Companies and trade organisations frequently tell politicians that stricter environmental legislation would harm the economy significantly – but such claims have repeatedly been proven wrong. This is shown in the ChemSec report Cry wolf.
The report reviews examples of past industry cost estimates of complying with suggested environmental regulations and compares them with the actual costs after the laws have entered into force. Industry systematically “cries wolf”, saying that compliance costs would be considerable and jobs lost. But this is a false warning – research shows that it is not the case. Rather, the cost for industry to adapt to environmental policies has decreased since the 1990s, and industry has managed well with adjusting their operations to new regulations.
– Industry overestimating the costs of complying with environmental laws is a major obstacle to implementing new laws to protect health and environment. This is a systematically used strategy that can also be relevant to take into account today, for example in the on-going debate about the TTIP trade agreement between the EU and US. Other current examples are the EU process to develop criteria for Endocrine Disrupting Chemicals, as well as the implementation of the authorisation part of the REACH regulation, comments Theresa Kjell, ChemSec Policy Advisor.
The lessons presented in the report point towards three main problems with industry’s response to proposed green regulations: the cost models used are too static and limited, the cost reductions when complying with several regulations at the same time are ignored and the benefits of adapting are underestimated.