8.6 Challenges to the successful implementation of the IPP

Integrated Product Policy

The IPP constitutes an ambitious undertaking of the European Commission. Its development so far proves that attempts to make it more ‘radical’ have already met opposition from some stakeholders, who were able to mobilize themselves and to exert significant influence on its current form. If the IPP were to follow the implications presented in this volume, the opposition of business-oriented stakeholders would become even stronger, precisely demonstrating the need for a paradigm shift. The opposition could come from many mainstream econo­mists, from the business sector and from the bodies responsible for international trade liberalization.

Probably the most important challenge results from the fact that there may be many stakeholders (within the EU and outside its borders) who will oppose the IPP, especially if it entails restrictions on consumption of any kind. This relates to the general problem that the state of the environment is not incorporated into the widely accepted indicators of levels of economic development. In general, any economy-environment tradeoffs are influenced by how we measure the state of an economy. If, for this purpose, we do not incorporate indicators related to sustainable development, the problem will persist. These close links between economic, political and environmental factors may contribute to reducing the decision-making power of the European Commission’s DG XI and the European Parliament, which may be willing to support the IPP in its more stringent form (section 2.5). As already demonstrated by the reduction of the objectives of the packaging waste directive, the final shape of the document is usually far less stringent than its first draft prepared by the DG XI, as other stakeholders add their changes (see p. 205). Instead, if the fact that economic development and also the quality of human life depends on the state of the ecosystem is acknow­ledged, then the IPP can ‘spread its wings’.

Second, the development of the IPP may be hindered by the opposition of producers fearing that excessive interference by policy makers with product life­cycles could make the whole product development process more demanding in terms of time and financial costs. In the situation of market competition, they may also be reluctant to share some sensitive information about their production processes with their competitors, consumers and even with policy makers.

The third important challenge relates to the scope of the IPP that extends well beyond the geographical dimension of the EU, thus also exposing it to poten­tially far wider criticism and opposition. For example, the life-cycle approach is particularly contentious from the point of view of the international trade regime, because it deals with issues related to seemingly distant environmental impacts. In the case of imported products, these include those effects that arise during the production and extraction of raw materials, potentially in another part of the world than where consumption takes place. Nevertheless, as long as the regula­tory instruments are proportional to the environmental objectives that they are set to achieve, and as long as a government is able to prove that they do not aim at restricting international trade (meaning that they do not discriminate between foreign and national products), they are, in principle, allowed by the WTO regu­lations. Indeed, the IPP does not foresee otherwise.

However, due to the WTO principle of evaluating the similarity of products from the demand side, regardless of how they were produced, the international trade rules have indeed been found to affect the opportunities for individual countries to deal with the environmental impacts of products throughout their life-cycles (for example, Young 2001). Thus, the issue of product standards based on LCA has to be given more attention in the ‘trade and the environment’ debate and in the WTO negotiations. Moreover, the international trade rules restrict the use of the precautionary principle (as discussed in subsection 3.5.2), mainly because as yet they have not acknowledged our ignorance of economy-environment interactions. Regulatory and mandatory information instruments are most highly restricted by the WTO rules, while economic and voluntary instruments (voluntary information and voluntary agreements) are less restricted. The IPP should not be used to restrict international trade, but again, this is not the reason for which it was conceived.

The above challenges would become less significant, had the paradigm shifts introduced in subsection 8.4.1 taken place.