Communication from the Commission on impact assessment
Date: 2002-06-05
Institutions: European Commission
Subjects: EU law, EU policy, evaluation method, legislative procedure, sustainable development

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 5.6.2002
COM(2002) 276 final

COMMUNICATION FROM THE COMMISSION

ON

IMPACT ASSESSMENT

COMMUNICATION FROM THE COMMISSION

ON IMPACT ASSESSMENT

May 2002

1.

INTRODUCTION

The Commission intends to launch impact assessment as a tool to improve the quality and
coherence of the policy development process. It will contribute to an effective and efficient
regulatory environment and further, to a more coherent implementation of the European
strategy for Sustainable Development. Impact Assessment identifies the likely positive and
negative impacts of proposed policy actions, enabling informed political judgements to be
made about the proposal and identify trade-offs in achieving competing objectives. It also
permits to complete the application of the subsidiarity and proportionality protocol annexed to
the Amsterdam Treaty.

This communication explains how the process of impact assessment will be implemented in
the Commission, gradually from 2003, for all major initiatives,
those which are
presented in the Annual Policy Strategy or later in the Work Programme of the Commission.
An annex sets out
the main components of the impact assessment method. Technical
guidelines for implementation will be issued in September 2002.

i.e.

1.1.

Political context

In this communication the Commission establishes a new integrated method for impact
assessment, as was agreed at the Göteborg and Laeken European Councils. Impact assessment
is an action of the Better Regulation Action Plan (see document COM(2002)278).

Most recently, the Commission made commitments at the Laeken Council to implement
better regulation principles including a regulatory impact assessment mechanism. This
followed the Commission’s own White Paper on Governance.

The Commission is also delivering on its Göteborg commitments to implement sustainable
development and to establish a tool for sustainable impact assessment. With respect to the
latter, the Commission has added the external dimension of sustainable development through
its February 2001 Communication ‘Towards a Global Partnership for Sustainable
Development’.

The new impact assessment method integrates all sectoral assessments concerning direct and
indirect impacts of a proposed measure into one global instrument, hence moving away from
the existing situation of a number of partial and sectoral assessments. It provides a common
set of basic questions, minimum analytical standards and a common reporting format.
However, the new method will be sufficiently flexible to accommodate the differences
between Commission policies and to take into account
the specific circumstances of
individual policy areas.

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1.2.

The added value of introducing Impact Assessment

Impact assessment is the process of systematic analysis of the likely impacts of intervention
by public authorities. It is as such an integral part of the process of designing policy proposals
and making decision-makers and the public aware of the likely impacts.

Impact assessment is an aid to decision-making, not a substitute for political judgement.
Indeed, political judgement
involves complex considerations that are go far beyond the
anticipated impacts of a proposal. An impact assessment will not necessarily generate clear-
cut conclusions or recommendations. It does, however, provide an important
input by
informing decision-makers of the consequences of policy choices.

The Impact Assessment is also an effective and valuable communication tool. Consultations
with interested parties will generate useful discussion and bring in valuable information and
analysis. When carrying out an impact assessment, the Commission will seek a broad range of
views and will be open and transparent in the process as set out in its Communication on
general principles and minimum standards for consultation.

1.3.

Building an integrated impact assessment process

This approach to impact assessment is intended to integrate, reinforce, streamline and
replace all the existing separate impact assessment mechanisms for Commission
proposals.

• The Commission has considerable experience in single sector type impact assessments.
Existing tools cover for example impact on businesses, trade, the environment, health,
gender mainstreaming and employment. These impact assessments are, however, often
partial looking only at certain sets of impacts. This partial approach has made it difficult
for policy makers to assess trade-offs and compare different scenarios when deciding on a
specific course of action.

The impact assessment will replace existing requirements for business impact assessment,
gender assessment, environmental assessment, small and medium enterprises assessment,
trade impact assessment, regulatory impact assessment etc. Indeed, the new integrated
Impact Assessment tool builds on these existing practices and incorporates them into the
new tool.

