If I Could Start by Suggesting That I Think This Is Both a Very Hard and an Apparently

IF I COULD START BY SUGGESTING THAT I THINK THIS IS BOTH A VERY HARD AND AN APPARENTLY SIMPLE TOPIC

SIMPLY – ALL ECONOMIC DEVELOPMENT SHOULD BE SUSTAINABLE – i.e. IT SHOULD CONFORM TO THE DEFINITION THAT ECONOMIC ACTIVITY SHOULDN’T IMPINGE ON THE OPPORTUNITIES AND RESOURCES OF OTHERS AND OF FUTURE GENERATIONS

THE HARD SIDE OF THE COIN IS – WE KNOW – WE’RE NOT STARTING FROM SCRATCH – AND – IN TERMS OF SUSTAINABLE ECONOMIC DEVELOPMENT AND PROGRESS MOST OF US PROBABLY WOULDN’T START HERE – AND TO ACHIEVE A SITUATION WHERE ALL ECONOMIC DEVELOPMENT WAS SUSTAINABLE WOULD CREATE SIGNIFICANT CHALLENGES FOR OUR EXISTING INDUSTRIES AND BUSINESSES WHICH ARE – IN ECONOMIC TERMS – UNSUSTAINABLE

SO – WHERE DO WE GO FROM THERE – OR FROM HERE – IN FACT

FIRST OF ALL – IT’S NOT YEAR ZERO – WE ARE WHERE WE ARE – THERE IS ECONOMIC ACTIVITY WHICH CONTRIBUTES IN A NEGATIVE WAY TO OUR ENVIRONMENT

IT IS – HOWEVER – A RELATIVELY MODERN DEVELOPMENT – THAT THE LEVEL OF CONSCIOUSNESS ABOUT THAT – AND THE PREPAREDNESS OF INDIVIDUALS AND GOVERNMENTS TO ACT IN A WAY WHICH MITIGATES THAT CIRCUMSTANCE IS RELEAVNT AND SIGNIFICANT

I’M GOING TO TRY AND BREAK MY 7 TO 10 MINUTES TO SUGGEST THAT IT IS POSSIBLE TO ACHIEVE SUSTAINABLE ECONOMIC DEVELOPMENT – BUT THAT WE DON’T HAVE THAT NOW – AND THAT THERE ARE INTERVENTIONS LOCALLY AND INTERNATIONALLY THAT NEED TO BE MADE TO MOVE TOWARD SUSTAINABLE ECONOMIC DEVELOPMENT

FIRST LOCALLY – WE CAN’T EFFECTIVELY DISCUSS THE BALANCE BETWEEN ECONOMIC DEVELOPMENT AND ENVIRONMENTAL ISSUES WITHOUT DISCUSSING THE ROLE AND FUNCTION OF REGIONAL DEVELOPMENT AGENCIES AND REGIONAL ASSEMBLIES – IN PARTICULAR THEIR RESPONSIBILITIES IN REGARD TO THE REGIONAL SPATIAL STRATEGIES

THE RDAs ARE CHARGED WITH PRODUCING A REGIONAL ECONOMIC STRATEGY – THE CURRENT RES IS – AT THE MOMENT – IN DRAFT FORM FOLLOWING AN EXTENSIVE CONSULTATION

