Costs and Benefits of REACH
The costs and benefits of REACH have been intensely debated ever since REACH was first proposed, with industry tending to claim much higher costs than any other party.
When the REACH proposal was published in 2003, it included an “extended impact assessment." This assessment estimated that REACH would cost the EU chemical industry around 2.3 billion over 11 years, with a maximum total cost on industry of 5.2 billion, with health benefits of at least 50 billion.
The Commission's figures contrasted with studies from industry, in particular two studies, one done by Arthur D Little (ADL) for the German Industry Association (BDI), and the other done by Mercer consulting in France, both of which claimed that REACH would create a huge financial impact, knocking several percent off GDP growth. The industry studies were, however, soon criticized by other economists in a number of reports by the German Environment Agency UBA, the German Advisory Council for the Environment and the Science Policy Research Unit in the UK.
Meanwhile, a few studies were investigating the benefits of REACH, including a WWF-EEB discussion paper “A new chemicals policy in Europe new opportunities for industry,” a study on health benefits of REACH commissioned by WWF from the Environmental Economist David Pearce, and a study on REACH and innovation commissioned by WWF from the Science Policy Research Unit in the UK.
At the end of 2004, the impact assessment debate began to quiet down. In October 2004, The Nordic Council published an impact assessment of REACH which calculated that the changes in costs as a result of REACH will not be significant when compared with other variable business costs such as oil price and exchange rates. This study also heavily criticizes the ADL and Mercer studies, stating that they are “implausible..., based on numerous errors and exaggerations.”
Later on in October, the Dutch Presidency of the EU held a three day workshop on impact assessment for Council experts, with the conclusions emphasizing the importance of moving on from the impact assessment debate, and focusing instead on ensuring workability. As part of the preparation for this workshop they published a summary report of 36 impact assessments.
However, another impact assessment process was already underway at this point, a study funded by CEFIC and UNECE, examining REACH impacts on supply chains, commissioned from the consultants KPMG. The final report was published in April 2005 along with a Commission note; this study did not, however, provide evidence to back the immense impacts that industry had been predicting. The environmental NGOs WWF and EEB issued a joint statement, emphasizing that the study found that “The cost impacts on the individual companies remain moderate, even under the assumption of worst case effects.”; CEFIC's statement, in contrast, emphasizes the changes in REACH that they consider are necessary to minimize its impacts.
A meeting of Competitiveness Council (EU Industry Ministers) in June 2005 concluded that sufficient work had been done on the impact assessment of REACH, and the priority was to move forward with the political process of finalizing REACH.
The European Commission's Enterprise Commissioner, Gόnter Verheugen, has since said in an interview that "the figures used in the past were to say the least a little bit exaggerated. In terms of costs, REACH is not ‘that monstrum’ as it was described."
WWF and the European Environment Bureau have since published an analysis of the impact assessment of REACH.
 |
