Janez Potocnik, Europese Commissaris voor Wetenschap en Onderzoek, openingstoespraak " Invloed op de Europese eonomie" , op het Economisch Congres in Katowice (en)

Janez Potocnik

European Commissioner for Science and Research

Opening speech "Influence on European Economy"

European Economic Congress

Katowice, 16 April 2009

Ladies and Gentlemen

Thank you for inviting me to speak here today in Katowice – a forward-looking city that chose to name its biggest sports centre after a UFO!^[1] How progressive is that?

The word ecosystem is nearly 80 years old. It was first used in the 1930s and described the complex systems – the energy flows and cycles – of different organisms interacting with every other element in their local environment.

I’ve used the term before to describe European research – a research ecosystem of interactivity and flows and cycles. This description is now more valid than ever. And it is changing fast. And this is why we need to enhance and sustain our research effort. This is not a controversial thesis – I doubt that any of you would debate the need to invest in research, education and innovation if we want to achieve this.

Part of that change has been inspired by rapid growth. The world economy is getting bigger, more interrelated and more competitive. WTO membership figures back this up: now 9 out of every 10 societies are integrated into the world economy. Since 1990 about one billion workers have joined the global economy.

Our ecosystem is spreading and absorbing. And the emerging economies that have resulted from that shift will continue to grow in importance. They accounted for about 20% of the world’s economy in 2005 – by 2025 they will have increased their share to about 34%.

This is a competitive ecosystem too – increasingly so, as it becomes more multi-polar and better connected. In science and technology, emerging economies such as China and India are catching up with the traditionally top trio of the USA, Europe and Japan. There is no doubt that the world is becoming multi-polar, more interconnected and more competitive.

But of course, there is a downside to some of these ecosystem evolutions, because we don't live in a vacuum or a test tube. We live on a planet only 12,000 km high and 40,000 km round and it's the only one we have - and we have changed its climate to the extent that it will have serious impacts on our lives. Many of those will result from the impact of climate change on water, whether through shortages, or from rising sea levels. Climate change can exacerbate problems with food supplies and it can turn round and bite us by destroying our biodiversity.

So we are talking about nothing less than the key international challenge of the 21st century. And we will have to be both smart and quick in reducing greenhouse gas emissions, because if we don't climate change will have severe, and in many cases irreversible, impacts on our ecosystems, society and the economy.

Are you sitting comfortably? I hope not!

Of course when I say that we don't live in a vacuum I don't need to remind you that there are other problems in the world too. If you Google the phrase 'global economic crisis' these days, you get over 34 million hits. We are not, however, helpless.

Eugene Ionesco once said that "all history is nothing but a succession of crises -- of rupture, repudiation and resistance. When there is no crisis, there is stagnation". For me this means the need to turn the current economic crisis into opportunity. We can do this by building on the synergies between climate change and economic recovery actions, and build a long-term financial economic architecture that will encourage growth, sustainable development and avoid further acceleration of climate change. It's all about constructing the low-carbon economy – which is not a small thing for us here in Katowice, as we sit on top of some of the largest coal reserves in the world.

We are not starting from scratch. Our commitments and actions show that European policy makers are world leaders in fighting climate change already. The EU Climate Change and Energy Package, adopted in December 2008, is of global significance because it clearly shows our determination to act on climate change and energy. The package outlines ambitious targets for 2020, and covers cutting greenhouse gas emissions, increasing the use of renewables and improving energy efficiency.

The package reinforces the EU Emissions Trading System. It will enable it to serve as a nucleus for a global carbon market. And the adoption of binding targets for emissions from sectors not covered by the ETS ensures all sectors will contribute to our objectives. It will also be instrumental in transferring technology to third countries so that they can continue to grow in a sustainable manner.

The final outcome on the EU ETS is a good balance between the certainties and the safeguards industry want while retaining the environmental objectives of the proposal. Benchmark allocations will reward the 'early user' operators and industries who are already reducing greenhouse gases. Furthermore, innovative industries can profit from the significant opportunities which reducing greenhouse gas emissions can bring, for example through rising demands for energy saving construction and wind turbines, to give just two examples.

