Better Regulation for Better Results?
Is the EU’s regulatory reform agenda putting environmental standards at risk?
The Politics of Regulatory Reform
Over recent years, political concerns about the costs of regulation to business have risen to prominence, with accusations that rules such as those protecting rare species and habitats are placing “ridiculous costs” on businesses and the wider economy.
In the UK, the government has embarked on an ambitious deregulatory drive via its commitment to cutting the cost of regulation to business by £10 billion over the course of the current parliament. In addition, as one of the most vocal advocates for so-called “better regulation” amongst EU member states, the UK successfully secured commitment to a similar target-based approach at EU level as part of the deal it negotiated back in February regarding its continued relationship within the EU.
Although that deal will not now take effect (following the Brexit vote), this does not necessarily mean that there will be a reduced focus on this issue at EU level. Indeed, the European Commission has recently affirmed its own commitment to assessing the “feasibility” of establishing targets for the “reduction of burdens” under its REFIT programme, contrary to previous assurances that its better regulation agenda was not simply deregulation in disguise.
Better regulation is not about "more" or "less" EU legislation...[it] is about making sure we actually deliver on the ambitious policy goals we have set ourselves. – European Commission (2015)
So which is it...better regulation or deregulation? Environmental regulations play a key role in safeguarding nature and the wider environment, correcting market failures so as to ensure that the costs of environmental destruction and degradation are borne by those responsible and that nature is protected in the public interest. In principle, there is nothing wrong with seeking to minimise any unnecessary regulatory costs associated with achieving the objectives of existing legislation. However, there are genuine concerns that the current approach to regulatory reform lacks balance and could undermine existing standards of protection given its narrow focus on cutting short-term costs to business.
Assessing the Fitness of the Birds and Habitats Directives
In this context, the ‘fitness check’ of the Birds and Habitats Directives – the EU’s flagship nature laws – represents a key test case when it comes to judging if better regulation really does mean better results in practice.
Triggered by political lobbying around the supposed “burden” that they impose on certain sectors of the economy, the ‘fitness check’ of the Birds and Habitats Directives did not get off to a good start. In theory, this new type of policy evaluation is supposed to be an objective and evidence-based assessment of whether the legislative framework in a particular area is “fit for purpose” and delivering against its objectives. However, serious concerns surfaced back in November 2014 when the outcome was seemingly pre-empted by President Juncker in his mission letter to the new Environment Commissioner.
I would like you to focus on...continuing to overhaul the existing environmental legislative framework...and assess the potential for merging them [the Birds and Habitats Directives] into a more modern piece of legislation. – Jean-Claude Juncker (2014)
Thankfully, and in line with the European Commission’s Better Regulation Guidelines, the consultants tasked with actually conducting the formal evaluation of these laws have produced what amounts to an extremely comprehensive and evidence-based assessment of their performance, concluding that they work well where properly implemented. Indeed, the evidence shows that they play a vital role in underpinning effective nature conservation and delivering sustainable development in harmony with nature, without imposing significant unnecessary “burdens” on business. The evidence is clear both that the overall socio-economic and environmental benefits substantially outweigh the costs and that where problems exist the solutions lie in properly implementing these laws rather than weakening them.
Words of Warning from the UK
A comparable review of the implementation of the Birds and Habitats Directives in England was conducted in 2011. However, despite reaching broadly similar conclusions regarding the importance of improved implementation, follow-on action has fallen well-short of what is required.
More broadly, a recent audit of the UK government’s arbitrary target-based approach to regulatory reform as a whole has voiced serious concerns regarding its lack of a robust evidence-base and failure to properly account for the wider social and environmental impacts. Unsurprisingly, this means that many departments and regulators are now facing trade-offs between deregulating on the one hand and achieving their wider public policy objectives on the other hand.
What next for the EU?
While there have been many claims regarding the “burden” of environmental legislation over recent years, few have been informed by robust evidence. Given the urgency of the environmental crisis that we face, it seems strange that there should be such a major political focus on seeking to reform areas of legislation that are largely working well, are strongly supported by EU citizens, and account for a relatively small % of the regulatory costs associated with EU legislation as a whole.
As set out in the Environment Action Programme to 2020, EU regulation plays an essential role in delivering the objective of a “smart, sustainable, and inclusive” economy, and is vital to tackling major challenges such as climate change and biodiversity loss.
As we await the European Commission’s formal response to the findings of the ‘fitness check’ later this year, perhaps this represents a good opportunity for First Vice-President Timmermans to demonstrate that his “better regulation for better results” mantra is more than just empty rhetoric.