EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 16.7.2008 
SEC(2008) 2111 
  
COMMISSION STAFF WORKING DOCUMENT 
accompanying the  
 
COMMUNICATION FROM THE CO MMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMI TTEE OF THE REGIONS 
 
on the Sustainable Consumption and Produc tion and Sustainable Industrial Policy 
Action Plan 
  
SUMMARY OF THE IMPACT ASSESSMENT  
{COM(2008) 397 final} 
{SEC(2008) 2110} 
 
EN 2   EN This impact assessment report accompani es the Proposal for a Communication on a 
Sustainable Consumption and Production and Sust ainable Industrial Policy Action Plan. This 
Action Plan is the overarching element of a package of meas ures that will also include 
concrete legislative proposals. This impact a ssessment focuses on a proposal for an extended 
Integrated Package, which could improve the environmental performance of the European 
Union through the promotion of production and consumption of environmentally better 
performing products. 
The IA identifies several market failures that EU policy currently already addresses or where 
there could be a need for some  form of public intervention: 
• Environmental externalities resulting from prices not reflecting the negative 
environmental impacts of the production or consumption of products, 
• Information asymmetries due to high transaction costs for consumers to obtain 
relevant information on product characte ristics that influence environmental 
performance, 
• Bounded rationality meaning that even well informed consumers do not always 
act rationally in the sense of taking a long term view when  making purchasing 
decision, 
• Principal agent problems as a result of  a misalignment of incentives between 
economic actors , 
• And negative effects of thes e market failures on innovation.  
In addition there are what can be described as regulatory failures as, for example, some 
Member States' actions in the area of procurem ent or incentives can fr agment the internal 
market for products. 
Although there are already policies in place on greenhouse gas emissions, air and water 
quality, waste, product policy, en ergy efficiency, etc. that a ddress these market failures, 
several problems remain. The analysis shows th at some environmental externalities could be 
avoided without incurring additional costs.  More important however is evidence that 
information asymmetries are not being addressed sufficiently by existing tools and that even 
when they are, there is evidence that wit hout updating the information provided by labels 
(such as the energy efficiency label) they lose their informational value, and thus usefulness, 
over time. Moreover, there is evidence to sugge st that even if consumers have all the 
necessary information to make pur chasing decision based on what is in their best private and 
social interest, they fail to do so because of short-sighted behaviour. Principal agent problems 
persist in the area of  housing and existing policies related to energy performance of buildings 
cannot reduce them substantially in the near futu re. Due to the existence of remaining market 
failures, incentives to innovate are less than socially optimal.  
Furthermore, a multitude of diverging national cr iteria exists with respect to Green Public 
Procurement rules and incentives. This leads to fragmentation of the internal market that 
should be avoided. Finally, the policies in plac e are not sufficiently al igned and linked with 
each other to realise synergies but send conflic ting signals and have gaps that lead to a 
fragmented regulatory framework rather than a consistent one.  
The general objective of the acti on plan is to render the EU’s product policy more effective, 
thus contributing to the goals of the Lisbon St rategy and those of the Reviewed Sustainable 
Development Strategy.  
 
EN 3   EN More specifically: to rais e dynamically the market sh are of products with more 
environmentally performing feat ures; to provide consumers w ith relevant information on 
product performance; to help overcome problem s caused by a misalignment of incentives 
without prejudice to the rules of the Treaty, in particular State aid rules, and to reduce the 
potential for suboptimal outcomes as a result  of myopic consumer behaviour; to avoid 
fragmentation of incentives and stimuli; to remove barriers to trade to ensure that 
Environmental Industries can benefit from the advantages of the Inte rnal Market; and to 
maximize the environmental contribution of the EU's standards internationally whilst ensuring 
that the possible short run inci dence on the competitive position of EU industry is addressed, 
where necessary. 
Three options were considered to address thes e objectives: no further ac tion or the baseline 
scenario (no change of existing policies) a nd two alternative pack ages of measures.  
The no further action option would imply that the identified market and regulatory failures 
would not be addressed .  
The first alternative package is mostly focused on enhancing the role of the voluntary eco-
label scheme and linking it with other policies.  This option would promote a combination of 
instruments that would reinforce voluntary actio ns (Eco-label, Open Method of Coordination 
for the use of incentives, withou t prejudice to the rules of the Treaty, in particular State aid 
rules), promote Environmental Management a nd Audit Scheme, Green Public Procurement 
and identify internal market barriers for eco-industries (competitiveness screening). The 
different market and regulatory failures woul d essentially be addre ssed through the provision 
of information and the development of voluntar y incentives. The co-ord ination of existing 
policies would be done within the existing framework.  
The second alternative package consists of a set of measures that  are centred around an 
extended Integrated Package. This option would integrate a set of instruments to extend the 
scope of mandatory actions (Eco-design Di rective for Energy Using products, Energy 
Efficiency Labelling Directive, including ma ndatory level of product performance for public 
procurement) and link them with voluntary acti ons (Eco-label, Green Public Procurement, 
Environmental Management and Audit Scheme).  The use of incentives by Member States 
would be further harmonised without prejudice to  the rules of the Treaty, in particular State 
aid rules, and internal market barriers for eco-industries woul d be identified (competitiveness 
screening). The difference to option 2 is that this option places greater emphasis on mandatory 
requirements.  
The analysis of the impacts of each option pr esents a qualitative asse ssment of the positive 
and negative impacts. It gives an indication on  the extent to which each of the options can 
resolve the remaining market and regulatory fail ures established in the problem definition as 
well as indications of potential drawbacks or costs. A quantitativ e estimation of the effects on 
product prices, resource us e, life-cycle costs and CO2 emissi ons are provided for a number of 
product categories for which data is available.  The analysis is indicative only since a 
comprehensive quantitative assessment would requ ire large amounts of deta iled data, which is 
not currently available, and complex m odelling that would go beyond the scope of 
proportionality for this impact assessment.  
 
EN 4   EN Given that the Action Plan does not represent a concrete legislative proposal and that the 
detailed impacts of any measures that may s ubsequently be adopted will be analysed in 
separate impact assessments, th e level of analysis is deemed proportionate. Individual impact 
assessments will be carried for each of the envisaged measures  and more detailed analysis 
will be provided for these.  
The conclusion for this impact assessment is  that the second pack age of measures is 
preferable, which rests on an extended Integr ated Package based on the Ecodesign Directive 
and a more harmonised use of criteria for P ublic Procurement and incentives across the 
European Union. This option would enable subs tantial improvements in resource efficiency 
and reduce environmen tal externalities. 
The action plan will be regularly monitored in  order to adapt the actions and optimise the 
impacts in a cost-effective manner.