Evaluating impacts on additional costs
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Scope
Will the option impose additional adjustment, compliance or transaction costs on businesses?[1]
Definition
This key question deals with the potential impacts of a new policy impacts on the fixed and variable cost structure of companies. Adjustment costs are the one-off costs arising from the reallocation of resources as a result of policy induced changes. Compliance costs are the direct costs arising from complying with a policy measure. Transaction costs are incurred during the identification of the most appropriate compliance route.[1]
Such impacts may take effect through the need to invest in new installations, triggered by e.g. new environmental standards. It is also possible that existing production processes and work routines have to be adjusted in order to comply with new administrative or product quality standards. Furthermore it is possible that the market structure for specific companies is affected in a sense that their supply chain or the customer relation have to be re-organised. In those cases transaction cost may rise temporarily or even permanently.[1]
Result
Further information
EC related information:
European Commission: DG Enterprise and Industry
Activities of the European Union: Enterprise policy
Other information:
Indicators:
There are no Eurostat Structural or Sustainable Development Indicators directly related to this key question.[1]
See also
References
This text is for information only and is not designed to interpret or replace any reference documents. The text is partially adapted form the Commission Impact Assessment Guidelines SEC(2005)791