Politicians change their minds
Sustainability, Strategy & Finance

Politicians change their minds

If we are to make regulatory changes permanent, a greater focus is needed on the costs of sustainability related regulation. Yes, we understand the longer term benefits, but every change will create financial losers, and we need to get better at funding the transition periods.

A verbal contract isn't worth the paper it's written on - attributed to Samuel Goldwyn, but probably mis-quoted

Something we are seeing again and again is a sustainability related policy or regulation being proposed to great fanfare, only to be (quietly) scaled back, or even reversed. A global example of this is COP, but we also saw this recently at a more local scale with the reversal of the EU pesticide ban, which we highlighted in a recent What Caught Our Eye.

The aim was a good one - to cut pesticide use in Europe. Research tells us that while pesticides can be useful, they also cause harm to people and the environment. We can make do with less of them.

In this case we suspect that the underlying problem was a mixture of lobbying, and a failure to fully appreciate the challenge from the farmers perspective. If you stand back and look at recent trends, this second problem occurs frequently. We fail to recognise that while sustainability related changes produce long term benefits for society, there are often losers. Or more strictly, there are groups that have to bear the risks and the costs of the change. And when they become vocal, politicians often just backtrack.

In the case of the pesticide ban the group at risk was farmers. We have frequently highlighted that many farmers, even in Western Europe, live financially precarious lives. Many of them earn low incomes, and a bad year can have serious repercussions. Even if we can 'prove' that the proposed change is good for them in the long run, they are often poorly resourced for the transition period, and they often fear (and hence over-state) the costs involved.

One solution is to be more upfront about this, and have a generous financial package of assistance. But that adds to the cost of the proposal, and at a time when budgets are stretched, it's hard to find the money. So it's easier to change course, sometimes cynically justifying it as 'helping the general public cope better with the cost of living crisis' or some other glib sound bit.

The other, more left field option, is to come at the problem in a different way. In the case of pesticides, this might involve food retailers (supermarkets etc) working with (ie financially supporting) the farmers in their supply chains. With the right 'messaging' and support, it could be a win/win.

A shorter version of this blog was previously published as a What Caught Our Eye story. If you sign up (yes, it's free) you can get this, and all of our blogs, delivered straight to your inbox.

The details

EU reverses proposed pesticide ban - the beginning of a future trend?

Sustainability transitions create financial winners and losers, and if we don't make it attractive for the losers to adapt, they can block change.

The European Parliament has outright rejected a proposal on the EU’s pesticide reduction plan, effectively killing off the regulation, at least for now. The move has disappointed green groups but was celebrated by EU farmer associations. The sustainable use of pesticides regulation (SUR), which was part of the EU’s flagship Farm to Fork strategy, aimed to slash the use and risk of pesticides in half by 2030. But, it's been heavily contested right from the start. And, after months of effort, the European Parliament ultimately voted to reject the text entirely.

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