Does European Union Environmental Policy Pass a Cost–Benefit Test?
David Pearce
Published: September 2004
Most European Union countries are committed to some form of regulatory
impact assessment, and in some cases these assessments involve the formal use
of cost–benefit analysis. The European Treaty of Union also calls for a
comparison of costs and benefits for all European regulations. Despite this, only a
limited number of regulations have been subject to cost–benefit analysis. Using a
variety of sources, this paper investigates whether or not a selection of major
environmental regulations would pass a cost–benefit test. The general answer is
that, while some do, most do not. This finding has major implications for the
efficiency of European environmental legislation, and reflects on the willingness
of Member States to sign up to inefficient regulation.