• It is clear that the scope and methodology of impact assessment will vary according to the
initiative in question. In particular, impact assessment for some expenditure programmes,
negotiating guidelines for international agreements and white papers will require an
adjustment of the approach used for impact assessment of regulatory initiatives.

• The impact assessment process is an important step in the Commission’s efforts to
strengthen its evaluation culture. However, it should be noted that (budgetary) ex-ante
evaluation and impact assessment have different
functions and purposes. Ex-ante
evaluation focuses primarily on value for money, i.e. the cost-effectiveness for the
Community budget of all expenditure programmes/actions proposed. In contrast,
impact assessment is policy driven, it focuses on examining whether the impact of
major policy proposals is sustainable and conform to the principles of Better
Regulation.

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According to the Financial Regulation, there is and remains an obligation to carry out ex-
ante evaluations for all proposals involving budgetary expenditures. On the other hand,
impact assessment may be applied to certain proposals involving budgetary expenditure. In
these cases, given the partial overlap in the methodology of the two exercises, the specific
aspects of the ex-ante evaluation will be added to the full scale impact assessment covering
better regulation and sustainability. In practice the impact assessment will thus incorporate
those elements specific to the ex-ante evaluation that in some instances may not be covered
(particularly on cost-effectiveness issues). In this way the duplication of work will be
avoided and requirements of the Financial Regulation will be met..

1.4.

Implementation - A gradual introduction of the integrated Impact Assessment
procedures.

The impact assessment procedures will be introduced gradually.

In order to ensure a gradual phasing-in of the process, , the Commission will, starting with the
adoption of its work programme for 2003, identify certain proposals which will be subject to
an extended impact assessment as defined under section 3.2.

The preliminary assessment defined under section 3.1 will be required for all proposals
submitted in the context of the Annual Policy Strategy for 2004 that the Commission will
adopt in February 2003. On the basis of the preliminary assessments, the Commission will
also in this decision select the proposals needing extended assessments for the Annual Policy
Strategy and the Work Programme 2004. The system will be fully operational in 2004/2005.

As the process is being introduced gradually, it is understood that the impact assessment
statements in the first year of operation will be less complete. The full level of detail is
expected only from 2004.

Technical guidelines for impact assessment will be available by September 2002. These
technical guidelines will be based on existing guidelines of the Commission services, notably
on ex-ante evaluation.

1.5.

Participation of other institutions and member states

As the Commission has suggested to the Laeken Council and to the European Parliament,
other institutions should be encouraged to adopt similar new working methods. This should
apply in particular to significant amendments of Commission proposals (see section 2.3 of the
Better Regulation Action Plan, COM(2002)278).

Member States should carry out impact assessments where they use the right of initiative for
new legislation (Justice and Home Affairs). Furthermore, Member States should submit an
impact analysis of draft national rules that they notify to the Commission. Pursuant to the
recommendations made by the Mandelkern group, the Commission expects that these impact
assessments in a systematic manner accompany the notified draft rules, whenever a national
regulatory impact assessment has been carried out. In addition, Member States should also be
encouraged to define standards for consultation and impact assessment for the transposition of
those Directives that leave them broader margins for implementation.

The result of the analysis should be shared with the Commission, to facilitate feedback at
Community level.

4

As foreseen by the Communication on the action plan pertaining to “simplify and improve the
the Commission intends to undertake
regulatory environment” (Introduction page 4),
discussions with the other institutions, in order to conclude an agreement on the inter-
institutional aspects.

Introducing an integrated Impact Assessment process will help improve the quality and
coherence of policy design. It will also increase transparency, communication and
information on the Commission’s proposals: it is not therefore a substitute for the
political decision.

The new streamlined method will be introduced gradually, with the required flexibility
to accommodate the difference between the various types of policy initiatives and will
replace existing assessment tools in order to avoid duplication of work.

2.

COVERAGE

Impact assessment applies to the major initiatives,
Commission in its Annual Policy Strategy or its work programme.

i.e.

those presented by the

Within the general objective of ‘better regulation’, the aim of the impact assessment process
is that the Commission bases its decision on sound analysis of the potential impact on society
and on a balanced appraisal of the various policy instruments available.

