European Union

In 2010, the EEA produced its first assessment of global megatrends as part of its five-yearly assessment of the European environment’s state, trend and prospects (SOER 2010). In preparation for SOER 2015, the EEA is updating each of the megatrends, providing a more detailed analysis based on the latest data. This publication is one of the 11 updates being published separately in the second half of 2013 and early-2014. In 2014 the chapters will be consolidated into a single EEA technical report, which will provide the basis for the analysis of megatrends included in SOER 2015.

In 2010, the EEA produced its first assessment of global megatrends as part of its five-yearly assessment of the European environment’s state, trend and prospects (SOER 2010). In preparation for SOER 2015, the EEA is updating each of the megatrends, providing a more detailed analysis based on the latest data. This publication is one of the 11 updates being published separately in the second half of 2013 and early-2014. In 2014 the chapters will be consolidated into a single EEA technical report, which will provide the basis for the analysis of megatrends included in SOER 2015.

This exploratory assessment of global megatrends relevant for the European environment focuses on the impact of major global trends on Europe. A global-to-European perspective is relevant for European environmental policymaking because Europe's environmental challenges and management options are being reshaped by global drivers such as demographics, technologies, trade patterns and consumption. The assessment provides analysis of 11 relevant megatrends, summarises the links between megatrends and Europe's priority environmental challenges, and reflects on possible implications for policymaking.

Delivering both economic growth and GHG emissions reductions is essential to avoiding dangerous climate change, with its associated economic, social and environmental costs. Keeping the global temperature rise below 2°C represents a major challenge, particularly while ensuring decarbonisation is cost-effective and maintaining security of supply and competiveness. A number of policies have been implemented throughout the EU to reach its 2020 targets; the next challenge is to look ahead to 2030.
To continue the process of transforming to a low carbon economy and set the next waypoint towards the EU’s 2050 objective of reducing GHG emissions by 80-95%, the European Commission has released its proposal for an EU 2030 framework for climate and energy policies. Pursuant to this, the UK’s Department of Energy and Climate Change commissioned a set of detailed quantified scenarios for GHG emissions and the energy sector, in order to look at the costs and benefits to individual Member States and the EU as a whole from different potential EU policies and objectives for 2030.
Significant potential exists within the EU to reduce GHG emissions at reasonable costs, both in the short and long term. The 20% reduction of emissions by 2020 will likely be overachieved despite the current low ETS price; indeed, even with the existing surplus of EUAs, this will probably be the case without further policy intervention. The Commission’s
Low Carbon Roadmap suggests that a tighter cap and target would put the EU on a more cost effective pathway to 2050.

A report to the European Council by the Reflection Group on the Future of the EU 2030.

The independent Reflection Group was set up by the European Council under the chair of Mr. González to identify, analyse and propose solutions to the challenges the EU will be facing at the horizon 2030. It is composed of 12 members with outstanding expertise in their field of activity. They have also sought the opinion of experts from the academic and business worlds.

This report to the European Council lists a wide range of problems with which the EU and member states are confronted, for instance the global economic crisis and states coming to the rescue of banks, climate change and energy supply as well as the threats of terrorism and organised crime.

The Reflection Group is convinced that the EU can overcome the difficulties, if everybody - politicians and citizens - are decided to pull together and act in a decisive manner to develop this ambitious political project. It is therefore essential that citizens back up the Union and participate in its further development.

