Results of the CCCS-ESS Essay Competition 2022

1^st Prize

Mr Tseng Zhi Cheng, Sean Douglas (Asia-Pacific Centre for Environmental Law)

Abstract:

As the climate change problem worsens, the private sector is increasingly seen as a vital lever for environmental sustainability. In this respect, competition law is often seen as an obstacle to much needed business collaboration. It need not be. At its normative core, considerable overlap already exists between the aims of competition law and environmental sustainability – both seek to increase dynamic efficiencies, and ensure longevity of businesses. Through the exemption to the prohibition under s. 34 of the Competition Act, environmental sustainability can be incorporated into the competition law framework. Such exemption provides, inter alia, that agreements would not be prohibited if they contribute to the promotion of technical or economic progress. In this regard, environmental economics has sufficiently progressed to allow environmental benefits to be translated into the language of economics and competition law. The CCCS is thus encouraged to adopt a more capacious interpretation of “economic progress” to allow the consideration of environmental benefits in its cost-benefit analysis. In setting out a theoretical rubric, the CCCS could act in one of two ways: first, it could act to prevent businesses from agreeing to activities harmful to sustainability. This requires a lighter touch approach. Second, it could take action to support agreements that promote sustainability, which would require a balanced approach. Adopting this framework requires some practical implementation. This includes making climate change a strategic priority and publishing specific guidelines on environmental sustainability agreements. The CCCS could also engage in a dialectic with businesses that could extend to creating a ‘sandbox’ for businesses to experiment with sustainability-linked collaborations. Importantly, it would need to undertake capacity-building in sustainability and environmental economics expertise to credibly account for benefits under its analyses. While challenging, competition law’s role in facilitating desirable business collaboration in environmental sustainability is not only possible but critical.

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2^nd Prize

Mr Tian Chuyue (NUS)

Abstract:

The traditional focus of competition law has been maintaining market competition and efficiency. But as the world undertakes more progressive measures to combat climate change, questions arise as to how clashes between environmental protection and market efficiency should be resolved, as well as how the Competition and Consumer Commission of Singapore (CCCS) can make use of its toolkits to contribute to Singapore’s environmental campaigns. This essay starts by highlighting the fluidity of market definition in light of environmental changes and the corresponding policy reforms. It then moves on to argue that environmental factors can and should be incorporated into the CCCS’s assessment of business conduct. Not only does the Competition Act permit the CCCS to do so, but it is also the duty of the Commission to encourage sustainable practices. The essay further examines three questions:

(1) In relation to restrictive agreements, how the CCCS can take environmental benefits into account in an objective and principled manner. Ideally, environmental benefits should constitute “net economic benefits”. But given the practical difficulty of quantifying the benefits, it is also suggested that the CCCS can consider not taking formal proceedings against restrictions that are purely ancillary to an environmental agreement.

(2) How the CCCS should supervise concentrated markets and dominant firms which arise as a consequence of new environmental policies and technologies. Conversely, how the CCCS can promote sustainability in concentrated markets, such as through introducing the right to repair. Exact answer to these questions requires case-by-case analysis.

(3) In view of the growing concerns over greenwashing, what measures the CCCS should adopt to facilitate Singapore’s ambition to become a green finance hub. Broad-based guidelines governing general business conduct, as well as stronger legal enforcement measures, are called for. Public education on greenwashing is also crucial.

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3^rd Prize

Ms Selene Tanne (NUS Law, Asia-Pacific Centre for Environmental Law)

Abstract:

Humanity is facing existential environmental crises, including climate change and biodiversity loss. This must be mitigated through environmental sustainability, which entails decarbonisation and reduced resource consumption. Despite the urgency, progress remains sorely inadequate. Sustainable technologies exist but not at the large scale of production and consumption required. Thus, this essay argues that competition and consumer protection regimes (i.e., laws and policies) can and should be instrumentalised by Singapore to push the economy-wide sustainability transition. While both are crucial, our competition regime is an important driver in the background, while our consumer protection regime takes a more front-facing role in driving our economy-wide sustainability transition.

