EU Taxonomy: Mission Impossible

Abstract

Abstract The EU Taxonomy stands in sharp contrast to the principles of a market economy. It requires regulatory knowledge that cannot be expected to exist and hampers rather than stimulates entrepreneurial initiatives for coping with socially relevant scarcities. For all objectives addressed with his approach, more efficient policy instruments exist that play with and not against market forces. Apart from allocative inefficiencies, the Taxonomy-approach opens the door for all kinds of particularistic maneuvers and hidden political agendas. The Taxonomy absorbs high-skilled labor that is in high demand elsewhere in the economy and creates a massive extra bureaucratic burden without any expectable benefit for the total economy. Given the fundamental flaws in the overall concept, policy makers should stop it rather sooner than later.