EU Regulators REACHing for Straws

While I'm on the theme of government caused inflation (see here), the European parliament is in overdrive passing laws that will drive up the cost of living for its citizens. Among the several laws passed recently, a sweeping chemical industry regulation, called "REACH", is the most remarkable. It will basically require chemical companies to register and recertify with the government nearly every chemical used in any way on the continent. The compliance costs will be enormous and these costs will find their way into the price of goods, untold numbers of everyday goods really. I am sympathetic to the theoretical argument that these costs are not without benefits, that there will be some health benefit and value accruing to society. I am however firmly convinced that the net result will be a dead weight loss to Europe's economies and standard of living. Governments have atrocious records in cost benefit analysis and nearly anyways impose huge costs for dubious, fleeting and sometimes non-existent benefits. What's worse is that European lawmakers are 1) arrogant enough to think that their little plan is appropriate for the rest of the world and 2) stupid enough to think that others will follow suit. Most developing countries place a higher value on economic development than on environmental protection. Those that have some concern for environmental stewardship make an effort to address severe environmental malfeasance but otherwise ignore dubious environmental initiatives that will hold back development. Either way, rapidly developing countries will see this as an opportunity to attract chemical industry capital and jobs at the expense of Europe. I'm betting that China and India laugh at this and get more aggressive at developing their chemical sectors. Stay tuned.