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Democratic Debates: Healthcare in the US is twice as expensive as in Europe – But is this really due to high drug prices?

Watching the #DemDebate in Iowa was an interesting lesson on how something becomes true if enough politicians repeat the same twisted fact over and over again. 

Once all candidates had agreed that Iran having a nuclear bomb would be a problem, the debate shifted towards healthcare reform and the fact that the U.S. is the world leader in healthcare spending as a share of GDP (whooping 17.7% of GDP compared to a typical 8-12% when looking at countries such as the UK, France, Canada, Switzerland, or Germany).

Hedge-Fund-Manager-turned politician Tom Steyer opened by saying that the US spends twice as much per person on healthcare than any other developed nation and that’s why we need a stronger role of the government in healthcare. Steyer forgets to mention that the United States is already the global leader in government healthcare spending:

According to the World Health Organization at least 49% of all healthcare expenditure in the United States is paid by the government (state and federal). That gets you close to 9% of the US GDP and is more than public and private health spending in the United Kingdom combined. 

This should make all of us skeptical and get us to question whether a bigger role of government in healthcare spending would actually bring costs down.

Vermont Sen. Bernie Sanders talked about “greed and corruption of pharmaceutical companies“ and lambasted them as the main reason for high health expenditures in the United States. And while it is true that the US is the largest market for drug sales, they account (including retail and inpatient use) for merely 14% of total health expenditures.

Simple math shows us that even if Bernie Sanders becomes POTUS and brings all drug prices down to $0.00, the US’ healthcare spending would still equal 15% of its GDP, and still it a world leader in healthcare spending. All of this while effectively killing any new medical innovations in the country.

These 2-2.5 percentage points in savings could (according to PWC) also be realized by cutting through red tape and the billing madness of the US health system(s). An unknown but significant amount of efficiency gains could be realized by opening up insurance markets nationwide and giving patients in every state more choice when it comes to their insurer.

High salaries for medical professionals (doctors and nurses) are definitely the elephant in the room that political campaigners don’t touch. Even purchase power adjusted medical professionals make easily twice as much as in other (very) developed countries. By opening up the US medical labor market to more immigration, mutual recognition of medical degrees and training, the US could counter ever-rising salaries for professionals. More competition among medical and nursing schools could also tackle student debt of medical professionals.

While merely 0.3 percentage points could be directly saved by reforming medical malpractice laws, a much bigger amount could be saved by doctors reducing their fear of lawsuits. So-called defensive medicine is the behavior of doctors that are worried about getting sued by patients. Some studies estimate that over-prescribing and over-treatments can make up a quarter of total health costs in the United States. While I think that that number is too high, even if it’s just 5% of total health expenditure, we would be able to shave off another percentage point getting us closer to the Switzerlands of the world.

In short: The Democratic candidates don’t have to worry: The US is already the global leader in government health spending per citizen. If they really want to bring total spending down, they should advocate for legal (liability) reform, opening up the medical and nursing job markets to more immigration, and more choice and competition in the insurance market. Nationalizing all pharmaceutical companies and handing out drugs for free won’t do the trick.

In your face: Planes are getting more efficient but passenger taxes drive airlines out of business

Range increases of new jetliners

The UK government has apparently just saved the regional carrier Flybe from bankruptcy by delaying over a hundred million pounds of passenger departure tax payments to the UK government and suggesting to lower this tax altogether in the future. Saving a local airline causes these days an outcry not because of government interventionism but the general anti-flying segment also known as flight shaming. Unfortunately the UK government did not move away from their plan to increase the APD for long haul flights by April 1st. 

Let’s look at what’s currently happening in the industry when it comes to long haul flights: Following aviation news regularly one can observe a real arms race in the last couple of years on which airline currently holds the record on the world’s longest flight. 

Just a few years ago Qatar Airways was the record holder with their Doha-Auckland flight on the newly delivered Airbus A350. 

Now Singapore to New York ranks as the world’s longest flight (and yes, there are different geeky ways to determine what “long” means but no need to dig into this here). 

Now one can just label these new ultra long haul routes as PR stunts of airlines or the manifestation of big egos of airline executives. But the actual marvel behind this is that flights are getting more and more efficient. This allows airlines to schedule longer flights and spare passengers hours of layovers at random airports on the way home. 

