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The Choice of Regulatory Instruments for a Circular Economy

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Environmental Law and Economics

Part of the book series: Economic Analysis of Law in European Legal Scholarship ((EALELS,volume 4))

Abstract

Traditionally, our economy is based on a linear model: from extraction, production and consumption to final disposal. This model is based on the unlimited use of natural resources and endless possibility of growth. But this model is reaching its limits as the negative impacts it imposes on the environment are threatening human survival. This chapter discusses an alternative economic model: the circular economy. Contrary to the linear model that requires unlimited exploitation of natural resources, a circular economy is based on a continuous re-use of materials and products. In order to attain these goals, there needs to be a shift of paradigm that requires the adoption of clever and fitting legislation. Looking at three main approaches to environmental regulation – command-and-control , market-based and information – this chapter examines their interpretation in European law. The Ecodesign Directive, the concept of Extended Producer Responsibility used in waste legislation and the Energy labelling Directive provide interesting examples of how the law can lead to changing the economic model towards a sustainable one. This chapter studies the benefits and limits of those particular regulatory approaches to achieving the goals of the circular economy.

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Notes

  1. 1.

    Le Moigne 2014, p. 38.

  2. 2.

    GUA 2000, p. 10.

  3. 3.

    Pearce and Turner 1990, p. 39.

  4. 4.

    Wacker and Blank 1999 (Table 1 includes some changes by the author).

  5. 5.

    Pearce and Turner 1990, p. 37.

  6. 6.

    Pearce and Turner 1990, p. 37.

  7. 7.

    E.g. lead, cadmium, beryllium, or brominated flame retardants.

  8. 8.

    McDonough and Braungart 2002, p. 27.

  9. 9.

    See Georgesçu-Roegen 1971; see also Pearce and Turner 1990, p.38.

  10. 10.

    This may be because they substances are altered by the recycling process or they have been mixed with other materials in a way that makes their removal impossible.

  11. 11.

    Pearce and Turner 1990, p. 39.

  12. 12.

    Pearce and Turner 1990, p. 41.

  13. 13.

    Andersen 2007, p. 135.

  14. 14.

    The life cycle of a product is typically covering raw material extraction, design and manufacturing, packaging and distribution, use and maintenance, and finally end-of-life aspects, such as recycling or disposal.

  15. 15.

    European Commission 2015b.

  16. 16.

    Source: Website of the French Ministry of Environment, Energy and the Sea, http://www.developpement-durable.gouv.fr/L-economie-circulaire,45,403.html (last accessed 09.05.2016). Translation by the author.

  17. 17.

    Article 69 of the Law No. 2015–992 of 17 August 2015 relative to the energy transition for the green growth.

  18. 18.

    Stahel 1984 (the paper received the Mitchell Prizes in 1982 and was published in 1984).

  19. 19.

    McDonough and Braungart 2002, pp. 105–110.

  20. 20.

    WHO/UNEP 2013.

  21. 21.

    McDonough and Braungart 2002, pp. 104–105.

  22. 22.

    See e.g. Ellen Mac Arthur Foundation 2015, p. 19.

  23. 23.

    Montel-Dumont 2010, p. 3.

  24. 24.

    Field and Field 2013, p. 4.

  25. 25.

    Field and Field 2013, p. 4.

  26. 26.

    For a good account of the environmental damage caused under the former USSR, see Peterson 1993.

  27. 27.

    In 2015, China was by far the largest emitter of CO2 worldwide, with 30% of global emissions, followed by 15% for the United States. See Olivier, J.G.J. et al. 2015.

  28. 28.

    Field and Field 2013, p. 5.

  29. 29.

    Ibid.

  30. 30.

    Ibid.

  31. 31.

    Gruber 2011, p. 3 and p. 123.

  32. 32.

    Baliga and Maskin 2003, p. 307.

  33. 33.

    Mankiw and Taylor 2011, pp. 198–199.

  34. 34.

    Feldman and Serrano 2006, p. 143.

  35. 35.

    Kotchen 2013, p. 278.

  36. 36.

    Kotchen 2013, p. 278.

  37. 37.

    Baliga and Maskin 2003, p. 307.

  38. 38.

