Policy Monitor—The Economics of Toxic Substance Control and the REACH Directive

Policy Monitor—The Economics of Toxic Substance Control and the REACH Directive Abstract The European Union (EU) regulation on the registration, evaluation, authorization, and restriction of chemicals, known as the REACH Directive, is intended to improve the protection of human health and the environment through the better and earlier identification of the intrinsic properties of the thousands of chemicals commonly used in the EU. This article presents an overview of the technical and economic challenges of toxic substance control and discusses how REACH has addressed the challenges of chemical regulation. The article identifies a number of barriers encountered in implementing REACH, including the fact that critical data concerning the toxicological properties of chemicals is missing from about 90 percent of the 184 REACH registration dossiers examined. The article also discusses how the information generated by REACH could be used to develop complementary policies, such as risk-based taxation, to better reflect the external effects of harmful chemicals and to provide further incentives for the development of products and processes that minimize the generation and use of hazardous substances. The article concludes by highlighting key insights and guidance for industry, policymakers, and academic researchers that can be derived from this examination of the economics of toxic substance control and REACH. Chemicals: A Blessing and a Curse Chemicals are used in almost all manufactured products to enhance appearance or performance and provide many other benefits, including boosting agricultural production, making water safer to drink, and contributing to pest control and public health. However, less than 5 percent of the millions of industrial chemicals on the market have been adequately evaluated for their potential health and environmental effects (Schaafsma et al. 2009). Research shows that chemicals can negatively affect human health and the environment in numerous ways. For example, some common chemicals can disrupt the endocrine or immune system in humans (Prüss-Ustün et al. 2011). Others can harm our brains, our reproductive abilities, and fetal development or can trigger cancer (Fredslund and Bonefeld-Jørgensen 2012). Chemicals can also damage wildlife and ecosystems (United Nations Environment Programme 2012). Moreover, a growing body of evidence indicates that many chemicals have biological effects at doses that were previously considered negligible (Vandenberg et al. 2012). It is also becoming increasingly evident that long-term exposure to relatively low doses of chemicals can cause subtle harmful effects (Birnbaum 2012). In addition, people and ecosystems are exposed to mixtures of thousands of chemicals from a wide range of sources, which can be detrimental because low and supposedly safe levels of some chemicals can become hazardous when they are combined with other substances (Sarigiannis and Hansen 2012). Not all chemical products or uses pose potential risks, nor is the nature of the risk always the same. The properties of their formulations, amounts applied, application methods, and environmental conditions determine their behavior and fate in the environment. In some cases, chemicals are not obviously dangerous. In fact, they may have rather low reactivity, but after accumulating to dangerous levels in the biosphere, their properties may become negative. Furthermore, some chemicals can travel far from where they were used or emitted. For example, various hazardous persistent organic pollutants (POPs)1 that were used in the past as pesticides and solvents have been discovered in Arctic regions where these chemicals have never been produced or used (Fromberg, Cleemann, and Carlsen 1999). The U.S. Environmental Protection Agency (EPA) defines a toxic chemical as any substance that may be harmful to human health or the environment if inhaled, ingested or absorbed through the skin (U.S. Environmental Protection Agency 2010). Although the environmental economics literature has been expanding, very little attention has been paid to the specific issues that arise in the regulation of chemical substances that might turn out to have toxic properties. This article seeks to fill this gap in the literature by discussing the technical and economic challenges of toxic substance control, focusing in particular on experience with the implementation of the European Union (EU) regulation on the registration, evaluation, authorization, and restriction of chemicals—known as the REACH Directive—which is arguably the strictest law to date regulating chemical substances and affects industries throughout the world. The goal is to provide some principles and guidelines to policymakers who are responsible for the design and implementation of toxic substance control policy and to provide the chemical industry and other stakeholders with an overview of the key features of REACH. The article also seeks to provide academic researchers with an overview of toxic substance control and to highlight additional research that is needed to help advance the state of the art of chemical regulation. The remainder of the article is organized as follows. The next section describes the technical challenges that arise in assessing chemical hazards and risks. This is followed by a discussion of how these challenges affect the economics of toxic substance control and complicate the implementation of chemical regulations. Then I provide an overview of REACH and discuss how it addresses the challenges of regulating chemical substances. The penultimate section evaluates the performance of REACH and identifies lessons learned and the potential for improvement. The final section discusses the guidance that REACH offers to industry, policymakers, and academics to help them improve chemical regulation in the future. Technical Challenges of Assessing Chemical Hazards and Risks Quantifying the risks associated with chemical use poses a major challenge for assessing chemical hazards and risks because it is difficult to trace exposures and determine the levels of risk they pose. Risk assessment methodologies are generally used to systematically evaluate specific environmental hazards (Hansen, Carlsen, and Tickner 2007). The words hazard and risk have very specific meanings in chemical assessments. Hazard relates to the intrinsic properties of a chemical, for example, the various concentrations of a chemical that can cause various detrimental effects. Risk relates to the ability to cause harm in certain situations and thus refers to a combination of both hazard and exposure. This means that risk assessment must consider both the chemical’s toxicity (or hazard) and human and/or wildlife exposure, which depends on how the chemical is used. Thus, in assessments of chemicals, if there is no exposure, then by definition there can be no risk. To illustrate, a very hazardous chemical poses a risk if it is inhaled or poured down the drain, but not when it is kept in a stoppered bottle. The remainder of this section discusses how risk assessment is used to identify chemical hazards and to trace exposures, thus providing critical information concerning the toxicological properties of chemicals that can be used as a basis for regulating chemicals. The difficulties of assessing the risks of chemical mixtures are also discussed. Risk Assessment and Chemical Regulation Risk assessments seek to quantify the risks associated with exposure to toxic chemicals. Four steps are used to quantify the risks to human health (van Leeuwen and Vermeire 2007). The first step is hazard identification, which often consists of testing whether the chemical causes cancer or other harmful effects in laboratory animals. The second step is dose–response assessment, which identifies the relationship between receiving a dose of the chemical and experiencing adverse effects. Analysts often have to extrapolate findings from high laboratory doses to low actual doses and from laboratory animals to humans. Third, exposure assessment estimates how often, for how long, and with what intensity humans are exposed to the chemical. This is determined based on surveys that ask subjects about their lifestyles and habits, taking environmental samples, and screening subjects’ blood, urine, hair, or other physical samples to measure concentrations of the chemicals in their bodies. Fourth, risk characterization combines the exposure and dose–response assessments to estimate health impacts on subjects. The information gathered through these four steps is then used to identify a threshold safety exposure dose (i.e., reference dose), which is the level at which humans can be exposed to chemicals for specific periods of time without suffering adverse health effects. Likewise, environmental hazard assessment seeks to identify the concentration of chemical substances below which adverse effects on the environment are not expected to occur. In principle, the reference doses for human and environmental protection are fairly conservative because they incorporate uncertainty factors and assume that people and species may be exposed daily or constantly throughout their lives. Risk assessment measures environmental risk by comparing the reference dose to the exposure level that human populations and/or species actually face. If actual exposure levels exceed the reference dose (i.e., the risk ratio of exposure to reference dose is greater than 1), unacceptable effects on humans or other species are likely to occur and immediate regulatory action to restrict or prohibit the use of the chemical is required (Schwarzenbach et al. 2006). However, certain groups of chemicals that are particularly dangerous are treated as “nonthreshold” chemicals,2 that is, uncertainties in the risk assessment and the consequences of being wrong are of such a magnitude that it is considered appropriate to regulate them based on their hazard properties alone (Syberg et al. 2009). The main rationale for restricting or banning the use of these substances is that because exposure cannot be ruled out, and the substances can cause serious harm, it is preferable to encourage the use of safer alternatives (Hansen, Carlsen, and Tickner 2007). Chemical Mixtures We turn now to the difficulties of assessing the risks of chemical mixtures. As discussed earlier, real-life exposures generally involve mixtures of chemicals. Some of these may be “intentional” mixtures, in the sense that they are intentionally manufactured as chemical mixtures (e.g., pesticides, laundry detergent), while others may be “coincidental” mixtures, composed of unrelated chemicals from different sources but with the potential to affect the same population of individuals (e.g., different pesticides are found simultaneously in an average stream and effluents from sewage treatment plants contain hundreds of different pollutants; see, e.g., Paxéus 1996). The greatest concern about the toxicity of chemical mixtures is that combined chemicals may result in a synergistic toxicity that is not detected in evaluations of individual chemical toxicity (LeBlanc and Wang 2006). However, in general, such synergistic interactions have been found to be surprisingly rare. Moreover, it has been shown that as the number of chemicals in a mixture increases, the individual interactions between chemicals are likely to become less dominant because their relative contributions to the overall toxicity decrease. Because synergistic effects are not common, the addition of individual risk ratios (a method known as concentration additivity) is widely used to estimate the toxicity of chemical mixtures (Backhaus, Arrhenius, and Blanck 2004). If chemicals are assessed individually, there is the potential for underestimating societal risks. To illustrate, consider a case in which each of the individual components of a mixture are below the threshold concentrations that would trigger immediate regulatory action (e.g., the risk ratio for each of four chemicals in a mixture is 0.26 and thus the individual components are deemed safe). However, the overall toxicity of the mixture, which is given by the sum of the individual risk ratios, is greater than 1, implying that regulatory action is needed. Thus compliance with individual threshold values does not necessarily safeguard against mixture effects, suggesting that chemical regulation that does not consider chemical mixtures will fail to fully address chemical risks. Characteristics That Complicate Implementation of Chemical Regulation Based on the technical challenges of assessing chemical hazards and risks and the toxicity of chemical mixtures, there appear to be (at least) five main characteristics of chemicals that complicate the implementation of regulations to control them (see also Macauley, Bowes, and