"In the framework of both the Lisbon Strategy and the Sustainable Development Strategy, European institutions agreed on the necessity to modernise and develop the European social model in the light of slowing growth, persistent structural unemployment, rising inequalities.
In recent years along with the persistence of the main risks of the industrial society (illness, disability, old age) new social risks are brought about by economic and demographic developments; main factors are: a higher probability of job loss for larger parts of society and different age cohorts; changes in size and composition of families with reduction of the capacity to provide “in house” care; limited capacity of welfare systems to deal with these risks due to financial constraints and difficulty in updating welfare arrangements; cultural and education gaps. These transformations pose a serious problem of adequacy of the European welfare states. The present patterns may reveal not as successful as they used to be in protecting all against poverty, in guaranteeing social cohesion and in responding to citizens’ aspirations in modern democracies.
Social challenge is common to all EU Member States, but exposure to old and new social risks largely varies across regions. In this paper, the assessment of regional sensitivity is based on a summary index of social risk which combines several indicators of drivers referring to three relevant dimensions: family, labour market, and welfare. With more detail, the following indicators have been used:
• the share of poor at regional level, as a proxy of the size of the social risk in terms of income;
• the rate of employment calculated on total population, that embodies the social impact of both demographic trends (share of population in working age) and of labour market factors (activity rate on working age population and rate of unemployment);
• the educational attainment of working people, as a proxy of the regional share of low-skilled workers with higher probability of experiencing unemployment or of receiving a low wage;
• an index of efficacy, adequacy and sustainability of the welfare states at national level
According to the level of social risks measured by the summary index, regions have been classified in five typologies which have been displayed in a map. More than one half of European regions show a low or very low sensitivity to social risks. These top class regions are concentrated in Northern (especially low risk regions) and Central Europe along with United Kingdom. On the opposite side, about one quarter of European regions have a high or very high sensitivity confirming the existence of great disparities among countries and regions. Generally speaking, the two most critical areas are individuated in the Mediterranean countries –Portugal, Southern Spain, Greece, Italian Mezzogiorno- and in the Eastern area of new Member States with the exception of Estonia. Comparison with maps of European cohesion policy is interesting. All the regions with high and very high exposure to social risk are regions of Convergence or phasing-out area, with few exceptions. In the other direction, most of the regions of Convergence area show a high and very high social risk exposure. This is especially true for Southern Italy, Spain, Portugal, Greece, Hungary, Poland, Slovakia, Latvia and Lithuania (and would be true also for Bulgaria and Romania not included in summary index). There are however important exceptions regarding some of the new Member States (Czech Republic, Slovenia and Estonia), Eastern Germany and Convergence regions in the United Kingdom showing an intermediate or low social risk sensitivity.
In neighbour countries the picture is more concerning. Fight against poverty and promotion of employment are priorities in each country. Most of them are still faced with a number of challenges such as high unemployment, which particularly affects young people and women, the prevalence of an informal economy, leaving workers without social rights and social protection, as well as the mismatch between education and labour market needs. Most countries lack an integrated approach combining economic, employment and social objectives. They also suffer from poor administrative capacity in this area. Significant efforts are needed to implement effective labour market policies, to promote decent work and guarantee productive employment, rights at work, social protection and equal opportunities for men and women.
As far as challenge intensity is concerned, the European Union is in a favourable condition with regard to social risks in a broader OECD perspective; in fact, all countries with income inequality below OECD average level are European. Nevertheless there are various factors which may increase the intensity of the challenge on Europe.
The number of Europeans living under the poverty line has increased in the last decades. Around 100 million Europeans in 2004 (22.5% of the total population) had less than 60% of the EU median income, but the situation is widely differentiated across countries and within them.
Although social benefits reduce the percentage of people at risk of poverty, serious holes exist in the social protection policies in several countries. In addition there are doubts on the financial sustainability of the present model in the next decades and on its adequacy to deal with new social risks.
The employment and participation rates remain below the targets set within the Lisbon Strategy, especially for women and old workers. Data on educational attainment show that the share of population with secondary and tertiary education is lower than other large OECD countries.
Impacts of social challenge on disparities depend on the relation between regional sensitivity and challenge intensity and they are assessed in a qualitative manner through construction of two scenarios corresponding to the two extremes of the expected range of variation of challenge intensity. A pessimistic scenario is characterised by a decrease in the number of double wage households and an increase in the number of people living in working-poor families or depending on social transfers. In a context of slow growth and of tightening financial constraints, new demand for welfare do not find adequate coverage. The target set by Lisbon Strategy in terms education and of employment rates are only partially achieved. This pessimistic scenario is likely to lead to increasing regional inequalities.
In an optimistic scenario, greater labour demand driven by economic expansion, and more effective policies allow an increase in participation rates and in the number of double wage earner households. In addition investments in education and life long learning increase average skill levels of both local and immigrant workers, reducing the proportion of low skilled low-income workers. Effective reforms of the welfare states, made easier by loosening financial constraints, ensure greater coverage for old and new social risks. This optimistic scenario is likely to be linked to a process of convergence."

