Why are global megatrends important for Europe?

Europe is bound to the rest of the world through multiple systems, enabling two-way flows of materials, financial resources, innovations and ideas. As a result, Europe's ecological and societal resilience will be significantly affected in coming decades by a variety of global megatrends — large-scale, high impact and often interdependent social, economic, political, environmental or technological changes. This report analyses 11 megatrends that are considered to be of key importance for Europe's long-term environmental outlook. It builds on the analysis initiated as part of the EEA's report The European environment — state and outlook 2010 (SOER 2010; EEA, 2010).

Many global trends have significant consequences for Europe. For example, demographic, economic or geopolitical developments elsewhere can influence the availability and price of natural resources and energy in Europe. Increasing environmental pollution in other world regions likewise contributes to direct environmental and human harm in Europe. For instance, although European emissions of ozone precursor gases have declined significantly in recent decades, measured concentrations  of ground-level ozone have not fallen at most ground monitoring stations (EEA, 2014a). There is evidence that this is partly due to the long-range transport of precursor gases from other parts of the world (HTAP, 2010).

Conversely, Europe contributes to environmental pressures in other parts of the world. Greenhouse gas emissions in Europe contribute to climate change impacts elsewhere and potentially far into the future. Globalised supply chains mean that European consumption contributes to pressures on ecosystems and communities in other areas of the globe, for example through threats to global freshwater quality and quantity, and the degradation of habitats and landscapes (Tukker et al., 2014).

This report explores how global developments may impact Europe, particularly the European Union (EU), and its environment. A global-to-European perspective is relevant for European environmental policymaking because Europe's systemic environmental challenges and response options are increasingly shaped by global drivers. Similarly to other advanced economies, Europe's relative size and influence on the global economy is expected to decline in coming decades. This changing global setting presents both challenges and opportunities.

The development of some global megatrends and related impacts over coming decades is becoming better understood. However, many uncertainties remain, associated with multiple drivers and change factors that unfold differently across world regions and over time. Global megatrends can also be perceived in contrasting ways by different societal groups and stakeholders. Continued global population growth, for example, can be seen as either a boost or a burden for economic development; urbanisation can be perceived as a source of growing pressures on ecosystems, or as an opportunity for more resource-efficient lifestyles.

These uncertainties notwithstanding, it is clear that 'business as usual' is no longer a viable development path for Europe. Current lifestyles  in Europe and other developed regions put excessive pressures on the environment (Figure 0.1). Furthermore, as a growing global middle class increasingly adopts the resource-intensive consumption patterns of advanced economies, the total environmental burden is rapidly moving beyond globally sustainable limits (Rockström et al., 2009). This represents a growing threat to future advances in living standards and increasingly raises questions about the fairness of the wealthy imposing highly disproportionate burdens on the global ecosystem.

These trends underline the need for action to reconfigure systems of production and consumption so that they operate within planetary limits and thereby ensure the well-being of current and future generations. In Europe, as elsewhere, efforts to manage environmental pressures, economic development and human well-being need to overcome the short-termism currently dominating political and economic thinking and embrace long-term, integrated, global perspectives instead.

The final section of this chapter identifies potential policy responses to influence the megatrends or manage their impacts on the European environment.

Implications of global megatrends for Europe's ability to meet its resource needs

The resources that societies rely on to meet their basic needs can be classified into four major categories: food, water, energy and materials (EEA, 2013b). In addition, ecosystems are essential to ensure the availability and quality of these resource categories, as well as providing a range of other ecosystem services that shape human health and well-being. The 11 megatrends differ in their impacts on the various resource categories, both in terms of their magnitude and the directness of their effects.

Food

Meat consumption is expected to increase by more than 70% globally between now and 2050 if current lifestyles and diet patterns remain unchanged (FAO, 2012b). Most of the increased demand is expected to occur outside Europe, and will strongly increase the pressure on global ecosystems through conversion of natural habitats into agricultural land. Conservative estimates suggest that global terrestrial biodiversity will decline by at least another 10% by 2050 (OECD, 2012b), and that soil degradation and water erosion will cause large-scale losses of valuable agricultural land. In addition, global food security is expected to be compromised by increasingly adverse impacts on agricultural yields from climate change and by increasing levels  of pollution, the latter particularly in Asia.