Palmer 1992). I discuss each of these characteristics here. Chemical Exposure Occurs at Different Stages of the Product Life Cycle The first characteristic is that exposure to chemical substances occurs at different stages of the life cycle of products, that is, during the production of the product’s inputs, during the product’s use by industry or households, and during disposal. Each of these stages may require different types of regulations. The number and diversity of producers to regulate become far more limited the farther upstream one goes, whereas moving downstream leads to a progressively larger and more diverse set of intermediate producers, and ultimately thousands of final product users. Thus the challenge is to identify which actors are most readily able to implement measures to minimize chemical risks cost-effectively at each stage of the product life cycle. Dangers Vary Across Products The second characteristic that complicates the implementation of environmental regulations is that the risks from exposure vary markedly across products. This means that we need to design and implement policy instruments that reflect these differences in chemical toxicity and risks. Although a broad range of policy instruments is available to regulate chemicals,3 two main instruments have been used to control chemical substances: taxes and bans. A serious drawback related to the use of such chemical taxes is that regulators have limited control over the effect of a tax on emission levels. This is because once the tax rate is set, it is largely up to firms to decide how much to abate. Moreover, the majority of the chemical taxes in place entail low rates and do not vary with the riskiness of the chemicals (Söderholm and Christiernsson 2008). This could lead to unintended consequences, because even if the taxes promote reductions in the quantity of chemicals used, the reductions may be achieved through the substitution of more toxic products. Thus, for very hazardous chemicals, command and control regulations (e.g., bans) provide the required certainty of control. However, for chemicals not deemed to be very hazardous (i.e., the ratio of exposure to the reference dose is less than 1), the goal of designing policy instruments that reflect differences in chemical toxicity and risks could be achieved through risk-based environmental taxation, which would assign a relatively higher tax rate to chemicals that pose a greater risk to humans and the environment (e.g., Nichols 1982; Sadler 2000). For example, risk-based taxes have been applied to pesticides in Europe, where differentiated pesticide taxes have led to the use of less risky pesticides and non-chemical plant protection strategies (Böcker and Finger 2016).4 Such risk-based taxation may also increase its perceived fairness and hence political legitimacy (e.g., Söderholm and Christiernsson 2008). Substitution of Products and Processes The third characteristic is the wide scope for substitute products and production processes. Indeed, as indicated earlier, when efforts are made to eliminate a highly hazardous chemical in products, manufacturers frequently substitute another hazardous chemical. More specifically, what is known as a “lock-in” problem occurs when one chemical from a group of structurally similar chemicals is removed from the market and replaced with other chemicals from the same group, with essentially the same health and environmental concerns (Strempel et al. 2012). Thus regulations must be broadly defined to avoid the lock-in problem. This links back to the issue of the choice of policy instruments. Empirical evidence has shown that banning a substance while allowing exemptions is often less cost effective than a tax because the costs of substitution differ considerably across uses/producers and taxes provide polluters with a higher degree of flexibility to search for alternative solutions (e.g., Slunge and Sterner 2001). Bans might also lead to lobbying for exemptions rather than research on new technologies (Sterner 2004). Substitution might take place not only “within” borders but also “across” borders (known as “leakage”) if large asymmetries in the stringency of chemical regulation shift chemical-intensive production toward countries or regions with less stringent regulation. However, empirical evidence has shown that taking the lead in implementing ambitious environmental policies leads to small adverse effects on competitiveness, trade, and employment (e.g., Dechezleprêtre and Sato 2017).5 Chemical Mixtures The fourth characteristic of chemicals that complicates the implementation of regulation concerns chemical mixtures. Regulations have attempted to move beyond single chemical assessments to focus more on the cumulative effects of simultaneous chemical exposures. In fact, the U.S. Superfund program began conducting cumulative risk assessments at hazardous waste sites as early as the 1980s (e.g., U.S. Environmental Protection Agency 2003). However, due to the limitations of current science and the lack of methods and data, the implementation of legislation addressing chemical mixtures is far from easy. Direct regulation can be used, based on the overall toxicity of a mixture, but as discussed earlier, given the wide variation in the cumulative toxicity of chemicals, risk-based taxation of individual components of a mixture is a much more effective instrument. Intentional mixtures are easier to regulate because their composition is generally known and risk assessment can be performed prospectively based on the properties of the individual constituents. Unfortunately, it is much more difficult to address coincidental mixtures due to their varying composition in space and time and the constant entry of new pollutants (Backhaus, Arrhenius, and Blanck 2004). However, one option would be to also implement environmental quality standards that limit the concentration of hazardous substances in different environmental media. Lack of Information and Information Asymmetries The final characteristic concerns the issue of information. In particular, there is a lack of information about the effects of chemicals and there is asymmetric information about the costs of compliance with chemical regulations (Sterner 2004). Testing of chemicals improves the information base about the effects of chemicals for regulatory decision making concerning the production and use of chemicals. Given limited time and resources, testing a large number of chemicals requires prioritization. The literature suggests that chemicals with higher exposure and those that are known to be highly toxic or highly persistent should be tested first because testing of such chemicals offers more valuable information (e.g., Gabbert and Weikard 2010). This is also important because testing costs comprise not only direct monetary costs, but also animal welfare loss.6 Asymmetric information In addition to the lack of information about the effects of chemicals, the regulator does not know with certainty the costs of compliance with chemical regulations. When a regulatory authority imposes a direct control, the regulated industry has an incentive to overestimate the costs of compliance in order to obtain exemptions. In contrast, when taxes are used, industry has no incentive to overestimate the costs because doing so would imply that the equilibrium tax necessary to achieve reductions in pollution is high. One would also not expect firms to underestimate compliance costs because doing so would amount to acknowledging that compliance is easier than it actually is. Furthermore, a tax promotes rapid technological change (Sterner 2004). That is, if a company has an exemption from a ban that allows it to use a chemical for a given period, it has little incentive to develop or adopt alternatives before the concession deadline. However, if taxes are used, there is an incentive to quickly adopt safer alternatives to minimize tax payments. The regulator also does not know if firms are complying with chemical regulations. This is because existing chemical regulations frequently require firms to self-report their compliance status to regulatory agencies. Although self-reporting reduces enforcement costs, a minimum level of enforcement is necessary to ensure that self-reports are truthful and complete (Kaplow and Shavell 1994). Information disclosure Compliance can be enhanced by complementing conventional policy instruments with public disclosure—the regulatory collection and dissemination of information about firms’ environmental performance. This type of regulation corrects for informational asymmetries between polluters and consumers, allowing communities to pressure polluters to decrease their emissions. Public disclosure is becoming increasingly popular, due in part to evidence that the U.S. Toxic Release Inventory (TRI), which requires that manufacturing plants that emit more than a given threshold level of any listed toxic substance provide emissions data to the EPA for use in a publicly available database, has had a significant impact on emissions. More specifically, national releases declined by 43 percent from 1988 to 1999 (Bui and Mayer 2006) and by approximately 30% between 2001 and 2010 (U.S. Environmental Protection Agency 2010). The pressure placed on firms by private and public sector agents to improve environmental performance also helps to explain the adoption of voluntary measures, such as certification and labeling (Sterner and Coria 2012). More specifically, firms might “overcomply” with regulatory standards in order to attract “green” consumers, preempt future regulations, and reduce how intensively existing regulations are enforced. For example, under the U.S. 33/50 voluntary program,7 the EPA challenged participating firms to aggressively reduce their aggregate emissions of 17 highly toxic chemicals. Evaluations of the program has shown that substantial reductions of the targeted chemicals were achieved because it targeted firms with the greatest reduction potential (Hoang, McGuire, and Prakash 2018). Growing pressure from consumers has also incentivized major brands, health care providers, and retailers to evaluate alternatives to chemicals of concern and to develop lists of restricted substances to guide suppliers in avoiding these chemicals (see. e.g., Geiser et al. 2015 and Cattermole 2016). To summarize, coherent and effective regulation of chemicals depends on the availability of information about the toxicological properties of chemicals. Thus the challenge is determining how to gather accurate information and utilize it to design policies that reflect differences in chemical risks. In the next section we discuss how information is gathered and utilized under the REACH Directive. The Regulation of Chemicals Under REACH In the late 1990s, the EU was making slow progress in assessing the potential human health and environmental hazards of commonly used chemicals because of a lack of information concerning the properties of the chemicals and the burden of proof of these hazards falling on regulatory authorities rather than industry (Brown 2003). Thus, in 2001, the European Commission (EC) proposed a framework for a new system of chemical regulation aimed at addressing these issues. In late 2003, the EU proposed an early version of REACH (Bergkamp and Herbatschek 2014). After several rounds of stakeholder input and negotiation between industry representatives and regulatory officials, the REACH Directive was adopted in December 2006 and entered into force on June 1, 2007, with implementation phased in over a decade. When fully in force in June 2018, it will require all companies manufacturing or importing chemical substances into the EU in quantities of 1 metric ton or more per year to provide a safety-related dataset for a large number of existing and new chemicals to the agency established to manage the technical, scientific, and administrative aspects of REACH, the European Chemicals Agency (ECHA). In the remainder of this section I describe the regulatory programs under REACH, the role of member states in REACH, and the program’s global impacts. Regulatory Programs Under REACH REACH regulates chemicals commonly used in the EU in industrial processes and in intentional chemical mixtures and products, which range from cleaning products and paints to clothing, furniture, and electrical appliances (e.g., Bergkamp and Herbatschek 2014). The aim of REACH is to ensure a high level of health and environmental protection through the better and earlier identification of the intrinsic properties of these chemicals (Williams, Panko, and Paustenbach 2009). With this aim in mind, the REACH Directive has established four complementary regulatory programs: Registration. This requires that regulated companies submit a dossier that contains information on a given substance. The dossier must include