The principle is that all Commission legislative and all other policy proposals proposed for
inclusion in the Annual Policy Strategy or the Commission and Work Programme as
established in the context of the strategic planning and programming cycle1 will be subject to
the impact assessment procedure, provided that they have a potential economic, social and/or
environmental impact and/or require some regulatory measure for their implementation. The
basic criterion is therefore the submission of a proposal for inclusion on the Commission’s
Annual Policy Strategy and/or Work Programme.

A second principle is that of the proposals submitted for inclusion in the Annual Policy
Strategy or the Work programme, impact assessment will only be required for:

–

–

Regulatory proposals, such as directives and regulations, and

In an appropriate form, other proposals such as white papers, expenditure
programmes and negotiating guidelines for international agreements that have
an economic, social or environmental impact.

However, certain types of proposal will normally be exempt from the impact assessment
procedure. This would include proposals like Green Papers where the policy formulation is
still in process, periodic Commission decisions and reports, proposals following international
obligations and executive decisions for example, implementing decisions, statutory decisions
and technical updates, including adaptations to technical progress. Commission measures
deriving from its powers of controlling the correct implementation of Community Law are
equally exempted. The Commission may, though, in some instances decide to carry out an
impact assessment.

1

Established in the Communication of 25 July 2001 - SEC (2001) 1197-

5

it should be noted that

In addition,
in unforeseen circumstances, or situations of force
the Commission will apply the requirements of this Communication with the
majeure,
necessary flexibility. In this respect due account will be taken of the obligations which may
result from emergency situations, international obligations, human rights, security and safety
issues.

Impact assessment will be applied to the major initiatives presented by the Commission
in its Annual Policy Strategy or its Work Programme, be they either regulatory
proposals or other proposals having an economic, social and environmental impact.

3.

THE TWO STAGES IN THE IMPACT ASSESSMENT PROCESS

The impact assessment procedure will be integrated into the Strategic Policy and
Programming /Activity Based Management programming cycle2.

There will be two stages in the Commission’s impact assessment process.

3.1

Preliminary Assessment:

(a) Scope

The preliminary assessment gives a first overview of the problem identified, possible options
and sectors affected. It will serve as a filter to help the College identify the proposals that will
be subject to an extended impact assessment (see below 3.2). The preliminary assessment is
required as a condition for inclusion of proposals in the Annual Policy Strategy, or where an
initiative’s nature cannot be defined in detail at this early stage, for inclusion in the Work
Programme. The Commission decision will confirm the selection of major proposals for
extended impact assessments in the Annual Policy Strategy.

The first stage assessment will result in a short statement (see outline in Annex 1) focusing
on the following key factors:

–

–

–

Identification of the issue / objectives and desired outcome;

Identification of the main policy options available to achieve the objective,
taking into account proportionality and subsidiarity considerations, and
preliminary indications on expected impact;

Description of
the preparatory steps already undertaken and foreseen;
(consultations of interested parties, studies), and indication of whether an
extended impact assessment is needed3.

The preliminary assessment should follow the method that will be outlined in the general
guidelines and the report should reply to the above standard questions for the preliminary
assessment.

2

3

Defined in the ABM Communication SEC (2001) 1197
When appropriate, indication if at a later stage further impact assessment will be necessary, e.g. when implementing measures are
proposed.

6

(b) Timing:

The preliminary assessment must be established early in the policy formulation process as a
condition for inclusion of a legislative or policy proposal in the Annual Policy Strategy
prepared in February for the following year and, at the very latest, be finalised in November
before inclusion into the Work Programme. The preliminary assessment statements for all
proposals should be made available to the Commission for consideration when adopting its
Work Programme.

