Overall, notified bodies may face net costs. However, the costs associated with a reduction in the level of work as a result of a more-coherent scope and product definition are inconsistent with responses from manufacturers. Taking the predicted benefits from the additional work required to address signal-carrying ready-made connecting devices (€700,000 {$640,000} to €19 million {$17 million}) would mean that notified bodies may experience net benefits.

End-Users of Equipment and Appliances

Consumer and user awareness of EMC arises mainly through experience of electromagnetic interference (EMI). Of the consumer organizations contacted, 64% considered that consumers do experience such problems, mainly because these organizations receive complaints about EMI. They also believe that consumers are likely to contact public authorities when they experience EMI problems, so the level of complaints to authorities may be a good indicator of the level of EMI problems.

Half of the respondents believed that the amendment would result in reduced levels of EMI; the remainder did not think that EMI levels would change. Responses also indicated that consumers might be willing to pay a premium for equipment that avoided EMI problems, in contrast to the views of manufacturers that such a premium would not be feasible.

The main costs faced by users relating to the amendment include increased prices. The increases were attributed to the costs manufacturers pass on to ensure the compliance of ready-made connecting devices, the costs of redesign to ensure that apparatuses meet the requirements without additional devices, and the costs of meeting the information requirements of the amendment. End-user costs may also include reduced availability of products in cases in which manufacturers restrict sales to technically competent users.

The primary benefits to users would arise from reduced levels of EMI under the amendment, most noticeable to users of TV and radio. Sensitive populations, such as hearing-aid users and people who are electrically hypersensitive, may also see some benefits. No reliable data are available on the size of such populations or the extent of problems experienced, and so it proved impossible to quantify these benefits.

Users and Operators

This group includes radio, telecommunications, and electricity network operators, their professional and private users, and consumers using radios, televisions, telephones, and other forms of electronic communication. The key issue for this group is the potential for EMI to affect the operation, as well as the quality, of networks, although networks may also give rise to EMI. Network operators expect the overall level of EMI to decrease as a result of the amendment. Amateur radio users, however, expect the overall level of EMI to increase under the amendment.

Currently, network operators spend only a small sum in dealing with EMI. This is because action is only taken when EMI is detected by operators or by a third party. However, responses from organizations representing consumers indicate that a significant proportion experience EMI problems, which are most noticeable in relation to the use of networks. Therefore, these groups would benefit from a reduction in EMI.

Costs for this population arising from the amendment to the EMC Directive include:

In addition, some costs may come in terms of increased EMI problems under voluntary resort to notified bodies if the amendment results in any delays in authorities determining whether to withdraw an apparatus from the market.

Benefits for network operators and users relate to the amendment's potential for reducing levels of EMI. These include:

Some benefits may arise from reduced EMI associated with the inclusion of ready-made connecting devices within the scope of the directive. It was not possible to quantify these benefits. Overall, this group may face net costs from the amendment, with most of the costs borne by network operators.

Public Authorities

Public authorities in each member state are responsible for enforcing the EMC Directive and for dealing with complaints about EMI. Public authorities responding to the study believed that most variables would result in no change in the effect of the EMC Directive for them.

The main costs for public authorities occur as a result of increased workload associated from the application of the directive to ready-made connecting devices. Another potential cost may result from the increased time to withdraw noncompliant products from the market because of the voluntary use of notified bodies.

Benefits associated with the amendment are expected to come from easier identification of products because of new information requirements in the amendment. Overall, the amendment is anticipated to result in net costs to public authorities.

The Qualitative Costs and Benefits

A significant number of costs and benefits could not be quantified. For example, some manufacturers predicted costs from additional training and staff education in cases in which notified bodies will not be used. Installers and operators of fixed installations predicted increased costs due to the need to determine who is responsible for ensuring compliance. Such costs could be significant if litigation is required.

Some manufacturers indicate an increase in costs due to delays in getting products to market in which competent bodies are replaced by notified bodies. Such delays could be seen in countries where there is a limit on the number of notified bodies. If the level of EMI were reduced, certain users and operators of networks would see qualitative benefits ; however, if the level of EMI increases, certain users (including amateur radio users) would experience costs. Notified bodies may see an increase in their level of work in cases in which competent bodies are replaced by notified bodies.

Conclusion

Calculation of the overall level of costs and benefits suggests that there may be net costs as a result of the amendment to the EMC Directive. These may range from €1.3 billion ($1.2 million) to €3.5 billion ($3.2 billion), with a best estimate of net costs of €2.4 billion ($2.2 billion), discounted over eight years. This compares with a total production value for all manufacturers, installers, notified bodies, and networks covered by the EMC Directive, discounted over the same eight-year period, of €5700 billion ($5200 billion). The highest estimated net costs, of €3.5 billion ($3.2 billion), therefore represent only 0.06% of total production value. This can be compared with the current costs of compliance, which are estimated at 1­5% of product price.

The distribution of costs and benefits indicates that manufacturers are predicted to pay most of the costs (89­90%) but will only experience 54­68% of the benefits. Certain sectors (notably information technology manufacturers and small- and medium-sized enterprises) may experience proportionally higher costs of up to 0.5% of total production value. Network users and operators are expected to receive almost one-third of the benefits, whereas notified bodies receive between 2 and 13%. However, the number of costs and benefits that could not be quantified complicates such a comparison of costs and benefits.

About 60% of the costs are associated with having a more-coherent scope and product definition in the amendment, with information requirements for apparatuses accounting for nearly 30%. Almost all of the costs are likely to fall onto manufacturers, unless they are able to pass on some of the costs through increased product prices. The majority of the benefits (73­83%) are related to the regime for fixed installations. Manufacturers and network operators and users experience these benefits. Such benefits may offset some--but not all--of the costs that manufacturers expect to face under the amendment.

Teresa Fenn is a consultant and Jan Vernon, PhD, is business development director for Risk & Policy Analysts Ltd. (London). Jan Vernon can be reached at jan@rpalon.demon.co.uk. The full report can be downloaded from the European Commission's Web site (http://europa.eu.int/comm/enterprise/electr_equipment/engin/cba.pdf)