information about the identity, manufacture, classification, and labeling of the substance; guidance on its safe use; summaries of its intrinsic properties; possible proposals for further testing; main use categories; types of uses; and significant pathways of exposure. Regarding information about the intrinsic properties of chemicals, the information requirements under REACH are tiered according to weight, which can be viewed as a proxy for the level of exposure. For substances that are produced annually or imported in amounts of more than 10 tons, a chemical safety assessment must be prepared that includes information on human health and environmental hazards as well as an assessment of persistent, bioaccumulative, and toxic (PBT) and very persistent and very bioaccumulative (vPvB) characteristics and possible restrictions for certain uses (Williams, Panko, and Paustenbach 2009). If a substance meets the criteria for classification as dangerous8 or is assessed to be PBT or vPvB, then the chemical safety assessment must also include an exposure assessment and a risk characterization. Evaluation. Under this program, the ECHA is required to evaluate a minimum of 5 percent of the registration dossiers it receives, of which 25 percent must be randomly selected and 75 percent must be targeted (i.e., selected based on technical or hazard-related concerns). When making targeted selections for evaluation, priority is given to substances of very high concern (SVHCs) that are produced in amounts greater than 100 tons per year per producer (Hansen, Carlsen, and Tickner 2007). SVHCs are chemicals classified as carcinogenic, mutagenic, or toxic for reproduction; PBT or vPvB; substances that give “rise to an equivalent level of concern” as endocrine-disrupting chemicals; or chemicals that meet more than one of the previous three criteria. Authorization. The authorization program seeks to ensure that the risks from SVHCs are properly controlled and to cause the replacement of SVHCs with safer chemicals. A substance subject to authorization cannot be placed in the market for use on its own, in mixtures or incorporated into an article unless the use has been specifically authorized. The REACH Directive states that authorization should be granted only if the registrant demonstrates that the risks are adequately controlled or the substance provides socioeconomic advantages that outweigh the risks and no suitable alternative substances or technologies are available (Bergkamp and Herbatschek 2014). Thus the burden of proof lies with the firms, which must apply for authorization by a deadline established under the REACH Directive and cease use of the chemical by a specified date unless authorization is granted or an application for authorization is pending. Restriction. This program is aimed at managing—at the EU level—chemical risks to human health and the environment that are not adequately addressed by the other provisions of REACH. Under this program, the manufacture and use of chemical substances, as well as their presence in products, can be subjected to binding limitations and conditions, including complete prohibitions. Unlike authorization, restriction is not limited to SVHCs and applies even to substances that do not require registration (e.g., substances manufactured or imported in amounts less than 1 ton per year). A restriction may take many forms, including general bans on all uses, bans on specific uses (e.g., as a flame retardant), bans on products available to the general public, and limits on the concentration of a substance in specific consumer products (Bergkamp and Herbatschek 2014).9 In addition to the four programs, REACH also establishes rules on notification of the presence of SVHCs in products. Companies producing or importing articles containing SVHCs must notify the ECHA and all downstream users (since downstream users may be in a position to implement measures to reduce exposures to the chemical). Data Sharing Under REACH REACH follows a “one substance, one registration” approach. This means that firms that produce or import the same chemical substance are required to share data with each other and to submit those data as part of one joint registration. Thus the data sharing under REACH encourages communication and cooperation between competing firms.10 This joint registration also eases the burden on the ECHA of evaluating the registration materials by consolidating much of the information from many companies into a single document. Moreover, this data sharing and joint registration reduces duplicative animal testing and spreads the cost of testing over multiple companies (Abelkop and Graham 2015). Role of Member States in REACH Decisions regarding authorization and restriction are made by the EC. However, member states may recommend that specific chemicals be considered as SVHCs. Member states are responsible for ensuring enforcement of REACH (through official systems of controls and legislation that specifies penalties for noncompliance). Furthermore, member states can adopt regulatory measures that complement REACH (see Scott 2009). One example of such complementary measures is the Swedish tax on bromine-, chlorine-, and phosphorous-based substances used in electronics, which was implemented in 2017. Global Impacts of REACH REACH has not only affected European companies, it has also served as a model for chemical reforms around the world (e.g., Uyesato et al. 2013), including in Korea, Japan, China, and Malaysia. It also inspired the recent reform of the U.S. Toxic Substances Control Act—known as the Frank R. Lautenberg Chemical Safety for the 21st Century Act (referred to hereafter as the “Lautenberg Act”)—which was signed into law in June 2016. The Lautenberg Act significantly strengthens the EPA’s regulation of chemicals and authorizes it to collect fees from the chemical industry to help fund chemical reviews (Denison 2017). Like REACH, the new law requires the EPA to evaluate both existing and new chemicals, with clear and enforceable deadlines. Furthermore, the Lautenberg Act requires the EPA to evaluate a chemical’s safety based purely on health risks11 and to then take steps to eliminate any unreasonable risks. REACH Performance: Lessons and Potential for Improvement We next examine the performance of REACH thus far and discuss some potential areas for improvement. Performance of REACH REACH has been in place for more than 10 years. During this time, information has been provided on 130,000 substances, 11,560 companies have registered substances, 60,134 registration dossiers have been submitted for 16,124 substances, 173 substances have been identified as SVHCs, 31 substances have been included on the authorization list, and 65 substances have been restricted (Bourguignon 2016). The annual cost of REACH for the chemical sector (including registration fees and dossier preparation costs) over the 2008–2014 period is estimated to be about 0.8 percent of the companies’ value added and less than 0.2 percent of their revenues (Bourguignon 2016). In terms of the health and environmental benefits of REACH, most studies seem to agree that it is too soon to see a clear effect (Bourguignon 2016). However, REACH is expected to have a long-term positive effect on human health and the environment through either successful substitution of chemicals or better risk management procedures (de Avila and Sandberg 2006). Nevertheless, the main contribution of REACH is expected to come from the new information collected on the toxicological properties of chemicals under the registration program, which can help industry adopt relevant risk management measures (European Chemicals Agency 2017). Regarding substitution, there is some evidence that the authorization requirement has stimulated substitution away from SVHCs, although it is difficult to know how much substitution this requirement has caused because the ECHA does not receive information from companies that previously used (but have ceased using) SHVCs and thus did not apply for an authorization. Interestingly, firms have indicated that inclusion on the candidate list of substances to be classified as SVHCs provides an early warning to firms to replace their use of SVHCs, and it has been an important driver of substitution (e.g., Coria and Autade 2018). Inclusion on the candidate list also creates a stigma for the chemicals listed. Downstream users, which are often consumer-oriented companies, appear to fear bad press associated with using an SVHC and therefore instruct their suppliers to switch substances in order to avoid controversy. Listing also seems to encourage companies not to seek authorization in order to avoid having the company name associated with controversial substances, even if the benefit–cost case for authorization is strong. There is also evidence that companies that apply for an authorization often overestimate the benefits of continued use of SVHCs and underestimate the costs to human health and the environment, suggesting that companies overestimate the costs of compliance in order to be granted authorization. For example, the ECHA (2017) estimates that the aggregate benefit–cost ratio for continued use of authorized substances thus far is 15:1, implying that for the time being it has been socially beneficial to authorize the use of such substances. However, the aggregate benefit–cost ratio stated in the firms’ applications has been much higher—100:1 (European Chemicals Agency 2017). It is difficult to determine whether firms have made such a sizeable overestimation of the ratio for strategic reasons or out of ignorance, although it is likely that it reflects not only uncertainty, but also an element of tactical reporting. Moreover, although the ECHA’s scientific committees have recommended the authorization of all applications received to date, they have recommended shorter review periods than suggested in the firms’ applications, either because the applications failed to demonstrate convincingly that suitable alternatives would not become available in the near future or because the applications’ assessments of risks or socioeconomic impacts contained substantial uncertainties and/or methodological shortcomings. Lessons Learned and Potential for Improvement of REACH It is useful to highlight some of the lessons learned from REACH thus far. First, under the “no data, no market” concept (i.e., any company that wishes to manufacture or import a chemical into the EU in an amount of 1 ton or more per year must first register the chemical substance and provide a safety-related dataset), more data on chemicals have been assembled than ever before (Abelkop and Graham 2015). Second, by covering all stages in a substance’s life cycle, REACH has promoted communication throughout the industrial supply chain, forcing manufacturers to learn more about their entire supply chains and stimulating risk management measures and safety-enhancing chemical substitutions (Abelkop and Graham 2015). Regarding potential improvements to REACH, a fundamental problem of the program is that as a regulatory instrument it is not able to directly incentivize a reduction in the use of conventional chemicals (i.e., chemicals not listed as SVHCs, which account for the vast majority of chemicals that are regulated under REACH). Indeed, authorization and restriction are the two key REACH programs for mandatory regulation of chemical risk. In contrast, the underlying assumption of the registration and evaluation programs is that with greater information on the hazardous properties of chemicals, companies will reduce the use of such chemicals voluntarily, as a matter of good business practice. However, although REACH has led to the production of more information, the case for mandatory regulation has remained largely unchanged because the ability of voluntary approaches to achieve reductions in chemical use or to promote the use of safer alternatives has not been proven, particularly in the absence of a credible threat of other regulation that specifies clear targets and commitments (Organization for Economic Co-operation and Development 2003). A second area for improvement concerns quality assurance. The incentive structure of REACH for self-reporting of the toxicological properties of chemicals is inverted in the sense that if producers signal concern about the hazardous properties of a chemical, government authorities or the general public will intervene via mandatory regulations or bad publicity. In other words, producers have an incentive to underestimate risks in order to avoid mandatory regulations or bad reputations. It is doubtful that the current structure will create sufficient incentives for accurate and thorough reporting of the toxicological properties of chemicals unless there is sufficient assurance of data quality in the registration process to counterbalance the existing