3.2

Extended Impact Assessment

a) Decision by the Commission

On the basis of the preliminary assessment statement the Commission in the Annual Policy
Strategy or at the latest in its Work Programme for the forthcoming year, decides which
proposals will require an extended impact assessment. In deciding the Commission will inter
alia take the following criteria into account:

– Whether the proposal will result in substantial economic, environmental and/
or social impacts on a specific sector or several sectors, and whether the
proposal will have a significant impact on major interested parties;

– Whether the proposal represents a major policy reform in one or several

sectors.

b) Scope

The purpose of the extended impact assessment is normally two-fold:

–

–

To carry out a more in-depth analysis of the potential impacts on the economy,
on society and on the environment.

To consult with interested parties and relevant experts according to the
minimum standards for consultation following the guidelines given in the
Communication on Consultation, due account being made of exceptions in case
of specific consultation requirements foreseen by the Treaties or international
agreements. This is important for purposes of data and information gathering as
well as validation. The consultation process should in addition allow a
discussion of wider considerations such as ethical and political issues. The
main results of
this consultation should be summarised in the impact
assessment report.

In preparing an extended impact assessment it is important to consider how to assemble the
further information needed to answer fully key questions4. Where it
is not possible to
assemble all relevant data within a reasonable time frame, qualitative or partial data will be
used. In such cases an interim and/or ex-post evaluation must be explicitly foreseen at the
latest to inform the next review of the legislation (interim or ex-post evaluation will follow
the rules of the Communication on evaluation, as specified in Annex 2, section 5).

4

The extended Impact Assessment will follow the technical guidelines for impact assessment to be issued under the authority of
the Secretary General in the autumn of 2002 and the general method as described in annex 2 of this Communication. Wherever
needed, services can decide to use outside expertise

7

The responsible Commission service should present the results of the analysis in an impact
assessment report that forms part of the inter-service consultation on the proposal concerned.
The Impact Assessment report should also be sent to the other institutions as a working
document when the proposal is adopted by the Commission. A summary of the main findings
should be included in the explanatory memorandum.

(c) Timing

In most instances the extended impact assessment will be carried out following the Annual
Policy Strategy decision in the spring. Directorate Generals should then report on progress on
the extended impact assessment as a condition for the inclusion of a proposal in the Work
Programme in the autumn.

The extended impact assessment will have to be completed at the latest when the proposal
enters inter-service consultation, and all impact assessment reports must be attached to the
inter-service consultation package.

(d) Organisation of the extended impact assessment

For the proposals, which the Commission has decided to subject to an extended impact
assessment, the process will differ in two ways: first, with respect to the level of detail
required and, second, with respect to the organisational arrangements.

• The impact assessment will be conducted according to the principle of proportionate
analysis, i.e. varying the degree of detail to the likely impacts of the proposal. This means
that the depth of the analysis will be proportionate to the significance of the likely impacts.
Thus, proposed measures that are likely to have serious negative side effects or particularly
affect certain groups in society should be more thoroughly analysed than minor technical
changes to regulations. Likewise, the analysis will be adapted to the specific circumstances
of the policy domain concerned, to take into account differences between types of activities
conducted by services and specific statutory obligations.

• Normally,

the responsible Directorate General will conduct

the extended assessment
informing the Secretariat General and involving other Directorate Generals where these
may be affected by the proposal (using external expertise as appropriate).

In some cases, the Commission may decide that, for the proposals with the most significant
crosscutting impact and the highest political importance, the DG responsible for the Impact
Assessment is assisted by, and normally chairs, an inter-departmental group including the
most concerned DGs and the SG. The Commission will ensure that the design of these
proposals takes into account the horizontal multi-sectoral aspects, in particular economic,
social and environmental impacts as early as possible in the process. The task of the inter-
departmental group is to define the scope, monitor
the progress of the extended
assessment, and supervise the completion of the impact assessment reports for crosscutting
proposals.

While conducting the impact assessment is the responsibility of the services in charge, the
Secretariat General will co-ordinate the basic support structure for the new impact
assessment procedures through the SPP/ABM cycle and its network, in particular regarding
the selection and monitoring of the proposals subject to extended impact assessment. The
Secretariat General will co-ordinate the issuance of guidance documents, organisation of

8

training, exchange of good practice and will monitor the final quality of the impact
assessments carried out.