THE RDA HAS A RESPONSIBILITY TO PRODUCE THAT RES IN A WAY WHICH CONTRIBUTES TO SUSTAINABLE ECONOMIC DEVELOPMENT

BUT THIS ISN’T SOMETHING ON WHICH THE RDA IS PARTICULARLY SCRUTINISED

FOR EXAMPLE – ALTHOUGH STELLA HOUSE IS – I UNDERSTAND – ONE OF THE MOST ENERGY EFFICIENT BUILDINGS IN THE COUNTRY – THERE IS NO REQUIREMENT ON THE RDA TO MEET ANY TARGETS FOR ENERGY EFFICIENCY IMPROVEMENTS IN THE REGIONAL ECONOMY – THERE IS NO REQUIREMENT ON THE RDA TO CONTRIBUTE VIA THE RES TO REDUCTIONS IN CO2 EMISSIONS – THERE IS NO REQUIREMENT ON THE RDA TO MEET TARGETS FOR DEVELOPMENTS AND USE OF RENEWABLE ENERGY IN THE REGION – ALTHOUGH THERE IS MUCH ACTIVITY VIA THE RENEWABLES ENERGY CENTRE IN BLYTH TO DEVELOP AND CAPITALISE ON THOSE TECHNOLOGIES – THE RDA – THE KEY AGENCY FOR ECONOMIC DEVELOPMENT – IS NOT BOUND BY GOVERNMENT TARGET TO INCREASE THIS TYPE OF ENERGY PRODUCTION AND USE

THE REGIONAL SPATIAL STRATEGY – THE KEY PLANNING DOCUMENT FOR THE REGION – IMPACTING UPON ECONOMIC DEVELOPMENT AND TRANSPORT DEVELOPMENT IN THE REGION – RECENTLY PUBLISHED BY THE REGIONAL ASSEMBLY AND SUBJECT TO PUBLIC SCRUTINY NEXT YEAR – SHOULD PROVIDE A REAL OPPORTUNITY FOR CONSIDERATIONS AND INFLUENCE ON SUSTAINABLE DEVELOPMENT

BUT AGAIN – THE MEASURES THAT AREN’T CHARGED TO THE RDA ARE ALSO NOT CHARGED TO THE REGIONAL ASSEMBLY IN ITS PRODUCTION OF A SPATIAL STRATEGY

THESE ARE – FOR ME – KEY CONCERNS IN INFLUENCING FUTURE ECONOMIC DEVELOPMENT

IF THE RDA IS CHARGED WITH REDUCING CARBON EMISSIONS BY 20% - YOU CAN BE SURE THAT IN THE SUPPORT IT GIVES TO BUSINESSES TO GROW – THERE WOULD BE A CLEAR REQUIREMENT FOR THOSE BUSINESSES TO RECEIVING THAT SUPPORT TO IDENTIFY MEASURES THAT WOULD CONTRIBUTE TO THOSE REDUCTIONS

IN ITS SCRUTINY OF THE RDA THIS MAY BE SOMETHING THAT THE REGIONAL ASSEMBLY PICKS UP – THE COHESION OF THE RDA PERFORMANCE WITH SUSTAINABILITY AND THE ENVIRONMENT – IT WOULD BE MUCH MORE ABLE AND ENTHUSIASTIC IN DOING THAT – AND ARGUABLY BE IN A MUCH STRONGER POSITION TO DO SO – IF THAT WERE A SPECIFIC CONSIDERATION IN THE REGION’S SPATIAL STRATEGY

BOTH OF THESE MEASURES WOULD – OF COURSE INCREASE REGULATION ON BUSINESSES – I’M NOT SURE WHETHER THEY WOULD INCREASE BUSINESS COSTS DUE TO REGULATION – OR REDUCE THEM VIA GREATER ENERGY EFFICIENCIES – BUT I AM SURE THAT THESE MEASURES CAN’T BE NATIONALLY UNILATERAL WITHOUT RISKING FURTHER CAPITAL FLIGHT TO LESS REGULATED – USUALLY POORER ECONOMIES

EXPERIENCE HAS SHOWN US THAT HISTORICALLY THE MOST SUCCESSFUL ECONOMIES IN TERMS OF ECONOMIC GROWTH HAVE ALSO BEEN THE BIGGEST CONTRIBUTORS TO THE MOST DAMAGING ENVIRONMENTAL PHENOMENA – THAT WOULD SUGGEST THAT ECONOMIC DEVELOPMENT AND ENVIRONMENTAL CONCERN HAVE CERTAINLY NOT BEEN INTEGRATED IN THE PAST