Part I demonstrates how fair competition as we know it is environmentally damaging and seems at odds with environmental sustainability. Part II reconciles the two by showing how our competition regime maintains fair competition in a balanced and effective manner, excusing collaborations and mergers if they can achieve net economic benefits and benefits to consumers and wider society. Further, it draws on best practices from the Netherlands, a jurisdiction that is a pioneer in sustainability-conducive competition regulation, to show that we are on the right track and for ideas on how fair competition can be used to spur sustainability activities. Part III argues that, in contrast, our consumer protection regime is insufficient to protect consumers against greenwashing and regulate green claims. As a solution, it suggests setting up an expert group to (1) create and promulgate standards for green claims that are harmonised with international standards and national goals; and (2) exercises monitoring, verification, and enforcement powers.

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Merit

Mr Jonathan Loke Chieh Hahn & Mr Benjamin Choo Guang Neng (University of Cambridge)

Abstract:

Environmental sustainability today is a significant priority of the Singapore government with far-reaching policy implications, of which competition and consumer protection law is one. This essay distinguishes between existing pro-competition and consumer measures that complement certain sustainability goals, while also considering the potential conflicts between environmental sustainability and conventional economic efficiency considerations. We propose there is no need for a major overhaul to the existing regulatory framework, though elements can be modified to accommodate such considerations.

Where sustainability and economic efficiency complement each other in cases where competition and consumer protection law improves competition on sustainability grounds and protects consumers from “greenwashed products”. Where sustainability and economic efficiency conflict, we note that there could be higher costs resulting from adoption of more sustainable practices which are then passed on to consumers. There are also risks of higher environmental standards raising barriers to entry into an industry. To this end, it is recommended that CCCS integrate sustainability concerns into its net economic benefit framework in three ways: social carbon costing, revealed preferences, and stated preferences.

We conclude that CCCS should not deviate from its original mandate of enforcing competition and consumer law; however, it should adopt new methods to better quantify environmental effects of anti-competitive behaviour. Its approach should also complement the government drive towards sustainability more generally.

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Merit

Ms Fiona Zeng YuQi

Abstract:

Environmental protection has become one of the most critical concerns in 21st century. To meet the Paris agreement to limit global warming to below 2, preferably 1.5 °C, groundbreaking technologies and improvisation of industrial standards are needed. Due to the complexity and challenges in shifting businesses towards sustainability, competitors are often required to collaborate to bring about greater impact than acting independently. However, the nature of collaboration might potentially distort market competition. The aim of this paper is to discuss the role of competition and consumer protection laws and policies in supporting and incentivizing sustainable business practices while ensuring healthy competition within markets.

First, I will be exploring how rivalries could be engaging in productive collaboration without restricting competition.

Second, I will be exploring cases where collaboration, while creating positive environmental impact, is anticompetitive and might breach the competition and consumer protection law. I will then assess the effectiveness of current laws and policies in balancing the needs between promoting sustainability and ensuring fair competition. I argue that current competition assessment is inadequate in quantifying the benefits derived from environmental protection and would suggest Competition and Consumer Commission of Singapore (CCCS) to (i) conduct a consumer’s welfare cost and benefits analysis through consumer surveys; (ii) use environmental indicators to quantify environmental impact; (iii) use long time horizon for assessment.

Lastly, I will be exploring cases where collaborations are anticompetitive and detrimental to the environment. I will be focusing on greenwashing conduct. I will then assess the effectiveness of current laws and policies in combating such challenges. I argue that there is a lack of competition and consumer laws specifically targeting greenwashing and guidance for consumers to identify greenwashing. I suggested CCCS to write (i) a new Code to address greenwashing; (ii) publish legislative definitions to define sustainability jargons.

