Event report: “Sustainability and green innovation in competition policy”

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Amidst the wave of conferences related to refugee crisis or the UK and Europe, currently dominating discussion in Brussels, the Central Library was pleased to attend a conference on EU competition and sustainability policies which was hosted by Bruegel, a European think tank specializing in economics. The aim of the event was to discuss the dilemma between supporting sustainability while green initiatives and at the same time preserving competitiveness, public interest and consumer’s pocket.

The speakers included Prof. Yossi Spiegel and Prof. Maarten Pieter Schinkel, who presented the findings  of their recent joint paper, Ms Céline Gauer from the European Commission’s DG COMP, and Ms Reinhilde Veugelers from Bruegel, who was the moderator.

The paper ‘Can collusion promote sustainable consumption and production?’ touches upon examples taken from the Dutch economy practice of horizontal agreements in which companies representing a certain sector come together and jointly decide to protect the environment by restricting particular practices. As an example, Prof. Spiegel mentioned the North Sea fishermen who, in the early 2000s decided to limit the amount of harvested shrimp to promote fishing methods that are less damaging for the seabed. This decision led to a rapid rise of prices, with consequences for shrimp consumers’ budgets. This type of practice, as well as others mentioned by  the speakers, raises some questions on  how to use antitrust mechanisms with regard to environmentally-friendly projects. Additionally, it poses questions on  the role of horizontal agreements in promoting investments in SCP (Sustainable Consumption and Production) and on its  effects on competitiveness. In order to partly address these concerns, Professors Spiegel and Pieter Schinkel created a model in which they compared four scenarios of cooperation and competition between two generic companies.

The so-called ‘Exploding Chicken’ was presented as an  example to illustrate how the Competitiveness Policy could eventually be detrimental for the progress of green initiatives. It was not possible to remove the meat of chickens living in inhumane conditions from the supermarkets. The laws protecting competitiveness had to be respected despite the public outcry that spurred the initiative.

The Commission’s representative elaborated in detail on President Juncker’s Green Agenda, in which sustainability considerations are to be treated as any other efficiencies in the antitrust.

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“Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between European Union (EU) countries and which have as their object or effect the prevention, restriction or distortion of competition. ” For further reading of the decisions click here.

The Commission considered that this approach will still lead to decarbonisation of the economy and sustainability progress. According to her, there is no trade off between environment and competition rules that ensure affordability of green products. The competition policy can contribute to the Green agenda by making the market fit for players investing in environmentally-conscious production methods.

To read more on competitiveness and EU policies have a look at the Central Library’s TTR issue 32.

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