perverse incentives. Unfortunately, such a system of quality assurance is not in place, as reflected in the poor quality of a significantly large proportion of registration dossiers. For example, in a 2016 REACH Progress Report on the results of dossier assessments, the ECHA found that critical data were missing in about 90 percent of the 184 examined registration dossiers, with the noncompliant companies asked to provide the missing information (European Chemicals Agency 2016). Companies also failed to update their data regularly, even though REACH instructs them to do so (European Chemicals Agency 2016). Thus the ECHA may want to consider refusing or withdrawing a chemical’s registration if dossiers are incomplete or of poor quality. A third area for improvement concerns the fate of information once it is generated. It is important to make sure that the information generated to date under REACH actually leads to fewer risks to human health and the environment by using such information to design policy instruments that reflect differences in chemical toxicity and risks. The experience with risk-based pesticide taxation suggests that risk-based taxation of the chemicals covered under REACH is feasible and that it can be implemented using the same type of information that is provided in the REACH registration dossiers. Moreover, Sweden’s experience with taxes on chemical substances suggests that the use of complementary measures to speed up the EU transition towards safer products is a feasible option. Tax revenues can be used to support innovation and cover administrative costs and, in particular, to provide funding to increase the stringency of the quality assurance activities performed under REACH. Finally, the impact of economic instruments can be further increased through the use of disclosure mechanisms such as the TRI or the candidate list under REACH because company reputation can be leveraged to play a key role in improving the performance of chemical regulation. Conclusions and Insights for Industry, Policymakers, and Academia This article has discussed the major technical and economic challenges of toxic substance control and how REACH has addressed the challenges of chemical regulation. I conclude by highlighting key insights and guidance for industry, policymakers, and academic researchers that can be derived from this examination of the economics of toxic substance control and REACH. For industry. The main insight is that chemical regulation is less costly than industry might expect and can have positive effects for companies by enhancing safety, improving the management of risks, enhancing the reputation of the firm, and attracting “green” consumers. For policymakers. The main insight is that REACH has succeeded in gathering information, but more information is not always better information. Thus there must be effective systems of quality assurance. Moreover, policymakers should not limit their focus to direct regulations because there is much to gain from policies that better account for the social cost of chemical use. Finally, regulators should be more proactive and use the information generated by REACH to develop complementary instruments that can increase the incentives for substitution toward safer chemicals. Risk-based taxation is one example of such an instrument. For academia. The main insight is that further research on the economics of chemical regulation should focus on assessment of the policy options that are best suited to addressing chemical mixtures and ex post evaluation of chemical regulations in place, in particular, quantification of the costs and benefits of such regulations, as well as identification of the factors affecting their performance. Finally, truly interdisciplinary research is needed to define sufficiently protective boundaries against the human and ecosystem impacts of chemical emissions and exposures, thus providing the holistic scientific information that policymakers need to develop coherent and effective regulations. This article benefitted from input by colleagues at the FRAM Centre for Future Chemical Risk Assessment and Management at the University of Gothenburg. I am particularly grateful to Thomas Sterner, Thomas Backhaus, Christoph Rheinberger, Jorge Bonilla, Daniel Slunge, Lina Trosvik, Debbie Axlid, Managing Editor Suzanne Leonard, and Features Editor Frank Convery for valuable discussions and comments. Appendix Table 1 Policy options for the control of chemical substances Instruments Examples Strengths Direct controls Emission and exposure standards, bans on products/processes EPA emission standards for chlorinated solvents; U.S. Occupational Safety Act limits to exposure to chemicals in the workplace; bans on DDT, PCBs, and CFCs High level of certainty over the outcome, which is particularly relevant for chemicals for which the likelihood of irreversible damage is high Liability Liability rules for hazardous wastes in U.S. CERCLA Enhances compliance with conventional instruments through fines or compliance incentives Economic instruments Taxes, fees, or charges Taxes on fertilizers and pesticides in Europe; Swedish tax on bromine-, chlorine-, and phosphorous-based substances used in electronics Spurs substitution towards safer chemicals. If differentiated, can reduce overall toxicity Tradable permits Phasing out of CFCs and asbestos in the early 1980s The outcome of the regulation can be effectively predicted Deposit–refund schemes Lead–acid batteries, pesticide and propane gas containers, waste oil, and tires of vehicles Provides incentives for proper disposal Engaging the public Information disclosure, voluntary agreements, certification and labeling Toxic Release Inventory, U.S. EPA 33/50, Greenpeace Detox Campaign, cancer warning labels under California’s Safe Drinking Water and Toxic Enforcement Act Enhances compliance with conventional instruments. Provides proactive firms with the opportunity to improve their public image Instruments Examples Strengths Direct controls Emission and exposure standards, bans on products/processes EPA emission standards for chlorinated solvents; U.S. Occupational Safety Act limits to exposure to chemicals in the workplace; bans on DDT, PCBs, and CFCs High level of certainty over the outcome, which is particularly relevant for chemicals for which the likelihood of irreversible damage is high Liability Liability rules for hazardous wastes in U.S. CERCLA Enhances compliance with conventional instruments through fines or compliance incentives Economic instruments Taxes, fees, or charges Taxes on fertilizers and pesticides in Europe; Swedish tax on bromine-, chlorine-, and phosphorous-based substances used in electronics Spurs substitution towards safer chemicals. If differentiated, can reduce overall toxicity Tradable permits Phasing out of CFCs and asbestos in the early 1980s The outcome of the regulation can be effectively predicted Deposit–refund schemes Lead–acid batteries, pesticide and propane gas containers, waste oil, and tires of vehicles Provides incentives for proper disposal Engaging the public Information disclosure, voluntary agreements, certification and labeling Toxic Release Inventory, U.S. EPA 33/50, Greenpeace Detox Campaign, cancer warning labels under California’s Safe Drinking Water and Toxic Enforcement Act Enhances compliance with conventional instruments. Provides proactive firms with the opportunity to improve their public image Notes: CFCs = chlorofluorocarbons; CERCLA = Comprehensive Environmental Response, Compensation and Liability Act; DDT = dichlorodiphenyltrichloroethane; PCBs = polychlorinated biphenyls;. Source: Sterner and Coria (2012). View Large Appendix Table 1 Policy options for the control of chemical substances Instruments Examples Strengths Direct controls Emission and exposure standards, bans on products/processes EPA emission standards for chlorinated solvents; U.S. Occupational Safety Act limits to exposure to chemicals in the workplace; bans on DDT, PCBs, and CFCs High level of certainty over the outcome, which is particularly relevant for chemicals for which the likelihood of irreversible damage is high Liability Liability rules for hazardous wastes in U.S. CERCLA Enhances compliance with conventional instruments through fines or compliance incentives Economic instruments Taxes, fees, or charges Taxes on fertilizers and pesticides in Europe; Swedish tax on bromine-, chlorine-, and phosphorous-based substances used in electronics Spurs substitution towards safer chemicals. If differentiated, can reduce overall toxicity Tradable permits Phasing out of CFCs and asbestos in the early 1980s The outcome of the regulation can be effectively predicted Deposit–refund schemes Lead–acid batteries, pesticide and propane gas containers, waste oil, and tires of vehicles Provides incentives for proper disposal Engaging the public Information disclosure, voluntary agreements, certification and labeling Toxic Release Inventory, U.S. EPA 33/50, Greenpeace Detox Campaign, cancer warning labels under California’s Safe Drinking Water and Toxic Enforcement Act Enhances compliance with conventional instruments. Provides proactive firms with the opportunity to improve their public image Instruments Examples Strengths Direct controls Emission and exposure standards, bans on products/processes EPA emission standards for chlorinated solvents; U.S. Occupational Safety Act limits to exposure to chemicals in the workplace; bans on DDT, PCBs, and CFCs High level of certainty over the outcome, which is particularly relevant for chemicals for which the likelihood of irreversible damage is high Liability Liability rules for hazardous wastes in U.S. CERCLA Enhances compliance with conventional instruments through fines or compliance incentives Economic instruments Taxes, fees, or charges Taxes on fertilizers and pesticides in Europe; Swedish tax on bromine-, chlorine-, and phosphorous-based substances used in electronics Spurs substitution towards safer chemicals. If differentiated, can reduce overall toxicity Tradable permits Phasing out of CFCs and asbestos in the early 1980s The outcome of the regulation can be effectively predicted Deposit–refund schemes Lead–acid batteries, pesticide and propane gas containers, waste oil, and tires of vehicles Provides incentives for proper disposal Engaging the public Information disclosure, voluntary agreements, certification and labeling Toxic Release Inventory, U.S. EPA 33/50, Greenpeace Detox Campaign, cancer warning labels under California’s Safe Drinking Water and Toxic Enforcement Act Enhances compliance with conventional instruments. Provides proactive firms with the opportunity to improve their public image Notes: CFCs = chlorofluorocarbons; CERCLA = Comprehensive Environmental Response, Compensation and Liability Act; DDT = dichlorodiphenyltrichloroethane; PCBs = polychlorinated biphenyls;. Source: Sterner and Coria (2012). View Large Footnotes 1 POPs are a group of organic compounds that are resistant to environmental degradation. Because of their persistence, POPs bioaccumulate, with potential adverse impacts on human health and the environment. 2 These substances are usually referred to as substances of very high concern. These include genotoxic carcinogens; persistent, bioaccumulative, and toxic (PBT) chemicals; and very persistent and very bioaccumulative (vPvB) chemicals. 3 See Appendix table 1 and Sterner and Coria (2012) for an overview of policy alternatives. 4 In Denmark, for instance, the toxicity tax is based on a pesticide risk indicator that accounts for environmental toxicity load, human health load, and environmental fate and behavior load (Finger et al. 2017). Moreover, the heterogeneity in tax levels is high, ranging from €25.5/ha to €0.57/ha, and this heterogeneity has played a major role in achieving the Danish government’s objective of reducing the total amount of pesticides applied by 40 percent from 2013 to 2015 (e.g., Böcker and Finger 2016). 5 One key argument for the UK to leave the EU has been the burdensome environment, health and safety regulations (Gamble 2012). However, all existing EU regulations will continue to apply until the UK actually leaves the EU. If, after that, the UK retains access to the European market as part of the European Economic Area, then business will continue as usual. If it does not, all UK companies will become non-EU companies and will not be allowed to register their substances directly with the European Chemicals Agency (the agency that manages REACH; see discussion in the next section), thus requiring either that part of their organization that is based within the EU to register them or they work with their customers to help them register as importers. 6 To avoid additional animal experiments, alternative testing methods could be developed and the results of all existing animal testing disseminated through public databases. 