Essentially: unsold clothing is worth less than zero and recycling most clothing creates more emissions than it saves. So the law is forcing headache for nothing.
If companies are taking raw materials worth more than zero, and turning them into clothing worth less than zero, then I think deterring them from doing that is beneficial to society overall.
If they knew in advance that the clothing wouldn't sell, they would never have made it!
But companies stockpile goods in anticipation of potential demand. For example, they'll "overproduce" winter coats because some winters are colder than average. This sort of anti-overproduction law means that the next time there's an unexpected need -- for example an unusually cold winter -- there will be a shortage because there won't be any warehouses full of "just in case" inventory.
They could, but it’s a tradeoff. Inventory costs money and if you cut production, that means laying off workers and possibly selling productive assets, at which point it becomes more expensive to scale production back up.
Every business decision is a tradeoff. Smart government interventions in the economy add weight to that tradeoff to reflect externalities not otherwise accounted for; this is how cap-and-trade on SO2 emissions works. Hamfisted government interventions set hard and fast rules that ignore tradeoffs and lead to unintended consequences.
I don't think this is accurate. It's more that the textiles are produced in Asia and transported in containers.
Due to the high shipping costs, they err on the side of filling up the containers to cover the fixed cost. After selling the clothes, there might be enough clothes left over to fill shipping containers to return the clothes, but they will be clothes from different brands and manufacturers.
It would require extraordinary coordination on both the origin and destination country to return the clothes to the manufacturer where they could add the left over clothes to the next batch that is being shipped out to a different country.
Do we really need warehouses full of "just in case" inventory? It's not life or death, it's just slightly more profitable for companies to overproduce than it is for them to attempt to meet demand exactly.
Climate change is coming, fast and brutal. I'm okay with these multi-billion-dollar revenue companies making a few points less in profits, if it means slowing climate change by even a fraction of a fraction of a point.
They don't need those profits. But our children need a viable planet.
Companies can't meet demand exactly, no matter what profit margin they take, because it's not possible to predict demand exactly. Biasing towards overproduction is how you minimize the risk of shortages when there's a bit more demand than you expected.
as far as a market clearing problem goes, we should be forcing them to sell it at lower and lower prices, or even going to negative and payoyng people to take it off their hands.
supply and demand is that an oversupply makes prices fall, rather than driving artificial scarcity
Well, it sounds like that's what the EU is going to try. My guess is that the manufacturers are mostly destroying stuff for economically rational reasons, and will respond with production cuts leading to that same artificial scarcity from a consumer perspective.
(Although the original commenter would say, I suspect, that it's perfectly OK if there are minor consumer shortages in luxury goods for the sake of the climate.)
> This sort of anti-overproduction law means that the next time there's an unexpected need -- for example an unusually cold winter -- there will be a shortage because there won't be any warehouses full of "just in case" inventory.
Clothes are something extremely overabundant in the EU. And even if they weren't, the unexpected overdemand will result in just using your old coat another year or buying one you like less. Workers are being unnecessarily exploited and resources are being unnecessarily wasted... so I think nudging companies in the right direction is way overdue. Will it work the way EU thinks? Probably not. Just like GDPR was well-intended, but the result is higher entry barrier to new companies and a bunch of annoying popups. But I'd argue that's a result of "not enough" regulation rather than "too much". Companies caught abusing our data should have been outright banned IMHO.
What about cases where 2 pieces of clothing when bundled together have value due to making it more efficient for people to find the right size, but over the right size is found the other becomes waste? A company can't prevent a consumer from ruining the wasted clothes.
But that is how physical stores currently work, where you can try the stuff on, before you buy it? If you care about this, you can of course take the upper one to try on, like all do and then buy the lowest one. But you wash the clothing anyways before actually wearing them, so it doesn't really matter. Honestly I don't get your point.
The worth is zero because the producer doesn't pay for the externalities (pollution, landfill usage etc). So essentially it is "free" because it is subsidized by everyone.
The "headache" is just : produce what you sell, sell what you produce, don't fill the world with your shit.
Also: this will lead to it being harder to find clothing in your size in the EU (since each size is a new sku and must be inventory managed per the law)