And while thousands of private jets will descend into Switzerland for some collective flight shaming at the World Economic Forum in Davos, it is important to point out that flying is getting more efficient. Consumers have more and more choices and additional direct flights allow them to travel faster.  

Those demanding less flying and higher taxation on flights are neglecting the fact of ongoing efficiency gains in the aviation industry and at the same time de-democratize flying by making it less affordable for the average consumer. 

Conventional jetliners becoming more fuel efficient is an ongoing development and does not need any policy input as it is in the intrinsic interest of airlines to offer more competitive routes and ticket prices. 

The next step would be to allow a regulatory framework for supersonic passenger flights. We wrote a paper on this last year. 

Why Amazon’s investment in Deliveroo could be good news for consumers

In May 2019 the global e-commerce powerhouse Amazon invested roughly 500 million USD in the British food delivery service Deliveroo leading to a 16% equity stake in that company. The British competition watchdog Competition and Markets Authority (CMA) issued a statement asking both companies for concessions (usually agreeing to sell off some businesses or leave some markets to reduce market shares) in order to see the deal green-lighted. While the battle for leadership in the global ready-to-eat meal delivery market has been on for years, Amazon’s (re-)entry in this market might be excellent news for consumers.

Right now Deliveroo is mainly active in European markets (though it left one of its main markets, Germany, earlier this year due to labor disputes) and currently expands into Asian countries. It competes with similar companies such as UberEats or Delivery Hero. As an early adopter of such services I have tried most of them in various European cities. One common weakness of their offering can be seen in their predominating business attitude of focussing more on acquiring and keeping more restaurants on their platform instead of servicing their (ordering end-) customers.

Some of the poor customer experience can be seen in the lack of standardized (or non leaking) packaging and usually little to no help in case of missing items, cold food, or massive delays. Customer service usually tells you that they are merely the broker and are not liable for the restaurants faults. And while the platforms usually refund you for missing food, this is usually not what you want when you are very hungry on a Friday evening and need to rush to the movies (such a situation and a no-show of my pizza was when I deleted Deliveroo from my phone).

Amazon tried restaurants once before and failed in the UK market. They might have been too early or were not able to get sufficient market shares quickly enough. Their new and very pricey attempt to get back into the European ready-to-eat meal delivery should be applauded by consumers:

Amazon is one of the most customer-centric companies out there. The consumer is usually always right and Amazon is there to make it right. Amazon’s grocery service Fresh is a great example on how to constantly provide customer service on a high level.

That consumer focus is currently lacking in the food delivery sector. A strategic investment in food delivery companies with combined know how transfer and keeping the importance of the end user in mind could really bring food deliveries to the next level. Great for everyone who does not have time to cook a meal every evening!

Apparently the CMA sees this differently. The BBC reports:

But, on Friday, the regulator said Amazon had failed to deal with "initial concerns that their investment in Deliveroo could be bad for customers, restaurants and grocers".
The CMA is worried that Amazon's plans to invest in Deliveroo could stop it from launching a rival company, which would increase competition and potentially lower prices for consumers.

If competition watchdogs now stop any attempt of horizontal integration of companies because they are worried that this would stop the creation of new companies we would open the floodgates of antitrust litigation.

“There are relatively few players in these markets, so we’re concerned that Amazon having this kind of influence over Deliveroo could dampen the emerging competition between the two businesses.”

CMA executive director Andrea Gomes da Silva

Let’s also keep in mind that the meal delivery market is losing hundreds of millions a year in the UK alone. The CMA stopping consolidation of the market will also prevent this sector to turn profitable in the near future – and that could jeopardize the success of this entire industry in Europe.

Source: https://www.statista.com/statistics/760546/deliveroo-income-loss/

I really hope that the CMA will listen to consumers that actually use food delivery services and don’t just stick to the old antitrust textbook of an analogue world or the pressure from brick and mortar retailers who might have missed the train of going digital and convenient. A dash of Amazon’s customer-centricity might make me reinstall Deliveroo and use it for good.

For the New Year: Some Fresh Thoughts on How to Tackle High Drug Prices

Some thoughts for 2020 what we need to do in order to tackle high drug prices.

Germany’s Uber ban is bad for consumers and the environment

Today a court in Frankfurt effectively banned Uber in all of Germany. The company Taxi Deutschland, a licensed taxi app, went to court arguing that Uber requires a license. The court agreed with Taxi Deutschland’s interpretation of the legal situation.

