Back in the early 1970s, it took a small group of scientists and intellectuals in the Club of Rome to warn us about the future of the planet. Nowadays, protectio of our environmental heritage has achieved a very high profile among the new values of civilized international society. Bearing in mind the often unfocussed attitude of governments which since the United Nations Conference in Stockholm in 1972 have solemnly committed themselves to safeguarding the environment, the environmental awrness of the general public throuhout the world has made great strides. Citizens and lobbies are concerned not only with a specific aspect of the environment, but are calling for an overall policy ranging from global issues to the quality of drinking water, from the air that we breath to the question of our own particular environment; Those who thought that environment policy was a fleeting fashion or a passing fancy got their sums wrong. There is now an ecological and environmental awareness which impinges upon increasingl

y wide sections of the population and which urges us to rethink our economic policies on the basis of environmental protection considerations. The European Community has interpreted this awareness by playing a particulary decisive, anticipatory role. The Community environment policy launched in 1972 has produced some very interesting results over the last 20 years. The Council of Ministers, for example, has adopted some 200 pieces of legislation concerning highly diverse topics such as water, air, waste, chemicals and biotechnologies, environmental impact assessment, and the protection of spieces and biotypes. Thanks to the Single Act, environment policy, which has been implemented under five-year action programme, finally received a precise legal framework. However, there is still much to be done to limit the damage caused to the environment by urbanization, the flight from the land, traffic, mass tourism and a certain type of economic development, plus the fact that the traditional types of pollution have

been compounded by new phenomena - the greenhouse effect, the depletion of the ozone layer and the deforestation, - which threaten the terrestrial ecosystem's global equilibria. The June 1990 Dublin Economic Council expressly recognized the gravity of these problems. In a solemn declaration, the Heads of State and of Governments stressed the Communuty's specific responsibility with regard to environmental protection. This political impulse has been reflected in the provisions of the new Treaty of Maastricht. When it enters into force, environment policy will be able to rely on provisions and legal instruments which will enable more vigorous action to be taken against pollution. It is now becoming increasingly clear that effective and sustainable economic growth and effective environmental protection are no longer contradictory but in fact interdependent objectives, since future economic growth depends on rational management of natural resources which are both the basis of and the limits to economic developme

nt. The Commission has recognized this and made it the starting point for its new environment strategy described in detail in the 5th Action Programme on the Environment which sets the ambitious objective of "sustainable development and respect for the environment". The 5th Action Programme advocates an ambitious Community policy providing for a more effective range of intervention instruments than its four predecessors. The new programme, which was submitted to the Council of Ministers and the European Parliament in March, is based on the idea that legislation and regulations are no longer enough to guarantee adequate protection of environmental balance. The philosophy underlying this strategy is simple: it aims not only at integrating environmental policy into the other Community policies but also at involving citizens, public institutions and economic operators in the formulation and application of environmental policy and adequate flaking measures. In accordance with the principles of subsidiarity and sh

ared responsibility. Although it provides for an improvement in the legal instruments and the means of enforcing environmental legislation, this programme clearly calls for more frequent and more precise recourse to other forms of intervention - in particular, economic and market-orientated forms - capable of influencing the actions of economic operators. These market-based instruments are aimed at producers and consumers so as to encourage them to use natural resources more responsibly and avoid pollution and waste. This should be achievable by "internalizing" external environmental costs. The aim is to restore balance to prices, so that more environmentally friendly goods and services are not at a disadvantage compared with their competitors which use more polluting production techniques. Although it is difficult to calculate the costs involved in protecting our environmental heritage, pricing mechanism and accounting instruments are essential to the echievement of sustainable economic development, which i

s defined as the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs, since assigning an economic value to ecological factors may prompt economic operators to take environmental impact into account when making an investment or consumption choice. Where market forces prevail, product prices musr reflect all the costs which production and consumption entali for society, including environmental costs. Recourse to economic instruments must allow to set the prices which reflect environmen,tal costs. These instruments should embrace all the ecological costs borne throughout a product's entire life cycle, from the cradle to the grave, i.e. from the source to production and distribution, use and final disposal, so that products manufactured in accordance with ecological criteria are not at a competitive disadvantage vis-à-vis polluting products. The 5th Action Programme on the Environment provides for various categories of economic and fiscal instr

uments. First of all, I should like to mention the question of taxes. In accordance with "the polluter pays" principle, taxes should discouraged pollution at source and promote clean precesses throughout market-based incentives. Moreover, the use of such instuments is already a fact of life in relation to water. They have been used, for example, to finance water purification clean-up measures and facilities. The second category of economic instruments comprises tax incentive measures which may have a considerable impact on consumption and behavioural models. Account is already being taken of the environment dimension in taxation measures. The differentiated taxes applied by the Member States on more or less polluting motor fuels are a concrete example of this, not forgetting of course the carbon tax which the Commission presented in the Spring on the basis of the Community strategy to limit carbon dioxide emissions and improve energy efficiency. Generally speaking, it should be possible to rationalize tax sy

stems so as better to reflect environmental requirements and new production sector dynamics. It seems increasingly necessary to impose greater levels of taxation on activities which call into question economic and environmental structures, rather than apply them to activities which can have a negative impact on investment and employment. A third category of economic instruments comprises the granting of State aid relating to the environment. The latter are already the subject of a Community framework designed to make them consistent with the polluter-pays principle. Subsequently, priority will be given to aid in the form of tax relief aimed at promoting investment in environmental monitoring facilities and the introduction of clean production processes. The fourth category of instruments comprises environmental audits. These should be used as means of internal mamagement to indicate the degree of efficiency of management of natural resources, energy consumption, levels of productivity and waste. In future, e

coaudits should have the same degree of importance as other types of traditional business management audits. This arsenal of instruments should result in sustainable development, primarily by appealing to the sense of responsibility of all interested parties so as to ensure that environmental imperatives are integrated into individual behaviour, in manufacturing processes and in economic and sectoral policies. Following the Rio Conference on environment and Development in June 1992, the 5th Programme - of which ecotaxes is one of the main aspects - represents the most concrete and responsible answer that the Community can supply in the international endeavours to combat global problems related to protecting our environmental heritage.

Karel van Miert, Commissioner of the EC