Industry & economy

On 15 January 2015, the German government enacted the so-called 'bureaucracy brake'. The aim is to mitigate the long-term impact on the economy. It is of the utmost importance that the government's regulatory proposals do not lead to an increase in compliance costs. Consequently, any additional burdens must be offset by comparable reductions in regulatory requirements. This puts considerable pressure on the justification of environmental policy proposals, which are often accused of imposing costs on business that are disproportionate to their social and economic benefits. The objective of this research project, carried out in collaboration with the ZEW - Leibniz Centre for European Economic Research and the Institute for Applied Ecology (Öko-Institut e.V.), is to determine the actual relationship between the costs incurred by businesses as a result of selected environmental regulations and the overall social benefits. This will make it easier to demonstrate the added value of these environmental regulations in the context of an ex-post evaluation.

The quantitative impact assessment of federal legislation is primarily concerned with the documentation of compliance costs, which must be explicitly stated in the draft regulations proposed by the Federal Government for the Cabinet Draft. In accordance with Article 2 of the Act on the establishment of a national regulatory watchdog (Gesetz zur Einsetzung eines Nationalen Normenkontrollrates - NKRG), it represents 'the total measurable time and costs incurred by the public, the economy and the public administration as a result of complying with a federal legal provision'. The precise specifications of the compliance burden are delineated in the 'Guidance for determining and presenting the compliance burden in the Federal Government's regulatory projects'. However, some costs are not included, which can represent a significant economic burden for the enterprises concerned. Therefore, the non-profit 'Foundation for Family Businesses' commissioned the National Institute for Public Administration German to identify costs that are not or insufficiently considered in the current practice of estimating compliance costs.