The market certainly offers a means of accelerating changes in behaviour but, to be genuinely effective, these changes must be focussed and clearly directed by long-term policies, and that means robust legislation and, dare I say it, just as robust enforcement.

Distinguished guests, 
Ladies and Gentlemen,

Having only fairly recently been afforded the privilege of addressing this Parliament, I was somewhat astonished - indeed touched - to be invited back again to discuss the crucial subject of how we can shift our economies onto a lower carbon trajectory. I realise only too well that you are engaged ceaselessly with momentous issues, not least how to navigate the turbulent currents of this difficult and serious economic climate. But it is certainly heartening that here, in Brussels, so much thought is being given to the profound changes we need if Europe is to cope with the long-term economic consequences of climate change and the depletion of the world’s natural capital. If I may – and since you have been rash enough to ask me in the first place! - I would like to take this opportunity to consider why there is no more pressing problem and also how, perhaps, it might be addressed.

First and foremost, I believe, we need to deepen our understanding of the relationships between food, energy, water and economic security and the policies which are put in place in those areas; this is increasingly important given the rising demand and competition for land and other resources, which is already having an impact on prices and is exacerbated, as you will have no doubt have noticed, by rapidly changing weather patterns.

I am a historian, not an economist, but it is plain to me that responding to these problems with a “business as usual” approach towards our pursuit of Growth Domestic Product (GDP) growth offers only short-term relief, not a long-term cure. Why? Because I cannot see how we can possibly maintain the growth of GDP in the long-term if we continue to consume our planet as voraciously as we are doing. We have to see that there is a direct relationship between the resilience of Nature’s ecosystems and the resilience of our national economies. And, let us not forget, it is on that resilience that our future prosperity actually depends.

I know there is a great deal of debate about the meaning of resilience. I cannot help but think it means an ability to absorb, repel and adapt to external shocks and without it we have very little, if any, capacity for mitigation and adaptation. If the fabric of the Earth’s life-support system fragments, as it appears it may be starting to do; if those systems become weak or even collapse – essentially, if Nature’s capital loses its innate resilience – then how long does it take for our economic capital and economic systems to lose their resilience too?

A graphic example of this, ladies and gentlemen, is found in the fate of the world’s rainforests. Having already felled or burned a third of the world’s tropical rainforests in the last fifty years, six million hectares of rainforest continue to disappear every year. That of course is the equivalent area of nearly twenty-four thousand football pitches every day! And with them go tens of thousands of species of plant and animal – gone forever, into extinction, together with who knows how many vital cures and medicines and innovative biomimetic solutions to the problem we are facing. And because the trees are not there to transfer billions of tonnes of water to the atmosphere, so the world’s weather patterns are disrupted which, in turn, seriously undermines the stability of food production. So, you see, burning a hectare of rainforest has a direct impact upon the livelihoods of many communities and, thus, a direct impact on economic growth and prosperity at a local level. This has been underlined in recent days by the discovery that the ‘once in a hundred year drought’ (that by the way has now occurred twice in five years!) has killed so many trees in the Amazon that the depleted forest may be becoming a source of greenhouse gas rather than a store. Stopping deforestation is not a lifestyle choice, it is an absolutely critical part of any low carbon growth plan. If we fail to address this problem, despite everything else we might do, there is no answer to climate change.

Neither is there any way around the fact that we have to move away from our conventional economic model of growth, based, as it is, on the production and consumption of high carbon intensity goods. We need to meet the challenge of decoupling economic growth from increased consumption in such a way that both the wellbeing of Nature’s ecology and our own economic needs do not suffer. It seems to me that we need a framework focussed on resilience that enables us to recalibrate and balance our approach. If we do not think about creating such a framework and resolve that central dilemma soon, then I fear we are in for a very rough ride indeed. The trouble is we do not have the luxury of failure and success will be in building low carbon industries that provide not only substantial economic opportunity, but also a means to ensure Europe’s competitiveness.

There are, happily, some encouraging signs of progress. I have followed closely - and have been very encouraged by - the Strategic Energy Technology plan which aims to transform the entire European energy system – how we source it, produce it, transport and trade it. This is a big step towards making low carbon technologies affordable and competitive and, therefore, a market choice. In fact, if I may say so, with this particular initiative you have offered a very encouraging example to the rest of the world.

I know only too well the difficulties you must have encountered in mustering support for the European Union (EU) target of reducing greenhouse gases by twenty per cent by 2020. But climate scientists by their hundreds are warning that if we are to avert the worst consequences of climate change we have to reduce CO2 emissions by at least fifty per cent by 2050. That can only mean your 2020 target has to be a minimum ambition. I know that many in the E.U. aspire to agree a target of reducing greenhouse gasses by thirty per cent, and I can only applaud their efforts.