AND IF WE LOOK NOW AT CHINA – A GROWTH RATE OF 9% PER ANNUM – COMBINES WITH A GROWTH IN CARBON EMISSIONS AND INDUSTRIALLAND DEVELOPMENT THAT WOULD MATCH EVERYTHING THE REST OF THE WORLD HAS DONE WITH ONE GENERATION

MEANWHILE AN INCREASE IN THE CLIMATE OF 1 DEGREE CELSIUS IN AFRICA COULD REDUCE ITS GDP BY 4%

DESPITE THE EARTH SUMMIT IN 1992 THE KYOTOSUMMIT IN 1997 AND ALL THE INTERNATIONAL NEGOTIATING DIFFICULTIES SINCE – THERE IS NOT SUFFICIENT CONSENSUS TO RESTRICT THE IMPACT OF ECONOMIC DEVELOPMENT ON THE ENVIRONMENT

CLEARLY TRADE IS A KEY ROUTE TO SUSTAINABLE ECONOMIC DEVELOPMENT – I WOULD NOT SUGGEST A TRADE WAR WITH EITHER AMERICA OR CHINA – I MIGHT IF I WAS BIG ENOUGH – BUT THERE IS A CASE – I THINK – FOR PLACING SUSTAINABLE DEVELOPMENT MUCH HIGHER UP THE AGENDA FOR THE WORLD TRADE ORGANISATION DISCUSSIONS IN DECEMBER IN HONG KONG

AND I GUESS THAT’S WHERE MOST CHALLENGES OF THIS NATURE END UP – NEEDING POLITICAL LEADERSHIP

OUR OWN PRIME MINISTER HAS SAID ALL OF THE RIGHT THINGS ABOUT BALANCING ECONOMIC DEVELOPMENT AND ENVIRONMENTAL IMPACT – THAT MERELY FOCUSSING ON GDP IS INSUFFICIENT – BUT DELIVERING CULTURE CHANGE REQUIRES MUCH MORE THAN SAYING ITS IMPORTANT

The seminar broadly endorsed Friends of the Earth's view that Government policy intervention is needed in four broad areas: to improve policy integration; in the nature and extent of public investment; in training and other measures to guide economic restructuring; and in fiscal policy.

Integration of environmental and economic policy requires environmental regulation to be designed in such a way as to provide an incentive for innovation, especially innovation which supports increased employment. This issue is addressed by both Michael Jacobs' and Michel Potier's papers. Policy integration must also be demonstrated in the development of new indicators of economic progress which take full account of environmental factors.

Public investment (and directed private investment) is needed to take the opportunities which exist for job creation in infrastructure development (notably for public transport) and in, for example, energy efficiency, investing in the insulation of the homes of the fuel poor, to save energy and improve health and equity. Such issues are again addressed in more depth by both Michael Jacobs' and Michel Potier's papers.

Policies to manage the restructuring process are essential. Regions and sectors will lose out, relatively, as the nature of the economy changes. Training measures, in particular, must be delivered to help individuals make the transition to jobs in sustainable industry. The paper by Ray Hudson and Paul Weaver addresses some of these issues in more depth.

Tax reform to shift the burden of taxation away from labour, and onto environmental resources, is perhaps the most fundamental incentive that Government can provide to shift the economy towards sustainability. Such a measure would provide a continued incentive for businesses to increase the environmental efficiency, rather than their labour efficiency. Gerrit de Wit's paper focuses on this issue.

Finally, the seminar was planned as an opportunity to expose the blockages to policy change, from the ideologies of government and civil servants, to the direction of international policy, in a constructive way. These were discussed throughout the day, and if nothing more, simply by bringing together key players in the debate, Friends of the Earth hopes that it has begun a process whereby we can move past these obstacles to achieve a sustainable working future, rather than a bleak dystopia.