• The results will be presented in an impact assessment report to be attached to the inter-
service consultation. This assessment will replace existing assessments carried out by DGs,
such as regulatory impact assessments, business impact assessments, environmental impact
assessment etc. (see 1.3), now will be covered by the requirements for this category.

The principle of proportionate analysis will be the driver of the process.

There will be two stages: First a filtering exercise based on a short preliminary
assessment of all work programme proposals and second an extended assessment of the
selected proposals.

4.

AN AID TO THE FINAL POLICY CHOICE

Impact Assessment is an aid to decision-making, not a substitute for political judgement.

The main components of the extended impact assessment are described in Annex 2.

As to the policy choice, the final options (i.e. a draft Commission proposal submitted for
decision by the College) will emerge through the Impact Assessment process. Sometimes the
impact assessment may point towards a preferred basic approach and the optimal policy
instrument early in the process. Subsequent analysis will then focus on improving the
effectiveness of the proposal in terms of changes introduced to key design parameters or
stringency levels. It may also identify accompanying measures to maximise positive and
minimise negative impacts.

The reasons for the most preferred policy option will be clearly outlined in the Impact
Assessment Report. Alternative instruments that meet the same set of policy objective(s)
should always be considered at an early stage in the preparation of policy proposals.

Regarding the choice of instruments, the generic types of policy instruments that can be
considered include:

–

–

–

–

–

–

–

–

Prescriptive regulatory actions (e.g. setting air quality standards);

Co-regulatory approaches (e.g. social dialogue);

Market-based instruments (e.g. emission trading, taxation);

Financial interventions (e.g. taxation, subsidies, co-financing, seed or risk
financing);

Action aiming at Voluntary Agreements or self regulation;

Information, networking or co-ordination activities;

Framework Directives, as foreseen by the Action plan on Better Regulation;

The Open Method of Co- ordination.

9

It goes without saying that the selection of an instrument must be compatible with relevant
Treaty provisions. A combination of the above instruments should also be considered, taking
into account the respective competencies of the Community and the Member States as defined
by the Treaty.

Impact Assessment is an aid to decision-making, not a substitute for political judgement.

The assessment report will justify the chosen policy option, after having examined
alternatives.

5.

PRESENTATION AND PUBLICATION

The preliminary assessment statements will be annexed to the Work Programme of the
Commission as a working document of the services.

The final impact assessment reports should be attached to the inter-service consultation (see
outline in Annex 3). In addition, intermediate results from extended impact assessments
should be shared as early as possible with the other Directorate Generals most concerned.

The main results of the preliminary and/or extended assessments should be summarised in the
explanatory memorandum. The final reports should also be attached to the proposed decision
when submitted to the Commission for final adoption. This does not affect the requirement to
present a legislative financial statement. As such the impact assessment reports will be
adopted by the Commission as a supporting working document of the services and transmitted
together and in parallel with the proposal to the other institutions.

The Commission will ensure full transparency on the results of impact assessment both
for the preliminary and extended assessment.

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ANNEXES:

(1)

(2)

(3)

FORMAT FOR THE PRELIMINARY ASSESSMENT STATEMENT

COMPONENTS OF IMPACT ASSESSMENT

INDICATIVE REPORTING FORMAT FOR THE EXTENDED IMPACT
ASSESSMENT

11

ANNEX 1
Preliminary Assessment Statement

1.

PROBLEM IDENTIFICATION

Describe the problem that the policy/proposal is expected to tackle:

Indicate potentially unsustainable trends associated with the problem,
- Economically:
- Socially:
- Environmentally

Indicate the potential inconsistencies between the three dimensions or with other policies

2.

OBJECTIVE OF THE PROPOSAL

What is the overall policy objective in terms of expected impacts?

3.

POLICY OPTIONS

What is the basic approach suggested to reach the objective?

What policy instruments have been considered?

