How Europe Can Save the World

One of the things I've always admired about Richard Stallman is his belief that if you do the Right Thing, eventually you'll win everyone over. That's seems to be happening in software, but I've always been slightly sceptical that it might work elsewhere. I was wrong, it seems:

The European Union's drive to set standards has many causes—and a protectionist impulse within some governments (eg, France's) may be one. But though the EU is a big market, with almost half a billion consumers, neither size, nor zeal, nor sneaky protectionism explains why it is usurping America's role as a source of global standards.

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If you manufacture globally, it is simpler to be bound by the toughest regulatory system in your supply chain. Self-regulation is also a harder sell when it comes to global trade, which involves trusting a long line of unknown participants from far-flung places (talk to parents who buy Chinese-made toys).

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Obey EU rules or watch your markets “evaporating”, a computer industry lobbyist tells Mr Schapiro. “We've been hit by a tsunami,” says a big wheel from General Motors. American multinationals that spend money adjusting to European rules may lose their taste for lighter domestic regulations that may serve only to offer a competitive advantage to rivals that do not export. Mr Schapiro is a campaigner for tougher regulation of American business. Yet you do not have to share his taste for banning chemicals to agree with his prediction that American industry will want stricter standards to create a level playing-field at home.

What this says is that tough regulations in the EU plus globalisation work to spread high standards for business throughout the world. So how about the following?

If the EU brought in laws that imposed an environmental impact tax on every item sold in the EU - determined by working out the cost/damage to the environment caused by that single item, and calculated by the EU - then the above logic would imply that companies around the world, including the US and China, would have very strong incentives to minimise environmental damage.

Moreover, as the above quotation points out, global companies would also start pushing for such legislation to be enacted in their home markets in order to create a level playing-field with their local competitors. The greenness would flow from Europe across the world, without the need for a post-Kyoto treaty or anything similar.

C'mon Europe, time to save the world. (Via PlexNex.)