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Congress Wants to Copy Some of the EU’s Worst Food Rules. That’s a Bad Idea

There is simply no argument in favor of copying EU food regulations.

Legislation looming in the US Congress could emulate European food standards by copying European agricultural regulation. PACTA (Protect America’s Children from Toxic Pesticides Act), legislation sponsored by Senators Elizabeth Warren, Cory Booker, and Bernie Sanders would outlaw any pesticide that is illegal in either European Union member states, the European Union itself, or Canada.

To many Americans, Europe represents the epitome of culinary civilization, and it’s true that Italian standards for pasta, French standard for bread, and Spanish standards for seafood often far outrank what the average restaurant will serve in the United States. But with that said, we shouldn’t confuse the presence of prime cooking schools in France with a better food market. Europe’s increasing hostility towards crop protection in the form of pesticides is not going to do itself any favors.

A cornerstone of the EU’s continuous ambitions to revamp its food regulation is the “Farm to Fork Strategy,” known as F2F. This strategy, which is part of the “European Green Deal,” is a roadmap for a set of package bills set to hit the EU’s legislature in the coming years. Two of its cornerstone proposals are a reduction of pesticides by 50 percent by 2030, and increasing organic food production to 25 percent by 2030 (it is currently at about 8 percent).

The European Commission has yet to release an impact assessment on what the Farm to Fork strategy would mean for farmers and consumers. Despite repeated calls from EU parliamentarians, it has been unable to provide hard numbers backing up the political argument that these environmental reforms would also be good economically. Thankfully, the US Department of Agriculture (USDA) did its own study. In fact, when the USDA made an impact assessment, it found that, if implemented, F2F would result in a 12 percent reduction in agricultural production in Europe and increase the prices of consumer goods by 17 percent in the EU, by 5 percent in the US, and by 9 percent worldwide.

In addition, the USDA also found that in the adoption scenario, trade flows would be reduced, and that Europe’s GDP would decline significantly as result of the increase in food commodity prices (Europe’s GDP decline would represent 76 percent of the overall global GDP decline as a result of F2F).

Developing nations would also be hard hit. Because as a result of these stringent food rules, the EU would implement protectionist measures.

“By 2030, the number of food-insecure people in the case of EU-only adoption would increase by an additional 22 million more than projected without the EC’s proposed Strategies,” USDA concluded.

You could ask why it all matters, since Europeans do pay less for food that apparently is also cooked better. It is true that grocery shopping in Germany can be quite eye-opening to Americans—a pound of wild-caught smoked salmon costs anywhere between $10 and $20 in America (or more), while in Germany those prices vary between $2 and $10. Most of that is because the United States does not shower its farmers and fishers with the same lavish farm subsidies that Europe does. While the US also subsidies farmers, research shows that Europe “out-subsidises” the States by a long shot. So while supermarket prices are lower for consumers, it’s the tax returns of Europeans that tell the real story. In countries such as Belgium, effective income tax rates (with social security) are upwards of 50 percent. In fact, single Belgian workers are the highest taxed in the entire OECD, and they are closely followed by those in Germany and France, both nearing the 50 percent mark. And this doesn’t even go into detail of how the European Union uses its farm subsidies to undercut producers in developing markets and, as the New York Times put it, how oligarchs milk these millions of farm subsidies for their own benefit.

Reducing pesticides by political decree rather than through innovative technology is a non-scientific approach. If the argument of the European Union were that with modern farm equipment, such as smart-sprays, the amount of pesticides could be reduced because farmers are able to make their use more efficient, then that would be a forward-thinking approach. Instead, the 50 percent reduction target looks good on a poster, but has little to do with evidence-based policy making. After all: if the existing 100 percent are bad for human health, why only restrict 50 percent, and not the entirety of all these substances?

Incidentally that is what the EU did on a large scale with neonicotinoids, by banning certain ones for farming use. Neonicotinoids, or neonics, are insecticides that are essential for farmers not to lose a significant amount of their crops each season. In December last year, the French parliament voted for a three year suspension of the ban on neonics, because sugar beet farmers were risking going completely out of business over crop losses. The bans exist in Europe because neonics have been accused of harming pollinators.