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Merit

Ms Toh Yan Yun (NTU)

Abstract:

The competition and consumer protection framework in Singapore constitutes the range of mechanisms that the government engages to maximise the productivity and economic efficiency of its markets. As environmental sustainability takes an increasingly central and pivotal role in the national agenda, the existing efficiency logic arguably restrains the ability of businesses to undertake sustainability agreements without infringing the Competition Act. Considering the plausibility of a conflict between sustainability and the Competition Act, the green transition poses novel problems regarding the definition, quantification, and inclusion of sustainability under the current legal architecture. Concurrently, as more businesses seek to appeal to environmentally-conscious consumers, the issue of greenwashing intensifies.

Consequently, this paper argues that while a complete overhaul of current policies is unnecessary, calibrated amendments and increased governmental intervention is, however, imperative. Six suggestions will be provided to tackle both the incorporation of sustainability initiatives and the troubling practice of greenwashing. For the former, it asserts that:

I. The publication of sustainability guidelines detailing the CCCS’s approach towards sustainability will be necessary to empower businesses in their green endeavours

II. The CCCS should employ state preference methods in their quantification of consumers’ willingness to pay for environmental sustainability benefits

III. A review of the current competition regulatory framework to consider the inclusion of sustainability agreements that yield wider societal benefits will be crucial to tackling the climate change urgency

With regards to the curbing of greenwashing practices, it contends that:

I. The educating of consumers will be vital in bridging the information gap that currently hinders their ability to practise due diligence against greenwashing practices

II. The CCCS can issue consumer protection law guidance for all businesses making environmental sustainability claims to follow

III. Legislative changes should be implemented to explicitly target greenwashing and prompt voluntary civil compliance among businesses

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1^st Prize

Mr Caius Or Shin Yi (Tampines Meridian Junior College)

Abstract:

This essay explores the role of competition and consumer protection laws in promoting environmental sustainability in light of the deteriorating quality of the environment.

Section 1 establishes the context of environmental sustainability and the role of firms, highlighting the growing role of firms in promoting environmental sustainability. As key elements of private initiatives, competition and consumer protection laws play an essential role in driving environmental sustainability.

Section 2 analyses the various causes of market failure in the market for sustainable initiatives. This includes demand-side market failure due to information asymmetry and positive externalities, along with supply-side market failure due to first-mover disadvantage. This section also illustrates the impacts and introduces an outline of possible ways to reduce market failure such as collaboration among firms, and further details the environmental benefits of collaboration.

Section 3 examines the role of competition law in driving environmental sustainability. Competition law can promote sustainability by enhancing productive and dynamic efficiency, but it also has the potential to impede sustainable collaborations by firms. This is exacerbated by the legal uncertainty surrounding sustainable collaborations given the lack of explicit guidelines and precedent cases. I argue that environmental benefits should be considered as economic efficiencies when assessing the anticompetitive effects of sustainability agreements given the positive externalities generated, and this would be consistent with Singapore’s approach to competition law. These benefits can be measured with established methods of pricing environmental benefits such as shadow pricing.

Section 4 addresses how consumer protection law can be enhanced to better reduce false or misleading sustainability claims (greenwashing) by providing greater certainty and clarity with regards to these claims.

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2^nd Prize

Mr Lim En Hao, Mr Matthew Tan Yee Keat & Shayna Leng Shuen Rea (Hwa Chong Institution - College Section)

Abstract:

Competition and consumer protection laws should strike a balance between inter-firm agreements/collaboration promoting sustainability, and maintaining healthy competition. The exigency for firms to align with national sustainability goals poses a dilemma: can competition be sacrificed for future welfare?

This paper focuses on business agreements forwarding sustainability goals instead of agreements that stifle sustainability, enabling us to evaluate if the Competition and Consumer Protection Commission of Singapore’s (CCCS) current framework adequately assesses “out-of-market” efficiencies and costs of anti-competitiveness.