A lot remains to be done to implement it in all its details, but the Commission has already begun its work on this, for example, the analysis to identify sectors deemed to be exposed to a significant risk of carbon leakage and the setting of the benchmarks has already started.

And there are other areas, perhaps not as obvious, but just as crucial where we need to apply pressure to implement the Climate and Energy Package. These include sectors not covered by the EU ETS, such as transport (cars, trucks), buildings (particularly heating), services, small industrial installations, agriculture and waste. This is not small potatoes, as these sectors account for about 60% of total greenhouse gases emissions in the EU. Member States must consider the energy savings and emission reduction potentials in these sectors when planning for measures to alleviate the current economic recession.

I know that Poland had its reservations about the ETS, particularly with regard to potential increases in electricity prices and I know that you have argued strongly against full auctioning of allowances for the power sector. However, there are understandable and unavoidable reasons why electricity prices must rise:

• 1) 

  Current prices are too low to invest in further generation capacity;

• 2) 

  No action today will mean even higher costs in the future.

Clearly the electricity market must be organised to respond to the economic realities of our era.

It is as you can see a VERY complex ecosystem. But it is worth the effort.

Why? Because there are multiple benefits associated with these actions: a contribution to climate change mitigation, more secure energy supplies, innovation and increasing the competitive advantage of the European energy sector while creating more jobs in the European low carbon technology sector.

On this last point, I should point out that we do realise the crucial importance of building a low-carbon economy. We are implementing our SET-Plan as a means to put EU industry at the forefront of this fast-growing low carbon technology sector. The plan will stimulate better use of and increases in resources, both financial and human, to accelerate the development and deployment of low-carbon technologies of the future. Because, let's face it, we will have to lower the costs of clean energy. This is as relevant for Poland – perhaps more relevant - as it is for anywhere else in Europe.

But having said that, we have to proud of the fact that – in less than a year – we have to come to an agreement on an ETS package which is acceptable to all 27 Member States and to the European Parliament. This is a demonstration that even when perhaps the image of the international institutions is at a pretty low ebb, when the will is there - effective international cooperation can deliver the agreements the world needs.

However, further work will need more of this collaborative spirit because Europe cannot address the climate challenge alone. We need to bring others along with us. But we are committed. The recent spring European Council re-affirmed the commitment of the European Union in playing a leading role in bringing about a global and comprehensive climate agreement in Copenhagen in December 2009, designed to limit global warming below 2 degrees Celsius and put the world on a sustainable, low-carbon path. If we delay, we will miss the 2 degrees Celsius target, leaving us – and future generations – open to the potentially calamitous impacts of even greater climate change.

Furthermore, the recent Commission Communication entitled ‘Towards a comprehensive climate change agreement in Copenhagen’ sets out concrete proposals to achieve an international climate agreement. It addresses, in particular, three key challenges:

targets and actions for both developed and developing countries;

the key issue of financing to tackle climate change; and

building an effective global carbon market.

Research and development is the lever we need, to put ourselves back on track to embrace the sustainable development path and deal with the climate change and energy challenges. In Europe, but also globally, we need to invest heavily in public and private financing with a significant shift in emphasis towards low-carbon technologies, especially renewable sources, and energy efficiency. Likewise, research on future climate evolution, impacts and adaptation to climate change need to be part of our strategic orientation - imagine a weather forecast that only told you what the weather was going to be like today and yesterday? Not much use, I think you'd agree.

What we need is a commitment to increase research and development in these areas. This needs to be an integral part of the Copenhagen climate agreement.

We hope that the steps we have taken will encourage others to take similar steps. There are already encouraging signs, not only from the United States, but also from Australia and Japan, where emissions trading systems are being developed and commitments to making meaningful CO₂ reductions are being made. These developments bode well for an agreement in Copenhagen in December.