The “Bee-pocalypse” in the early 2000s was blamed first on GMOs, then subsequently on neonics when the GMO argument was quickly found to be false. But neonics also aren’t at fault. Bee colony reductions and disappearances occur naturally and periodically throughout history. In fact, there were sporadic bee colony declines all throughout (recorded) history, namely the 19th and 20th century, before neonics were first introduced in 1985. In fact, not only are bees not affected by neonics, they aren’t even declining.

As the Washington Post reported in two separate articles in 2015—”Call Off the Bee-pocalypse: U.S. Honeybee Colonies Hit a 20-Year High” and “Believe It of Not, the Bees Are Doing Just Fine,” the hysteria of global bee declines are simply inaccurate. You can even do this for yourself: visit the UN’s Food and Agricultural Organization’s (FAO) website, select “beehives” in the visualised data section, and click on any country or region you like. Most countries and regions have a steady upwards trend in the prevalence of bees. In the United States, the bee population is actually set to double in the coming years compared to the 1960s level.

So why lie about it? Why is it such a prevalent narrative that GMOs (or any given pesticide of the day) kill the bees? The argument is politically convenient, but not scientifically sound. In Europe, the enemies of modern agriculture have a view of the world that does not match the society of comfort and availability. The EU’s Green Deal Commissioner Frans Timmermans bemoaned in May last year (mind you this is at the height of the first COVID-19 lockdown) that “we’ve gotten used to food being too cheap.”

He didn’t mean that agriculture subsidies were out of proportion, but rather that being able to buy meat or fish on any given day and for low prices were problematic in nature. For a man paid $30,000 a month for his Commission job, while Romanian consumers paid upwards of 20 percent of their income on food, that’s the definition of tone-deaf.

In the United States, availability and competition are key. Also, while Europe’s dreams of a world where nature politely sends no insects to eat our crops, no mold to befall food stocks, and where no other natural conditions could endanger food security, the United States has always enabled scientific innovation. Case in point, the US is far ahead on developing genetic engineering, while Europe lags behind.

There is simply no argument in favor of copying EU food regulations.

Originally published here

An EU Carbon Tariff Is Policy Mischief

A carbon adjustment would be bad news for consumers…

In November of 2020, the European Roundtable on Climate Change and Sustainable Development accepted a paper on the concept of carbon border adjustments, otherwise known as carbon tariffs. It is now widely understood that the EU is seriously considering implementing a new regime of carbon tariffs as part of its overall climate strategy. 

Simply put, carbon tariffs would be taxes on goods from countries that do not meet the EU’s  level of environmental protection. Their main purpose is to avoid “carbon leakage,” in which companies move to countries that don’t impose costs on carbon.

The problem with this, first and foremost, is that tariffs are taxes paid for by domestic consumers, which means the end result is European consumers footing the bill via higher prices on international goods. At a time when all of Europe is eyeing the end of the pandemic, and the worrisome economic recovery that will follow, a price inflating carbon adjustment would be troublesome to say the least.

Supporters of this policy will argue that a border adjustment will have the positives of encouraging high emission exporters to clean up their act, and benefit European industry in the process. The thought process is that if foreign goods become more expensive, EU goods will become comparatively cheaper.

On getting high emission countries to meet European climate standards, it is naive to assume that the developing world can meet such benchmarks. As many in the development policy arena have rightly pointed out, the developed world propelled itself to its current status by first focusing on growth, which is what now allows Europe the luxury of enacting policies to protect the environment. Because of that, I’m hard pressed to see the developing world have the capacity, in the short-medium term, to create the infrastructure necessary to meet EU standards.

This means that the adjustment just serves as a tool to tilt the scales toward domestic industry. While that shift may seem positive to some, the Trump Administration’s tariffs give us a real life case study on why this is immensely negative. While the reasons for these tariffs were populist in nature, the lessons hold true for tariffs pushed forward for other policy goals.

Looking at the impact on washing machines, Trump’s tariffs increased the tariff on these goods to 20% on the first 1.2 million units imported, and to 50% for all units imported after that amount. The result was a 12% increase in the price of imported washing machines, and dryers, which despite not being taxed are often sold in pairs. Unfortunately, consumers were also faced with higher prices for domestic washing machines, largely because domestic producers were able to increase their prices as their competitor’s prices increased. For consumers, the end result of this policy was a price increase of around $88 per unit, which totaled to a total price inflation of $1.56 billion, generating $82.2 million in tariff revenue.

