Monday 29 September 2014

Germany Vs Housewives: Does the EU know best?

By Frankie Lampl

Far from being a fringe support industry, procurement finds itself at the heart of the EU debate; for example when a directive on the carbon footprint of Vacuum Cleaners becomes the hot news story of Germany vs Housewives. Tensions have run high with the Daily Mail warning us that the EU are coming for our hairdryers and lawn mowers next, while Dyson have not missed the golden opportunity to promote their brand by accusing Germany of influencing the legislation to favour their own archaic and undemocratic non-bagless technology.

How far should remote political bodies (be they in Westminster or Brussels) be weighing in on our purchasing choices?

Let’s look at two opposing examples of the impact of top-down climate policies.

1. Bad policy: Diesel cars.

That large sector of society who tether their car purchasing behaviour to road tax have found themselves feeling ‘betrayed and misled’ that a tax break on diesel cars is being removed. Far from being the meddling EU attacking our British privileges as advertised, this is in fact a key example of how the notion of ‘public good’ is complex and only as good as the evidence that it is based on. Diesel cars were subsidised as they produce less CO2 and are more fuel efficient, however our very own DECC subsequently discovered that, whilst better for the environment, they are vastly more harmful to health, with Diesel particulates causing some 30,000 deaths per year and costing the NHS an estimated 10 times the health-bill of petrol-related illnesses. The problem then comes with trying to make a centralised rule for a complex and chaotic model – since diesel is only worse where there are people to inhale it, surely the optimal solution is to have a city diesel tax, and a countryside petrol tax. In fact, whilst on the subject, either tax is ridiculous, and the fairer and more effective method would be the Vacuum Cleaner route of coercing manufacturers into innovating.

2. Good policy: CFCs

It is a fairly well-worn story, but the regulation and phasing out of CFCs saving the OZone layer is a good one. From the end of WWII, chlorofluorocarbons were developed for use in refrigeration and solvents. In the early 1970s research was published suggesting that these gases were depleting the Ozone layer. A Multilateral Environmental Agreement was agreed by 196 states in 1985 to phase out the use of CFCs, and it worked. So here, finally, was a top-down policy implemented by politicians that more or less saved the planet.

It appears that the key to the success, failure, or fundamental righteousness of these schemes lies in the robustness of the data supporting them, and the comprehensive logic used to interpret it. Before a law is made by the EU, it has to go through an exhaustive (and expensive) process of consultation and impact-assessment. Compared with the free market it also gives an accountable body to which to bring counter-arguments and alternative theories, and one which is not exposed to the level of risk or the requirement for unswerving growth of individual companies.

So from a procurement perspective, is the EU getting the balance right? The final argument in their favour is that the majority of EU procurement directives are targeted towards ensuring free competition and the very freedom of choice that is taken away by restrictions on electrical household goods. So what is the overall effect of being part of the EU? Does the very distance allow a level of objectivity and fight the inherent bias of a close-knit community, or does it only provide directives that are out of touch, inconvenient and ineffective?

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