For the last couple of years, Uber was able to operate in Germany by working with subcontractors that complied with the German rental car and chauffeur services regulations. That law also mandates the driver to drive back to a dispatching station after every single ride. This is of course not just expensive but also terrible for the environment and just adds additional cars to already congested roads. The plaintiff was able to prove that many Uber drivers do not drive back empty to their dispatching station but keep picking up passengers. While this is good news for the environment, roads, and passengers, it is bad legal news for Uber. Policy makers should realize that this is an outdated regulation and update it according to the realities of many consumers preferring Ubers to licensed taxis.

Uber entered the German market in 2013 and for the last six years politicians kept complaining about Uber not being fully compliant with German laws. Updating these outdated, anti-competitive, and unecological laws did somehow not happen. Instead of legislative changes we see the old-school taxi lobby pushing their special interest successfully through German courts.

The court in Frankfurt also questions whether Uber is merely a platform connecting drivers with passengers or actually the provider of the ride. A spokesperson of the court said that consumers are not aware of Uber being merely a platform. One can only assume that the judges have never used an Uber as to everyone who was in an Uber and had a conversation with their driver it is pretty obvious that the drivers and independent contractors and not employees of Uber.

No one is forced to use an Uber!

In the heated debate about whether ride hailing services such as Uber or Lyft should be banned many people suggest that they aren’t safe as the drivers are not licensed taxi drivers. And while there are definitely black sheep among Uber drivers one can at least be assured to be GPS-tracked during the entire ride and one can give feedback to Uber about bad behavior. More important is that the dimension of choice does not appear in the debate at all: No one is forced to use an Uber. So those who dislike Uber should just not use their services and keep walking, cycling, or taking a cash-only overpriced and smelling Taxi. But those who prefer to use the Ubers of the world should be allowed to choose as well.

Fighting for consumer choice since Summer 2014

I was probably one of the first Uber customers when they started in Berlin. I just loved that I didn’t need to have cash on me and usually spent 30% less than in a yellow cab. When in Summer 2014 taxi drivers all over Europe went on a symbolic strike against the new competition from Uber, two friends of mine and I took an Uber (and paid it out of our own pockets) to the taxi manifestation in front of the olympic stadium in Berlin. We countered the 1,000 taxi drivers protesting by endorsing competition and made some headlines that day.

On the other side you can clearly see that some taxi drivers weren’t happy at all about consumers fighting for their right to choose. Just look at this very angry driver:

The fact that there were literally no consumer groups that stood up for customers like us who wanted to be able to choose between Uber and taxis was one of the reasons why we went on and several years later started the Consumer Choice Center.

There are many outdated regulations that don’t reflect consumer preferences and just serve special interests. In cases like Uber bans this is not just bad for consumer choice but also for the environment and traffic. 

My big appeal to German politicians is to update legislation and create a solid framework in which innovative companies such as Uber and Lyft can compete with legacy industries such as licensed taxis. Or as we say in German: Macht die Bahn frei für Wahlfreiheit im Taximarkt!


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at 
consumerchoicecenter.org

Tort lawyer tries to extort $200 million, gets burned

We’ve written before that there is a significant problem with bogus lawsuits and unscrupulous tort lawyers in our country. That’s why we launched time4legalreform.org, to track many of these cases.

Often, large tort legal firms will put advertising to rack up plaintiffs for class-action lawsuits against companies who’ve been accused of some wrongdoing, either rightly or wrongly.

Sometimes, there is collusion between plaintiffs’ attorneys and scientific authorities who conjure up “expert” testimony to use in court. We covered that in our video on IARC, the International Agency for Research on Cancer.

This week, a startling arrest has once again proven that we need legal reform in this country.

In an action filed on Monday, a Virginia-based attorney is accused of trying to extort a global chemical company out of $200 million, claiming he’ll tarnish their reputation, cause a “40% stock loss” and start a monumental “public relations nightmare”.

It is alleged that attorney Timothy Litzenburg “approached a global company in October and threatened to make public statements claiming that it had significant civil liability for manufacturing a supposedly dangerous chemical used in Monsanto’s Roundup weedkiller,” according to Law360.

He was arrested by authorities for attempted extortion and interstate threats, presumably against Bayer (Monsanto’s parent company), who he is pursuing in many court actions. His firm represented the plaintiff who won a $289 million verdict against Monsanto in August 2018, a verdict that was later reduced to $78 million.