Now, supporters of tariffs might argue, as Trump did, that even though consumers were paying more for imported goods, and ironically domestic goods as well, the policy had the positive effect of emboldening domestic industry and creating jobs. This is actually true, the policy did create manufacturing jobs in the United States, approximately 1800 new positions. The problem is that those jobs came with an enormous cost for US consumers, so much so that American consumers paid $811,000 in higher prices per job created. This doesn’t even remotely come close to passing a cost benefit analysis.

We don’t know what the rate of the carbon adjustment would be, although it is likely that, per WTO rules, it would have to match whatever domestic rates of carbon taxation are. If the carbon tariff were to match, lets say, France’s domestic carbon tax of €44.81 per tonne of carbon emissions, the impact of a carbon adjustment would be significant. Take the figures from Trump’s washing machine fiasco, and apply those lessons to all products imported to Europe from high emission countries, and the bill consumers will have to shoulder is nothing short of astronomical.

Originally published here.

Is Now The Time For A War On Plastic?

On Wednesday, the international consumer advocacy group Consumer Choice Center released a policy paper detailing the war on plastic, federal and state efforts at mitigating plastic waste, and potential legislative steps to better protect our environment.

In Deconstructing The War On Plastic the authors evaluate the issue of plastic waste in the United States including that of single-use plastics and alternatives and examine if legislative efforts to curb plastic waste will ultimately better serve the environment.

“In our report we highlight how local or state bans on plastic products often come with high negative environmental externalities,” said co-author Yaël Ossowski. “These bans ultimately push consumers to high-impact alternatives, and don’t necessarily reduce the total amount of plastic used by consumers. Rather than trying to ban their way out of this problem, we propose that state and local governments better collaborate to expand advanced recycling,” said Ossowski, also deputy director at the Consumer Choice Center.

“At the federal level, the combination of the Break Free From Plastic Pollution Act and the CLEAN Future Act will make tackling plastic waste significantly more difficult. Both acts seek to put a moratorium on permits for advanced recycling facilities. This incredibly problematic because it hamstrings recycling efforts, which limits the nation’s ability to properly recycle plastic waste,” said co-author David Clement, North American Affairs Manager at CCC.

“Not only that, but the acts also seek to create a recycled content mandate for plastic products. Creating demand for recycled plastic, while at the same time limiting the capacity of plastic recycling facilities, is a recipe for disaster; specifically, one where demand for recycled plastic rapidly outpaces supply, which will drastically increase prices,” added Clement.

The authors propose a 4-step solution for the issue of plastic waste:

1) A ban on the export of plastic waste to countries that fail to meet environmental stewardship standards.

2) The expansion of advanced recycling and chemical depolymerization permits.

3) Embrace innovation and market solutions. There are a variety of new biodegradable plastics being brought to market, and those market solutions should be permitted to continue to develop.

4) Evaluate market mechanisms to price waste accordingly, so that externalities of mismanaged waste are not offloaded onto communities. We propose a full review of how the US can effectively price waste, in consultation with both consumers and producers.

Originally published here.

Europe Shouldn’t Follow Congress’ War on Plastic

Europe should steer clear of these heavy handed, and counterproductive initiatives…

At the Federal level in the United States, Congress has declared a war on plastics, specifically with the Break Free From Plastic Pollution Act and the CLEAN Future Act. Their goal is to ultimately reduce the amount of plastic waste that the US produces, which would in turn result in lower rates of mismanaged plastic ending up in the environment. On its face, the goals of congress are noble, but their policy prescriptions are incredibly misguided. It would be disastrous for Europeans if the EU followed America’s lead and replicated either of these Acts.

Replicating the CLEAN Future Act or the Break Free From Plastic Pollution Act would be a disaster for Europe for two main reasons.

The first is that Congress is attempting to enact a moratorium on permits for plastic manufacturing facilities. The purpose of this is to stop the expansion of this industry, which in theory protects the environment from the emissions associated with production. But this fails to recognize that there are legitimate and environmentally conscious reasons to choose plastic over competing products. Take, for example, the shipment of baby food. Baby food in plastic containers, as opposed to glass alternatives, generates 33% feweremissions because of the energy required in the production of plastic and its lighter weight in transportation. Although this is just one niche example, this same principle could be applied to a near-infinite number of plastics.