"The energy challenge is a challenge with many dimensions. At the broad level there are issues like sustainability of energy use, security and competitiveness of supply. These broad issues themselves can be broken down to many smaller but no less important issues as e.g. global and European energy demand and supply, the availability of fossil fuel resources, renewable energy, energy transmission networks, prices for oil, gas and electricity to cite only a few of them. All these issues can be further broken down from a geographical point of view, from the global to the European, to the national and potentially to the regional level.
This large number of dimensions makes it difficult to get hold of all the issues involved in the energy challenge at the same time, nevertheless this paper aims at providing an overview of the energy challenge and its dimension. At the same time it is clear that this overview can only be the start of a much more detailed analysis, hence it is considered to be a more or less suitable basis for further research. After all this seems highly necessary in order to develop a clear view on what the effects of the energy challenge on the European regions will be.
The present paper, which intends to cover most of the dimension of the energy challenge, develops a specific structure of analysis in order to present the results in a coherent way. Amongst the many possibilities our structure splits the energy dimensions according to whether they pertain to the supply or the demand side of energy or whether they pertain to the transaction from the supply to the demand side. Thus on the supply side we analyse: Global and European energy supply, renewables and technology. With respect to energy transaction issues we focus on pipelines and LNG, energy (electricity) networks, oil prices, electricity and gas prices (incl. environmental taxes). On the demand side we analyse: global and European energy demand, GHG emissions, energy efficiency, economic effects, emission trading and finally carbon storage.
Given the number of raised issues the intention of the analysis if to provide an overview of, while an in depth analysis of each point would be far beyond the scope of the paper.
Given this the paper finally attempts to analyse the potential negative and positive impacts these dimension could have on regional disparities. Given the severe data and information limitations at the regional level and, given the fact that the energy challenge as such is a complex issue, it is extremely difficult to define two clear scenarios, as many assumptions have to be made about potential positive and negative developments in each of these challenges. Therefore, the scenario analysis is a highly speculative exercise that goes most of the components of the energy challenge and analysing them whether on to what extent they might affect the EU regions. All components are analysed with respect to their potential positive and negative impacts on regional disparities as well as with respect to the data available to investigate this issue further. As such the analysis below provides modules for scenario building, allowing to chose for each component of the energy challenge whether it is assumed to apply until 2020 or not."