This case is similar to that of Michael Avenatti, the one-time Trump foe who was arrested and charged for attempting to extort Nike out of over $20 million. He has since been charged with fraud as well, accused of embezzling even more millions from his clients.

Glyphosate, the chemical compound in Roundup, has repeatedly been proven in hundreds of studies to not be carcinogenic, including the FDA. But that hasn’t stopped lawyers from weaponizing to the court system to overturn science.

Litzenburg is, of course, innocent until proven guilty, but if the allegations are true, it’s just another case that proves our legal system is being used and abused. That’s why we need #legalreform now.

We can’t afford to continue to allow bogus lawsuits and unscrupulous lawyers to completely change public policy and public opinions on science.

As Predicted, California’s Gig Economy Labor Rules Are Already Backfiring

California unions protest for passage of AB5, to make all contractors and freelancers employees.

Back in September, the state of California passed AB5, the law requiring all companies using contract workers in the state to treat them as employees.

Labor activists and unions were insistent that this law was necessary to provide security and stability to the thousands of contractors and gig economy workers throughout the state.

At the time, we warned it would be very harmful both for consumers and contractors. Our comments were featured in a Mashable article, as well as hosted on our website. Now, it seems it panned out, unfortunately.

Because of the stricter regulations on companies based in the state, various media outlets have announced they would be laying off thousands of freelance and contract workers they can no longer afford to employ.

Specifically, Vox Media, who called the law a “victory for workers everywhere“, announced it was parting ways with all of its California-based freelancers.

The layoffs are, of course, unfortunate. No one supports large and systematic firings, and certainly not in the news media, a vital industry to our democracy. But the economic trends in journalism have been negative for several years.

However, at the same time, it’s important to note that these kinds of laws, those that seem the most well-intentioned, actually end up having very detrimental effects.

That’s a lesson for practically every piece of legislation, and why we will continue to be active at the Consumer Choice Center. Laws have consequences that are very real and impact people’s lives.

Let’s hope California can clean up its act and allow freelancers and contractors to make a living without too much interference.

A Personal Note: All I want for Christmas is not being shamed for flying!

2019 is coming to an end and by December 31st I will have been on 81 flights and 274 hours in total this year. The 210,493 kilometers I have flown in 2019 does not include one helicopter ride I took after an avalanche looked me in a valley. I would have probably also circumnavigated the earth more than 5.25 times if the Eurostar wouldn’t be such an excellent connection with the Eurostar on my 15+ trips from London to Brussels.

And while many of my frequent flyer friends would chuckle about the fact ‘that I didn’t even hit the 100 flights a year’, many concerned environmentalists think that we should stop flying at all and the few private trips my statistic include were unnecessary. 

So should I be ashamed of flying?

Looking at the facts might be a better way to navigate one through the flight shaming debate than just parroting the claims and allegations of environmental activists.

If you care about the environment better fly!

Flying has actually overtaken car rides nearly 20 years ago as the more fuel (and hence carbon-) efficient means of transportation. Michael Sivak of the University of Michigan Transportation Research Institute calculated that driving in 2010 was even about twice as energy-intensive as flying commercially. 

Comparing train rides to flights, trains will look often much better than flying. However this also depends always on where the electricity of the train is coming from (or if the train is even Diesel-fueled). Wired writes:

“It also makes a big difference whether the train is diesel-powered or electric, and – if it’s the latter – how that electricity is generated. In France, for instance, where a lot of energy comes from nuclear power and trains are mostly electric, travelling by train is greener than in the UK, which has delayed electrification plans indefinitely – although even a journey by diesel train still produces 84 per cent less carbon than flying. 

More than half of the emissions related to rail come from infrastructure activities such as building stations, laying tracks, lightning stations and powering escalators. Of course, that’s not enough to bring train emissions close to those of passenger flights, but it’s something to bear in mind when high-speed rail is touted as a greener alternative. If the routes don’t already exist, there will be a carbon cost to building them – and the rise of electric cars may change the equation further.”

If you want to feel good that you take the train you first might want to check if it’s fueled by a carbon neutral energy source such as nuclear energy. Hence the likelihood to feel environmentally conscious is higher when you take a TGV through the nuclear nation of France than an electric train or diesel train through Germany where 50% of the energy generation comes from fossil fuels and similar CO2 emitters (coal, gas, oil).