Beyond questions on sustainability and competing products, the moratorium reeks of regulatory capture. For those unfamiliar, regulatory capture is when new laws are passed that insulate an existing industry from future competition, allowing them to solidify its market share. The bill’s moratorium on plastic facilities shields the existing industry from competition, and ensures that more environmentally conscious competitors are kept out of the market entirely. This is important for both those who oppose cronyism and corporate welfare, and those who want better environmental policies, especially because there are new almost entirely biodegradable plastic products coming to market. Preventing permits for innovators benefits the existing industry at the expense of consumers and the environment.

On top of a moratorium on plastic manufacturing, the Acts also seek to implement a moratorium on advanced recycling permits and chemical depolymerization. Through chemical depolymerization, all plastic can be either recycled, repurposed, or converted. Chemical depolymerization is the process of breaking down plastics, altering their bonds, and repurposing them into other products. There are countless examples of why this technology is key to dealing with mismanaged plastics, with innovators turning problematic plastic into everything from resin pelletsroadwaystiles for your home, and high strength graphene. If the US wants to tackle plastic waste, the federal government can’t at the same time limit advanced recycling capacity. By capping recycling facilities, these bills prevent the scalability of recycling efforts, which creates a giant hurdle for dealing with plastic waste. The goal of legislation should be to make recycling more affordable, which is only possible through more competition. 

To make matters worse, these Acts also create a recycled content mandate. This type of mandate has its pros and cons, but it is disastrous if it is enforced alongside a permit cap on advanced recycling.

Creating a recycled content mandate will drastically increase, by decree, the demand for

recycled plastic. In fact, the BFFPP Act, if followed through with the CLEAN Future Act,

would mandate upwards of 25% recycled content in plastic bottles by 2025, and 80% by 2040.

The issue here is that these mandates will limit the capacity of advanced recyclers to meet that demand. If there is a significant uptick in the demand for recycled plastic, and advanced recycling is not allowed to scale up to meet demand, we could see a situation where demand rapidly outpaces supply, which will only serve to drive prices upwards. Those inflated costs will mostly be shouldered by consumers, who will have those costs passed on to them in the form of higher prices. This trend is exactly what was seen in other countries who passed bio-ethanol mandates, which had the negative effect of significantly increasing prices for the crops used in the creation of ethanol. 

Europe should steer clear of these heavy handed, and counterproductive initiatives. Rather than doubling down on restrictions, Europe should embrace innovation and advanced recycling, which both enhances consumer choice and protects the environment. 

Originally published here.

The lasting effects of the Diesel controversy

Emissions and costs of this debate have been weigh on consumers…

I was recently reminded of the effects of the long-lasting Diesel controversy on a trip to the Netherlands. The city centre of Amsterdam is a restricted traffic zone for certain types of engines, for the purpose of protecting air quality. The website of the city government says:

“City traffic is a major polluter of the air. Amsterdam therefore has environmental zones that keep the most polluting passenger cars, trucks, company cars, taxis, buses and mopeds and mopeds out of the city. With the environmental zone we want to improve the air quality in the city. In municipalities with an environmental zone you may encounter a yellow or green environmental zone. Amsterdam has a green environmental zone.”

Most diesel engines have since been barred from entering the city centre, under the threat of hefty fines for their users. For years, the city has refused to be polluted by cars. This anti-conformist left-wing municipality, traditionally run by the Labour Party and its green allies, managed to reduce traffic by 25% in the 1990s. This was despite the fact that road traffic increased by 60% elsewhere in the country during the same decade.

In March, a set of member states consisting of Austria, Belgium, Greece, Ireland, Lithuania, Luxembourg and Malta, and led by Denmark and the Netherlands, called on the EU to propose tougher emissions standards, in order to set phase-out dates for both petrol and diesel cars.

This contradicts the premise of free choices for consumers. Individual cities in Germany have also decided to implement similar bans; a third of Germans drive diesel cars. Are they supposed to sell their vehicles within the coming months? Or worse, should they move out of these two cities? What sense does it make to have a major continental country become a Swiss cheese of diesel no-go zones, in which both residents and visitors will have to count in major bypasses when they travel through the country?