"In this paper climate change is understood as a set of alterations in the average weather caused by global warming due to the emission of anthropogenic greenhouse gases.
Climate change is serious and scary. Amongst all challenges that are dealt with in this project it is the one challenge that potentially has the most severe impacts, globally and on Europe. The very reason for this is that climate change affects virtually every aspect of our every day life, economic, social and environmental. It is a multidimensional challenge, with its impacts not only ranging from issues like human health, supply of safe water and food, biodiversity, economic development etc., but also has impacts on all the other four challenges dealt with under this project.
The impacts of climate change can be extreme, almost unbelievable. To illustrate, pessimistic estimates predict that if global temperature increases by around 3°C above pre-industrial level additional 550 million people (approximately the size of the EU) will be at risk of hunger in world. Likewise, for the same increase in temperature, 50% of animal species may be extinct, and this is just the top of the (by then non-existing) iceberg.
Climate change is not an European challenge. It is a global challenge with effects on Europe. This has to be made aware of. Because just as Europe is responsible for safeguarding its people from the negative impacts of climate change, it has, being one of the world’s major force, to take up its responsibility for the other parts of the world. It is certainly not enough to sit back and enjoy the privilege of being born into a developed part of the world that, if let alone, could deal with any problem or challenge. Our actions affect people all over the world, just as their actions affect us. From that, if philanthropist reasons are not enough for Europe to take up its responsibility, it should do so, because the impacts climate change has in other parts of the world might have military, social and economic repercussions on the Europeans.
In the light of the severity of the impacts climate change can have, it is surprising how little is known about it in public. Sure, climate change gained public attention in 2007, when Al Gore and the IPCC won the Nobel Peace Prize "for their efforts to build up and disseminate greater knowledge about man-made climate change, and to lay the foundations for the measures that are needed to counteract such change". But still it is felt that public awareness is much too low.
Tackling climate change and finding the right policies is not only about mitigation, adaption and analysing the problem. It is also about making it known to the people, because in the end it is us that, with our every day actions, are responsible of what the future climate will be.
Task
In this spirit, and since climate change is, as mentioned, a multidimensional challenge this paper, by reviewing the current literature, aims at giving an overview of the multiple impacts climate change can have globally and on Europe. Its main focus are the economic, environmental and social consequences, firstly at the world and secondly at the European level, with the ultimate aim to derive some conclusions on how climate change affects the European Union’s NUTS-2 regions.
The remainder of the paper is organised as follows:
Chapter 2 reviews current findings on the global and European impact of climate change, also taking into account developments in neighbouring regions, likely repercussions from global effects on Europe and some aspects of adaption to climate change. Chapter 3 develops an indicator to assess the vulnerability of EU NUTS 2 regions to climate change. Finally, chapter 4 by taking into account the insights from the previous chapter the paper dares to present two scenarios of potential impacts of climate change on regions: a pessimistic scenario based on the assumption that climate change and global warming cannot be stopped and an optimistic scenario based on the hypothesis that global warming will stop at the EU’s target of a temperature that is only 2°C higher than in the pre-industrial era.
Importantly, it has to be noted that mitigation will not be covered in this paper, as this will be done in the paper on the energy challenge."

"In this study, three main drivers of the current demographic challenge in the EU regions have been singled out and have been used in making up the sensitivity index through their main components :
- Total population change;
- Changes in labour-age population;
- Population ageing.

In a global frame of reference, Europe presents a peculiar demographic situation characterised by: i) very low or below-zero rate of population growth; ii) steady growth or initial decrease of the labour-age population; iii) ageing processes which involve the entire population as well as its significant parts, labour-age population in particular.
Four critical areas have been singled out in respect to the EU27 regions’ sensitivity to the demographic challenge by 2020:
1) The former Eastern Germany, with some extensions westwards;
2) The North-western part of Spain;
3) North-western and Central Italy, with some extensions southwards;
4) All the Bulgarian regions.

(...)Some changes in the future population dynamics are almost independent from the future macro-economic prospects and the relevant scenarios. The cohort turnover by 2020 shall modify the demographic structure and trends. Future migrations, internal or external to the EU, may change only partially those turnovers, so that their impact can be foreseen with large confidence.
The two alternative scenarios – the pessimistic one, which foresee a severe and perdurable economic recession, vs. the optimistic one, which imagines a fast recovery driven by innovation – mainly affect only the migration components of the demographic challenge. In that, much will depend on the ways and territorial distribution of the economic recession/development. Also the involvement and response of the neighbouring countries in those processes will have important returns on the foreseeable future of the European population.
Results of both scenarios confirm that European regions in 2020 will continue facing ageing and immigration. In the pessimistic scenario, ageing is more diffused and this negatively affects population change. In particular: social risks and costs of demographic change increase in more sensitive regions, while the future growth potential is limited in less sensitive regions. In the optimistic scenario, demographic constraints are moderately less stringent. In this context, more sensitive regions may experience increasing internal disparities in population ageing and agglomeration; less sensitive regions may experience lighter constrictions in WAP and in the future population growth. Both scenarios would require supporting social and economic adaptation of the different territories to demographic change, stressing the relevance of cohesion policy."