Speech to Environmental Integration & Economic Development Conference - European Parliament's view on the environmental legacy of Structural Funds

Speech delivered on Sun 22nd Jan 2006

During the 20th Century the Earth experienced the greatest period of warming in the last thousand years.

Drought, floods, hurricanes and earthquakes are no longer the stuff of Biblical lore. They are a reality for millions of people, rich and poor.

The UK Government's Chief Scientist Sir David King argues that climate change poses a greater threat to the planet than global terrorism.

You don't need to read between the lines. The message is clear.

Humankind is no longer simply conquering nature - we are in danger of beating it to death.

So I have this to say to those who still scoff at theories of climate change: remember Easter Island.

Only when the last tree has died, the last river been poisoned, and the last fish caught will we realise we cannot eat money.

Europe's citizens value quality of life, especially a clean environment.

They want their children and grandchildren to grow up in a better world.

And they want their governments to devise effective responses to dangers like pollution, depletion of natural resources and reduced biodiversity , which could have a sever impact on our way of life.

The problem is, we have known about these threats for years, but progress has been painfully slow.

This was especially true when environmental legislation was the primary responsibility of national governments.

Governments which, by dint of their relatively short mandates, also tend to think in the short-term,

Some - like Germany - took their environmental responsibilities seriously: others, less so.

In certain EU Member States - like the one I know best - it was barely visible thanks to a political climate in the 1980s and 90s which prized road-building and greater energy use over responsible environmental management.

Plus ça change - the voting record of some of our political leaders speaks louder than words.

Even at European level the environment tended to play poor cousin to big policy areas like agriculture and regional development while legislation was proposed more in response to emergencies than as part of a long term strategy.

I think, for example, of directives like those on Mine Safety and Maritime Transport which were the director consequence of major accidents in the European States.

What we are now experiencing is no less than a paradigm shift.

In today's rapidly globalising world - although many leaders do not like to admit it - national governments have less and less leverage when it comes to environmental management.

For the environment, unlike nation states, has no borders.

And for supranational challenges, we need supranational responses.

Supranational institutions.

Global reach.

That's where the European Union can make the difference.

Since 1997, thanks to action in the European Parliament (in which Group I lead, Liberal Democrats played a decisive role), the European Union has been required to ensure its financial instruments are put to the service of economic growth, social cohesion and long term protection of the environment.

That means that the environment is not just a political add-on.

Rather, it runs all major policy strands.

The Lisbon Agenda and the Gothenburg conclusions - launched within a year of each other - are the most important manifestations of this process and have put the environment on a level of parity with other Community goals like economic growth and social protection.

Of course, success takes time.

And when the Lisbon Agenda was re-launched last year we had to accept that the Union is unlikely to meet its environmental commitments unless it steps up a gear.

But at least we are finally on the right track.

And I am sure you will agree that forthcoming thematic strategies on Air Pollution, Waste Management, and sustainable use of resources - amongst others - are yet another step in the right direction.

Let's not fool ourselves. The new generation structural funds will be geared mainly to economic growth. 60% of Objective One for Cornwall and 75% of Objective Two for the rest of the South West will be earmarked for the Lisbon agenda. But with intelligent thinking - "mining the gold in people's heads", as the Japanese call it - we can fund project which have economic and environmental benefits. Cornwall's wave hub, for example.

With regards to Structural Funds - and today's conference theme - research has shown that the environmental sustainability cross-cutting theme has yielded considerable benefits.

Between 1989 and 1999 alone, around 13 billion euros form Structural Funds were spent on environmental schemes in areas qualifying for Community regional assistance, augmented by the many programmes which included environmental protection as part of their remit.

To give you one or two examples, the residents of Palma de Majorca are now drinking seawater thanks to EU funding which allowed a desalination plant to open in 1999.

