Cardiff process’ was launched in June 1998 at the European Council meeting at Cardiff, UK. Within the Cardiff process, all relevant Council formations were asked to develop environmental integration strategies, covering their respective policy areas. Progress on implementing the strategies was to be monitored by identified indicators and taking into account the Commission’s guidelines.

All EU Council Presidencies between 1997 and 1999 prioritised progress in the Cardiff process. Significant attention was further given to the process during the Swedish Presidency in the first half of 2001. However, despite subsequent attempts to reinforce the Process, it has faltered since 2001. An annual stocktaking of the process has, however, been established, to feed into the Spring Summit, and this could help reinvigorate the Cardiff process.

Although all Council formations have had to develop strategies, nine sector Councils were specifically identified to start the process: Agriculture, Transport and Energy, Development, Internal Market and Industry, Fisheries, General Affairs and ECOFIN (predominantly involving economic/finance Ministers). The Commission, despite the Council’s overarching responsibility in the process, has also been engaged in developing and reviewing the strategies.

By June 2001, strategies were in place for only six of the nine Councils, but another two were completed by March 2002. The sector strategies have been found to vary in terms of content and quality, however (Fergusson et al 2001). While they tend to acknowledge the need for changes in policy, they have been disappointing with respect to including specific timetables. There has been a tendency to reflect agreed EU policy positions, rather than longer term visions of sustainable development. This has been supported by studies by e.g. Kraemer et al (2001) and SERI (2000).

The strategies’ content is arguably also in need of revision, in light of changes in the environmental policy context, notably following agreement on the 6EAP, the World Summit on Sustainable Development, and major reforms of EU sector policies. The latter have major environmental implications, notably in the context of agriculture, fisheries, transport and regional development (Wilkinson et al 2002).

The European Council’s Spring Conclusions of 2003 noted the Commission’s ‘intention to carry out an annual stocktaking of the Cardiff process of environmental integration and a regular environment policy review and to report in time for the outcomes of these exercises to be taken into account in the preparation of its future Spring reports, starting in 2004’. The annual stocktaking of the implementation of the integration strategies should provide information on the extent to which policy changes have been secured, in support of environmental integration.

After much delay the Commission finally on 1 June 2004 published the stocktaking^[1], stressing the need to invigorate the environmental integration process and calling for clear operational targets and implementation of the Cardiff strategies.

The document attempts to assess the progress on ‘strategy implementation’ in all the nine sectors covered so far by the Cardiff process, and concludes that the Cardiff process has produced mixed results. On the positive side the CAP reform and initiatives on renewable energy and energy efficiency are mentioned. However, the stocktaking points at the need for improving the consistency of strategies and the need for political commitments to integration to be followed up by measures and implementation at all levels of governance. In particular, three opportunities for further promoting environmental integration are mentioned, namely:

A very positive feature of the document is a section for each sector on ‘challenges and opportunities ahead for environmental integration’, which highlights relevant policies and measures that are in the pipeline. This kind of information would in fact have been very helpful for this project as it essentially points at other policies where environmental integration could take place. Note though, that because policies are mentioned in these sections, it does not necessarily mean that the Commission has decided to ‘green’ the policy items. However, the sections could prove to be a useful tool for environment policy makers and NGOs as a kind of work programme indicating where efforts could be targeted in the near future.

2.1.1 The Cardiff Process and IPP

According to the Commission’s latest communication on IPP (see Section 2), the Commission is to encourage individual sectors, in their reports pursuant to the Cardiff Process, to be more explicit in how they intend to integrate the IPP approach into their work. Moreover, Member States are encouraged to ensure the integration of IPP thinking into non-environment policy areas.

2.2 EU Sustainable Development Strategy (SDS)

In 2000, the EU agreed on the Lisbon strategy, which has the ten-year goal of making the Union the most dynamic, competitive knowledge-based economy, enjoying full employment and strengthened economic and social cohesion. It was argued early on in the process that the Lisbon strategy lacked the environmental dimension to deliver sustainable policies.

