Jeffrey D. Sachs

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2020 Europe Sustainable Development Report (ESDR 2020)

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Summary of findings and recommendations

The COVID-19 pandemic represents a serious setback for sustainable development in Europe and around the world, but the EU is right not to compromise on its vision or its values. The SDGs are the global affirmation of European values. They are the “future we want”. While the goals are achievable and financially affordable, meeting them will depend on strong political leadership and ambitious policies. Sound data is also imperative to track progress. This report by SDSN and IEEP, provides such data, as a complement to the official Eurostat report on the SDGs.

The most pressing priority for Europe is to suppress the pandemic – through non- pharmaceutical interventions and the introduction of a safe vaccine as early as science permits. Compared with countries in the Asia-Pacific region, European and EU responses to the COVID-19 pandemic have been far less effective. Learning from countries that have succeeded in suppressing the virus and have better managed to mitigate its health and economic impacts will be key to achieving SDG target 3.d on preparedness for global health security issues. Greater preparedness, coordination and resilience are also needed to prepare Europe for other critical threats, including climate risks.

The SDGs are a framework on which to “build back better” under a post-COVID-19 economic recovery, and for financing within Europe and globally. The investment-led recovery should support a sustainable, inclusive and resilient recovery from COVID-19 based on the European Green Deal and addressing all 17 SDGs. More than stimulus packages that boost aggregate demand, the crisis calls for a recovery driven by transformative public investments that support green infrastructure, digitization, and responsible consumption and production. This must be accompanied with increased efforts and investments to boost education and skills throughout Europe and to accelerate the convergence of living standards. Coordinated efforts to reform tax systems, and in particular digital taxes, are crucial to finance these transformations in Europe and in the rest of the world.

Europe faces its greatest SDG challenges in the areas of sustainable diets and agriculture, climate and biodiversity – and in strengthening the convergence of living standards across
its countries and regions.
This year’s SDG Index and Dashboards presents pre-COVID-19 data. Even before the onset of the pandemic, no European country was on track to achieve all 17 SDGs
by 2030. The EU and partner countries were performing especially poorly on SDG 2 (No Hunger), due to unsustainable diets, high and rising obesity rates, and unsustainable agricultural and farming practices. Major performance gaps are seen for SDG 12 (Responsible Consumption and Production), SDG 13 (Climate Action), SDG 14 (Life Below Water), and SDG 15 (Life on Land). Education and innovation capacities must be strengthened to accelerate the convergence in living standards across EU Member States, and to equip EU citizens with the skills they need to thrive in a digital economy.

Unsustainable supply chains and trade-related spillovers from the EU undermine other countries’ capacities to achieve the SDGs and increase the likelihood of future pandemics.
The 2020 International Spillover Index shows that European countries are generating large, negative spillovers outside the region – with serious environmental, social and economic consequences for the rest of the world. For instance, imports of clothing, textiles and leather products into the EU is related to 37 fatal workplace accidents and 21,000 non-fatal accidents every year.

The EU needs an integrated and comprehensive approach to implementing the SDGs and must communicate clearly against the SDGs. The European Commission was astute in not launching a separate SDG strategy process for the EU in parallel to the European Green Deal. Key elements of an SDG strategy for the EU have already been in place and are addressed in the Commission President’s political guidelines and the Commission’s annual work programmes. Gaps can be identified and filled notably through the European Green Deal and without an additional overarching strategy process. Yet, this approach still needs to be worked out and implemented across the EU’s policies.

An integrated approach to the SDGs must focus on three broad areas: internal priorities; diplomacy and development cooperation; and negative international spillovers. The concept
of SDG Transformations, introduced in the 2019 Europe Sustainable Development Report (ESDR 2019), can help the EU frame a narrative that is operational and easy to communicate. By grouping major synergies and any trade-offs, the transformations can focus attention on the greatest implementation opportunities and challenges that the region faces.

