Where is Europe’s Environment Agenda?

Where is the Environment?

Today, 27 October 2015, the Commission published their Annual Work Plan.

It is bare reading on the environment front. There is only one substantive legislative proposal, the re-tabling of the withdrawn circular economy package. It falls under the title ” A New Boost for Jobs, Growth and Investment”. It’s like the Environmental Chapter of the Treaty (Title XX in case you were wondering) has been tippexed out.

I come to this with historical baggage. I am old enough to remember when the EU was the global centre for environmental leadership and regulatory innovation. The rules and standards adopted in Brussels were taken up across the world (USA excluded) and were seen as the gold standard of good regulation. The European Commission realised that when they acted on the environment they generated tremendous goodwill towards the European project. And, the environmental standards in Europe were enhanced, and doomsayers prophecies of economic collapse were never borne out. Today, those ideas are unfashionable, to say the least in Brussels.

 

What of  Today

The Commission states ” The aim is to address economic and environmental concerns by maximizing efficiency in the use of resources, covering the whole value chain (including sustainable consumption, production, waste management) and through innovation, thereby enabling the development of new markets and business models. The package will consist of a broad action plan, including actions on monitoring effective progress, and a waste proposal with long-term targets.”

I have highlighted the environmental initiatives.

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The concrete legislative package will be updating the current Waste Framework Directive and the daughter directives (WEEE,  Packaging and Packaging WasteELV, etc).  This will likely centre around new targets and deadlines.

It is unclear whether the package will tackle knotty issues of the reform of Chemical Regulation that would allow a genuine Circular Economy and how to handle so-called contaminated recylates back into the production system. Whether the package will reflect the thinking of “Cradle to Cradle: Remaking the Way We Make Things” remains to be seen.

Other Initiatives

Other ongoing evaluations on REACH, Nature protection, Occupational Health and Safety legislation, continue their way through the byzantine new Commission system for revision.

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Impact

With such slim pickings, the Member States and EP will have a lot more time to closely examine any and all Commission legislative proposals. Secondly, this will likely mean the EP in particular will take the role of examining all too often important delegated legislation proposals in a lot more depth.

The Rational Optimist – Why Today So Many Are So Prosperous

The Rational Optimist: How Prosperity Evolves by Matt Ridley

The main message of the book is that the world is getting better. We humans keep finding amazing ways to solve great challenges.

Billions of people now lives that were until recently the preserve of only the great Kings and Queens. Sure, there are still too many people in poverty, but those numbers are becoming smaller every year.

And, whilst good news may not sell newspapers, it is clear that the end of this 21st century will be a lot better than the world we live into today.

Capitalists should read it. It will give them an articulate case to defend themselves, even if they don’t really believe in what they are doing.

Politicians and regulators still think they know what the solutions are and what to do. But, beyond preserving the rule of law, private property rights and a few other vital things, they really have no idea what they are doing. Even today, too few countries really even have the fundamentals in place.

If you think the doom and gloom merchants are wrong, pick up a copy of this book. You’ll be happy to know you are living in the very best time there ever has been to be alive.

Specifically, I enjoyed the sections on technology & free trade, the limited role of government to innovation, and capitalism.

 

Technology and Free Trade

Ridley observes “I find that my disagreement is mostly with reactionaries of all political colours: blue ones who dislike cultural change, red ones who dislike economic change and green ones who dislike technological change.” Concerns as relevant to the EU as they are to the USA.

He goes on to point out “Without trade, innovation just does not happen. Exchange is to technology as sex is to evolution. It stimulates novelty. The extraordinary thing about exchange is that it breeds: the more of it you do, the more of it you can do. And it calls forth innovation.”  Indeed, if a country cuts of trade, things don’t stay the same, they go backwards, and often the regression is quick.

It’s a miracle that trade happens. Ridley notes that “Cultures, it seems, like to shoot messengers. People do their utmost to cut themselves off from the free flow of ideas, technologies and habits, limiting the impact of specialisation and exchange.”

The message from history is so blatantly obvious – that free trade causes mutual prosperity while protectionism causes poverty – that it seems incredible that anybody ever thinks otherwise.

This is most obvious when it comes to migration. It’s funny that people are against migration, given we have been doing it from the very beginning of time. But, as a species we have historically reacted to new people by attacking and/or killing them. But, migrants are the people who seem to drive things forward.  As Ridley notes “All it took was an occasional incomer from the mainland to keep technology from regressing”.   Innovators like Isambard Kingdom Brunel would be lost to us, he was of French stock.

 

Clever People, Politicians and Regulators Not Needed

It is interesting to read how little role government, or their supporting intellectual class, has made to innovation. Government often puts a block on improvements or is the cause of making things worse.

Ridley notes “As the Australian economist Peter Saunders argues, ‘Nobody planned the global capitalist system, nobody runs it, and nobody really comprehends it. This particularly offends intellectuals, for capitalism renders them redundant. It gets on perfectly well without them.”

This is an important observation. As a politician or as a regulator, roles I have participated in first hand, there is a self belief held by many, if not all the participants, that they know the best solution, and by implication, how to secure that.

These über minds have solved the problem of knowledge and have found the holy grail on any given issue on how to solve a problem. If you think about it, even if the politicians and regulators actually intended the measures they adopt to work (and I think there is little empirical evidence to support the idea that the politicians passing the laws really intend for them to work that often), it would be assuming amazing skills on legislators and regulators. They would be a magnificent group of humankind who help bring about prosperity and improvement for all.  What Saunders suggests is the chance of this being the case are at best unlikely.

 

Capitalism and Free Trade

Capitalism is a system that has provided amazing levels of wealth and a better life. It’s done so for the very wealthy, but even more, its lifted billions out of gut wrenching poverty.

I have become interested in how few large firms seem to support the idea that capitalism is a good thing, or at least do so publically. As I get older, I have become more circumspect that telepathy works.  Ridley steps in and answers my question.

He observes “Like Milton Friedman, I notice that ‘business corporations in general are not defenders of free enterprise. On the contrary, they are one of the chief sources of danger….

They are addicted to corporate welfare, they love regulations that erect barriers to entry to their small competitors, they yearn for monopoly and they grow flabby and inefficient with age.”

He continues “Most big firms are actually becoming frail, fragile and frightened – of the press, of pressure groups, of government, of their customers…Companies have a far shorter half-life than government agencies. Half of the biggest American companies of 1980 have now disappeared by take-over or bankruptcy; half of today’s biggest companies did not even exist in 1980″.

Ridley notes “It was Joseph Schumpeter who pointed out that the competition which keeps a businessman awake at night is not that from his rivals cutting prices, but that of entrepreneurs making his product obsolete.” As Umber has shown, new innovation can be slowed down, but rarely stopped, by government interference. There is something gratifying about owners of capital constantly cutting their margins and prices to provide cheaper and better products and services year on year with one inevitable benefit: things become cheaper for the poor. As Ridley observes, today many people live better lives than the Sun King, Luis XIV.

The book contains a wealth of positive observations from food production, climate change, poverty reduction and much else. We are living in the best of times.