In an article published on September 24, 2019, non-governmental organization CHEM Trust announced the publication of a new report titled “Discounting future damage? Do socio-economic assessments in EU chemicals policy underplay future impacts?” The report analyzes how socioeconomic assessments are used to support regulatory decision making on industrial chemicals under the REACH law in the EU. It specifically focuses on (i) reviewing how discounting is used within such assessments to calculate future costs of health and environmental impacts and (ii) how comprehensively health costs were considered within a set of 12 previous restriction proposals and 21 authorization applications. The report explains that “the choice of discount rate, and how it is used is not just a dry academic exercise, but is laden with implicit moral decisions and value judgement about the importance of future impacts relative to current costs.” Review of the previous socioeconomic assessments found that “where impacts were uncertain, or there was not sufficient evidence, there was no attempt to quantify impacts. This was particularly the case with uncertain health and environmental impacts. These impacts are typically those that occur the furthest in the future. If more attempts were made to include such uncertain effects in analyses, the discount rate would matter even more.”
The report recommends policy makers to consider use of the precautionary principle regardless of economic effects. It also questions whether or not health and environmental impacts should even be monetized at all. “Ensuring that non-economic effects such as health, are not converted into a monetary value, would mean that the trade-offs are clear, and would create less of a bias against consideration of effects that are more uncertain and harder to quantify.”
CHEM Trust director Michael Warhurst commented on the report’s findings saying “this report shows that there are major holes and inconsistencies in the way health and environmental impacts are costed in socioeconomic assessments within REACH. It is not acceptable – and is against the precautionary principle – for more complex or uncertain impacts to just be ignored.” He went to recommend that “it is time to focus on substituting the most hazardous groups of chemicals, rather than continuing with complex and misleading attempts to monetize health and environmental impacts.”
Read More
Michael Warhurst (September 24, 2019). “Regulating chemicals: is putting a price on health impacts unrealistic and misleading?” CHEM Trust
Luke Buxton (September 26, 2019). “NGO report identifies ‘major holes’ in REACH socioeconomic assessments” Chemical Watch
Reference
Sarah Arnold (September 2019). “Discounting future damage? Do socio-economic assessments in EU chemicals policy underplay future impacts?” New Economics Foundation (pdf)