Europe relies to a considerable extent on imports to meet domestic demand for food, in particular vegetables, fruit, seafood, coffee, tea and cocoa (Eurostat, 2011). The global developments described above could impact Europe directly through food-price increases or more indirectly through environment- and poverty-induced human immigration. These effects could be aggravated by interactions with other global megatrends. In particular climate change and the increasing global pollution load may adversely and directly impact the amount and quality of food produced on European territory.

Water

Globally, the availability of sufficient good-quality freshwater is increasingly threatened by population growth and increasing consumption, combined with adverse impacts from climate change (Murray et al., 2012). Even if water is used more efficiently, the absolute agricultural intensification needed to meet the world's growing food and feed demand could lead to severe water stress in many world regions in the coming decades (Pfister  et al., 2011). Developments projected to occur outside Europe, such as strongly increased drought frequency due to climate change (for example in the Middle East and North Africa) or increasing levels of water pollution (for example in China), might be felt indirectly in Europe through price shifts and related economic impacts, or increased requests to contribute to large-scale international financial assistance.

Climate change and global pollution levels also exert direct pressures on European freshwater quantity and quality. Drought and resulting water scarcity related to climate change are expected to increase considerably in southern Europe, where 80% of national water abstraction is already used for agricultural irrigation (EEA, 2013b). In contrast, western and northern Europe are likely to face increased flood damage (Rojas et al., 2012). Moreover, the transboundary transport of pollutants emitted outside Europe is anticipated to play an increasing role in the future, with potentially adverse impacts for European freshwater quality, such as water acidification (HTAP, 2010).

Energy

As Europe is heavily dependent on fuel imports for its energy supply, its access to energy resources is significantly influenced by global population and economic trends. World energy demand is projected to increase by 30–40% over the coming 20 years (IEA, 2013). Due to the globalised nature of energy resource flows combined with the prominent role of subsidies in the energy sector, changes in economic power blocs, trade agreements, or geopolitical conflicts are likely to have large impacts on Europe.

European energy supply is expected to be increasingly affected by climate change, for example by decreasing the availability of cooling water for nuclear generation due to longer periods with low river-flows and increased river water temperatures. The European energy system also has strong links with pressures on global ecosystems, in particular in relation to bioenergy production. Bioenergy-crop farming to meet renewable energy demands in developed countries, including in Europe, is one of the main drivers of habitat destruction and tropical deforestation, and its associated global water footprint is projected to increase tenfold by 2030 (Gerbens-Leenes et al., 2012). The expansion of bioenergy-crop production can create significant trade-offs and potential competition with increasing global  food demand, as well as causing displacement and other social impacts on small-scale farmers in developing countries (German et al., 2011).

Materials

Global demand for materials has increased tenfold since 1900 (Krausmann et al., 2009), and is projected to double again by 2030 (SERI, 2013). Countries in developing regions, notably China and India, account for a rising proportion of global trade flows and material resource use. Growing global competition for resources represents a major concern for Europe since it is structurally dependent on imports for many key resources — for example 58% of metal ores consumed in the EU-28 in 2013 were imported.

There are particular concerns about access to certain 'critical raw materials', which have limited deposits in Europe or are absent altogether. World production of these materials is often monopolistic in character, with a single country, frequently China, in control of the global market. This raises concerns about future resource access and prices, in particular because global demand for materials such as niobium, gallium and other rare Earth metals is projected to grow by more than 8% annually in the coming five to ten years (EC, 2014d). Many emerging and prominent green technologies, including photovoltaics, wind turbines, hybrid and electric cars, are currently dependent on these critical raw materials. Access to certain materials could therefore have an important impact on the long-term transition of the European energy sector away from fossil fuel dependency (EC, 2014d).

Ecosystems

The interplay of environmental pressures from intensifying global use of food, water, energy and materials is apparent at the landscape scale. Models consistently project global ecosystem depletion and biodiversity loss to continue or accelerate under all existing policy scenarios (Leadley et al., 2010). Many people in developing countries rely heavily on their local environment to meet their basic needs (TEEB, 2010), meaning that continued ecosystem destruction could drive significantly increased migration. Ultimately, the destruction of ecosystems in other parts of the world is likely to increase the environmental pressure on European ecosystems.