Andre Gocavles writes on youMatter.world about how flying is more economical and better for the environment than taking the car. He also spends a good amount of time criticizing the average numbers shown by the European Environment Agency (EEA) that are usually quoted to show how bad flying is for the environment. The EEA uses very high load factors for cars, does discount the change these cars get stuck in traffic or use air conditioning. At the same time they take below industry-average load factors for planes to put them in a (apparently politically motivated) worse light than cars. At the same time evidence tells you another story:

“In the end, a journey by plane is often environmentally better than one by car for long journeys. All other things being alike, choosing the plane increases the occupancy rate of the planes – which will take-off anyway whether you are in it or not. Doing it also reduces traffic congestion and, therefore, optimizes the overall transportation networks. Most times, if you’re carrying less than 4 people in your car, choosing the plane will give you a lower CO2 footprint. And the longer the distance, the more this logic is true. Why? Because a plane’s CO2 emissions are higher during the take-off and landing phases. So the longer the flight is, more kilometers or miles the plane will have to soften the impact of these 2 phases.”

A lot of the comparison numbers do not take into account the CO2 footprint of actually building train tracks and maintaining them. Poor occupancy rates of trains are also not mentioned.

And if you still feel bad about your (relatively low) carbon footprint caused by flying you might want to follow some of the policy suggestions offered by Reason Foundation’s Bob Poole

  • Massive Forest Restoration: A number of recent papers in peer-reviewed journals have found that there is room, on land areas adjacent to existing forests, for huge amounts of carbon-absorbing trees to be planted. A widely noted paper in Science by Jean-Francois Bastin and others estimates that reforesting 2.2 billion acres of such land could absorb 205 gigatonnes of carbon. There are a number of other scientific papers along these lines and an overview article in Scientific American.

Agricultural Land Restoration: Bloomberg News reported that for an estimated $300 billion, about 2 billion acres of worn-out farmland could be restored to productive use, sequestering carbon in the process. It cited research by the UN Food & Agriculture Organization and others. The Wall Street Journal discussed a start-up company, Indigo Ag Inc., that is setting up a market for carbon credits based on this idea.

Planes have become at least 4 times more carbon efficient compared to where they were in the 1970’s. The rise of low cost carriers have brought more narrow setups of seats on planes and occupancy rates of 90% and above due to better route planning. So the next time you hear an environmentalist complaining about flying being too cheap, feel free to respond that especially those who made flying cheaper also helped to bring down its per passenger carbon footprint. These developments are highly encouraging and also a faster improvement than with any other technology. Flight shaming and ban of this great way of transportation would kill innovation that could make flying even less noisy and less polluting. 

With that I wish you all very Happy Holidays and a good start into 2020.


Fred Roeder
Managing Director
Consumer Choice Center


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at 
consumerchoicecenter.org

Open Letter on Climate Change

Open Letter on Climate Change:

Dear Executive Vice-President Timmermans, 

On behalf of the Consumer Choice Center, the consumer advocacy group representing and empowering consumers in the EU and globally, I would like to congratulate you on your appointment. We wholeheartedly share your determination to find the most sustainable and consumer-friendly solution to the climate change dilemma and hope our perspective on the matter would be valuable.

While we welcome your ambition to reduce carbon emissions in Europe by 2050, we also believe that every policy should also be considered through the lens of consumer choice and affordability. The world, as we know it now, wouldn’t be possible if innovation was prevented from running its course and making our lives longer, safer and more prosperous. 

All too often the unlimited potential of innovation to help solve the issue of climate change is dismissed to the detriment of European consumers. Being able to freely choose between a train ride and a flight, or between gene-modified and organic foods is crucial. Well-intended policies tend to fall prey to popular rhetoric turning a blind eye to alternative solutions. The entrepreneurial spirit is an essential part of our European culture, and it’s about time we channeled it into the global fight against climate change.

We should stay united, sensible and considerate in our efforts to tackle climate change. Whereas taxes and bans might seem like good solutions, their direct and tangible impact on consumers and their ability to choose cannot be ignored.

We believe that the key issues the European policymakers should take into account centre around food supply, mobility and energy.

Embracing innovation in agriculture, mobility and energy sectors is a great way to combat climate change.