This environmental dimension was added in 2001, with the adoption of an EU SDS. The SDS thus complemented the principal lines of the Lisbon strategy, notably by adding both short and long-term (mostly) environmental objectives. The SDS took the shape of European Council Conclusions, namely the Gùteborg Summit Conclusions in June 2001. The Conclusions were partly based on a longer Commission proposal for a SDS (May 2001, COM(2001)264).

The SDS was produced in time for the 2002 UN Johannesburg Summit. It is also a response to Article 2 of the Treaty.

The 2001 Gùteborg Conclusions (the SDS) dedicated four pages to the issue of sustainable development, focusing on four key issues:

All four priorities were environment-related, however, they were also strongly linked to some of the main Cardiff sectors, namely energy, transport, industry and agriculture. The Conclusions further outlined how the strategy was to be taken forward, with a coordination role given to the General Affairs Council. Each annual Spring Summit is to give policy guidance and hence renew political commitment to sustainable development in Europe. Plans for introducing sustainability impact assessments are also mentioned (see Section 4 for further detail). In implementing the Strategy, the separate Councils were asked to finalise and further develop the Cardiff Strategies, taking into account the objectives of the 6EAP and the SDS.

Importantly, the Gùteborg Summit also recognised the need for a stronger external dimension of the Strategy. The elements agreed upon at the Gùteborg Summit have subsequently been elaborated. The May 2002 Development Council thus added this dimension with further refinements made at the Barcelona Spring 2002 Summit.

There are a number of institutional weaknesses in respect of developing and reviewing the EU SDS. There is an Economic Policy Committee (see Section 3.1), an Employment Committee and a Social Protection Committee, which all contribute to the Spring Summit Process every year. However, the environmental policy field does not have an Environmental Policy Committee to support the Environment Council’s annual contributions to the SDS. During the Spanish Presidency in 2002, this imbalance was discussed, but it was decided not to create a new committee. Therefore, the preparation of the environmental contribution to the Spring Summit takes place in the Council’s Working Parties on the Environment and on international Environmental Issues respectively. So far the environment has been sidelined in the SDS and has been given limited attention in the Spring Reports and at the Spring Summits.

In its May 2001 Communication, the Commission had proposed that a comprehensive review of the SDS should take place at the beginning of each new Commission (in other words every five years). The Commission’s 2004 Work Programme foresaw the publication of a consultation document on the first review for May 2004. It appears, however, that this timetable has slipped, but consultation is expected to be launched in July 2004. The Lisbon Strategy mid-term review is foreseen to take place during 2005.

Little information is currently available on the content and the possible link between these two reviews. According to the Commission^[2], the SDS review should be used to further integrate the internal and international dimensions of the SDS. In April 2004 in Kinsale, at an Irish Presidency conference on Sustainable Development, the interrelationship between the SDS and the Lisbon strategy was discussed. At the conference, Catherine Day, Director-General of DG Environment, highlighted that since the review of the SDS will take place at the same time as the preparations for the mid-term review of the Lisbon strategy there is a risk that the Lisbon review will overshadow the SDS review. She thus called for a comprehensive and full SDS review, seizing the chance to reinvigorate the sustainable development approach to policy making in the EU. She confirmed that a preliminary SDS review paper would be launched in the coming months. However, some informal contacts with the Commission suggest that this paper will not be a review, but rather a short document with questions to start a stakeholder consultation, others suggest that the timetable is likely to slip again and that any action might not be taken before a new Commission is in place in November 2004.

2.2.1 The EU SDS and IPP

IPP is recognised as having a key role in contributing to sustainable development. At a strategic level it is to be an integral part of the EU SDS and one of the main delivery mechanisms of objectives set out in the 6EAP, in particular the Thematic Strategies on natural resource use and the prevention and recycling of waste.