    Coasian policy analysis, however, may be useful, as it entails a comparative institutional approach, where the relative costs of each instrument and institution involved should be taken into account to minimise total costs of solving the social problem.

  39. 39.

    Tietenberg 1998, p. 587.

  40. 40.

    Field 1994, p. 206.

  41. 41.

    Field and Field 2013, p. 206.

  42. 42.

    Barry and Martha Field use the term ‘technology’ standards instead of ‘specification’. I think that the latter is more broad and hence gives better account of the variety of measures it refers to.

  43. 43.

    Faure 2012, p. 240.

  44. 44.

    Faure 2012, pp. 240–241.

  45. 45.

    Field and Field 2013, p. 208.

  46. 46.

    Field and Field 2013, p. 209.

  47. 47.

    See e.g. Orts 1995, 781; see also Sunstein 1990.

  48. 48.

    Hereafter “Ecodesign Directive”.

  49. 49.

    See in particular Article 15 Ecodesign Directive.

  50. 50.

    Article 3 Ecodesign Directive. According to Article 2 (4 and 5), “‘placing on the market’ means making a product available for the first time on the Community market with a view to its distribution or use within the Community, whether for reward or free of charge and irrespective of the selling technique; [and] ‘putting into service’ means the first use of a product for its intended purpose by an end-user in the Community”.

  51. 51.

    See document published on the website of the Commission’s DG Energy: https://ec.europa.eu/energy/sites/ener/files/documents/list_of_ecodesign_measures.pdf (last accessed 09.05.2016).

  52. 52.

    European Commission Regulation No 813/2013.

  53. 53.

    European Commission Regulation No 814/2013.

  54. 54.

    Porter and van der Linde 1995, p. 99.

  55. 55.

    See e.g. European Commission 2003.

  56. 56.

    Annex II Ecodesign Directive.

  57. 57.

    Bergquista et al. 2013.

  58. 58.

    Gruber 2011, p. 140.

  59. 59.

    Baumol and Oates 1971, p. 44.

  60. 60.

    Annex II Ecodesign Directive.

  61. 61.

    Article 15 (4)(a) and (b) Ecodesign Directive.

  62. 62.

    See Preamble (17) and Annex II(1) Ecodesign Directive.

  63. 63.

    See e.g. Annexes I, II and III Commission Regulation No. 813/2013.

  64. 64.

    Article 15(4)(d) Ecodesign Directive.

  65. 65.

    Article 18 Ecodesign Directive.

  66. 66.

    Field and Field 2013, p. 220.

  67. 67.

    Jönbrin and Melin 2008, 52. Moreover, in 2012, big home appliance producers called on the Commission to increase the regulation of products through ecodesign requirements. See Joint Statement by Philips, Electrolux, Bosch and Siemens, and the Coolproducts Coalition, 21 June 2012, retrieved from http://www.coolproducts.eu/resources/documents/Joint-statement.pdf (last accessed 09.05.2016).

  68. 68.

    Article 17 Ecodesign Directive.

  69. 69.

    Pallemaerts et al. 2006, p. 106.

  70. 70.

    On the legitimacy of the coregulation process, see Verbruggen 2009.

  71. 71.

    European Commission 2002.

  72. 72.

    Tojo 2005, pp. 32–33.

  73. 73.

    Palmer, Oates and Portney 1995, p. 122.

  74. 74.

    Field and Field 2013, pp. 221–222.

  75. 75.

    Field and Field 2013, p. 223.

  76. 76.

    Vatn 2005, p. 396.

  77. 77.

    Tyler 2006.

  78. 78.

    See e.g. Tenbrunsel and Messick 1999; and Fehr et al. 1997.

  79. 79.

    Article 3(1) Ecodesign Directive.

  80. 80.

    See e.g. Krivošík and Attali 2014.

  81. 81.

    Field and Field 2013, p. 226.

  82. 82.

    Montel-Dumont 2010, p. 4.

  83. 83.

    Directive 2008/98/EC (hereafter WFD).

  84. 84.

    Directive 2012/19/EU (hereafter WEEE Directive).

  85. 85.

    Article 8(1) WFD.

  86. 86.

    Article 14(4) WEEE Directive.

  87. 87.

    Article 15(1) WEEE Directive.