More direct pressures on European ecosystem resilience derive from urbanisation, in particular from landscape fragmentation due to urban sprawl and expanding transport infrastructure. Between 1990 and 2006, industrial areas and infrastructure in Europe expanded by 45%, residential areas grew by 23%, but population increased by only 6% (EEA, 2013b). Moreover, European terrestrial ecosystems are expected to be increasingly affected by drought, wildfires, floods, glacier melt, or species extinctions due to climatic changes expected in the decades ahead. Marine ecosystems are projected to suffer from the combined effects from temperature increases, ocean acidification and sea level rise. Although significant reductions in European pollution levels have been achieved, severe problems persist, such as the eutrophication of aquatic ecosystems due to high nutrient concentrations originating from sources such as agriculture and urban waste water systems.

Responding to global megatrends — challenges and opportunities for Europe

As the examples in the previous section illustrate, the boundaries between developments in Europe and other parts of the world are growing more blurred. Europeans are increasingly affected by changes in distant regions— some very sudden, others unfolding over decades. Policy planning and strategic decision-making must, therefore, reflect the long-term and global contexts. That means finding ways to produce sufficient food, water, materials and energy to meet the needs of a growing global population, while maintaining ecosystem resilience and services.

Acknowledging the long-term and global context in strategic planning

Several recent global and European initiatives have embraced the need for long-term, global, and strategic risk assessment. For example, the European Strategy and Policy Analysis System (ESPAS) has assessed the long-term political and economic environment facing Europe over the next 20 years, and Europe's policy response options (ESPAS, 2012). It emphasised that Europe and the world are experiencing a period of accelerated change, in particular with respect to power, demographics, climate, urbanisation and technology.

Similarly, the World Economic Forum (WEF) has identified ten global risks of the highest concern for business. Four of these — concerning water, food, climate change responses and extreme weather events — relate directly to the environment (WEF, 2014). Environmental themes likewise appear prominently in the 17 proposed Sustainable Development Goals (UN, 2014a) that have been drafted pursuant to the UN's Rio+20 outcome.

Increasingly, European strategic policy processes are also incorporating long-term and global perspectives. For example, to guide short- and medium-term actions, the EU's 7th Environment Action Programme (EU, 2013) sets out a 2050 vision that Europe should 'live well within the planet's ecological limits'. It acknowledges that 'global systemic trends and challenges, related to population dynamics, urbanisation, disease and pandemics, accelerating technological change and unsustainable economic growth add to the complexity of tackling environmental challenges and achieving long-term sustainable development'. It further recognises that 'many environmental challenges are global and can only be fully addressed through a comprehensive global approach'.

Two approaches to addressing global megatrends

Global megatrends are, by their nature, a manifestation of a vast number of processes and changes across the world. Faced with shifts of this character, Europeans have two main clusters of response options. First, they can seek to shape global change in ways that mitigate and manage risks, and create opportunities. This could be achieved, for example, through unilateral and multilateral efforts to mitigate environmental pressures or facilitate trade, or through using foreign aid mechanisms to invest in education and poverty alleviation.

Second, they can find ways to adapt to global trends. This could take the form of seeking to anticipate and avoid harm by increasing the resilience of social, environmental and economic systems. It could involve restoring damaged ecosystems or correcting social impacts that have already occurred. Or it could involve exploiting opportunities that arise as a result of the changes, such as the commercial opportunities associated with innovation, expanding global markets and prosperity.

European policy measures

These two clusters of responses are already emerging to some degree in recent European environmental policy initiatives, notably in efforts to increase resource efficiency and create a low-carbon society. The EU's Roadmap to a Resource Efficient Europe (EC, 2011b) and its Roadmap for moving to a competitive low-carbon economy (EC, 2011a) include visions and targets stretching as far ahead as 2050, emphasising the need for long-term transformation of Europe's systems of production and consumption.

In accordance with these long-term goals, the EU's Raw Materials Initiative (EC, 2008, 2014b) and the European Innovation Partnership on Raw Materials (EC, 2012a) under the EU'sInnovation Union Flagship Initiative (EC, 2010a) aim to reduce the EU's import dependency by boosting resource efficiency, substitution and recycling. Efficiency improvements can augment Europe's economic resilience to global trends by lessening its vulnerability to uncertain supplies and volatile prices. At the same time, they can help mitigate Europe's contribution to escalating global resource demand; boost competitiveness by reducing production costs; and drive innovation in green sectors which are likely to grow in importance globally in coming decades.