In what way do the options identified respect the subsidiarity and proportionality principles?

Which options can be excluded at this an early stage?

4.

IMPACTS – POSITIVE AND NEGATIVE

On a preliminary basis please indicate the expected positive and negative impacts of the
selected options, particularly in terms of economic, social and environmental consequences?

Please indicate who is affected and possible severe impacts on a particular social group,
economic sector or region (inside or outside the EU), in the short term; in the medium and
long term?

5.

FOLLOW-UP

What preparatory steps have already been taken (consultations, studies)?

Is an extended assessment recommended? Yes/no

Is a consultation planned? Yes/no

12

ANNEX 2

The main components of the Extended Impact Assessment (IA)

The following questions should be asked when carrying out an extended impact assessment:

(1)

(2)

(3)

(4)

what issue is the policy/proposal expected to tackle; what would be the Community
added value;

what main objective is the policy/proposal supposed to achieve;

what are the main policy options available to achieve the objective;

what are the impacts – positive and negative – expected from the different options
identified;

(5)

how can the results and impacts of the policy/proposal be monitored and evaluated;

The analysis may be iterative; these questions need not therefore necessarily be dealt with in
strict sequential order.

1.

ANALYSING THE ISSUE

The first question in the IA process relates to the identification and analysis of the issue(s) in
one or more policy areas. This will be described in economic, social and environmental terms.
It will be expressed as concretely as possible in qualitative, quantitative and where possible
monetary terms. The urgency of action and any risks5 inherent in the initial situation should
also be identified.

Giving a precise and objective description of causal chains is vital, as too often analysis
becomes flawed at this first stage by assuming rather than establishing links between causes
and effects. It should also refer to the outcome of previous consultations for example the
lessons drawn from Green Papers.

2.

IDENTIFYING THE POLICY OBJECTIVE

On the basis of the problem analysis, the policy objectives will be expressed in terms of
expected results in a given timeframe (i.e. in terms of 'ends' not 'means'). Where relevant,
previously established objectives (e.g. in the Treaty, existing legislation, policies, European
Council requests, etc.) will be set out as well as the legal base on which such a proposal might
be based.

The initial objective(s) may be revised/refined as a result of the analysis carried out under 3.3
– 3.6.

5

A risk is commonly defined as an event that can result in an undesirable or negative outcome. It is characterised by the probability
of the event occurring and the resulting impact if it does occur. Taken together these two factors combine to produce a level of
risk exposure. The analysis should examine the severity of the risk exposure, and how it can be managed.

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3.

IDENTIFYING POLICY OPTIONS AND ALTERNATIVE INSTRUMENTS

Alternative options or instruments to achieve the policy objective(s) should always be
considered at an early stage in the preparation of policy proposals.

The subsidiarity and proportionality principles should also be taken into account and further
explored throughout the IA process: it should be made clear why the problem has to be
addressed at the European level and what the value-added of Community intervention is
compared with no- regulatory action or action by Member States.

The "no policy change" scenario must always be included in the analysis as the point of
reference ("counterfactual situation") against which other options are compared.

The term “policy option” (for action at EU level) encompasses combinations of three closely
linked elements, which will be examined simultaneously:

(a) Considering various ways (“basic approaches”) to reach the objective.

In many instances, there may be several ways of reaching the objectives, which should be
considered when identifying the various options.

(b) Considering various policy instruments.

The choice of instruments must respect relevant Treaty provisions. A combination of the
the respective
different
competencies of the Community and the Member States as defined by the Treaty.

instruments might also be considered,

taking into account

In addition it should be considered how the proposal fits in with the existing and, when
known, forthcoming rules and policies that are being developped.

(c) Focusing on realistic options

Detailed analysis will focus on a limited number of the most relevant, realistic options, judged
against the following criteria:

–

–

–

–

–

relevance to the problem;

effectiveness in achieving the objectives (this should be quantified, wherever
possible and made meaningful);

coherence with wider economic, social and environmental objectives;

inter-action with other existing and planned Community interventions;

cost (resources required) and user-friendliness.