• A recent report for the Environment Agency found people living within 1 km of the most polluting industrial sites were 6 times more likely to be the most deprived compared to the least deprived. The most deprived wards are clearly those with the highest air pollution concentrations [4].

• In the UK inequalities between rich and poor people and between regions are increasing; concentrations of combined social and environmental disadvantage continue to cause blight;

• We work longer hours and with bigger income inequalities and wage gender gaps than any other country in Europe;

• We draw in large quantities of natural resources and manufactured goods and services from other parts of the world and our footprint thereby adds to the pressures on other countries resources and their environment. (If our patterns of consumption in the UK were repeated around the world, by 2050 we'd need an extra 8 planets);

• Our policies on trade, aid and investment can have an adverse impact on the prospects for sustainability on other parts of the world;

• The failure to meet their own modest targets notably on transport and waste. Britain has the most congested roads in Europe and traffic grows inexorably. It has one of the lowest recycling rates in Europe and household waste production is rising faster than economic growth.

• Even where the targets have been met there is little evidence that it as due to the Sustainable Development strategy or its indicators; "The government acts because it cares about health, education and crime, not because it thinks of the as components of sustainable development" [Levett-Therivel consultants report to the SDC]

• Attempts at greening government have largely stalled. The House of Commons Environmental Audit Committee called to account the Government's rhetoric about integrating sustainable development into the work of all departments saying sustainable development had a "limbo existence" in Whitehall [5].

• In March 2004, a House of Commons Environmental Audit Committee report on aviation concluded that: "If aviation emissions increase on the scale predicted by the DfT, the UK's 60% carbon emission reduction target which the Government set last year will become meaningless and unachievable."

• Attempts at ensuring key international commitments made at the Johannesburg Earth Summit are put into practice were this week called "a patchy and uninspiring picture of Government action". We hope that the new UK Sustainable Development Strategy will give renewed momentum to these commitments, and enshrine them in a clearer form against which performance can more readily be measured. House of commons environmental Audit Committee. The World Summit on Sustainable Development 2002: a UK progress report.

Friends of the Earth's checklist for a Sustainable Development Strategy with Teeth- does it…

Aim for quality economic development:

• The strategy must redefine the economic component of sustainable development and cease trading economic growth against social and environmental factors (as happens now);

• Recognise that sustainability within economic policy is an opportunity for a different economy;

• Replace GDP as the key measure of a successful economy, and replace it with a measurement that takes sustainability into account;

• For significant progress to be made toward sustainable development, economic policy has to be firstly about quality and secondly about quantity. At present, it is only concerned with the latter.

The 1999 strategy contained positive rhetoric from the Prime Minster on this point:

"But focusing solely on economic growth risks ignoring the impact - both good and bad - on people and on the environment. Had we taken account of these links in our decision making, we might have reduced or avoided costs such as contaminated land or social exclusion. Now, as we approach the next century, there is a growing realisation that real progress cannot be measured by money alone… We must ensure that economic growth contributes to our quality of life, rather than degrading it".

However, in practice there is no strategy for quality growth - quantity still remains the priority. The December 2003 Aviation White Paper is a clear example of how the Government trades off environmental and social concerns for economic growth, rather than promoting economic activity which meets environmental and social goals. In particular it predicts its policies will lead to a tripling of aviation's carbon emissions, thus flying in the face of the officially stated policy to reduce emissions by 60 per cent by 2050.

2. Include a sustainable consumption and production indicator and target:

• Formulate an overall resource use indicator that compares UK use of resources, such as minerals and paper, with other countries. We advocate the Total Material Requirement indicator and set a target to reflect the need for reductions in overall resource impacts;

• Support the development of footprint indicators that clearly show what the impact of UK consumption is on other countries.