  88. 88.

    Swaney 1992, p. 627 et seq.

  89. 89.

    European Commission DG Environment 2014, p. 29.

  90. 90.

    For instance, the battery of the iPhone is sealed, which makes it difficult to remove for repair or recycling. Apples argues that the choice of an enclosed battery is for aesthetical purposes (the iPhone chassis has no gaps), to make the equipment as thin and light as possible, and to reduce the chances of moist and dirt getting inside. See notably patent of the ‘Integrated embedded battery’ US 20110292598 A1 filed by Apple Inc.

  91. 91.

    Field and Field 2013, p. 230.

  92. 92.

    The marginal damage is the additional damage caused by an additional unit of emission.

  93. 93.

    Field and Field 2013, p. 231.

  94. 94.

    Baumol and Oates 1971, p. 44.

  95. 95.

    Swaney 1992, p. 629.

  96. 96.

    Kalimo et al. 2012.

  97. 97.

    Tietenberg 1998.

  98. 98.

    France adopted a law in 2014 to require that such information be made available to consumers.

  99. 99.

    Tojo 2004, p. 6.

  100. 100.

    Directive 2010/30/EU (hereafter Energy labelling Directive).

  101. 101.

    The Energy labelling Directive defines the term ‘supplier’ as “the manufacturer or its authorised representative in the Union or the importer” of products (Article 2(h)).

  102. 102.

    5 Energy labelling Directive.

  103. 103.

    See notably the contribution of Renate Schubert in this volume. See also EcoWatch publication from 18 May 2018 “10 Big Announcements Big Business Made to Meet Consumer Demand for Green Products”, retrieved from http://ecowatch.com/2015/05/18/big-business-green-products/ (last accessed 09.05.2016).

  104. 104.

    Tietenberg 1998, p. 591 et seq.

  105. 105.

    Cohen and Santhakumar 2007, p. 599.

  106. 106.

    Tietenberg 1998, p. 600.

  107. 107.

    Tietenberg 1998, p. 600.

  108. 108.

    European Commission 2015a.

  109. 109.

    European Commission 2015b, Chapter 1.

  110. 110.

    Article 4 WEEE Directive.

  111. 111.

    See e.g. Recital 12 of the WEEE Directive: “The establishment, by this Directive, of producer responsibility is one of the means of encouraging design and production of EEE which take into full account and facilitate its repair, possible upgrading, re-use, disassembly and recycling.”

  112. 112.

    Article 1(1) Energy labelling Directive states that it “establishes a framework for the harmonisation of national measures on end-user information, […] thereby allowing end-users to choose more efficient products.”

  113. 113.

    Recitals 7 and 13 Ecodesign Directive.

  114. 114.

    Article 2(23) Ecodesign Directive.

  115. 115.

    See e.g. Commission Regulation No 666/2013, which notably contains rules related to functions such as noise, dust pick up capacity, motor operational lifetime, and the durability of the hose.

  116. 116.

    Article 15(4)(a) Ecodesign Directive.

  117. 117.

    Article 15(5) Ecodesign Directive.

  118. 118.

    Field and Field 2013, p. 241.

  119. 119.

    Ambec et al. 2013, pp. 8–11.

  120. 120.

    Porter and van der Linde 1995, pp. 99–100.

  121. 121.

    Article 2(23) Ecodesign Directive reads: “Ecodesign means the integration of environmental aspects into product design with the aim of improving the environmental performance of the product throughout its whole life cycle” (emphasis added).

  122. 122.

    Article 10(4)(d) Energy labelling Directive.

  123. 123.

    European Commission DG Environment 2014, p. 23.

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  1. Department of Public and International Law, University of Oslo, NO-0130 Oslo, St. Olavs plass, P.O. 6706, Oslo, Norway

    Eléonore Maitre-Ekern

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    Klaus Mathis

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    Bruce R. Huber

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Maitre-Ekern, E. (2017). The Choice of Regulatory Instruments for a Circular Economy. In: Mathis, K., Huber, B. (eds) Environmental Law and Economics. Economic Analysis of Law in European Legal Scholarship, vol 4. Springer, Cham. https://doi.org/10.1007/978-3-319-50932-7_12

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