Let us not forget that the oil-dependent, high-input, industrialised form of agriculture which now dominates food production around the world ties food prices firmly to the price of oil. One study estimates that a person on a typical Western diet is, in effect, consuming 4.4 litres of diesel per day and this factor helped push the F.A.O.’s Food Price Index up last December to its highest level since it was created in 1999. We should also bear in mind that we live in a world where one billion people go hungry and another billion are nutritionally deficient, while yet another billion suffer from the health impacts of over-eating and obesity; mostly in richer countries where billions of dollars worth of food are also wasted and thrown away every year. At the same time, in the developing world around forty per cent of agricultural produce is wasted before it even gets to market. Poor land management means that yields are frequently at only forty per cent of capacity… This is surely an insane situation.

And sadly, our highly intensive form of agriculture also affects our marine environment as nutrient enrichment caused by agricultural run-off is becoming a major issue for marine health. As you will know better than I, nutrient enrichment leads to algal blooms which cause significant depletion of dissolved oxygen levels in the water and so create “dead zones” that are uninhabitable to fish. The UNEP’s Global Environment Outlook report in 2004 cited over 140 dead zones world-wide – among the largest and most famous being the one that occurs annually in the Gulf of Mexico due to run-off from the US corn belt. In 2002, this particular dead zone was estimated to be the size of Massachusetts. Furthermore, and I have to say, not very encouragingly, a recent report from Denmark suggested a possible scenario, where a combination of higher temperatures and increased levels of carbon-dioxide leads to a rise in these persistent dead zones from just under two per cent of oceans (today) to in excess of twenty per cent (by 2100).

It is perhaps worth noting that twenty-five per cent of the carbon dioxide we emit is absorbed by the oceans. But, it appears that the capacity of the oceans to continue this function is decreasing due to the loss of coastal habitat: for example 13.5 giga-tonnes of carbon dioxide will be released within the next fifty years as a result of mangrove clearance that occurred between 1980 and 2005 (much of this due to shrimp farming for the European market). This is equivalent to all transport-related emissions in twenty seven EU countries over a fifteen year period from 1997 to 2005.

In addition to these problems, the health and productivity of our oceans is also at threat from over-fishing, climate change, toxic pollution, invasive species and habitat degradation. These multiple threats make it imperative that a holistic and precautionary approach is adopted in order to manage marine ecosystems so as to ensure maximum food security benefit from fisheries and while understanding the carbon-related consequences of assuming that aquaculture will be able to fill the protein gap from the precipitous decline of wild fisheries.

I suspect I may not be alone in thinking it strange, to say the least, that, globally, despite subsidies in the region of sixteen billion dollars of public money every year, we appear to be close to bringing the fishing industry to its knees. It is worth recognizing that the fishing industry contributes over 200 billion dollars a year to global GDP, but may not be able to do so for much longer. But here, in the midst of such a big problem, lies a potential solution which could be of use to the other sectoral challenges we face. Research into the state and future of the North East Atlantic Bluefin Tuna fishery estimates that subsidies of around 120 million dollars return an annual profit of only around 70 million dollars. The research found that a sustainable future for the fishery, even without subsidies, could produce annual profits of 310 million dollars per year, if tuna stocks could recover to a sustainable level. The World Bank’s own estimates suggest that if we were to eradicate the perverse subsidies which currently exist, curb overfishing and improve ineffective management, then the global fishing industry could contribute 250 billion dollars per year to global GDP, and on a sustainable basis. This offers at least hope of a long-term cure, rather than a short-term form of relief and one from which the vast majority of stakeholders would benefit. I know it would require difficult decisions and even more difficult implementation measures. But, if we lift our eyes from the “here and now” and look to the future, I wonder if we really have any alternative?

Ladies and gentlemen, I hope you can see my point. Essentially we have to do more today to avert the catastrophes of tomorrow, and we can only do that by changing the way we frame our approach to the economic problems that confront us. If we are to make our agricultural and marine systems resilient in the long-term, for instance, we have to design policies in every sector that bring the true costs of environmental destruction and the depletion of natural capital to the fore.

Having looked at these issues for very nearly thirty years and, being fortunate enough to have consulted some of the world’s most eminent experts, I wonder if I might just share with you a couple of observations about how it seems to me, at least, it might be possible to do this?

I would certainly suggest that social and economic stability is built on valuing and supporting local communities and their traditions, recognising as does the Report from the International Assessment for Agriculture Knowledge, Science and Technology for Development, recognising the contribution which, for example, diverse farming systems make to economic and ecosystem resilience. Policies that encourage diverse landscapes, communities and products can generate all sorts of positive results, not just in agriculture, but in tourism, forestry and industry. So, there is a need for policies that focus funding on strengthening diversity. Might there be, perhaps, benefit in public finance being more specifically directed using “smart subsidies?” The aim would be to target a diversity of production in more specific ways while protecting public goods. This is vital if we are to strengthen the resilience of our agriculture, marine and energy systems so that they can ensure supply and thus withstand those sudden shocks on international markets which are bound to come our way, given the impact of climate change.