While green innovation and competition are essential to increasing sustainability, “out-of-market” efficiencies are difficult to quantify and qualify as they are (1) non-pecuniary, (2) long-run benefits, and (3) indirectly related to the market. Additionally, anti-competitiveness in the Green Economy arises primarily through novel agreements instead of traditional margers. Moreover, the accompanying problem of Greenwashing demands a novel solution: its high prevalence undermines the current CCCS model reliant on consumer proactivity.

In lieu of these difficulties, we propose a framework that aligns with CCCS’ undergirding principles and aims to (1) qualify “out-of-market” efficiencies as demand-side efficiences and dynamic efficiencies, (2) quantify aforementioned efficiencies through various valuation methodologies, (3) utilise quantitative indicators to analyse the costs of anti-competitive agreements, and (4) offer detailed specifications for the objective justification of sustainability claims.

Singapore’s national drive towards sustainability has deep implications for economic sectors like the Green Finance industry. While the Green Economy is on the rise, this paper’s recommendations seek to empower CCCS in the effective facilitation of healthy competition and achievement of sustainability. Instead of attempting to reform CCCS’ underlying principles, this paper demonstrates that its existing principles can be applied in unique ways to address market failures and “out-of-market” efficiencies prevalent in the Green Economy.

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3^rd Prize

Ms Emily Tan Cheng Kai & Mr Wu Yu (Raffles Institution - Junior College)

Abstract:

Public awareness of environmental problems has grown over the past few years, galvanising worldwide efforts to switch to more sustainable practices. On top of inspiring individual action, this has also prompted governments to introduce laws and guidelines to ensure environmental protection. However, there exists cost barriers that may disincentivise businesses from engaging in the ‘greenification’ of their production processes and operations. As such, businesses occasionally engage in anticompetitive behaviours in order to mitigate the aforementioned harms.

While the primary goal of current competition and consumer protection laws remains the guaranteeing of fair market competition, given Singapore’s goal to transform into a green economy, there is room to consider the ways in which competition and consumer protection laws can evolve to better support businesses who wish to embrace sustainable practices.

In our paper, we evaluate two broad categories of anticompetitive behaviour: behaviour that is environmentally harmful and behaviour that is environmentally beneficial. In the former case, we examine how existing law — in protecting fair competition — coincides with sustainability interests. Specifically, we focus on three types of behaviour: greenwashing, abuse of dominance and collusive agreements.

We discuss possible improvements which can better deal with such instances. In the latter case, when competition and sustainability interests conflict, we first evaluate the normative question of whether competition law should make exceptions in order to better support sustainability goals. We further suggest a possible framework for how environmental interests can be factored into judgements on anticompetitive cases. Finally, we touch on alternative measures that CCCS can

adopt in order to balance competition and sustainability interests.

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Merit

Ms Ayda Ko Jing Xuan & Ms Teo Hui Qi Asta (Dunman High School)

Abstract:

With the rise of environmentalism, consumers’ shifting tastes and preferences for green products have spurred the market to strive for greater sustainability in the production of their goods. By considering the existing state of competition and consumer protection laws and policies, this paper seeks to analyse the efficacy of current measures in promoting sustainability goals, while protecting consumers against unfair trading practices and preventing abuse of dominance arising from collaborations.

Firstly, current competition laws and policies have effectively recognised the benefits and drawbacks of collaborations, striking a healthy balance between collaboration and competition by allowing collaborations with net economic benefits. However, there is still a need for greater clarity and explicit guidance in regards to the permissibility of specifically green collaborations with competitors.

Secondly, consumer protection laws today reduce information asymmetry between consumers and firms by tackling misleading claims. However, current guidelines need to be extended further to cover environmental misrepresentation as well. There is still a lack of resources for firms to avoid making misleading sustainability claims, and for consumers to identify greenwashing practices.

Without a uniform definition of what constitutes environmental sustainability, current competition and consumer laws have faced many difficulties in specificities directly dealing with sustainability matters. To more accurately address sustainability matters, the essay introduced a more specific measurement and categorisation of environmental benefits that can complement current guidelines. Through the expansion of the existing net economic benefit system, sustainability collaborations could be further encouraged. Moreover, the introduction of a sustainability index for firms can also protect competition despite the increase in market concentration.