Agriculture

Agriculture

With the world’s population expected to reach almost ten billion by 2050, and innately limited natural resources facing new environmental challenges, the situation can hardly be regarded as positive. If we look beyond popular solutions, we will find that there are many more ways to approach the issue. Innovation in agriculture is one of them. 

Organic farming is appealing because it’s “natural” and is, therefore, associated with higher food safety, but it can potentially do more harm than good if we choose to stick to it. In 2017, researchers at the Research Institute of Organic Agriculture in Switzerland estimated that if the world chose to fully convert to organic agriculture, we would need between 16 and 81% more land to feed the planet. The overreliance on limited natural resources, as in the case of organic farming, is significantly more dangerous than taxes. 

The European Union has traditionally objected to most innovations in food science and prevented European consumers from accessing biologically-enhanced food. This can be seen in the very limited number of genetically modified crops authorised for cultivation in the EU, and a very cumbersome and expensive process of importing genetically modified food and a recent European Court of Justice ruling against gene editing.

However, there is no substantial scientific evidence of the health and environmental risks ascribed to GM products. With the help of gene engineering, we would be able to decrease our dependence on natural resources and minimise the use of fertilisers and pesticides. Creating drought and heat-tolerant crops would ensure we don’t need to deforest wild areas to free up more land for agricultural purposes.

In order to unleash the potential of gene modification and help it mitigate the environmental challenges we have to face, it is also essential that the EU creates fair and equitable conditions for GMO-free and GM foods.

Under the existing EU legislation, all food which contains greater than 0.9% of approved GMOs must be labeled as such. No such rule exists with regards to foods that are 100% GMO-free, proving that there is explicit discrimination in place giving GMO-free food an unfair advantage on the market. 

Gene modification should excite us as it would allow us to address the issue of climate change in a smart way. 

Our recommendations:

  • Reassess the existing EU regulations on the grounds of potential gains and benefits for the consumer rather than simply based on popularised threats not based in fact.
  • Ensure fair and equitable market conditions for GM and GM-free foods.
Airbus

Mobility

Recently, nine EU finance ministers called for a European aviation tax as a means to cut emissions from flying. Similar schemes, such as a 7-euro EU-wide flight tax, have been suggested in the past, but haven’t had any political success mainly due to the opposition from countries such as Malta, Cyprus and Latvia, Poland, Hungary, Ireland, and Croatia due to the fact that they are hugely dependent on tourism.

Every tax imposed on airlines ends up hurting consumers without solving the climate change dilemma, especially in the long run.

The liberalisation of air travel within Europe and the emergence of low cost carriers and massive competition within the airline industry have allowed millions of European to use planes for either leisure or economic activities.

Economic migrants and commuters from Eastern Europe can visit their families more often and more cities are connected to the rest of the continent. Assuming that European taxes would move more of these travel patterns to rail neglects the realities of European rail networks and actual distances to travel. Passengers flying from Bucharest to Brussels will hardly be able to use buses or trains for this journey.

Saving the environment is as important to airlines as it to each and every one of us. The aviation industry has been making consistent efforts to use less fuel. Giving innovative technologies such as new materials and fuel saving engines a chance doesn’t usually come to mind as a possible solution, while its potential to help us cut the emissions would actually have a significant impact. For example, Airbus’ new A321XLR. has 30% less kerosene consumption per passenger, while adding 30% more range than the currently used A321neo. 

Our recommendation:

  • Do not impose additional taxes on airlines at the expense of European consumers and let innovation take its course.
  • Do not discriminate against existing and well-established technologies such as the internal combustion engine. Technology neutrality has to be maintained in both, type of engine and mode of transportation.
European Council

Energy

There is a wide agreement between policymakers, activists and the public that reducing carbon emissions is key to fighting climate change. Taxing polluters tops the list of the most popular solutions. We, as a consumer group, are concerned that as long as there is no viable and affordable alternative, additional taxation of carbon would only hurt consumers. All carbon taxes are usually passed on to the consumer and thus should be avoided.

As the debate on how to decarbonise Europe carries on, it is about time the discourse stopped turning its back on the astounding advantages of nuclear energy. Aside from being fully carbon-free, nuclear is also one of the safest energy sources. It also keeps the air clean contributing to the overall wellbeing. Between 1995 and 2016, the US could have emitted 14,000 million metric tons of carbon dioxide more without nuclear. 