Only those options which best satisfy these criteria should be retained for further analysis,
whilst the others should be discarded.

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4.

ANALYSING THE IMPACT

For the policy option retained, and where possible for selected alternatives all relevant
positive and negative impacts should be examined and reported on in the impact analysis,
with a specific emphasis on their environmental, economic and social dimensions. This
process has two stages: first the relevant impacts are identified, then they are assessed in
qualitative, quantitative and/or monetary terms.

4.1.

Identifying impacts (“screening”)

The Impact Assessment should identify both direct and indirect impacts of the selected
options. It should make explicit the possible difficulties with the identification of impacts.

Impacts will as far as possible be expressed in economic, social and environmental terms
although it may be difficult to group certain impacts in one or the other of these categories. ).
The main task will be to identify all relevant (positive and negative) impacts, notably those
relevant under the EU Sustainable Development Strategy, both in its internal and external
dimensions (including the EU’s international development policy).

Examples of economic, social and environmental impacts include:

–

–

–

Economic impacts: both macro- and micro-economic impacts, notably in terms
of economic growth and competitiveness, i.e. changes in compliance costs,
including administrative burdens to businesses/SMEs and implementation costs
for public authorities, impacts on the potential for innovation and technological
development, changes in investment, market shares and trade patterns as well
as increases or decreases in consumer prices etc.

impacts:

impacts on human capital,

Social
impact on fundamental/human
rights, compatibility with Charter of Fundamental Rights of the European
Union changes in employment levels or job quality, changes affecting gender
equality, social exclusion and poverty, impacts on health, safety, consumer
rights, social capital, security (including crime and terrorism), education,
training and culture, as well as distributional implications such as effects on the
income of particular sectors, groups of consumers or workers etc.

Environmental impacts: positive and negative impacts associated with the
changing status of the environment such as climate change, air, water and soil
pollution, land-use change and bio-diversity loss, changes in public health, etc.

Depending on the issue at hand it will be made clear which social group, economic sector or
region is affected by a given impact; when relevant distributive effects will be analysed and
internal (within the Union) and external impacts (outside the Union) will be shown separately.

4.2.

Assessing the impacts (“scoping”)

A number of analytical methods can be used to assess impacts. They differ in concept and
coverage (e.g. cost-benefit analysis, cost-effectiveness analysis, compliance cost analysis,
multi-criteria analysis and risk assessment). The choice of method and the level of detail will
vary with the nature of the problem and judgements about feasibility. Technical guidelines for

15

impact analysis will be issued in September 2002 taking into account best practices and
existing assessment tools.

The following sets out the principles the Commission will follow in assessing impacts:

• The economic, social and environmental impacts identified for the proposed option should
be analysed and presented in a format that facilitates a better understanding of the trade-
offs between competing economic, social and environmental objectives. To show the
different impacts, make comparisons easier and identify trade-offs and win-win situations
in a transparent way,
is desirable to quantify the impacts in physical and, where
appropriate, monetary terms (in addition to a qualitative appraisal). Impacts that cannot be
expressed in quantitative or monetary terms should not, however, be seen as less important
as they may contain aspects that are significant for the policy decision. Nor can final
results always be expressed in one single figure reflecting the net benefit or cost of the
option under consideration.

it

• The assessment of the impacts will concentrate on the ones that are likely to be the most
significant and/or will lead to important distributive effects. In an integrated assessment, it
is important to avoid double counting (e.g. costs that are passed on to consumers as higher
prices should not be counted as costs to businesses as well).

• The time dimension (short, medium and long-term impacts) will also be examined in this
context, for instance by weighing short-term negative against long-term positive impacts,
using a discount rate, whenever positive and negative impacts can be expressed in
monetary terms. It will also be made clear whether the effects are one off, or develop over
time.

• When assessing impacts, strict cost-benefit analysis may not always supply the most
relevant information; for example, the degree of irreversibility should also be considered.
The precautionary principle should be applied when appropriate6. The impact on
established policy objectives where available, should be assessed.