7 Established in 1991, the EPA’s 33/50 program was one of the first voluntary pollution reduction programs in the United States. The program derives its name from its overall goals: an interim goal of a 33 percent reduction by 1992 of direct environmental releases and off-site transfers of 17 priority toxic chemicals and an ultimate goal of a 50 percent reduction by 1995 (see, e.g., Zatz and Harbour 1999). 8 Substances are deemed dangerous based on the criteria set forth in 67/548/EEC, the Dangerous Substances Directive. These include substances that are explosive, oxidizing, flammable or easily flammable, toxic, harmful, corrosive, or that have irritant effects. 9 An example of a substance currently restricted is asbestos, which causes malignant diseases such as lung cancer, pleural mesothelioma, and peritoneal mesothelioma and is the number one cause of occupational cancer in the world (Goodman et al. 1999). 10 Such communication and cooperation must also comply with applicable competition/antitrust laws. 11 These include risks to vulnerable groups like children and the elderly, and to workers who use chemicals daily as part of their jobs. References Abelkop A. D. K. , Graham J. D. . 2015 . Regulation of chemical risks: lessons for reform of the Toxic Substances Control Act from Canada and the European Union . Pace Environmental Law Review 32 : 108 – 224 . Backhaus T. , Arrhenius Å. , Blanck H. . 2004 . Toxicity of a mixture of dissimilarly acting substances to natural algal communities: predictive power and limitations of independent action and concentration addition . Environmental Science & Technology 38 : 6363 – 70 . Google Scholar CrossRef Search ADS PubMed Bergkamp L. , Herbatschek N. . 2014 . Regulating chemical substances under REACH: the choice between authorization and restriction and the case of dipolar aprotic solvents . Review of European, Comparative & International Environmental Law 23 2 : 221 – 45 . Google Scholar CrossRef Search ADS Birnbaum L. S. 2012 . Environmental chemicals: evaluating low-dose effects . Environmental Health Perspectives 120 4 : A143 – 44 . Google Scholar CrossRef Search ADS PubMed Böcker T. , Finger R. . 2016 . European pesticide tax schemes in comparison: an analysis of experiences and developments . Sustainability 8 4 : 378 . Google Scholar CrossRef Search ADS Bourguignon D. 2016 . EU policy and legislation on chemicals: overview, with a focus on REACH. Brussels: European Parliamentary Research Service. http://www.europarl.europa.eu/RegData/etudes/IDAN/2016/595861/EPRS_IDA(2016)595861_EN.pdf (accessed May 7, 2018). Brown V. 2003 . REACHing for chemical safety . Environmental Health Perspectives 111 14 : A766 – 9 . Google Scholar CrossRef Search ADS PubMed Bui L. T. M. , Mayer C. J. . 2006 . Regulation and capitalization of environmental amenities: evidence from the toxic release inventory in Massachusetts . Review of Economics and Statistics 85 3 : 693 – 708 . Google Scholar CrossRef Search ADS Cattermole A. 2016 . A catalyst for change . AATCC Review 16 2 : 31 – 38 . Google Scholar CrossRef Search ADS Coria J. , Autade A. . 2018 . Analyzing the effects of the candidate list of substances of very high concern on chemical production in Sweden. Working paper. Department of Economics, University of Gothenburg, Gothenburg, Sweden. de Avila C. , Sandberg E. C. . 2006 . REACH: better knowledge and better use of chemicals in the European Union . CHIMIA International Journal for Chemistry 60 10 : 645 – 50 . Google Scholar CrossRef Search ADS Dechezleprêtre A. , Sato M. . 2017 . The impacts of environmental regulations on competitiveness . Review of Environmental Economics and Policy 11 : 183 – 206 . Google Scholar CrossRef Search ADS Denison R. 2017 . A primer on the new Toxic Substances Control Act (TSCA) and what led it to. Environmental Defense Fund . https://www.edf.org/sites/default/files/denison-primer-on-lautenberg-act.pdf (accessed November 15, 2017). European Chemicals Agency . 2016 . Evaluation under REACH. Progress Report 2016. https://echa.europa.eu/documents/10162/13628/evaluation_report_2016_en.pdf/f43e244f-7c90-75bd-e1b2-3771bcb1f8e8 (accessed April 12, 2018). European Chemicals Agency . 2017 . Socio-economic impacts of REACH authorisations – a meta-analysis of the first 100 applications for authorization. Helsinki : European Chemicals Agency . https://echa.europa.eu/documents/10162/13637/tecch_report_socioeconomic_impact_reach_authorisations_en.pdf/590f78da-56db-df06-71df-3ab51868829f (accessed May 7, 2018). Finger R. , Möhring N. , Dalhaus T. , Böcker T. . 2017 . Revisiting pesticide taxation schemes . Ecological Economics 134 : 263 – 66 . Google Scholar CrossRef Search ADS Fredslund S. O. , Bonefeld-Jørgensen E. C. . 2012 . Breast cancer in the Arctic – changes over the past decades . International Journal of Circumpolar Heath 71 1 : 19155 . Google Scholar CrossRef Search ADS Fromberg A. , Cleemann M. , Carlsen L. . 1999 . Review on persistent organic pollutants in the environment of Greenland and Faroe Islands . Chemosphere 38 13 : 3075 – 93 . Google Scholar CrossRef Search ADS PubMed Gabbert S. , Weikard H. P. . 2010 . A theory of chemicals regulation and testing . Natural Resources Forum 34 : 155 – 64 . Google Scholar CrossRef Search ADS Gamble A. 2012 . Better off out? Britain and Europe . Political Quarterly 83 3 : 468 – 77 . Google Scholar CrossRef Search ADS Geiser K. , Tickner J. , Edwards S. , Rossi M. . 2015 . The architecture of chemical alternatives assessment . Risk Analysis 35 12 : 2152 – 61 . Google Scholar CrossRef Search ADS PubMed Goodman M. , Morgan R. W. , Ray R. , Malloy C. D. , Zhao K. . 1999 . Cancer in asbestos-exposed occupational cohorts: a meta-analysis . Cancer Causes & Control 10 5 : 453 – 65 . Google Scholar CrossRef Search ADS PubMed Hansen S. F. , Carlsen L. , Tickner J. A. . 2007 . Chemicals regulation and precaution: does REACH really incorporate the precautionary principle . Environmental Science & Policy 10 5 : 395 – 404 . Google Scholar CrossRef Search ADS Hoang P. C. , McGuire W. , Prakash A. . 2018 . Reducing toxic chemical pollution in response to multiple information signals: the 33/50 voluntary program and toxicity disclosures . Ecological Economics 146 : 193 – 202 . Google Scholar CrossRef Search ADS Kaplow L. , Shavell S. . 1994 . Optimal law enforcement with self-reporting of behavior . Journal of Political Economy 102 : 583 – 606 . Google Scholar CrossRef Search ADS LeBlanc G. A. , Wang G. . 2006 . Chemical mixtures: greater-than-additive effects? Environmental Health Perspectives 114 9 : A517 – 18 . Google Scholar CrossRef Search ADS PubMed Macauley M. K. , Bowes M. D. , Palmer K. L. . 1992 . Using economic incentives to regulate toxic substances . Washington, DC : Resources for the Future . Nichols A. L. 1982 . The importance of exposure in evaluating and designing environmental regulations: a case study . American Economic Review 72 2 : 214 – 19 . Organization for Economic Co-operation and Development . 2003 . Voluntary approaches for environmental policy: effectiveness, efficiency and usage in policy mixes . Paris : OECD Publishing . Paxéus N. 1996 . Organic pollutants in the effluents of large wastewater treatment plants in Sweden . Water Research 30 5 : 1115 – 22 . Google Scholar CrossRef Search ADS Prüss-Ustün A. , Vickers C. , Haefliger P. , Bertollini R. . 2011 . Knowns and unknowns on burden of disease due to chemicals: a systematic review . Environmental Health 10 1 : 9 . Google Scholar CrossRef Search ADS PubMed Sadler T. R. 2000 . Regulating chemical emissions with risk-based environmental taxation . International Advances in Economic Research 6 2 : 287 – 305 . Google Scholar CrossRef Search ADS Sarigiannis D. A. , Hansen U. . 2012 . Considering the cumulative risk of mixtures of chemicals – a challenge for policy makers . Environmental Health 11 ( Suppl 1 ): S18 . Google Scholar CrossRef Search ADS PubMed Schaafsma G. , Kroese E. D. , Tielemans E. L. J. P. , Van de Sandt J. J. M. , van Leeuwen C. J. . 2009 . REACH, non-testing approaches and the urgent need for a change in mind set . Regulatory Toxicology and Pharmacology 53 1 : 70 – 80 . Google Scholar CrossRef Search ADS PubMed Schwarzenbach R. P. , Escher B. I. , Fenner K. , Hofstetter T. B. , Johnson C. A. , Von Gunten U. , Wehrli B. . 2006 . The challenge of micropollutants in aquatic systems . Science 313 : 1072 – 77 . Google Scholar CrossRef Search ADS PubMed Scott J. 2009 . REACH: combining harmonization with dynamism in the regulation of chemicals. In Environmental protection: European law and governance . Oxford : Oxford University Press . Google Scholar CrossRef Search ADS Slunge D. , Sterner T. . 2001 . Implementation of policy instruments for chlorinated solvents. A comparison of design standards, bans and taxes to phase out trichloroethylene . Environmental Policy and Governance 11 5 : 281 – 96 . Sterner T. 2004 . Trichloroethylene in Europe: ban versus tax. In Choosing environmental policy. Comparing instruments and outcomes in the United States and Europe , ed. Harrington W. , Morgenstern R. D. , 206 – 21 . Washington, DC : Resources for the Future . Sterner T. , Coria J. . 2012 . Policy instruments for environmental and natural resource management , 2nd ed . New York : RFF Press . Strempel S. , Scheringer M. , Ng C. A. , Hungerbühler K. . 2012 . Screening for PBT chemicals among the “existing” and “new” chemicals of the EU . Environmental Science & Technology 46 11 : 5680 – 87 . Google Scholar CrossRef Search ADS PubMed Syberg K. , Jensen T. S. , Cedergreen N. , Rank J. . 2009 . On the use of mixture toxicity assessment in REACH and the Water Framework Directive: a review . Human and Ecological Risk Assessment 15 6 : 1257 – 72 . Google Scholar CrossRef Search ADS Söderholm P. , Christiernsson A. . 2008 . Policy effectiveness and acceptance in the taxation of environmentally damaging chemical compounds . Environmental Science & Policy 11 3 : 240 – 52 . Google Scholar CrossRef Search ADS United Nations Environment Programme . 2012 . Global chemicals outlook: towards sound management of chemicals. Synthesis report for decision-makers. Nairobi : United Nations Environment Programme . U.S. Environmental Protection Agency . 2003 . Framework for cumulative risk assessment. EPA/600/P-02/001F. Washington, DC : Office of Research and Development, National Center for Environmental Assessment . U.S. Environmental Protection Agency . 2010 . Toxic Release Inventory national analysis overview. Technical report. https://www.epa.gov/sites/production/files/documents/2010_national_analysis_overview_document.pdf. Uyesato D. , Weiss M. , Stepanyan J. , Park D. Y. , Yuki K. , Ferris T. , Bergkamp L. . 2013 . REACH’s impact on the rest of the world. In The European Union REACH Regulation for Chemicals: law and practice , ed. Bergkamp L. , 335 – 72 . New York : Oxford University Press . van Leeuwen C. J. , Vermeire T. G. , eds. 2007 . Risk assessment of chemicals: an introduction . Dordrecht : Springer . Google Scholar CrossRef Search ADS Vandenberg L. N. , Colborn T. , Hayes T. B. , Heindel J. J. Jr. , Jacobs D. R. , Lee D.-H. , Shioda T. , Soto A. M. , vom Saal F. S. , Welshons W. V. , Zoeller R. T. , Myers J. P. . 2012 . Hormones and endocrine-disrupting chemicals: low-dose effects and nonmonotonic dose responses . Endocrine Reviews 33 3 : 378 – 455 . Google Scholar CrossRef Search ADS PubMed Williams E. S. , Panko J. , Paustenbach D. J. . 2009 . The European Union’s REACH regulation: a review of its history and requirements . Critical Reviews in Toxicology 39 7 : 553 – 75 . Google Scholar CrossRef Search ADS PubMed Zatz M. , Harbour S. . 1999 . The United States Environmental Protection Agency’s 33/50 program: the anatomy of a successful voluntary pollution reduction program1 . Journal of Cleaner Production 7 1 : 17 – 26 . Google Scholar CrossRef Search ADS © The Author(s) 2018. Published by Oxford University Press on behalf of the Association of Environmental and Resource Economists. This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs licence (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial reproduction and distribution of the work, in any medium, provided the original work is not altered or transformed in any way, and that the work is properly cited. For commercial re-use, please contactjournals.permissions@oup.com http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Environmental Economics and Policy Oxford University Press

Policy Monitor—The Economics of Toxic Substance Control and the REACH Directive

Loading next page...
 
/lp/ou_press/the-economics-of-toxic-substance-control-and-the-reach-directive-j6ioPtrBhT
Publisher
Oxford University Press
Copyright
© The Author(s) 2018. Published by Oxford University Press on behalf of the Association of Environmental and Resource Economists.
ISSN
1750-6816
eISSN
1750-6824
D.O.I.