Popular scepticism surrounding nuclear isn’t backed up scientifically. Multiple studies concluded that the risks of accidents in nuclear plants are low and have been declining. 

Embracing nuclear power will help us address climate change in a sustainable and consumer-friendly fashion. France and Sweden, who now emit less than a tenth of the world average of carbon dioxide per kilowatt-hour, are prime examples of decarbonisation through nuclear. They achieved this by recognising and embracing nuclear power. Opting for nuclear has made France and Sweden “greener” and led to a decrease in the price of electricity. On the other hand, Germany and Denmark, with their over reliance on renewable energy, have the highest energy prices in Europe.

European policymakers ought to provide a framework in which innovation and new technologies can make consumers’ lives easier and more affordable. In order to achieve this, the Commission should embrace technology neutrality instead of trying to predict what technologies would prevail in the future and favouring some above the rest. Effective energy market policies do not pretend to have all the answers: they create fair and equitable market conditions that let consumers and innovators coordinate in the marketplace and achieve their desired goals. 

For the sake of consumer choice and future innovation, European policymakers need to strictly adhere to technology neutrality and not pick winners of contests that are still ahead of us.

Our recommendations:

  • Recognise and embrace the possibilities to reduce carbon emissions by nuclear power.
  • Stay technology neutral and create a fair and equitable environment in which innovators can continue to innovate and compete on the same terms; do not pick winners and losers ahead of time.
  • Do not burden consumers with new taxes on energy.

Throughout history, innovation has always been the key driver of human progress and ever expanding prosperity. Innovation can become the best solution to the climate change issue too.

We are hopeful that European policymakers will choose to embrace the entrepreneurial spirit instead of taking the path of bans and other restrictions. The beauty of consumer-driven innovation is that it comes naturally through the marketplace. Consumers value their ability to choose and creating market conditions under which they are able to switch to more environment-friendly options is crucial.

Fighting climate change might seem like an uphill battle and preserving consumer choice and affordability on this journey is extremely challenging. The EU can become a global pioneer of innovation in agriculture, mobility and energy sectors if we stay united, sensible and considerate in the face of climate change. 

We would be delighted to elaborate further on the suggested policy recommendations.

Sincerely,

Fred Roeder
Managing Director
Consumer Choice Center

Creative Solutions for more Consumer Choice

Tbilisi, Georgia mandates all taxis to be white – Activists respond with free-market education on wheels!

In October 2019 the Georgian capital Tbilisi introduced tighter rules defining taxi services in the city. The formerly very open and competitive system got replaced by mandating taxis to be painted in white if they want to pick up passengers on the street. The new law also obliges taxis to be left-hand drive vehicles. In a relatively poor country like Georgia, most cars are imported used cars and come from both countries with left and right traffic. Both measures are adding costs to taxi drivers and ultimately to consumers.

Political activist and leader of the Girchi Party, Zurab Japaridze came up with an innovative solution to bypass these new regulations. He and his party set up a company called Shmaxi offering unemployed taxi drivers to drive passengers while educating them about the benefits of freedom. Passengers will not pay for the distance traveled but the length of their educational session. The drivers can either conduct the session themselves or play an audiobook in the car. Part of the educational canon are books and essays by Nobel Laureate Milton Friedman. 

Japaridze told JAM News: “The company will hire driver/educators who will convey ideas about freedom to passengers and talk to them about right and wrong. If the drivers lack the necessary knowledge, we will conduct training sessions and provide video materials that the passengers can listen to.”

This educational services on wheels allow Tbilisi’s consumers to pick between the newly regulated taxi services and the usually cheaper and more fun Shmaxi. Over 500 drivers have also signed up to drive Shmaxis around town.

Campaigner Mariam Ivanidze told me that “Some Shmaxi drivers say they earn more through our company than they could through the major taxi ones”. Shmaxi is not only a political but also a commercial success.

Shmaxi started operating in the Georgian city of Kutais as welli in order to warn local regulators not to repeat the devastating taxi regulations of Tbilisi.

This is a creative and wonderful win for consumer choice and could inspire advocates for competition in the taxi markets around the world. 

Now I am wondering if I should launch Shmaxi London as a response to the recent decision by Transport for London to take away Uber’s license… Listen to Thatcher’s biography while driving from Mayfair to London Heathrow Airport would be an entertaining way of killing the time stuck in traffic.


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