• Assessment of impacts is difficult because of the difficulty of making reliable forecasts.
Where appropriate, the comparison of different options will therefore be accompanied by a
sensitivity analysis of the results to changes in the main internal and external variables. As
a minimum the main factors that can change the direction of impacts must be highlighted.

• When assessing impacts also the fact that different experts employ different methods

should be taken into account.

5.

IMPLEMENTING, MONITORING AND EVALUATING EX-POST

The impact assessment should identify any possible difficulties in implementing the options
assessed and describe how these will be taken into account, for example in the choice of
implementation periods or the gradual phasing-in of a measure.

Member States should be asked to give information about problems that they would face in
implementing the proposal (e.g. implications for public administrations and enforcement
authorities).

6

According to the Commission Guidelines on the application of the precautionary principle – COM(2000)1.

16

Arrangements for monitoring the implementation of the chosen option will be described. The
subsequent ongoing or ex-post evaluations will follow the rules of the Communication on
Evaluation7, i.e. an overall ex-post or interim evaluation at a periodicity not exceeding six
years, depending on the nature of each activity.

Procedures to obtain monitoring data should be set out.

7

SEC(2000) 1051

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ANNEX 3

Indicative Reporting Format for the Extended Impact Assessment

1.

WHAT ISSUE/PROBLEM IS THE POLICY/PROPOSAL EXPECTED TO TACKLE?

• What is the issue/problem in a given policy area expressed in economic, social and

environmental terms including unsustainable trends?

• What are the risks inherent in the initial situation?

• What is (are) the underlying driver(s)?

• What would happen under a “no policy change” scenario?

• Who is affected?

2.

WHAT MAIN OBJECTIVE IS THE POLICY/PROPOSAL SUPPOSED TO REACH?

• What is the overall policy objective in terms of expected effects?

• Has account been taken of any previously established objectives?

3.

WHAT ARE THE MAIN POLICY OPTIONS AVAILABLE TO REACH THE OBJECTIVE?

• What is the basic approach to reach the objective?

• Which policy instruments have been considered?

• Which are the trade-offs associated with the proposed option?

• What “designs” and “stringency levels” have been considered?

• Which options have been discarded at an early stage?

• How is subsidiarity and proportionality taken into account?

4.

WHAT ARE THE IMPACTS – POSITIVE AND NEGATIVE – EXPECTED FROM THE
DIFFERENT OPTIONS IDENTIFIED?

• What are the selected options’ expected positive and negative impacts, particularly in
terms of economic, social and environmental consequences,
including impacts on
management of risks? Are there potential conflicts and incoherence between economic,
social and environmental impacts that may lead to trade-offs and related policy decisions?

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• How large are the additional (‘marginal’) effects that can be attributed to the policy
proposal, i.e. those effects over and above the "no policy change" scenario? Description in
qualitative and, where possible, also in quantitative and monetary terms.

• Are there especially severe impacts on a particular social group, economic sector

(including size-class of enterprises) or region?

• Are there impacts outside the Union on the Candidate Countries and/or other countries

(“external impacts”)?

• What are the impacts over time?

• What are the results of any scenario, risk or sensitivity analysis undertaken?

5.

HOW TO MONITOR AND EVALUATE THE RESULTS AND IMPACTS OF THE PROPOSAL
AFTER IMPLEMENTATION?

• How will the policy be implemented?

• How will the policy be monitored?

• What are the arrangements for any ex-post evaluation of the policy?

6.

STAKEHOLDER CONSULTATION

• Which stakeholders were consulted, when in the process, and for what purpose?

• What were the results of the consultation?

7.

COMMISSION DRAFT PROPOSAL AND JUSTIFICATION

• What is the final policy choice and why?

• Why was a more/less ambitious option not chosen?

• Which are the trade-offs associated to the chosen option?

•

In the case of poor data or knowledge at present, why is a decision to be taken now rather
than be put off until better information is available?

• Have any accompanying measures to maximize positive and minimize negative impacts

been taken?

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