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    View: Beware of the precautionary approach to regulation

    Synopsis

    Following the EU’s logically flawed and consumer-unfriendly precautionary principle would hobble India’s dynamic economy, especially at a time when Covid-19 is destroying the global economy. Growth in key areas like renewable energy production would be a serious casualty if GoI goes the hyper-precautionary way of assessing and regulating chemicals.

    Do we really need that sign?
    John C Hulsman

    Covid-19, the political risk event of our generation, will change many things. Not least of these is the continued sufferance of illogical, highly detrimental economic philosophies of the world, ideologies that India simply can no longer afford to tolerate.

    Foremost among these is the EU’s championing of the precautionary principle. The precautionary approach to regulation means that merely the suspicion of harm a product can do in the future — not necessarily based on any empirical evidence — is enough to doom it. Such an approach has resulted in the economic sclerosis evident today in most countries in Europe. The principle exhorts governments to set standards and act vigorously to outlaw products if they merely suspect something may go wrong, a far lower burden of regulatory proof entirely open to the bias of the regulators, often over shaky environmental or health grounds.

    In a utopian effort to somehow do entirely away with risk, the precautionary principle ignores the reality that proving a product to be ‘undangerous’ can simply never be accomplished. If all genetically modified (GM) foods are to be banned, for instance, it is because under the precautionary principle, they could count future possible imaginary dangers, while ignoring the overwhelming, documented historical fact that such foods have definitively ended endemic famines.

    Instead of curbing innovation, countries should adhere to the cost-benefit paradigm of regulation, forcing bureaucrats to outline all the benefits of a product, as well as its possible dangers.

    Other like-minded nations must defend the cost-benefit paradigm, as only its common sense weighing of advantages and dangers corresponds to the reality that regulators must actually deal with. Further, the EU’s drastic regulatory actions against, say, silicones, provides a cautionary tale for India, which, like Brazil and South Korea, is considering its own regulatory futures.

    Silicones are oils, lubricants or rubber-like substances often used as sealants against water and air penetration, serving as first-rate thermal and electrical insulation. Silicone-enabled products range from electric car batteries to energy-efficient LED(light-emitting diode) lights to wind turbines and solar panels. But based entirely on its precautionary principle, EU regulators have sought a series of restrictions on the use of three crucial silicone ingredients.

    Following the EU’s logically flawed and consumer-unfriendly precautionary principle would hobble India’s dynamic economy, especially at a time when Covid-19 is destroying the global economy.

    Growth in key areas like renewable energy production — a stated policy objective of the Indian government — would be a serious casualty if GoI goes the hyper-precautionary way of assessing and regulating chemicals.

    Regulators around the world should adhere to better principles to produce the best, most effective regulations that simultaneously protect human health and the environment, while promoting innovation that powers economic growth and consumer choice.

    The writer is member, US Council on Foreign Relations.
    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
    (Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

    3 Comments on this Story

    Abhinandan Kumar Jain49 days ago
    India Require a web Camera based helmet the beurocr
    ates checking any one
    primses attached with wifi with the phone of the beurocrates link with special investigation team computer at bengaluru to Assess the information.This cover both berucrates & bussiness persons.Inculding their accounts departments.
    फोकट के पैसेवाली49 days ago
    बहूत कनफूज हो भाया. There are certainly many issues mixed up while discussing age old problem. Scientific precautions, Fiduciary precautions and Govt servant's Competence.
    Nothing wrong in being extremely conservative while adopting new scientific evidence. One should be very risk-averse while handling public resources while take any amount of bold decisions in dealing own private matters.
    Problem with Govt Servants is their life goal of grabbing power to influence matter beyond their skill set by acquiring positions is injurious to society's health. Thankfully that's why constitutional framework is designed for checks & balances.
    JNU types Johnny come lately trying to reinvent wheel बहूत कनफूज होनेसे Earth flat नही हो जाता
    CORONA proved that.
    Ganesh49 days ago
    That's the REAL PROBLEM of India, beurocrates, overregulation, regulatory overkill hae hijacked and strangulated (ICU) the country for years. Political leaders DON'T understand that. Their jobs and promotions, risk aversion attitude are of PRIME importance. If India has to come out of this mess we have have to send all Delhi beurocrates to 5yrs PAID leave to Sudan
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