10.1093/reep/rey003
Publisher site
See Article on Publisher Site

Abstract

Abstract The European Union (EU) regulation on the registration, evaluation, authorization, and restriction of chemicals, known as the REACH Directive, is intended to improve the protection of human health and the environment through the better and earlier identification of the intrinsic properties of the thousands of chemicals commonly used in the EU. This article presents an overview of the technical and economic challenges of toxic substance control and discusses how REACH has addressed the challenges of chemical regulation. The article identifies a number of barriers encountered in implementing REACH, including the fact that critical data concerning the toxicological properties of chemicals is missing from about 90 percent of the 184 REACH registration dossiers examined. The article also discusses how the information generated by REACH could be used to develop complementary policies, such as risk-based taxation, to better reflect the external effects of harmful chemicals and to provide further incentives for the development of products and processes that minimize the generation and use of hazardous substances. The article concludes by highlighting key insights and guidance for industry, policymakers, and academic researchers that can be derived from this examination of the economics of toxic substance control and REACH. Chemicals: A Blessing and a Curse Chemicals are used in almost all manufactured products to enhance appearance or performance and provide many other benefits, including boosting agricultural production, making water safer to drink, and contributing to pest control and public health. However, less than 5 percent of the millions of industrial chemicals on the market have been adequately evaluated for their potential health and environmental effects (Schaafsma et al. 2009). Research shows that chemicals can negatively affect human health and the environment in numerous ways. For example, some common chemicals can disrupt the endocrine or immune system in humans (Prüss-Ustün et al. 2011). Others can harm our brains, our reproductive abilities, and fetal development or can trigger cancer (Fredslund and Bonefeld-Jørgensen 2012). Chemicals can also damage wildlife and ecosystems (United Nations Environment Programme 2012). Moreover, a growing body of evidence indicates that many chemicals have biological effects at doses that were previously considered negligible (Vandenberg et al. 2012). It is also becoming increasingly evident that long-term exposure to relatively low doses of chemicals can cause subtle harmful effects (Birnbaum 2012). In addition, people and ecosystems are exposed to mixtures of thousands of chemicals from a wide range of sources, which can be detrimental because low and supposedly safe levels of some chemicals can become hazardous when they are combined with other substances (Sarigiannis and Hansen 2012). Not all chemical products or uses pose potential risks, nor is the nature of the risk always the same. The properties of their formulations, amounts applied, application methods, and environmental conditions determine their behavior and fate in the environment. In some cases, chemicals are not obviously dangerous. In fact, they may have rather low reactivity, but after accumulating to dangerous levels in the biosphere, their properties may become negative. Furthermore, some chemicals can travel far from where they were used or emitted. For example, various hazardous persistent organic pollutants (POPs)1 that were used in the past as pesticides and solvents have been discovered in Arctic regions where these chemicals have never been produced or used (Fromberg, Cleemann, and Carlsen 1999). The U.S. Environmental Protection Agency (EPA) defines a toxic chemical as any substance that may be harmful to human health or the environment if inhaled, ingested or absorbed through the skin (U.S. Environmental Protection Agency 2010). Although the environmental economics literature has been expanding, very little attention has been paid to the specific issues that arise in the regulation of chemical substances that might turn out to have toxic properties. This article seeks to fill this gap in the literature by discussing the technical and economic challenges of toxic substance control, focusing in particular on experience with the implementation of the European Union (EU) regulation on the registration, evaluation, authorization, and restriction of chemicals—known as the REACH Directive—which is arguably the strictest law to date regulating chemical substances and affects industries throughout the world. The goal is to provide some principles and guidelines to policymakers who are responsible for the design and implementation of toxic substance control policy and to provide the chemical industry and other stakeholders with an overview of the key features of REACH. The article also seeks to provide academic researchers with an overview of toxic substance control and to highlight additional research that is needed to help advance the state of the art of chemical regulation. The remainder of the article is organized as follows. The next section describes the technical challenges that arise in assessing chemical hazards and risks. This is followed by a discussion of how these challenges affect the economics of toxic substance control and complicate the implementation of chemical regulations. Then I provide an overview of REACH and discuss how it addresses the challenges of regulating chemical substances. The penultimate section evaluates the performance of REACH and identifies lessons learned and the potential for improvement. The final section discusses the guidance that REACH offers to industry, policymakers, and academics to help them improve chemical regulation in the future. Technical Challenges of Assessing Chemical Hazards and Risks Quantifying the risks associated with chemical use poses a major challenge for assessing chemical hazards and risks because it is difficult to trace exposures and determine the levels of risk they pose. Risk assessment methodologies are generally used to systematically evaluate specific environmental hazards (Hansen, Carlsen, and Tickner 2007). The words hazard and risk have very specific meanings in chemical assessments. Hazard relates to the intrinsic properties of a chemical, for example, the various concentrations of a chemical that can cause various detrimental effects. Risk relates to the ability to cause harm in certain situations and thus refers to a combination of both hazard and exposure. This means that risk assessment must consider both the chemical’s toxicity (or hazard) and human and/or wildlife exposure, which depends on how the chemical is used. Thus, in assessments of chemicals, if there is no exposure, then by definition there can be no risk. To illustrate, a very hazardous chemical poses a risk if it is inhaled or poured down the drain, but not when it is kept in a stoppered bottle. The remainder of this section discusses how risk assessment is used to identify chemical hazards and to trace exposures, thus providing critical information concerning the toxicological properties of chemicals that can be used as a basis for regulating chemicals. The difficulties of assessing the risks of chemical mixtures are also discussed. Risk Assessment and Chemical Regulation Risk assessments seek to quantify the risks associated with exposure to toxic chemicals. Four steps are used to quantify the risks to human health (van Leeuwen and Vermeire 2007). The first step is hazard identification, which often consists of testing whether the chemical causes cancer or other harmful effects in laboratory animals. The second step is dose–response assessment, which identifies the relationship between receiving a dose of the chemical and experiencing adverse effects. Analysts often have to extrapolate findings from high laboratory doses to low actual doses and from laboratory animals to humans. Third, exposure assessment estimates how often, for how long, and with what intensity humans are exposed to the chemical. This is determined based on surveys that ask subjects about their lifestyles and habits, taking environmental samples, and screening subjects’ blood, urine, hair, or other physical samples to measure concentrations of the chemicals in their bodies. Fourth, risk characterization combines the exposure and dose–response assessments to estimate health impacts on subjects. The information gathered through these four steps is then used to identify a threshold safety exposure dose (i.e., reference dose), which is the level at which humans can be exposed to chemicals for specific periods of time without suffering adverse health effects. Likewise, environmental hazard assessment seeks to identify the concentration of chemical substances below which adverse effects on the environment are not expected to occur. In principle, the reference doses for human and environmental protection are fairly conservative because they incorporate uncertainty factors and assume that people and species may be exposed daily or constantly throughout their lives. Risk assessment measures environmental risk by comparing the reference dose to the exposure level that human populations and/or species actually face. If actual exposure levels exceed the reference dose (i.e., the risk ratio of exposure to reference dose is greater than 1), unacceptable effects on humans or other species are likely to occur and immediate regulatory action to restrict or prohibit the use of the chemical is required (Schwarzenbach et al. 2006). However, certain groups of chemicals that are particularly dangerous are treated as “nonthreshold” chemicals,2 that is, uncertainties in the risk assessment and the consequences of being wrong are of such a magnitude that it is considered appropriate to regulate them based on their hazard properties alone (Syberg et al. 2009). The main rationale for restricting or banning the use of these substances is that because exposure cannot be ruled out, and the substances can cause serious harm, it is preferable to encourage the use of safer alternatives (Hansen, Carlsen, and Tickner 2007). Chemical Mixtures We turn now to the difficulties of assessing the risks of chemical mixtures. As discussed earlier, real-life exposures generally involve mixtures of chemicals. Some of these may be “intentional” mixtures, in the sense that they are intentionally manufactured as chemical mixtures (e.g., pesticides, laundry detergent), while others may be “coincidental” mixtures, composed of unrelated chemicals from different sources but with the potential to affect the same population of individuals (e.g., different pesticides are found simultaneously in an average stream and effluents from sewage treatment plants contain hundreds of different pollutants; see, e.g., Paxéus 1996). The greatest concern about the toxicity of chemical mixtures is that combined chemicals may result in a synergistic toxicity that is not detected in evaluations of individual chemical toxicity (LeBlanc and Wang 2006). However, in general, such synergistic interactions have been found to be surprisingly rare. Moreover, it has been shown that as the number of chemicals in a mixture increases, the individual interactions between chemicals are likely to become less dominant because their relative contributions to the overall toxicity decrease. Because synergistic effects are not common, the addition of individual risk ratios (a method known as concentration additivity) is widely used to estimate the toxicity of chemical mixtures (Backhaus, Arrhenius, and Blanck 2004). If chemicals are assessed individually, there is the potential for underestimating societal risks. To illustrate, consider a case in which each of the individual components of a mixture are below the threshold concentrations that would trigger immediate regulatory action (e.g., the risk ratio for each of four chemicals in a mixture is 0.26 and thus the individual components are deemed safe). However, the overall toxicity of the mixture, which is given by the sum of the individual risk ratios, is greater than 1, implying that regulatory action is needed. Thus compliance with individual threshold values does not necessarily safeguard against mixture effects, suggesting that chemical regulation that does not consider chemical mixtures will fail to fully address chemical risks. Characteristics That Complicate Implementation of Chemical Regulation Based on the technical challenges of assessing chemical hazards and risks and the toxicity of chemical mixtures, there appear to be (at least) five main characteristics of chemicals that complicate the implementation of regulations to control them (see also Macauley, Bowes, and Palmer 1992). I discuss each of these characteristics here. Chemical Exposure Occurs at Different Stages of the Product Life Cycle The first characteristic is that exposure to chemical substances occurs at different stages of the life cycle of products, that is, during the production of the product’s inputs, during the product’s use by industry or households, and during disposal. Each of these stages may require different types of regulations. The number and diversity of producers to regulate become far more limited the farther upstream one goes, whereas moving downstream leads to a progressively larger and more diverse set of intermediate producers, and ultimately thousands of final product users. Thus the challenge is to identify which actors are most readily able to implement measures to minimize chemical risks cost-effectively at each stage of the product life cycle. Dangers Vary Across Products The second characteristic that complicates the implementation of environmental regulations is that the risks from exposure vary markedly across products. This means that we need to design and implement policy instruments that reflect these differences in chemical toxicity and risks. Although a broad range of policy instruments is available to regulate chemicals,3 two main instruments have been used to control chemical substances: taxes and bans. A serious drawback related to the use of such chemical taxes is that regulators have limited control over the effect of a tax on emission levels. This is because once the tax rate is set, it is largely up to firms to decide how much to abate. Moreover, the majority of the chemical taxes in place entail low rates and do not vary with the riskiness of the chemicals (Söderholm and Christiernsson 2008). This could lead to unintended consequences, because even if the taxes promote reductions in the quantity of chemicals used, the reductions may be achieved through the substitution of more toxic products. Thus, for very hazardous chemicals, command and control regulations (e.g., bans) provide the required certainty of control. However, for chemicals not deemed to be