The project has a dual economic and environmental function - for while home in La Palma, Calvía and Andraitx have a new source of drinking water at a reduced price, pressure has eased on the Balearic Islands' aquifers, exhausted by years of drought.

Likewise - and closer to home - the Nantgwynant Project has twinned environmental benefits like improved habitat management and control with economic benefits like job creation and regeneration in a shining example of this philosophy.

Not to mention the success of many smaller scale initiatives across South West England, some of which I showed recently to the European Commissioners for Agriculture and Research and others which the Energy Commissioner will see when he visits Cornwall later this spring at my invitation.

Of course there is much more which could be done. And of course we have not year achieved joined up thinking in all areas of policy in Brussels, any more than in the better national capitals. Why did the South West Regional Chamber not put a requirement into its housing strategy that all housing be built using sustainably produced materials and to exacting resource use standards, such as the houses recently built by the South West Sustainable Homes Trust in Langport, where I live? When we plan major schemes like the Eden Project, why do we design them around the private motor car?

Even where our laws are advanced, compliance with EU environmental legislation can be especially challenging, as it was for the accession countries which joined our Union in 2004 - many with fairly alarming environmental records dating from Soviet days.

Like all Member States they were assisted through Cohesion and Structural Funds but also through IPSA - the Instrument for Structural Policies for Pre-Accession devised in 1999 to enhance economic and social cohesion in East and Central Europe.

It has proved to be especially successful in financing certain vital structural projects like waste water treatment plants - over 300 in the first four years alone.

However progress on the implementation side was - and is - considerably slower.

Much of the allocated funding simply languished in the EU's coffers, hampered by a lack of suitable projects, skills and general environmental awareness in accession countries.

So why do we not allow new member states to use structural funds to insulate the housing stock, thus keeping down their energy bills and keeping alive their vulnerable citizens?

The challenge for today is to ensure that Croatia, Romania and Bulgaria - the latest beneficiaries - do not repeat the same mistakes.

That is not to say, however, that we have not seen positive results on the implementation side.

Most Environmental Sustainability Theme Managers - regardless of where they are based - have positively influenced programme delivery.

Improvements have been particularly noticeable in the advice, guidance and project appraisal which have helped mainstream sustainability into the whole economic process.

These are no mean achievements.

The European Parliament remains committed to the 'cross cutting' approach to environmental integration demonstrated by the South West - as our resolution of last July shows.

Indeed, many parliamentarians feel that the cross-cutting model should be transferred to wider economic development activity to ensure that the Structural Fund Programmes work towards long-term rather than short-term goals.

The Commission - at least in theory - wishes to reinforce this model and is proposing an even distribution between assistance for transport projects and support for projects connected with the environment in the Cohesion Fund.

With regard to Structural Funds it intends to improve the monitoring and assessment of regional programmes whose positive environmental impact is at times questionable.

And, as the other side of the coin, it will tighten-up the criteria on which projects are selected to ensure that they have a marked impact in economic, social and environmental terms.

Especially since, as the floods which swept Central Europe and the forest fires that ravaged Portugal last summer show, insufficient monitoring and investment in the environmental side of structural projects can have major economic consequences.

However, with the current round of Programmes reaching full commitment and negotiations for the next round of cohesion funds already underway, we must address the fact that only the UK, Austria, Latvia and Lithuania support retaining a cross-cutting approach to the environment.

That is, perhaps, unsurprising.

Member States have a long history of saying one thing and doing another when it comes to the environment.

And such hypocrisy is never more evident than during closed deliberations in Council. Which is why our campaign for meeting of the European Council to be open to public scrutiny is so important.

Although the basic framework is in place for successful integration projects, the money and the will to implement are often sadly lacking.

Many ministers simply don't want to spend the money, when the European economy is still floundering and security threats abound.

The new Member States in particular - which bore the brunt of integrating and implementing Community acquis prior to accession - are especially keen to avoid further costs and regulation…

…. despite the fact that they have already received derogations on countless directives.

