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Resource Efficiency

New reports highlight benefits of linking economic and environmental policies

13/03/2014

The European Commission has published two studies to demonstrate how environmental policy can encourage economic growth and vice versa. One study highlights the advantages of shifting the tax burden away from labour towards resource use and pollution, while the other provides evidence on the overall economic benefits from timely investment in defences against flooding. Read more…

The first study assessed the potential for greener taxes. It suggests that shifting taxes away from labour towards pollution, including increasing taxes on the causes of air and water pollution, would raise revenues of €35 billion in real terms in 2016. This figure would rise to €101 billion in 2025, with higher figures estimated if measures were implemented to remove environmentally harmful subsidies.

The second study assesses various links between environmental and economic policy, such as the macro-economic impact of floods, best practices in supporting small and medium-sized enterprises focusing on resource efficiency and environmental expenditure in all Member States. For example, the estimated cost of damage from flooding in the European Union (EU) during the 2002-2013 period is €150 billion – with flood defence measures costing some six to eight times less than the damage caused by flooding, investment is regarded as highly effective. Furthermore, the benefits of investing in green infrastructure, such as restoring natural features to help manage and store flood water, include better outcomes for biodiversity and could help reduce construction costs.

Both studies will feed into the European Semester, a mechanism established in 2010 to improve the coordination of economic policies in EU countries. It represents an opportunity to show that the environment is part of the solution to the economic and financial crisis, and, conversely, that macroeconomic instruments can also support environmental objectives.

Find more info:

Press release

Study on Economic and Social Benefits of Environmental Protection and Resource Efficiency Related to the European Semester

Study on Environmental Fiscal Reform Potential in 12 EU Member States

Greening the European Semester

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