Building the foundations for fundamental change

The EEA is working on the issue of sustainability transitions at a range of scales and using a mixture of systemic analytical approaches and assessments. This article discusses the opportunities and the challenges for systemic change in the context of EU policies and points to knowledge and governance approaches that can help to deliver such change. 

The context

The European Union and its neighbours have in recent decades achieved remarkable progress in socio-economic well-being and prosperity while taking actions that are cognisant of planet earth’s ecological limits. At the same time, as it is widely acknowledged, Europe and the rest of the world still face fundamental environmental and sustainability challenges of unprecedented scale and urgency.

The sheer size of the global population and the intensity of human activities has caused tremendous pressures on the Earth’s life-support systems through climate change, biodiversity loss, competition for natural resources and changes in the chemical composition of the atmosphere, oceans and soil. At the same time, not everyone has equally benefitted from the exploitation of natural resources and ecosystems, and inequality is still on the rise globally, including in Europe.

The EU has recently stepped up its ambitions regarding environment, climate, and broader sustainability goals, as reflected in the European Green Deal (EGD), related strategies and initiatives, and the proposal for the 8th Environment Action Programme (EAP). These frameworks increasingly connect across the environmental, economic, social and governance dimensions of sustainability, stressing the need to transform the core societal systems that drive environmental pressures, such as those meeting Europe’s demand for food, energy, mobility and housing.

In open, market economies, these systems are continually evolving and are sure to undergo further transformation over coming decades as a result of rapid technological and social innovation. What transitions research and policy increasingly affirms is that Europe needs to orient these ongoing structural change processes in ways that can enable society to achieve its sustainability objectives, not least social justice. This will require systemic, integrated and coherent policy responses.

The European Green Deal (EGD) embodies a major step forwards with such responses. In combination with the proposed 8th EAP, it very clearly moves beyond a narrow neoclassical framing reliant on microeconomic policy tools to shape choices. Instead, it emphasises the need for all areas of policy to enable fundamental structural transformation of the societal systems driving socio-economic and environmental problems.

Embracing a systemic perspective offers essential insights. Yet to fully comprehend the challenges and responses, it is necessary to understand the aggregate effects of systemic transitions, in terms of both socioeconomic and environmental outcomes. Addressing this macro-level perspective exposes fundamental tensions at the core of European policy centered on the sustainability of long-term economic growth.

It is currently unclear whether Europe can maintain GDP growth while preserving natural capital. Yet reducing economic output also presents major challenges. Europe’s socio-economic systems depend on growth to preserve employment levels and to finance social expenditures, public debt and investments in transitions. In the context of sustainability transitions and other trends such as demographic change and secular stagnation, governments will need to explore how to make societies less dependent on the types of economic growth that the EU has experienced in recent decades. 

What does ‘systemic change’ mean?

Maintaining current progress while advancing towards achieving sustainability will require fundamental and far-reaching societal change, engaging all sectors of the economy and society. For example, achieving the goals set out in the Paris Agreement requires transformational changes leading to deep reductions in greenhouse gas emissions. Tackling the escalation of global resource consumption requires a fundamental rethink of our levels and patterns of resource consumption and associated environmental footprints. 

Figure 1.  Production-consumption systems driving environmental pressures

Note: Based on EEA, 2014

As indicated in SOER 2020, achieving these goals will require major transformations in key production-consumption systems — especially energy, food, mobility, as well as in urban/housing systems.They are the result of the complex interplay between multiple factors, and while meeting society’s essential needs, these systems impose a burden on the environment by extracting resources and producing waste and emissions (Figure 1). Consequently, they are at the core of Europe’s environmental and sustainability challenges and are, correspondingly, identified as core elements of the European Green Deal.

Policy interventions that focused on marginal technological improvements and efficiency gains, which were at the core of policy agendas in the previous decades, have shown limited effectiveness in addressing major sustainability challenges, and often resulted in lock-ins and barriers to fundamental change. As discussed in SOER 2020, where there has been progress on reducing emissions and impacts on human health, the improvements are insufficient to meet the long-term objectives to 2050. Persistent challenges are resistant to traditional policy responses and could be more fully resolved if they were addressed as broader sustainability issues that cross environmental, social, economic and governance dimensions and at European and global levels.

The type of change that is required to achieve major systems reconfigurations is systemic. This means a fundamental, transformative, and cross-cutting form of change that entails major shifts and reorientation in systems goals, incentives, technologies, social practices and norms, as well as in knowledge systems, and governance approaches. For core societal systems, this means rethinking not just technologies and production processes but also consumption patterns and ways of living, as well as key paradigm that underpin the current economic model, in view of more sustainable alternatives focusing on, for example, well-being and resilience.