very hazardous (i.e., the ratio of exposure to the reference dose is less than 1), the goal of designing policy instruments that reflect differences in chemical toxicity and risks could be achieved through risk-based environmental taxation, which would assign a relatively higher tax rate to chemicals that pose a greater risk to humans and the environment (e.g., Nichols 1982; Sadler 2000). For example, risk-based taxes have been applied to pesticides in Europe, where differentiated pesticide taxes have led to the use of less risky pesticides and non-chemical plant protection strategies (Böcker and Finger 2016).4 Such risk-based taxation may also increase its perceived fairness and hence political legitimacy (e.g., Söderholm and Christiernsson 2008). Substitution of Products and Processes The third characteristic is the wide scope for substitute products and production processes. Indeed, as indicated earlier, when efforts are made to eliminate a highly hazardous chemical in products, manufacturers frequently substitute another hazardous chemical. More specifically, what is known as a “lock-in” problem occurs when one chemical from a group of structurally similar chemicals is removed from the market and replaced with other chemicals from the same group, with essentially the same health and environmental concerns (Strempel et al. 2012). Thus regulations must be broadly defined to avoid the lock-in problem. This links back to the issue of the choice of policy instruments. Empirical evidence has shown that banning a substance while allowing exemptions is often less cost effective than a tax because the costs of substitution differ considerably across uses/producers and taxes provide polluters with a higher degree of flexibility to search for alternative solutions (e.g., Slunge and Sterner 2001). Bans might also lead to lobbying for exemptions rather than research on new technologies (Sterner 2004). Substitution might take place not only “within” borders but also “across” borders (known as “leakage”) if large asymmetries in the stringency of chemical regulation shift chemical-intensive production toward countries or regions with less stringent regulation. However, empirical evidence has shown that taking the lead in implementing ambitious environmental policies leads to small adverse effects on competitiveness, trade, and employment (e.g., Dechezleprêtre and Sato 2017).5 Chemical Mixtures The fourth characteristic of chemicals that complicates the implementation of regulation concerns chemical mixtures. Regulations have attempted to move beyond single chemical assessments to focus more on the cumulative effects of simultaneous chemical exposures. In fact, the U.S. Superfund program began conducting cumulative risk assessments at hazardous waste sites as early as the 1980s (e.g., U.S. Environmental Protection Agency 2003). However, due to the limitations of current science and the lack of methods and data, the implementation of legislation addressing chemical mixtures is far from easy. Direct regulation can be used, based on the overall toxicity of a mixture, but as discussed earlier, given the wide variation in the cumulative toxicity of chemicals, risk-based taxation of individual components of a mixture is a much more effective instrument. Intentional mixtures are easier to regulate because their composition is generally known and risk assessment can be performed prospectively based on the properties of the individual constituents. Unfortunately, it is much more difficult to address coincidental mixtures due to their varying composition in space and time and the constant entry of new pollutants (Backhaus, Arrhenius, and Blanck 2004). However, one option would be to also implement environmental quality standards that limit the concentration of hazardous substances in different environmental media. Lack of Information and Information Asymmetries The final characteristic concerns the issue of information. In particular, there is a lack of information about the effects of chemicals and there is asymmetric information about the costs of compliance with chemical regulations (Sterner 2004). Testing of chemicals improves the information base about the effects of chemicals for regulatory decision making concerning the production and use of chemicals. Given limited time and resources, testing a large number of chemicals requires prioritization. The literature suggests that chemicals with higher exposure and those that are known to be highly toxic or highly persistent should be tested first because testing of such chemicals offers more valuable information (e.g., Gabbert and Weikard 2010). This is also important because testing costs comprise not only direct monetary costs, but also animal welfare loss.6 Asymmetric information In addition to the lack of information about the effects of chemicals, the regulator does not know with certainty the costs of compliance with chemical regulations. When a regulatory authority imposes a direct control, the regulated industry has an incentive to overestimate the costs of compliance in order to obtain exemptions. In contrast, when taxes are used, industry has no incentive to overestimate the costs because doing so would imply that the equilibrium tax necessary to achieve reductions in pollution is high. One would also not expect firms to underestimate compliance costs because doing so would amount to acknowledging that compliance is easier than it actually is. Furthermore, a tax promotes rapid technological change (Sterner 2004). That is, if a company has an exemption from a ban that allows it to use a chemical for a given period, it has little incentive to develop or adopt alternatives before the concession deadline. However, if taxes are used, there is an incentive to quickly adopt safer alternatives to minimize tax payments. The regulator also does not know if firms are complying with chemical regulations. This is because existing chemical regulations frequently require firms to self-report their compliance status to regulatory agencies. Although self-reporting reduces enforcement costs, a minimum level of enforcement is necessary to ensure that self-reports are truthful and complete (Kaplow and Shavell 1994). Information disclosure Compliance can be enhanced by complementing conventional policy instruments with public disclosure—the regulatory collection and dissemination of information about firms’ environmental performance. This type of regulation corrects for informational asymmetries between polluters and consumers, allowing communities to pressure polluters to decrease their emissions. Public disclosure is becoming increasingly popular, due in part to evidence that the U.S. Toxic Release Inventory (TRI), which requires that manufacturing plants that emit more than a given threshold level of any listed toxic substance provide emissions data to the EPA for use in a publicly available database, has had a significant impact on emissions. More specifically, national releases declined by 43 percent from 1988 to 1999 (Bui and Mayer 2006) and by approximately 30% between 2001 and 2010 (U.S. Environmental Protection Agency 2010). The pressure placed on firms by private and public sector agents to improve environmental performance also helps to explain the adoption of voluntary measures, such as certification and labeling (Sterner and Coria 2012). More specifically, firms might “overcomply” with regulatory standards in order to attract “green” consumers, preempt future regulations, and reduce how intensively existing regulations are enforced. For example, under the U.S. 33/50 voluntary program,7 the EPA challenged participating firms to aggressively reduce their aggregate emissions of 17 highly toxic chemicals. Evaluations of the program has shown that substantial reductions of the targeted chemicals were achieved because it targeted firms with the greatest reduction potential (Hoang, McGuire, and Prakash 2018). Growing pressure from consumers has also incentivized major brands, health care providers, and retailers to evaluate alternatives to chemicals of concern and to develop lists of restricted substances to guide suppliers in avoiding these chemicals (see. e.g., Geiser et al. 2015 and Cattermole 2016). To summarize, coherent and effective regulation of chemicals depends on the availability of information about the toxicological properties of chemicals. Thus the challenge is determining how to gather accurate information and utilize it to design policies that reflect differences in chemical risks. In the next section we discuss how information is gathered and utilized under the REACH Directive. The Regulation of Chemicals Under REACH In the late 1990s, the EU was making slow progress in assessing the potential human health and environmental hazards of commonly used chemicals because of a lack of information concerning the properties of the chemicals and the burden of proof of these hazards falling on regulatory authorities rather than industry (Brown 2003). Thus, in 2001, the European Commission (EC) proposed a framework for a new system of chemical regulation aimed at addressing these issues. In late 2003, the EU proposed an early version of REACH (Bergkamp and Herbatschek 2014). After several rounds of stakeholder input and negotiation between industry representatives and regulatory officials, the REACH Directive was adopted in December 2006 and entered into force on June 1, 2007, with implementation phased in over a decade. When fully in force in June 2018, it will require all companies manufacturing or importing chemical substances into the EU in quantities of 1 metric ton or more per year to provide a safety-related dataset for a large number of existing and new chemicals to the agency established to manage the technical, scientific, and administrative aspects of REACH, the European Chemicals Agency (ECHA). In the remainder of this section I describe the regulatory programs under REACH, the role of member states in REACH, and the program’s global impacts. Regulatory Programs Under REACH REACH regulates chemicals commonly used in the EU in industrial processes and in intentional chemical mixtures and products, which range from cleaning products and paints to clothing, furniture, and electrical appliances (e.g., Bergkamp and Herbatschek 2014). The aim of REACH is to ensure a high level of health and environmental protection through the better and earlier identification of the intrinsic properties of these chemicals (Williams, Panko, and Paustenbach 2009). With this aim in mind, the REACH Directive has established four complementary regulatory programs: Registration. This requires that regulated companies submit a dossier that contains information on a given substance. The dossier must include information about the identity, manufacture, classification, and labeling of the substance; guidance on its safe use; summaries of its intrinsic properties; possible proposals for further testing; main use categories; types of uses; and significant pathways of exposure. Regarding information about the intrinsic properties of chemicals, the information requirements under REACH are tiered according to weight, which can be viewed as a proxy for the level of exposure. For substances that are produced annually or imported in amounts of more than 10 tons, a chemical safety assessment must be prepared that includes information on human health and environmental hazards as well as an assessment of persistent, bioaccumulative, and toxic (PBT) and very persistent and very bioaccumulative (vPvB) characteristics and possible restrictions for certain uses (Williams, Panko, and Paustenbach 2009). If a substance meets the criteria for classification as dangerous8 or is assessed to be PBT or vPvB, then the chemical safety assessment must also include an exposure assessment and a risk characterization. Evaluation. Under this program, the ECHA is required to evaluate a minimum of 5 percent of the registration dossiers it receives, of which 25 percent must be randomly selected and 75 percent must be targeted (i.e., selected based on technical or hazard-related concerns). When making targeted selections for evaluation, priority is given to substances of very high concern (SVHCs) that are produced in amounts greater than 100 tons per year per producer (Hansen, Carlsen, and Tickner 2007). SVHCs are chemicals classified as carcinogenic, mutagenic, or toxic for reproduction; PBT or vPvB; substances that give “rise to an equivalent level of concern” as endocrine-disrupting chemicals; or chemicals that meet more than one of the previous three criteria. Authorization. The authorization program seeks to ensure that the risks from SVHCs are properly controlled and to cause the replacement of SVHCs with safer chemicals. A substance subject to authorization cannot be placed in the market for use on its own, in mixtures or incorporated into an article unless the use has been specifically authorized. The REACH Directive states that authorization should be granted only if the registrant demonstrates that the risks are adequately controlled or the substance provides socioeconomic advantages that outweigh the risks and no suitable alternative substances or technologies are available (Bergkamp and Herbatschek 2014). Thus the burden of proof lies with the firms, which must apply for authorization by a deadline established under the REACH Directive and cease use of the chemical by a specified date unless authorization is granted or an application for authorization is pending. Restriction. This program is aimed at managing—at the EU level—chemical risks to human health and the environment that are not adequately addressed by the other provisions of REACH. Under this program, the manufacture and use of chemical substances, as well as their presence in products, can be subjected to binding limitations and conditions, including complete prohibitions. Unlike authorization, restriction is not limited to SVHCs and applies even to substances that do not require registration (e.g., substances manufactured or imported in amounts less than 1 ton per year). A restriction may take many forms, including general bans on all uses, bans on specific uses (e.g., as a flame retardant), bans on products available to the general public, and limits on the concentration of a substance in specific consumer products (Bergkamp and Herbatschek 2014).9 In addition to the four programs, REACH also establishes rules on notification of the presence of SVHCs in products. Companies producing or importing articles containing SVHCs must notify the ECHA and all downstream users (since downstream users may be in a position to implement measures to reduce exposures to the chemical). Data Sharing Under REACH REACH follows a “one substance, one registration” approach. This means that firms that produce or import the same chemical substance are required to share data with each other and to submit