Employment and Environment in a Sustainable Europe

At the threshold to the 21 century, environmental policy faces major challenges in Europe. The European Treaties require an integration of environmental, economic and social policies in order to allow for a Sustainable Development. This is of special importance for the link between environmental and employment policy. Both play a very prominent role in the European Union. We start this paper with an introduction of how an integration of environmental protection into economic policies could look like. Then we explain in general terms, how we would define the three pillars of sustainable development: the viability (resilience) of environmental, economic and social systems. In order to operationalise the concept of Sustainable Development, indicators for these three pillars shall be defined. One possibility to define macro-indicators is to assign one indicator to each pillar: With regard to economic development and the social field, these objectives are relatively easy to operationalise indicators exist in both areas, f. ex. the GDP growth for the economic, unemployment rate for the social aspect. These indicators are of course not indisputable but widely used and can be taken as a general starting point. The objectives in the environmental field, however, are much more difficult to operationalise. This is in part due to the complexity of the matter because environmental burdens materialise and can be measured in many ways. Additionally, considerably less experience exists in this comparatively new policy area that has only been given high priority in EU’s policy for a relatively short period of time. The total material input into an economy can be seen as one indicator showing the environmental impact. This view brings about major challenges for economic theory: it is only feasible to describe possible policies adequately if the economy-environment-relationship is described adequately. Standard arguments of micro, meso and macro economics can be reformulated along these lines. Individual decision making, economic growth or structural change is then described in relation to the material flows activated by the economic activities under consideration. Some more general statements on the economy-employment-environment relationship from a theoretical point of view are made in the form of inequations and productivities. In addition to standard economic arguments on macroeconomic variables such as the relation of prices, wages, labour productivity, employment and total output we include the total material input along with resource productivities to describe, explain and evaluate possible developments of economic and environmental variables. A German research project suggested possible scenarios and fed them into a macroeconomic simulation model. From the results we show the relationships between the indicators, the productivities and how they can be influenced by policy measures. The simulation results indicate the possibility of win-win situations concerning the environment and employment. Additionaly we investigate whether the necessary basic statistic data are available for Austria and how the economy-employment-environment relations can be seen from an Austrian perception. Contact Sustainable Europe Research Institute Schwarzspanierstr. 4/8 A-1090 WIEN Tel./Fax: +43-1-969 0728 Email: [email protected] www.seri.at 1 Corresponding author, can be contacted at SERI 2 University of Graz, Departmenf of Economics and SERI 3 SERI 4 An earlier version of this paper was presented at the University of Pisa, October 2000. Hinterberger, Omann, Stocker 1 Content