Six Priority SDG Transformations inside the EU

  1. Education, Skills and Innovation: Ensure top quality education, including lifelong learning, for all Europeans, and strengthen innovation in strategic technologies and industries. EU countries must increase investments in innovation, educational quality and the development of skills for lifelong learning, including digital skills for all. Critical instruments include the European Education Area, Horizon Europe, and the Green Deal EU missions.

  2. Sustainable Energy: Promote energy efficiency, achieve zero-carbon power generation, decarbonise industry and create new jobs. A central pillar of the Green Deal focuses on decarbonizing power generation and transmission, mobility, buildings and industry. The bulk of
    the necessary decarbonization will occur through the combination of energy efficiency measures and electrification of point sources with zero-carbon power using smart grids. Success will require Trajectories for Achieving Climate Neutrality, as required under the proposed European Climate Law.

  3. Sustainable Communities, Mobility and Housing: Strengthen cities and other communities by promoting sustainable and smart mobility, renovating housing, ensuring sustainable building standards and supporting new jobs. The SDGs and the objectives of the Green Deal have a strong territorial dimension. Communities across Europe – be they large metropolises, cities, small towns, or villages and rural settlements – all need to become more liveable and require sustainable mobility and housing.

  4. Sustainable Food Production, Healthy Diets, and Biodiversity Protection: Ensure sustainable agriculture and ocean use, promote healthier diets and behaviours, and protect and restore biodiversity and ecosystems with decent incomes for farmers and fishermen. The “Farm-to-Fork” strategy recognises that sustainable food production, healthy diets and biodiversity protection can only be addressed together. Siloed policies and instruments will not succeed. This transformation covers the EU’s common agricultural policy, the goal of assuring healthy food for all, the common fisheries policy, a new biodiversity strategy, a new EU forest strategy and the promotion of reductions in greenhouse-gas emissions, as well as building resilience through the European Climate Law; the proposed “long-term vision for rural areas” and “zero-pollution action plan for water, air and soil”; and deforestation-free value chains.

  5. Clean and Circular Economy with Zero Pollution: Curb pollution, reduce material consumption, and minimise the environmental impact of European industry and consumers. The proposed “circular economy action plan” makes it clear that the use of materials such as biomass, fossil fuels, metals and minerals, along with associated water generation, are projected to continue to increase in the EU in the short term. The new action plan therefore emphasises the need for faster action, with a particular focus on key product value chains (electronics and ICT; batteries and vehicles; packaging; plastics; textiles; construction and buildings; food, water and nutrients). These efforts must integrate with the Green Deal’s “zero pollution ambition for a toxic-free environment”.

  6. The Digital Transformation: Build cutting-edge digital infrastructure, strengthen innovation, and protect citizen’s rights to their data and European democracy. EU and European companies must become leaders in the digital revolution if the region is to maintain its high
    living standards. This will require substantial investments in technology innovation and digital infrastructure. The Commission has identified critical needs, but more specificity and ambition are required to realise the Digital Transformation.

External Action and Development Cooperation for the SDGs

Green Deal/SDG Diplomacy can help to achieve sustainable development worldwide and advance EU geopolitical interests. At a time when multilateralism is under unprecedented pressure, European partnership, diplomacy and soft power must play a critical role in advancing the EU’s internal and external priorities, including the SDGs. This needs to extend to richer and poorer countries alike. The Green Deal has attracted major international attention, and other countries are keen to partner with European initiatives and experiences in mutual learning and transformation processes. If we needed a reminder, then COVID-19 has shown that the EU can also learn a lot from other countries through Green Deal / SDG Diplomacy.

The EU must lead multilateral SDG Diplomacy. EU leadership and diplomacy will be critical to advancing key multilateral processes towards achieving the SDGs: at the UN General Assembly, the High-Level Political Forum on the SDGs, the G7 (under UK Presidency in 2021 and German Presidency in 2022), the G20 (under Italian Presidency in 2021), and the Annual Meetings of the IMF and the World Bank. Of particular importance will be leadership from the EU – alongside China and the UK – in ensuring successful COPs in 2021 on biodiversity in Kunming and on climate in Glasgow.