To some degree some signs of systemic change have been happening in Europe, primarily as a result of a series of multiple crises. Already before the pandemic, environmental and social movements questioned established socio-economic paradigms such as consumerism and growth at all costs, while the COVID-19 crisis has spurred European society into action, reminding us that sustainability and change are intrinsically linked and that fundamental change is possible, especially in response to threats that are perceived as imminent. It has also reminded us that the (old) normal is not desirable and that, to become sustainable, our societies have to stop many of their practices and ‘build back better’ systems – as envisioned in the EU’s recovery plans. 

Figure 2. Policy mixes supporting systemic change towards sustainability (adapted from Loorbach, 2015)

Note: adapted from Loorbach, 2015

From a policy perspective, enabling systemic change means focusing on a broad policy mix to promote innovation and experimentation, to enable new ideas and approaches to spread, and to ensure that structural economic change produced by phasing out unsustainable modes of production and consumption in favour of more sustainable ones (Figure 2), leads to fair outcomes for all. It is not enough to promote economic growth and then seek to address harmful side-effects using social and environmental policies.

Instead, sustainability needs to become the guiding principle of policies and actions across society. As emphasised in the EGD, ‘All EU actions and policies will have to contribute to the European Green Deal objectives. The challenges are complex and interlinked. The policy response must be bold and comprehensive.’

Enacting systemic change: challenges and opportunities 

There are multiple challenges and opportunities associated with systemic change. One of the key challenges relates to its uncertain, co-evolutionary, and unpredictable nature. Systemic change, overall, is the result of a co-evolution between system elements — technologies, regulations, infrastructures, behaviours, etc. — that interact across different time and spatial scales. Moreover, the growing interconnectedness between Europe and the rest of the world point to the fact that production and consumption systems in Europe will undergo transformations in coming decades as a result of multiple ‘drivers of change’ that originate both within and outside Europe. For example, an expanding global population shift towards resource-intensive consumption patterns might create potential tensions concerning access to strategic resources. Similarly, a combination of global megatrends and European trends, such as demographic decline, and disruptive technological change, might create new challenges and opportunities for systemic change in the direction of sustainability.

Moreover, links between and across systems and broader sustainability goals, create additional challenges: addressing problems in one system may shift the burden, produce other trade-offs or generate unintended outcomes. For example, as illustrated in Figure 3, achieving the Sustainable Development Goals (SDGs) and other long-term sustainability goals requires considering their synergistic and antagonistic interactions, including transboundary effects between Europe and the rest of the world. The case of first-generation biofuels has made it clear that the goal of increasing bioenergy production can easily enter into conflict with the goal of fostering food security. However, there is growing recognition of the multiple co-benefits that protecting, conserving, enhancing and restoring natural capital have on health and well-being objectives.

Policy interventions geared towards systemic change may also generate winners and losers and inevitably challenge established investments, jobs, policies, behaviours and norms. This can provoke resistance from businesses, employees and society more broadly. Vested interests are one of the biggest obstacles to necessary change, as the drive to maintain a competitive advantage can deter individual countries and businesses from pursuing ambitious environmental goals.

Figure 3. Synergies and trade-offs across SDGs

Note: EEA and SEI (2019)

Given the high complexity and uncertainty associated with systemic change, governments cannot simply plan and implement for it. However, public policies and institutions are essential to catalyse and orient systemic change in cooperation with businesses and civil society. For example, governments and institutions can promote social innovation, including by supporting experimentation, facilitating the spread of new ideas and approaches. Similarly, they can accelerate systemic change by reorienting financial flows towards sustainable investments and by developing relevant knowledge systems and new skills, and by establishing mechanisms to prevent or alleviate the negative effects that major transformations will have on regions, industries and workers, therefore ensuring a just transition for all.

Lastly, as sustainability is becoming the overarching principle for new policy developments, new opportunities for catalysing systemic change are emerging as well. Yet, in order to enable such change to its full potential, a series of fundamental changes in Europe’s knowledge and governance systems might be necessary. These include: shifting away from a knowledge paradigm centered around certainty, prediction, and control, towards a paradigm that embraces uncertainty, foresight, anticipatory thinking, and adaptive approaches; shifting from a silo- and sector-based policy focus to a systemic approach to policy coherence that looks across domains and scales; better harnessing of ambition, creativity and power of citizens, businesses, and communities, through enhanced participation and public engagement (e.g. in defining visions and pathways); enabling local action by empowering communities, in recognition of the many legitimate perspectives on desirable futures and choices on how to reach them.