What is the binding glue that holds all of this action together: innovation.

And delivering that innovation is what the Lisbon strategy is all about. It's a transformational model which we want to use to turn the post-second-world-war resources-based economy into a knowledge-based society. A society that derives value from producing, diffusing and exploiting knowledge.

This means increasing not decrease our investment in all types of research, not just on climate change or energy, as important as they are: a crucial objective, especially in these turbulent times. I know that during the downturn it would be so easy to lose sight of the longer-term social and environmental challenges. But in addition to economic benefits, research and innovation can also provide productivity and efficiency gains, new insights and solutions. As I see it, this is the route to achieving a sustainable model of development which will also generate excellence in research and transform the innovation landscape.

Lisbon has already had an enormous impact on the policies of the Union – and in our research world it has also resulted in an important ramping up of the amount of Structural Funds earmarked for R&D and innovation. This additional investment could, for example, be used in a targeted way to help realise our low-carbon economy.

But no-one should think this is a model they can apply only to themselves: Lisbon – and the research innovations we are implementing are not based on an 'I'm alright Jack' mentality, we have to prioritise research and innovation together.

Companies, large and small, need an attractive and unified environment and a single market to invest in research and technology, to share knowledge, to cooperate and to innovate across the EU. They need national research and innovation systems that are mutually open and interoperable.

They need us to build bridges across our systems, programmes and policies. And pooling resources at all levels: regional, national, Community and global has been necessary for addressing complex challenges that cut across S&T disciplines, industry sectors and policy fields and where sufficient critical mass needs to be built. The SET plan is a one example where public and private resources at all levels – Community, national and regional – are joined and a complex web of stakeholders are coordinated using existing and newly developed structures and processes (ETPs; research alliances; industrial initiatives, etc.).

And to go even further, we must accelerate the completion of our European Research Area.

Last year, ministers agreed a vision for ERA in 2020 and a process – the Ljubljana process – of working together to realise this vision. ERA has to be 'baby' of the Member States, the research community and the enterprise sector - not a Brussels 'drawing board' invention. And I know just how much work is going into all the elements of our research ecosystem: there is a partnership with Member States to boost researchers' careers and their mobility; 'joint programming' of research; the ongoing implementation of 44 pan-European infrastructures which are listed in the ESFRI roadmap; initiatives to facilitate the transfer of knowledge from the public to the private sector across borders; and the development of a strategic framework which will help us cooperate on science and technology projects even more with the rest of the world. This hard graft has been confirmed through the Member States' National Reform Programmes. From 2000 to 2006, although R&D intensity has slightly stagnated, all the Member States have increased their investment in R&D.

And because innovation, like charity, starts at home we have introduced some of our own groundbreaking policies to add to the mix. We have established the European Research Council, which could – in time - radically change Europe's research system. We have launched large public private partnerships under the form of Joint Technology Initiatives. We have developed new, innovative funding instruments such as the Risk Sharing Financing Facility in partnership with the European Investment Bank, and as I mentioned earlier research and innovation funding is being mainstreamed through the Structural Funds budgets. In the framework of SET Plan, in a near future, we aim to launch Carbon Capture and Storage, renewable and other low carbon energies, industrial scale demo projects. Among other means, using 300 million euro of allowances put aside just for this purpose in the new ETS system will be of great importance.

And last, but certainly not least, we have designed the 7th Research Framework Programme, with an increased budget and simplified procedures, as a driving force for realising the European Research Area.

Ladies and Gentlemen

Bob Dylan once sang "You don't need a weatherman to tell which way the wind blows".

I believe this is the case – we know which way we want the wind to blow. We need to continue using the ERA and the Framework Programme as the means to transform our science ecosystem. I want us to keep asserting our European added value – that great balance of competition for excellence and cooperation for impact - on the world stage, while we transform our ecosystem into something even more sustainable.

^[1] The 'Spodek' (or Saucer, in Polish) is named after it's resemblance to a flying saucer.