The European Commission’s recent decision to extend tariffs on energy-efficient lightbulbs does not just encourage consumers to buy cheaper, more polluting ones. In Brussels, it has the effect of making it tricky to buy them at all. Staff working at the European Commission’s Berlaymont headquarters wanting to buy the environmentally-friendly bulbs at the nearest supermarket will be disappointed. The old-fashioned ones are there, but the upmarket Delhaize supermarket, a minute’s walk from the Commission, simply does not sell the green variety.
People talk about market failure and the environment, but all too often it’s government failure that’s really to blame. It is government failure when politicians slap tariffs on green products, pricing them out of the market. It’s government failure when politicians tax and discourage the attempts of business to develop new, green technologies. It is government failure when politicians fail to allocate property rights in environmental goods like fish stocks.
In Europe, there are many businesses who are trying to be real innovators on environmentally-friendly products. They believe that this gives them a competitive edge. There is Ecover, for example, showing that detergents can be less polluting and just as effective at cleaning. In the case of lightbulbs, Philips has invested 125m euros in the past five years in developing energy-efficient bulbs and has really been leading the market on this (and taking advantage of Chinese manufacturing capabilities to make them affordable).
It is a real tragedy that a European environmental innovator is being punished here by EU tariffs. In Europe, we have the opportunity of being the world leader in environmental quality and of showing that environmental progress and economic growth do not have to be mutually exclusive. Denying Commission staff, and EU consumers more generally, the ability to buy green is not good policy.
Tags: Delhaize, energy-efficient lightbulbs, European Commission