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Integrated Product Policy

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Integrated product policy (IPP) might be better termed 'environmental product policy'. It is an attempt by the European Commission to create conditions in which environment-friendly products, or those with a reduced impact on the environment, will gain widespread acceptance among the European Union's 15 member states and 380 million consumers.

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The history of IPP

The development of IPP goes back to 1997, when a review of current practice in member states and in individual companies was carried out for the Commission by accountants Ernst & Young and the University of Sussex in the UK. On the back of this study, a workshop was held at the end of 1998 which endorsed the use of a life-cycle approach - from the mining of raw materials through production, distribution and use to end-of-life disposal - in assessing the environmental impacts of products.

In May 1999, EU environment ministers agreed on the need to develop an environment policy that would 'concentrate more on developing and implementing an integrated approach that deals with the entire life-cycle of products'. They welcomed the Commission's proposal to draft a Green Paper, or consultation document, on IPP.

The IPP Green Paper

In February 2001, the European Commission published its Green Paper on IPP. This outlined the rationale for developing product-related environmental policies, and suggested some possible mechanisms that might be used - both at EU level and within the 15 member states. Click here to download a copy of the Green Paper in PDF format.

Consultation on the 32-page document ended on 30 June 2001, and discussions are continuing in the European Parliament and the Council of Ministers. On the basis of these, a White Paper outlining the Commission's strategy for implementing IPP is due to be published in the middle of 2002.

The IPP, when it emerges, will have a dual role. On the one hand it will provide a framework in which member states, local authorities, businesses and non-governmental organisations can adopt green product policies. On the other, it will lead to specific EU-wide policy initiatives designed to foster green consumerism.

How IPP might work

According to the Commission's consultation document, the central question is 'how the development of greener products and their uptake by consumers can be achieved most efficiently'.

The Green Paper stresses that no single measure in isolation is likely to achieve this result, and that a mixture of many different actions will be needed. These fall into three main categories:

  • Influencing prices - through measures such as reduced rates of tax on 'green' products, or state subsidies, or an extension of the 'producer responsibility' concept;
  • Stimulating demand - giving consumers better information about the products they buy, including the use of ecolabelling, and encouraging large, public-sector organisations to adopt green procurement strategies;
  • Promoting green production - by encouraging eco-design, promoting life-cycle information about products, and integrating environmental considerations into European product standards.

The Commission believes IPP has something to offer for all the various stakeholder groups - consumers, manufacturers, retailers and NGOs. Furthermore, it is keen that IPP should not simply be a case of passing legislation. Initiatives at the level of member states will be 'a major building block', says the Commission, 'as they allow a practice-oriented, bottom-up approach'.

However, it insists that the main driver behind the growth of green consumerism will be market forces, principally in the form of levers such as price reductions and better consumer information. An urgent priority, says the Commission, is to eliminate 'market failures' by ensuring that the price of products accurately reflects their full cost, including environmental impacts.

'At the moment, users may profit from a "free lunch" by causing environmental impacts without paying for them', it argues. Rigorously applying the 'polluter pays' principle would address such anomalies.

Measures to stimulate demand for 'green' goods must be supplemented by action on the supply side, the Commission believes. This might include new design standards and information campaigns, backed up by easy-to-use tools for checking the life-cycle impact of a product.

A further possibility is the use of 'product panels' - expert groups of stakeholders drawn together to develop new standards for particular products or product groups.

The Green Paper puts forward ideas on all these aspects of IPP, and poses more than 30 questions on particular aspects.

A new name?

As a footnote, ideas are being sought on a possible new name for IPP. The European Commission held a 'competition' in 2001 to generate suggestions, and is currently analyzing the entries.

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