On top of the consumer choice question, governments do not seem to link the question of CO2 emissions. Diesel emits more of those. A petrol engine ignites its petrol-air mixture by means of a spark plug. Diesel, on the other hand, manages without such external ignition. Highly compressed air heats the diesel fuel, which means that the energy in the fuel can be better utilised. As a result, fuel consumption and CO2 emissions are reduced. On average, diesel emits up to 15 percent less CO2 than petrol, even though it has a higher carbon content.

As for the argument on pollution affecting the health of residents, former President of the German Pneumology Society, Doctor Dieter Köhler, contradicts these activists and sees only a minor health-endangering role in particulate matter and nitrogen oxides. Many studies, he says, misinterpreted findings, and the costs of outlawing diesel vehicles would stand in no proportionate relationship to health hazards.

As mentioned above, some countries are calling for or have already set a phase-out date for fossil-fuel powered cars. Those dates vary, sometimes it’s 2035, sometimes it’s 2040. This poses a set of questions. In 2040, if we are still in need of cars running on fossil fuels, the ban would be disastrous and is unlikely to be implemented, or if we don’t need them anymore by that time the legislation would be obsolete. The pretense, however, that it is the role of the government to choose winners and losers in the innovation of a free market, is ridiculous.

We have to realise that when environmentalist activists say “ban diesel”, their actual aim in the long-run is to ban all vehicles running on fossil fuels, regardless of the economic and social consequences that this has.

Consumers deserve the right to choose their own cars, running on the petrol of their choice.

Originally published here.

‘Break Free’ Bill Will Do More Harm Than Good to the Environment

Everyone knows that plastic waste is a problem, and America’s record on recycling isn’t great. Less than 9% of all plastic waste is recycled, which unfortunately means that the bulk of that waste is left to sit in landfills taking decades to decompose, or worse, dumped into the environment. Plastic waste is a serious problem, but two new pieces of legislation focus on harming plastic production, not addressing plastic waste.

The Break Free From Plastic Pollution Act has been reintroduced in the House and Senate, deals more with trying to end the production of plastics, not address plastic waste through recycling investments. Unfortunately, as written, the bill will do for more harm than good, both from a consumer perspective and for the environment. 

Break Free seeks to implement a moratorium on permits for all new plastic manufacturing. The purpose of this is to stop the expansion of this industry, which in theory protects the environment from the emissions associated with production. But this fails to recognize that there are legitimate, necessary and environmentally conscious reasons to choose plastic over competing products. Take, for example, the shipment of baby food. Baby food in plastic containers, as opposed to glass alternatives, generates 33% fewer emissions because of the energy required in the production of plastic and its lighter weight in transportation. Although this is just one niche example, this same principle could be applied to a near infinite number of plastic, especially in food packaging.

The recent Texas freeze, as reported by the Wall Street Journal, exposed significant gaps in the supply chain for plastics. As a result of plant closures in response to the freeze, major auto manufacturers were forced to halt production due to a lack of plastic parts, building companies faced record shortages for adhesives and siding, and PVC piping companies failed to meet their contractual obligations with buyers. A moratorium on new plants mandates that this vulnerable supply chain remain intact in its current and mismanaged state, removing any chance at correction.

Like Break Free, the recently introduced CLEAN Future Act includes not only a moratorium on new plastic production, but a moratorium on permits for advanced recycling facilities. Advanced recycling allows for all plastic, yes all plastic, to be either recycled, repurposed, or converted into other products. There are countless examples of why this technology is key to dealing with mismanaged plastics, with innovators turning problematic plastic into everything from resin pelletsroadwaystiles for your home, and high strength graphene. If the United States wants to tackle plastic waste, the federal government can’t, at the same time, limit advanced recycling capacity. By capping recycling facilities, the bill prevents the scalability of recycling efforts, which creates a giant hurdle for dealing with plastic waste. 

A cap on facilities plus a cap on advanced recycling is even more problematic when you consider that both pieces of legislation aim to create a recycled content standard, which will mandate that plastic products be made with a certain percentage of recycled plastic. This type of mandate has its pros and cons, but it is disastrous if it is enforced alongside permit caps that limit recycling.

Originally published here.

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