Overall, if current competition and consumer protection laws could be extended to include sustainability explicitly, the goals of the CCCS in maintaining market efficiency and preventing market failures of market dominance and information asymmetry are not far from being achieved.

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Merit

Ms Jane Sim Jia Zhen & Ms Caitlyn Gan Shao Li (National Junior College)

Abstract:

In recent years, due to rising global environmental awareness, many countries including Singapore have been transitioning towards a greener economy. As more consumers shift towards sustainable products and more firms gear towards sustainable business models, this gives rise to increasing competition and room for unlawful acts in the market. Thus strong regulatory direction along with cohesive efforts across sectors are the key to transitioning to a green economy. In Singapore, laws such as the Competition Act and Consumer Protection (Fair Trading) Act (CPFTA) enforced by the Competition and Consumer Commission of Singapore (CCCS) have been regulating both the firms in the market and protecting consumers when achieving sustainable goals. However, both laws lack market context relating to sustainability and guidelines necessary for businesses and consumers to make key sustainability decisions. Therefore, targeted amendments have to be made to address these shortcomings.

Overall, this essay addresses 2 main aspects: (1) How current competition laws and policies can better enable companies to achieve their sustainability objectives; (2) How current consumer protection laws and policies can provide better protection for consumers against exploitation by green companies. In section 2, the role and limitations of the Singapore Competition Act relating to sustainability are outlined. Amendments and steps to take in 3 key areas - Anti-competitive sustainability agreements, Abuse of dominant position, Mergers and Acquisitions are also proposed. This is followed by suggestions on how to quantify externalities accruing from sustainable practices. Section 3 evaluates the benefits and costs of competitors agreeing on energy-efficient standards, and its impact on consumers. Here, we propose government subsidies for SMEs to encourage competitors to agree on energy-efficient standards. Lastly, section 4 evaluates the role and limitations of the CPFTA in protecting consumers from exploitation by green companies whilst suggesting guidelines for making sustainability claims.

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Merit

Mr Lee Zonglin, Tristan & Mr Tek Kai Zhen (National Service)

Abstract:

With the environmental movement gaining traction, the interaction between competition, consumer protection and sustainability is increasingly coming under the spotlight. Globally, we see regulators greening existing rules and working on new rules to foster sustainability. As Singapore’s competition and consumer protection authority, the Competition and Consumer Commission of Singapore (“CCCS”) has to consider how it intends to incorporate environmental considerations into its policies to align with the national drive towards sustainability.

In the domain of competition, we examine the situations where anti-competitive conduct may benefit or harm sustainability. We then borrow the “sword-and-shield” analogy to elucidate how competition laws and policies may tackle unsustainable conduct while providing sufficient leeway for sustainability cooperation to flourish. In the latter case, we answer important normative and technical questions regarding the integration of environmental considerations into the traditional competition assessment. Through examining the local legal framework, we argue that environmental benefits should be considered “objective justification” to defend firms from antitrust liability. We then delve into how environmental cost-benefit analysis (CBA) should be conducted, with reference to relevant concepts like shadow pricing, discounting, and standard of proof. Yet, we acknowledge the limitations of a purely utilitarian approach and suggest the possibility of a strong sustainability approach.

Concurrently, we identify the role of consumer protection policies in fostering sustainability through tackling greenwashing. Specifically, we propose a three-pronged approach. Firstly, we find that there is much legal uncertainty regarding greenwashing in Singapore and propose authorities to provide greater clarity through enacting new provisions or expounding on existing ones. Secondly, we leverage the economic concepts of screening and signalling and recommend authorities to mandate environmental disclosures as well as to implement an environmental certification and labelling scheme. Lastly, we argue that both top-down and bottom-up enforcement need to be stepped up to deter greenwashing.

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