2.3 The Current Political Climate

The Spring Summits are the occasion to evaluate the implementation of the Lisbon objectives and the SDS on the basis of the Commission’s annual Spring Report. These reports are based upon regular, separate policy reviews and guidelines produced each autumn by the Economic and Finance, and Employment Councils respectively.

There are signs at the highest political level in the EU that less attention is given to the environmental dimension of sustainable development. During recent years, there has been a growing emphasis within the European institutions and in public debates, on the costs of environmental regulation and the need for maintaining industrial competitiveness. There has been intensified lobbying against a variety of proposed EU environmental measures, such as REACH, as well as weakened commitment to the Kyoto Protocol, in some Member States and parts of the Commission. Another indication for weakening support for the environment element of the SDS is that the environment issue was not given a section in the 2004 European Spring Council conclusions.

The emphasis now is on ‘Environmentally Sustainable Growth’. Given these developments, it is expected that the ‘environment’ would have to offer at least ‘win-win’ solutions to economic growth/competitiveness issues to be considered seriously at a high political level. Environmental technologies are considered to offer one such ‘win-win’ solution. They consequently received considerable attention in the 2004 Spring Summit conclusions.

None of the two reports that had been foreseen to strengthen the environmental component of the 2004 Spring Report, namely the Environment Policy Review and the stocktaking of Cardiff were produced in time to be included in the drafting of the Spring Report this year.

Some argue that in order to accommodate the change in the political climate, the environment debates are turning away from the traditional legislation approach and towards new approaches, such as the so-called Open Method of Co-ordination.

2.3.1 The Open Method of Co-ordination

The roots of the Open Method of Co-ordination (OMC) lie in the Maastricht Treaty, notably in the provisions relating to the Economic and Monetary Union, in the so-called ‘Maastricht Criteria’ for economic and fiscal stability, and in the need to bring about a high degree of convergence among the economies of the Member States in the Euro zone (Kraemer et al 2003).

The OMC procedure for economic policy – Articles 98 and 99 of the EC Treaty - is described in Box 1, below.

Article 98
Member States shall conduct their economic policies with a view to contributing to the achievement of the objectives of the Community, as defined in Article 2, and in the context of the broad guidelines referred to in Article 99(2)…

Article 99
1. Member States shall regard their economic policies as a matter of common concern and shall coordinate them within the Council, in accordance with the provisions of Article 98.

2. The Council shall, acting by a qualified majority on a recommendation from the Commission, formulate a draft for the broad guide-lines of the economic policies of the Member States and of the Community, and shall report its findings to the European Council.

The European Council shall, acting on the basis of the report from the Council, discuss a conclusion on the broad guidelines of the economic policies of the Member States and of the Community.

On the basis of this conclusion, the Council shall, acting by a qualified majority, adopt a recommendation setting out these broad guidelines. The Council shall inform the European Parliament of its recommendation.

3. In order to ensure closer coordination of economic policies and sustained convergence of the economic performances of the Member States, the Council shall, on the basis of reports submitted by the Commission, monitor economic developments in each of the Member States and in the Community as well as the consistency of economic policies with the broad guidelines referred to in paragraph 2, and regularly carry out an overall assessment.

For the purpose of this multilateral surveillance, Member States shall forward information to the Commission about important measures taken by them in the field of their economic policy and such other information as they deem necessary.

4. [if] established, […] that the economic policies of a Member State are not consistent with the broad guidelines […] or that they risk jeopardising the proper functioning of economic and monetary union, the Council may, acting by a qualified majority on a recommendation from the Commission, make the necessary recommendations to the Member State concerned. The Council may, acting by a qualified majority on a proposal from the Commission, decide to make its recommendations public.

* The broad guidelines referred to in the two articles are the so-called Broad Economic Policy Guidelines.

In March 2000, the Lisbon European Council defined the Open Method of Co-ordination as ‘the means of spreading best practice and achieving greater convergence towards the main EU goals’. It is based on five key principles^[3]: subsidiarity, convergence, management by objectives, country surveillance and an integrated approach. The aim is to help Member States to progressively develop their own policies, in co-ordination with other Member States.