3. Broaden and strengthen the delivery of Environmental Justice:

• Propose new means to recognise and reduce disparities in environmental impacts in the UK - for example through better assessments of new policies and projects;

• Take into account the impact on future generations (e.g. through using precaution in new policies and laws for GM and chemicals);

• Consider the impact on people and resources across the world - through deeper cuts in carbon dioxide and funding to prevent climate change and new trade and aid policies;

• Ensure citizen's rights to information, to participate in decisions that affect them, and to have access to justice and redress.

4. Introduce measures to ensure that sustainability is at the heart of government practices and activities:

• Spending by public bodies (such as government departments, local authorities, schools and hospitals) is around £110 billion each year. This spending needs to be harnessed for sustainable development - for example through the purchase of locally produced food and the most energy efficient appliances.

• The public sector is responsible for around 5-5 per cent of UK carbon dioxide emissions.

5. Get the strategy into the heart of government - perhaps out of DEFRA - and include new tools for implementation:

• New tools are needed for linking the strategy to real decisions (such as the Treasury PSA targets) The consultation said that there is a need to "consider the room for including goals and targets" (2.6). Friends of the Earth says that if the strategy is to be influential, it is essential for goals and targets to be set, otherwise there is a danger that it will fall into the trap which the paper says it wants to avoid of "simply repackaging what we are already doing" (2.6).

6. Firm backing from the Prime Minister.

• If it is launched by Mr Blair, or at least a group of cabinet ministers, this will help indicate that sustainable development is seen to be at the heart of government, rather than at the fringes of

Regional Development Agencies (RDAs) should add two indicators to the core set prescribed by the Government. Indicators in order to properly reflect the RDAs' remit to promote sustainable development. These two additional indicators specifically would ensure that the core set reflected the importance of the prudent use of natural resources and effective protection of the environment in delivering quality economic growth. These two indicators are:

• emissions of greenhouse gases;
• total waste arisings.

Each RDA should set targets for reducing both of these. In the case of greenhouse gas emissions that target should not be less than the UK's 20% CO2 reduction target.

The Issue

Headline performance indicators exert a powerful influence over strategic decision making within organisations. They are a key means by which an organisation's success is measured by both itself and others. It is therefore vital that an organisation chooses performance indicators that accurately reflect its aims.

For the Government, and Regional Development Agencies, there is a very real and urgent challenge to modernise conventional headline indicators of success. Economic growth - as measured by GDP - has become the overriding indicator of success but as the Prime Minister recently made clear unalloyed growth can be detrimental to people's quality of life. The Chancellor of the Exchequer too, in each Budget since 1997, has stressed the need to encourage a better quality of economic growth not just more of it no matter what sort.

Yet the existing headline performance measure, GDP, is all about quantity and not about quality at all. What is needed is a modern headline indicator set for development that reflect properly social and environmental 'quality' factors as well as 'quantity' considerations.

In response to this challenge the Government has set out a framework for what sort of development it wishes to encourage. It calls for economic growth that:

• generates high and stable levels of employment;
• makes prudent use of natural resources;
• protects the environment effectively; and
• brings social progress by recognising the needs of all people.

The issue now is to capture these quality factors within a tightly defined headline set. It is inadequate to simply establish a wide ranging list of indicators that operate in parallel to the conventional headline indicators.

The Issue for RDAs

The core indicator set chosen by the Government for Regional Development Agencies fails to reflect properly two of the four key elements in the framework for quality development. The prudent use of natural resources and the effective protection of the environment are addressed only by the percentage of new-build housing on brownfield sites. This is a crucial failing that erects a significant barrier to the success of the regional economic strategies in delivering quality growth in the short, medium and long-term.

For Regional Development Agencies there are five key reasons why their headline performance indicators, as well as their strategies, must capture the two environmental aspects of quality growth.

* Competitiveness and productivity will increasingly be dependent upon being able to increase the efficiency with which energy and materials are used, and make significant often innovative advances in the reducing the amount of waste and pollution that is produced. Regions should aim to harness and exploit knowledge, skills and creativty to stimulate investment in this type of quality growth.