Impact of the REACH policy on the employment in the Czech Republic Overview of the study Final presentation January 16th, 2005

1 Characteristics of the REACH study1 Results of the REACH study2 Next steps3 Agenda Scenario "clouds"2.1 Scenario "storm"2.2 Scenario "hurricane"2.3

2 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. Characteristics of the REACH study 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 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 1

3 Methodology / Data / Model Characteristics of the REACH study 1 The study was based on a mathematical model with the following structure REACH direct costs loss of production (profitability) loss of production (restrictions) Impact on chemical industry Impact on automobile industry Impact on SME Impact on textile industry Impact on paper industry Recommendations for action (Ministry of social affairs) Impact on employment (+ specifically SME) Impact on XY industry … Impact on SME

4 Characteristics of the REACH study 1 Mathematical model was based on the following modeling steps and their interactions A loss of production (restrictions) B loss of production (profitability) C direct costs Production volume and employment Production volume and employment (after A impact) Production volume and employment (after A,B impact) Production volume and employment (after A,B,C impact) Modeling the A impact Modeling the B impact Modeling the C impact

5 Scenario variables 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 Three scenarios 1 The modeling process is based on three basic scenarios driven by calibration of eight basic variables Characteristics of the REACH study CLOUDS STORM HURRICANE optimistic basic pessimistic

6 Characteristics of the REACH study1 Results of the REACH study2 Next steps3 Agenda Scenario "clouds" Scenario "storm" Scenario "hurricane"

7 2 Results of the REACH study The overall results of the defined scenarios have a significant impact on the Czech economy "clouds" optimistic "storm" basic "hurricane" pessimistic 1.943mil. Kč 4.246mil. Kč 6.403mil. Kč mil. Kč mil. Kč mil. Kč Scenario Costs of the government (during the 11 years of REACH implementation) Loss of production. (every year after full implementation of the REACH) Lost employment opportunities (after full implementation of REACH)

8 Characteristics of the REACH study1 Results of the REACH study2 Next steps3 Agenda Scenario "clouds" Scenario "storm" Scenario "hurricane"

9 2.1 Results of the REACH study Chemical industry will loose 578 jobs under the scenario "clouds" SME (chemical) BE (chemical) BE (other) SME (other) Chemical industry (578)

Results of the REACH study The rest of the industries will loose jobs under the scenario "clouds" SME (chemical) BE (chemical) BE (other) SME (other) Other industries (1.189)

Results of the REACH study The SME sector will loose 930 jobs under the scenario "clouds" SME (chemical) BE (chemical) BE (other) SME (other) SME (930)

12 Characteristics of the REACH study1 Results of the REACH study2 Next steps3 Agenda Scenario "clouds" Scenario "storm" Scenario "hurricane"

Results of the REACH study Chemical industry will loose jobs under the scenario "storm" SME (chemical) BE (chemical) BE (other) SME (other) Chemical industry (1.985)

Results of the REACH study The rest of the industries will loose jobs under the scenario "storm" SME (chemical) BE (chemical) BE (other) SME (other) Other industries (3.836)

Results of the REACH study The SME sector will loose jobs under the scenario "storm" SME (chemical) BE (chemical) BE (other) SME (other) SME (3.417)

16 Characteristics of the REACH study1 Results of the REACH study2 Next steps3 Agenda Scenario "clouds" Scenario "storm" Scenario "hurricane"

Results of the REACH study Chemical industry will loose jobs under the scenario "hurricane" SME (chemical) BE (chemical) BE (other) SME (other) Chemical industry (4.380)

Results of the REACH study The rest of the industries will loose jobs under the scenario "hurricane" SME (chemical) BE (chemical) BE (other) SME (other) Other industries (10.220)

Results of the REACH study The SME sector will loose jobs under the scenario "hurricane" SME (chemical) BE (chemical) BE (other) SME (other) SME (8.784)

20 Characteristics of the REACH study1 Results of the REACH study2 Next steps3 Agenda Scenario "clouds" Scenario "storm" Scenario "hurricane"

21 detailed regional analysis of the impact of REACH policy 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 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 Next steps I. Phase Detailed analysis in the critical areas II. Phase Regional analysis III. Phase Definition of actions 3 The overall recommendations were divided in to the three main areas followed by implementation process Next steps IMPLEMENTATION