Tackling negative SDG spillovers

To ensure international legitimacy, the EU must address negative international spillovers. This will require coherent trade and external policies through Green Deal Diplomacy, strengthened tax cooperation and transparency, the application of EU standards to exports, and curbing trade in waste. Moreover, the EU needs to systematically track such spillovers and assess the impact of European policies on other countries and the global commons.

Getting it done – key tools for SDG implementation

Based on extensive consultations with stakeholders, we can idenitfy six major tools for implementing the SDG Transformations:

A New European Industrial and Innovation Strategy for the SDGs. The Commission rightly identifies the digital revolution, alongside the transition to climate neutrality, as the defining challenge and opportunity for securing long-term well-being and prosperity in Europe. New digital and clean-energy technologies are essential for realizing the SDGs. European companies and research institutions must secure a leading position in these defining technologies, and Europe’s population must have access to cutting-edge digital infrastructure and skills. As the new Industrial Strategy says, “This is about Europe’s sovereignty”.

Financing the SDG strategy. The SDGs and the European Green Deal form an investment agenda requiring 1.5% of EU GDP for the 2030 climate and energy targets alone. The Multiannual Financial Framework (MFF) and the Next Generation EU COVID-19 recovery package (NGEU) have the potential to advance the SDGs, but currently do not include meaningful references to the Goals. The Sustainable Europe Investment Plan is a step in the right direction, but more public and private resources are needed. New EU-wide revenue sources should be explored to support the Green Deal and the SDGs.

Coherent national and EU SDG policies – the SDG-based European Semester. The Commission has rightly identified the need to integrate the SDGs into the European Semester. A balanced approach towards coordinating national and EU-level SDG policies can be built around three components: (i) each country sets national targets and pathways for achieving them; (ii) the Semester reviews progress towards these targets and identifies implementation challenges; and (iii) sector coordination mechanisms review corresponding EU and national policies for greater alignment and higher ambition.

Coordinated Green Deal / SDG Diplomacy. Seizing these diplomatic opportunities will require focus and organisation within the EU’s External Action Service and close coordination with the directorate- generals for Trade (DG TRADE) and International Cooperation and Development (DG DEVCO), as well as the directorate-generals in charge of the Green Deal. The Commission might consider establishing a dedicated unit focused on the SDGs, which would help align major diplomatic initiatives, as well

as bilateral relations with an EU focus on promoting the SDGs domestically and internationally. Transformational SDG-cooperation policies need to address both poorer and wealthier countries.

Business standards and reporting. European businesses need to orient their activities towards the SDGs and report on their contributions, which in turn will require clearer metrics. In particular, the Non-Financial Reporting Directive (NFRD) needs to be aligned with the SDGs. The same applies to the Regulation on Disclosures Relating to Sustainable Investments and Sustainability Risks and to other aspects of the Sustainable Finance Package.

SDG monitoring and reporting framework. Each SDG Transformation needs to be carefully monitored against agreed targets, including the SDGs. Eurostat’s annual SDG Monitoring Report
has become an international reference on how official reports can track the SDGs. Unofficial SDG monitoring reports, including the present ESDR 2020, can provide an important complement to the official Eurostat report.

Outlook

The SDGs are Europe’s goals, and the EU is obliged to lead their implementation. Once the COVID-19 pandemic is under control, European recovery strategies must be aligned with the SDGs. The needed steps are bold but ultimately feasible, and current proposals by the Commission point the way. China’s carbon neutrality pledge and the election of Joe Biden in the United States hold the promise for greater multilateral cooperation on climate change and other SDGs. Here, too, the EU and European countries can lead, including by making the 2021 COPs of the climate and biodiversity conventions a success.