Impact of the REACH policy on the employment in the Czech Republic

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SCHP CR Association of Chemical Industry
of the Czech Republic and Arthur D.
Little Prague, 23.3.2006
Impact of the REACH policy on the employment in
the Czech Republic Overview of the study
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Agenda
Characteristics of the REACH study
1
Results of the REACH study
2
Scenario "clouds"
2.1
Scenario "storm"
2.2
Scenario "hurricane"
2.3
Next steps
3
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The primary goal of this study was an assessment
of the impact of the REACH policy implementation
on the employment in the chemical industry and
other selected industries
Characteristics of the REACH study
The main goal of the project is the assessment of
the employment loss risk as a most important
social impact of the REACH system implementation.
Results of the study should help the state
institutions define their future policy to
minimize this impact on the Czech economy.

• expected impact of the REACH policy
  implementation (direct costs, loss of production,
  )
• impact of the REACH policy on the employment in
  the chemical industry and other industrial
  sectors
• impact of the REACH policy on small and medium
  enterprises where higher impact is expected

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The study was based on a mathematical model with
the following structure
Characteristics of the REACH study
Methodology / Data / Model
Impact on automobile industry
Impact on SME

• REACH
• direct costs
• loss of production (profitability)
• loss of production (restrictions)

Impact on chemical industry
Impact on textile industry
Impact on SME
Impact on paper industry
Impact on SME
Impact on SME

Impact on XY industry
Impact on SME
Impact on employment ( specifically SME)
Impact on employment ( specifically SME)
Recommendations for action (Ministry of social
affairs)
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Mathematical model was based on the following
modeling steps and their interactions
Characteristics of the REACH study
A loss of production (restrictions)
Production volume and employment
Production volume and employment (after A impact)
Modelingthe A impact
B loss of production (profitability)
Production volume and employment (after A impact)
Production volume and employment (after A,B
impact)
Modelingthe B impact
C direct costs
Production volume and employment (after A,B
impact)
Production volume and employment (after A,B,C
impact)
Modeling the C impact
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The modeling process is based on three basic
scenarios driven by calibration of eight basic
variables
Characteristics of the REACH study
Scenario variables
Three scenarios
optimistic

• costs of registration
• number years for allocation of costs to the
  product prices
• loss of production caused by high registration
  costs
• strength of impact on the SME segment
• increase of costs based on the compulsory change
  of current supplier
• loss of production caused by the new restrictions
• possibility of substitution
• cost increase caused by substitutes

CLOUDS
basic
STORM
pessimistic
HURRICANE
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Agenda
Characteristics of the REACH study
1
Results of the REACH study
2
Scenario "clouds"
2.1
Scenario "storm"
2.2
Scenario "hurricane"
2.3
Next steps
3
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The overall results of the defined scenarios have
a significant impact on the Czech economy
Results of the REACH study
Lost employment opportunities(after full
implementation of REACH)
Costs of the government (during the 11 years of
REACH implementation)
1.943mil. Kc
6.403mil. Kc
16.060mil. Kc
Loss of production.(every year after full
implementation of the REACH)
4.246mil. Kc
13.692mil. Kc
33.272mil. Kc
"clouds" optimistic
"storm" basic
"hurricane" pessimistic
Scenario
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Agenda
Characteristics of the REACH study
1
Results of the REACH study
2
Scenario "clouds"
2.1
Scenario "storm"
2.2
Scenario "hurricane"
2.3
Next steps
3
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Chemical industry will loose 578 jobs under the
scenario "clouds"
Results of the REACH study
Chemical industry(578)
SME(chemical)
SME (other)
BE(chemical)
BE(other)
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The rest of the industries will loose 1.189 jobs
under the scenario "clouds"
Results of the REACH study
SME(chemical)
SME (other)
BE(chemical)
Other industries (1.189)
BE(other)
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The SME sector will loose 930 jobs under the
scenario "clouds"
Results of the REACH study
SME (930)
SME(chemical)
SME (other)
BE(chemical)
BE(other)
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Agenda
Characteristics of the REACH study
1
Results of the REACH study
2
Scenario "clouds"
2.1
Scenario "storm"
2.2
Scenario "hurricane"
2.3
Next steps
3
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Chemical industry will loose 1.985 jobs under the
scenario "storm"
Results of the REACH study
Chemical industry (1.985)
SME(chemical)
SME (other)
BE(chemical)
BE(other)
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The rest of the industries will loose 3.836 jobs
under the scenario "storm"
Results of the REACH study
SME(chemical)
SME (other)
BE(chemical)
Other industries (3.836)
BE(other)
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The SME sector will loose 2.062 jobs under the
scenario "storm"
Results of the REACH study
SME (3.417)
SME(chemical)
SME (other)
BE(chemical)
BE(other)
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Agenda
Characteristics of the REACH study
1
Results of the REACH study
2
Scenario "clouds"
2.1
Scenario "storm"
2.2
Scenario "hurricane"
2.3
Next steps
3
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Chemical industry will loose 4.380 jobs under the
scenario "hurricane"
Results of the REACH study
Chemical industry (4.380)
SME(chemical)
SME (other)
BE(chemical)
BE(other)
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The rest of the industries will loose 10.220 jobs
under the scenario "hurricane"
Results of the REACH study
SME(chemical)
SME (other)
BE(chemical)
Other industries (10.220)
BE(other)
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The SME sector will loose 8.784 jobs under the
scenario "hurricane"
Results of the REACH study
SME (8.784)
SME(chemical)
SME (other)
BE(chemical)
BE(other)
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Agenda
Characteristics of the REACH study
1
Results of the REACH study
2
Scenario "clouds"
2.1
Scenario "storm"
2.2
Scenario "hurricane"
2.3
Next steps
3
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The overall recommendations were divided in to
the three main areas followed by implementation
process
Next steps
Next steps

• detailed analysis of the value chains in textile
  and rubber processing industry
• detailed analysis of production losses in SMEs
  due to profitability problems
• analysis of the impact of the REACH
  implementation on innovations

I. Phase Detailed analysis in the critical areas

• detailed regional analysis of the impact of REACH
  policy implementation

II. PhaseRegional analysis
IMPLEMENTATION

• investment incentives for chemical industry
• re-qualification programs for employees in
  chemical industry
• system of financial help for SMEs in the chemical
  industry
• network of REACH advisory institutions for SMEs

III. Phase Definition of actions
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