Similarly, European climate and energy policy includes adaptation measures, such as the EU Strategy on Adaptation to Climate Change (EC, 2013a), alongside efforts to enhance energy efficiency and mitigate carbon emissions both within Europe and across the world. The EU is a vigorous proponent of a robust global regime to reduce greenhouse gas emissions and has played a leading role through its emissions reductions pursuant to the Kyoto Protocol and its own unilateral targets for 2020 and 2030 (EC, 2009b, 2014a). Alongside these measures, European energy technology policy pursues a Strategic Energy Technology Plan (SET-Plan) to accelerate the development of low carbon technology (EC, 2010b).

Policies also have an important role to play in financing the research and innovation needed to reconfigure European systems of production and consumption. With nearly EUR 80 billion of funding available over seven years — 2014–2020, the EU's Framework Programme for Research and Innovation (Horizon 2020) aims to foster scientific excellence and industrial leadership, and address societal challenges such as food security, climate action and resource efficiency (EC, 2015a).

Overcoming the gaps in global governance

While Europe has made some progress in enhancing resource efficiency and reducing environmental pressures, it is clear that individual governments or regional blocs face significant challenges in influencing global trends. As Held (2006) notes, 'the collective issues we must grapple with are of growing extensity and intensity and, yet, the means for addressing these are weak and incomplete'.

This observation certainly applies to management of the global environmental commons, for example in efforts to reduce greenhouse gas emissions or preserve public goods such as biodiversity and carbon sinks such as forests. But the same problem is also apparent in other areas requiring collective and collaborative global action, such as in meeting basic human needs by, for example, preventing poverty, conflict and global infectious diseases, and in enforcing global rules, for example regarding toxic waste disposal, intellectual property rights, regulation of finance and taxation of multinational companies. In essence, the globalisation of economic, social, technical and environmental flows has not been matched by the emergence of effective global governance mechanisms.

Strengthening global governance will partly require that governments reinforce rule-based forms of governance based on international institutions, laws and enforcement mechanisms. For Europe, obvious priorities in 2015 include the adoption of a robust global climate change agreement, and the Sustainable Development Goals as part of a post-2015 development agenda. There is also scope for the EU to extend the reach of its own regulations beyond Europe by taking advantage of commercial incentives for harmonisation of production standards across the world. This process is illustrated by the continuing adoption of EU 'Euro' emissions standards for road vehicles in Asian countries (EEA, 2014b) and the emulation of Europe's REACH legislation on chemicals in countries such as China (EC, 2006).

While regulatory and market-based tools have a clear role to play in addressing the challenges that have accompanied globalisation, decision-making processes at the global scale are frequently slow and complex, and enforcement mechanisms are often lacking. These limitations, as well as the opportunities presented by recent technological and social innovation, are driving the emergence of more participatory network governance approaches, based on more informal institutions and instruments. For example, non-governmental organisations and businesses play a growing role in developing, promoting and monitoring standards that influence the environmental and socio-economic impacts of production and consumption.

Crucially, responding to the weaknesses of governance across the world requires action at all scales — from intergovernmental processes to individual citizens. Cities and other subnational levels of government are increasingly engaged in cross-border networking and governance, as illustrated by the Covenant of Mayors (CM, 2014). Consumers and shareholders can also influence production practices across the world through their purchasing choices and investment decisions.

Enhancing the knowledge base to support transitions

Improving Europe's responses to global megatrends also depends on credible information on possible future developments and choices in the face of global risks and uncertainties. Better information is needed to mainstream long-term and global perspectives into policy. Increased use of foresight methods, such as horizon scanning, scenario development and visioning could strengthen long-term decision-making by bringing together different perspectives and disciplines, and developing systemic understanding. Impact assessments of the European Commission (EC, 2015b) and EU Member States, for example, could be enhanced if they were systematically required to consider the long-term global context.

Foresight methods could also enhance the usefulness of model-based quantitative projections and provide a platform for collaboration across government departments. Participatory approaches to scenario assessments could help increase the legitimacy and robustness of alternative options and pathways. Including forward-looking assessments and indicators in regular reporting on the state of the environment could likewise improve understanding of future trends and uncertainties.