The Council repeatedly ignored the EP's requests for a bigger budget to meet Lisbon environmental and economic targets.

That is why Parliament rejected December's budgetary deal.

We believe the time has come for both Council and Commission to raise their game and commit to a beefed-up integration strategy.

Something which is unlikely to happen unless considerable political pressure is applied to open up Council decision making and force the Commission's hand on funding when they discuss it in Trialogue today.

By focussing on integration as a means of generating funds, the Commission has effectively relinquished responsibility for implementing environmental policy at EU level and delegated it to the Member States.

It hopes, by was of the Union's other, well-funded policies, to ensure that environmental consideration are covered in every area without putting forward any kind of guaranteed funding.

This transfer of responsibility ignores the obvious: that environmental policy loses its overall cohesion if it is not managed and funded at a European level.

Take climate change.

Could there be any better example of an issue which can only be addressed effectively through a horizontal approach?

By ensuring, for example, that all projects and products embrace energy efficiency.

Or that cross-country CO2 transport emissions are effectively tackled.

It seems that if we are to have any success investing in the environment - particularly clean energy - Parliament needs far more say in how and where the money is spent.

Especially since a cross-cutting approach to environmental issues is not overt in the 2007-13 draft regulations.

That is why we will be pressing for greater use of the budget's flexibility instrument during negotiations on the Financial Framework for the next seven years.

And we are further insisting that the Commission

• demand all frameworks and national programmes be subject to Strategic Environmental Assessment

• suspend payments to any major infrastructure projects found to be in breach of environmental legislation

The future is always uncertain.

But we are at a crossroads.

Governments can either embrace new technologies to change the way we live. Or they can continue to pay lip service to the environment while carrying on with business as usual.

In 1997 the UK government promised my constituents in South West England that things would only get better.

But since then CO2 and aircraft emissions are up; energy use is up; municipal waste is up. And despite the Deputy Prime Minister telling voters: "I will have failed if there are not … fewer journeys by car … and I urge you to hold me to that", what do the figures tell us? That road traffic is also up.

Things can only get better. They have to get better.

And when the World Economic Forum has revealed that the UK, with all of its money, its power, and its access to new technologies, is less sustainable than Bangladesh something must be done.

That is why I sincerely hope that the UK's new National Strategic Reference Framework - due out soon - will maintain a cross cutting approach to the environment in its funding priorities.

Money invested in clean green technology is not money wasted.

In fact, it could create more jobs, revive manufacturing, and generate greater export potential for our products in the face of mounting challenges from China, India, and other emerging nations.

Take the energy industry - something of a political hot potato since Russia started playing 'power games' with its neighbours in recent months.

If we don't want to be 90% dependent on Russian oil by 2020 we need to develop more energy autonomy.

And if we want to meet our Kyoto targets we will have to reduce our dependence on fossil fuels and reduce overall energy consumption.

This conundrum can only be solved by integrating environmental and economic concerns - something acknowledged by EU governments when they agreed plans for a Common EU Energy Policy in December.

Immediate, and sustained, investment in projects like hydrogen fuel could achieve oil savings equivalent to a staggering 13% of global oil demand and power up to 30% of the global car fleet by 2050.

However the market will never take off unless billions of euros are invested over the coming decades.

That is where the EU can, and should, play its part. By pooling money for Research and Innovation Europe could lead the world in making a hydrogen economy the new reality.

This - and similar projects - demands much more money for Research and Development. But that must be the subject of another conference.

It also demands that Member States learn to perceive the economic rewards at the heart of environmental protection. And to design structural fund programmes which recognise this.

Delegates at this conference know that instinctively.

Many of you have been overseeing projects with these dual ends for some time.

You know it can work.

The European Parliament knows it can work.

Now our task is to make it absolutely clear to national governments that there is now alternative.

And that environmental and economic success can go hand in hand in an integrated approach to structural fund projects from 2007 onwards.