I would also suggest we need a different approach to profit and loss which would support Corporate Social Environmental and Economic Responsibility and give us the means to evaluate the impact of our actions properly. This was, incidentally, what drove me to set up my Accounting for Sustainability project six years ago. The aim was to develop a new approach to business reporting which reflects the interconnected impact of financial, environmental and social elements on an organisation’s long-term performance. And, I must say, I am delighted that an increasing number of organisations – including the British Government and international groups like EDF Energy, HSBC and Aviva – are adopting this system of “Integrated Reporting.” In fact, last year I expanded the project by launching an international group, supported by many of the world’s accounting and standard-setting bodies, as well as many major international accounting firms, Stock Exchanges and the UN. What has pleased me most is that this initiative pre-empted the findings of the UN's study into The Economics of Ecosystems and Biodiversity, or TEEB, which reported last Summer to the gathering of 193 Environment Ministers in Nagoya. Having conducted a global assessment of the multi-trillion dollar importance to the world's economy of the natural world, it called for the present system of national accounts to be upgraded rapidly so they include the health of natural capital, and thereby accurately reflect how the services offered by natural ecosystems are performing.

Underpinning any new framework, undoubtedly, is the need for an integrated set of long-term public policies and instruments to encourage a “green economy.” Such an economy would rely on sustainable asset management, more productive processing of waste, the construction of new, zero-carbon buildings and the retro-fitting of existing stock and on achieving stringent energy efficiency targets for our buildings, cars and household goods. If only we could look at the world in this new way, we could create significant – and, crucially, sustainable - economic opportunities. It would be an economy that would, on the one hand, put much more emphasis on planning sustainable urban developments and helping businesses to maintain biodiversity and safeguard ecosystems, while, on the other, placing less reliance on those government subsidies and mechanisms which, perversely, can end up eroding the vital, natural components that provide us with our essential capital resources.

For these solutions to be implemented at scale we would have to see effective partnerships between the public and private sectors, as the President just mentioned, and they would also need to involve the knowledge of many highly expert, non-governmental organizations. We could not leave it to the market alone. Long-term public sector policies need to be coherent and consistent in order to create an environment which is conducive to private sector investment. Only in this way will the private sector be prepared to commit investment capital.

The market certainly offers a means of accelerating changes in behaviour but, to be genuinely effective, these changes must be focussed and clearly directed by long-term policies, and that means robust legislation and, dare I say it, just as robust enforcement.

Now I would merely add to this list one very important acknowledgement, if I may, and that is the role of the consumer. It seems to me that until we all as consumers really begin to demand sustainable products and services from businesses and Governments, then policy-makers will struggle to see the importance of introducing real change. Lately, I have been asking myself why the public has not eagerly embraced the many advantages in pursuing a sustainable future. My conclusion is that, for too long, environmentalists have tended to concentrate on what people need to stop doing. If we are constantly told that living environmentally-friendly lives means giving up all that makes life worthwhile, then it is no surprise that people refuse to change! That is why, last year, I launched a new initiative called START, which aims to show people what they could start doing - the simple steps that we can all take to make better use of our natural resources. By working with some of Europe’s leading companies, such as Kingfisher and Eurostar, as well as celebrities and marketing professionals, we are unashamedly attempting to sell the benefits of sustainability. As one advertising executive put it to me, we are “making it cool to use less stuff.” Believe it or not, this smarter approach can actually be more profitable. As Marks and Spencer have found, an innovative approach to sustainability actually saves money.

I have to say, this process has not exactly been helped by the corrosive effect on public opinion of those climate change sceptics who deny the vast body of scientific evidence that shows beyond any reasonable doubt that global warming has been exacerbated by human industrialised activity. Their suggestion that hundreds of scientists around the world, and those who accept their dispassionate evidence - including presumably ladies and gentlemen myself, rather ironically I am constantly accused of being anti-science - are somehow unconsciously biased creates the implication that many of us are, somehow, secretly conspiring to undermine and deliberately destroy the entire market-based capitalist system which now dominates the world! I would ask how these people are going to face their grandchildren and admit to them that they actually failed their future; that they ignored all the clear warning signs by passing them off as merely part of a “cyclical process” that had happened many times before and was beyond our control; that they had refused to heed the desperate cries of those last remaining traditional societies throughout the world who warned consistently of catastrophe because they could read the signs of impending disintegration in the ever-more violent, extreme aberrations in the normally, harmonious patterns of Nature. I wonder, will such people be held accountable at the end of the day for the absolute refusal to countenance a precautionary approach, for this plays I would suggest a most reckless game of roulette with the future inheritance of those who come after us? An inheritance that will be shaped by what you decide to do here in this Parliament.

Ladies and gentlemen, you have been remarkably patient in listening to me. I promise you, what you decide here could induce the very necessary adjustments we so urgently need to make. So can I ask if you will be courageous enough to seize the moment, set Europe on a course for survival and economic prosperity and so earn the endless gratitude of our descendants…?