The OMC can involve elements of benchmarking, peer reviews, regular reporting, and the development by the Commission of voluntary guidelines for the Member States – and it already applies to the other two ‘legs’ of the EU Sustainable Development Strategy (SDS) – i.e. economic and employment policies (as well as innovation policies, pension policies etc.).

New areas for using the OMC are being explored. The aim of a recent Commission Communication^[4] is to define a common framework to support Member States in the reform and development of health care and long-term care, using the OMC. Also when the Commission, in December 2003, published its Environment Policy Review^[5], the idea of introducing some form of OMC in the environment field was further articulated.

Voices in support of applying the OMC to the environment policy – e.g. Kraemer et al (2003) - argue that this could help to address the current sidelining of environment in the EU SDS. According to Kraemer et al the evidence argues for at least two OMC processes, an ‘Environmental Policy OMC’ for environmental protection and nature conservation policy, and a ‘Cardiff OMC’ for environmental policy integration, but it is less evident whether a third ‘World Summit on Sustainable Development OMC’, focusing on sustainability policy and sustainable development strategies, should also be established. However, the application of the OMC should not be used in a way which would undermine or weaken the existing EU acquis, or as a permanent substitute for EU legislative action.

Sceptics, on the other hand, question whether the OMC really offers new opportunities and question how the EU environmental acquis can be safeguarded. According to Radaelli (2003), the OMC has not achieved much in terms of co-ordination in those policy areas to which it applies, and the main results so far have been to gain momentum for previously neglected or politically sensitive policy initiatives. Radaelli further argues that the OMC has become a legitimate discourse, because official documents and certain academics refer to the OMC more regularly. According to Radaelli, this means that policy practices that recently would have been labelled ‘soft law’, declarations, voluntary codes, or benchmarking exercises have now been ‘framed’ as applications of the OMC. Some may argue, therefore, that using OMC could undermine the current legal basis on which EU environment policy is based. One possibility that has been suggested to protect the legal basis is to restrict the availability of the OMC to areas where the EU does not possess legislative competence.

However, one must keep in mind that other instruments also can be ineffective and that the OMC has so far been applied in particularly difficult areas, where the application of other instruments has not been feasible. Also the OMC is a relatively new instrument and it may therefore be too early for an assessment of its effectiveness. Some have suggested that the OMC will only be efficient if there is a mutual interest among Member States in the exchange of best practices, hence the method should only be applied to areas where this is the case.

So far the process relating to the OMC has not been very ‘open’, which has been identified as a key weakness. At the core of the OMC is a network of civil servants and experts (Radaelli, 2003). It has further been criticised for failing to include the European Parliament, which has no formal role in the OMC, arguably a major step backwards in terms of good governance. However, the EP has been involved e.g. in relation to employment, pension and social inclusion policies. In relation to the use of OMC in these fields, the Employment Committee and the Social Protection Committee have been driving forces in the processes, which also pose the question whether it is possible to ensure an efficient OMC process for environment policy without an Environment Policy Committee.

2.3.2 Options for the use of OMC in an environmental framework

A test case for using the OMC in an environmental context will be the implementation of the Environmental Technologies Action Plan^[6], adopted in January 2004, the Commission has announced. To what extent the OMC will take precedence over or supplement traditional Community Methods, however, will depend on discussions with Member States.

It has been suggested that OMC could suitably be tried in relation to the economic instruments for the environment – e.g. the coordination of national efforts on green taxes and charges. While this is an interesting idea, there is already an existing OMC process for Economic Instruments, which applies to the economic policy via the Broad Economic Policy Guidelines and Articles 98 and 99 of the EC Treaty. This seems to have been ignored in the debate.

A possible way of safeguarding the continued development of the acquis in respect of environment policy may be to use the OMC only in areas of limited Community competences.

^[1] Commission Working Document, Integrating environmental considerations into other policy areas – a stocktaking of the Cardiff process, COM(2004)394, 01.06.2004