those data as part of one joint registration. Thus the data sharing under REACH encourages communication and cooperation between competing firms.10 This joint registration also eases the burden on the ECHA of evaluating the registration materials by consolidating much of the information from many companies into a single document. Moreover, this data sharing and joint registration reduces duplicative animal testing and spreads the cost of testing over multiple companies (Abelkop and Graham 2015). Role of Member States in REACH Decisions regarding authorization and restriction are made by the EC. However, member states may recommend that specific chemicals be considered as SVHCs. Member states are responsible for ensuring enforcement of REACH (through official systems of controls and legislation that specifies penalties for noncompliance). Furthermore, member states can adopt regulatory measures that complement REACH (see Scott 2009). One example of such complementary measures is the Swedish tax on bromine-, chlorine-, and phosphorous-based substances used in electronics, which was implemented in 2017. Global Impacts of REACH REACH has not only affected European companies, it has also served as a model for chemical reforms around the world (e.g., Uyesato et al. 2013), including in Korea, Japan, China, and Malaysia. It also inspired the recent reform of the U.S. Toxic Substances Control Act—known as the Frank R. Lautenberg Chemical Safety for the 21st Century Act (referred to hereafter as the “Lautenberg Act”)—which was signed into law in June 2016. The Lautenberg Act significantly strengthens the EPA’s regulation of chemicals and authorizes it to collect fees from the chemical industry to help fund chemical reviews (Denison 2017). Like REACH, the new law requires the EPA to evaluate both existing and new chemicals, with clear and enforceable deadlines. Furthermore, the Lautenberg Act requires the EPA to evaluate a chemical’s safety based purely on health risks11 and to then take steps to eliminate any unreasonable risks. REACH Performance: Lessons and Potential for Improvement We next examine the performance of REACH thus far and discuss some potential areas for improvement. Performance of REACH REACH has been in place for more than 10 years. During this time, information has been provided on 130,000 substances, 11,560 companies have registered substances, 60,134 registration dossiers have been submitted for 16,124 substances, 173 substances have been identified as SVHCs, 31 substances have been included on the authorization list, and 65 substances have been restricted (Bourguignon 2016). The annual cost of REACH for the chemical sector (including registration fees and dossier preparation costs) over the 2008–2014 period is estimated to be about 0.8 percent of the companies’ value added and less than 0.2 percent of their revenues (Bourguignon 2016). In terms of the health and environmental benefits of REACH, most studies seem to agree that it is too soon to see a clear effect (Bourguignon 2016). However, REACH is expected to have a long-term positive effect on human health and the environment through either successful substitution of chemicals or better risk management procedures (de Avila and Sandberg 2006). Nevertheless, the main contribution of REACH is expected to come from the new information collected on the toxicological properties of chemicals under the registration program, which can help industry adopt relevant risk management measures (European Chemicals Agency 2017). Regarding substitution, there is some evidence that the authorization requirement has stimulated substitution away from SVHCs, although it is difficult to know how much substitution this requirement has caused because the ECHA does not receive information from companies that previously used (but have ceased using) SHVCs and thus did not apply for an authorization. Interestingly, firms have indicated that inclusion on the candidate list of substances to be classified as SVHCs provides an early warning to firms to replace their use of SVHCs, and it has been an important driver of substitution (e.g., Coria and Autade 2018). Inclusion on the candidate list also creates a stigma for the chemicals listed. Downstream users, which are often consumer-oriented companies, appear to fear bad press associated with using an SVHC and therefore instruct their suppliers to switch substances in order to avoid controversy. Listing also seems to encourage companies not to seek authorization in order to avoid having the company name associated with controversial substances, even if the benefit–cost case for authorization is strong. There is also evidence that companies that apply for an authorization often overestimate the benefits of continued use of SVHCs and underestimate the costs to human health and the environment, suggesting that companies overestimate the costs of compliance in order to be granted authorization. For example, the ECHA (2017) estimates that the aggregate benefit–cost ratio for continued use of authorized substances thus far is 15:1, implying that for the time being it has been socially beneficial to authorize the use of such substances. However, the aggregate benefit–cost ratio stated in the firms’ applications has been much higher—100:1 (European Chemicals Agency 2017). It is difficult to determine whether firms have made such a sizeable overestimation of the ratio for strategic reasons or out of ignorance, although it is likely that it reflects not only uncertainty, but also an element of tactical reporting. Moreover, although the ECHA’s scientific committees have recommended the authorization of all applications received to date, they have recommended shorter review periods than suggested in the firms’ applications, either because the applications failed to demonstrate convincingly that suitable alternatives would not become available in the near future or because the applications’ assessments of risks or socioeconomic impacts contained substantial uncertainties and/or methodological shortcomings. Lessons Learned and Potential for Improvement of REACH It is useful to highlight some of the lessons learned from REACH thus far. First, under the “no data, no market” concept (i.e., any company that wishes to manufacture or import a chemical into the EU in an amount of 1 ton or more per year must first register the chemical substance and provide a safety-related dataset), more data on chemicals have been assembled than ever before (Abelkop and Graham 2015). Second, by covering all stages in a substance’s life cycle, REACH has promoted communication throughout the industrial supply chain, forcing manufacturers to learn more about their entire supply chains and stimulating risk management measures and safety-enhancing chemical substitutions (Abelkop and Graham 2015). Regarding potential improvements to REACH, a fundamental problem of the program is that as a regulatory instrument it is not able to directly incentivize a reduction in the use of conventional chemicals (i.e., chemicals not listed as SVHCs, which account for the vast majority of chemicals that are regulated under REACH). Indeed, authorization and restriction are the two key REACH programs for mandatory regulation of chemical risk. In contrast, the underlying assumption of the registration and evaluation programs is that with greater information on the hazardous properties of chemicals, companies will reduce the use of such chemicals voluntarily, as a matter of good business practice. However, although REACH has led to the production of more information, the case for mandatory regulation has remained largely unchanged because the ability of voluntary approaches to achieve reductions in chemical use or to promote the use of safer alternatives has not been proven, particularly in the absence of a credible threat of other regulation that specifies clear targets and commitments (Organization for Economic Co-operation and Development 2003). A second area for improvement concerns quality assurance. The incentive structure of REACH for self-reporting of the toxicological properties of chemicals is inverted in the sense that if producers signal concern about the hazardous properties of a chemical, government authorities or the general public will intervene via mandatory regulations or bad publicity. In other words, producers have an incentive to underestimate risks in order to avoid mandatory regulations or bad reputations. It is doubtful that the current structure will create sufficient incentives for accurate and thorough reporting of the toxicological properties of chemicals unless there is sufficient assurance of data quality in the registration process to counterbalance the existing perverse incentives. Unfortunately, such a system of quality assurance is not in place, as reflected in the poor quality of a significantly large proportion of registration dossiers. For example, in a 2016 REACH Progress Report on the results of dossier assessments, the ECHA found that critical data were missing in about 90 percent of the 184 examined registration dossiers, with the noncompliant companies asked to provide the missing information (European Chemicals Agency 2016). Companies also failed to update their data regularly, even though REACH instructs them to do so (European Chemicals Agency 2016). Thus the ECHA may want to consider refusing or withdrawing a chemical’s registration if dossiers are incomplete or of poor quality. A third area for improvement concerns the fate of information once it is generated. It is important to make sure that the information generated to date under REACH actually leads to fewer risks to human health and the environment by using such information to design policy instruments that reflect differences in chemical toxicity and risks. The experience with risk-based pesticide taxation suggests that risk-based taxation of the chemicals covered under REACH is feasible and that it can be implemented using the same type of information that is provided in the REACH registration dossiers. Moreover, Sweden’s experience with taxes on chemical substances suggests that the use of complementary measures to speed up the EU transition towards safer products is a feasible option. Tax revenues can be used to support innovation and cover administrative costs and, in particular, to provide funding to increase the stringency of the quality assurance activities performed under REACH. Finally, the impact of economic instruments can be further increased through the use of disclosure mechanisms such as the TRI or the candidate list under REACH because company reputation can be leveraged to play a key role in improving the performance of chemical regulation. Conclusions and Insights for Industry, Policymakers, and Academia This article has discussed the major technical and economic challenges of toxic substance control and how REACH has addressed the challenges of chemical regulation. I conclude by highlighting key insights and guidance for industry, policymakers, and academic researchers that can be derived from this examination of the economics of toxic substance control and REACH. For industry. The main insight is that chemical regulation is less costly than industry might expect and can have positive effects for companies by enhancing safety, improving the management of risks, enhancing the reputation of the firm, and attracting “green” consumers. For policymakers. The main insight is that REACH has succeeded in gathering information, but more information is not always better information. Thus there must be effective systems of quality assurance. Moreover, policymakers should not limit their focus to direct regulations because there is much to gain from policies that better account for the social cost of chemical use. Finally, regulators should be more proactive and use the information generated by REACH to develop complementary instruments that can increase the incentives for substitution toward safer chemicals. Risk-based taxation is one example of such an instrument. For academia. The main insight is that further research on the economics of chemical regulation should focus on assessment of the policy options that are best suited to addressing chemical mixtures and ex post evaluation of chemical regulations in place, in particular, quantification of the costs and benefits of such regulations, as well as identification of the factors affecting their performance. Finally, truly interdisciplinary research is needed to define sufficiently protective boundaries against the human and ecosystem impacts of chemical emissions and exposures, thus providing the holistic scientific information that policymakers need to develop coherent and effective regulations. This article benefitted from input by colleagues at the FRAM Centre for Future Chemical Risk Assessment and Management at the University of Gothenburg. I am particularly grateful to Thomas Sterner, Thomas Backhaus, Christoph Rheinberger, Jorge Bonilla, Daniel Slunge, Lina Trosvik, Debbie Axlid, Managing Editor Suzanne Leonard, and Features Editor Frank Convery for valuable discussions and comments. Appendix Table 1 Policy options for the control of chemical substances Instruments Examples Strengths Direct controls Emission and exposure standards, bans on products/processes EPA emission standards for chlorinated solvents; U.S. Occupational Safety Act limits to exposure to chemicals in the workplace; bans on DDT, PCBs, and CFCs High level of certainty over the outcome, which is particularly relevant for chemicals for which the likelihood of irreversible damage is high Liability Liability rules for hazardous wastes in U.S. CERCLA Enhances compliance with conventional instruments through fines or compliance incentives Economic instruments Taxes, fees, or charges Taxes on fertilizers and pesticides in Europe; Swedish tax on bromine-, chlorine-, and phosphorous-based substances used in electronics Spurs substitution towards safer chemicals. If differentiated, can reduce overall toxicity Tradable permits Phasing out of CFCs and asbestos in the early 1980s The outcome of the regulation can be effectively predicted Deposit–refund schemes Lead–acid batteries, pesticide and propane gas containers, waste oil, and tires of vehicles Provides incentives for proper disposal Engaging the public Information disclosure, voluntary agreements, certification and labeling Toxic Release Inventory, U.S. EPA 33/50, Greenpeace Detox Campaign, cancer warning labels under California’s Safe Drinking Water and Toxic Enforcement Act Enhances compliance with conventional instruments. Provides proactive firms with the opportunity to improve their public image Instruments Examples Strengths Direct controls Emission and exposure standards, bans on products/processes EPA emission standards for chlorinated solvents; U.S. Occupational Safety Act limits to exposure to chemicals in the workplace; bans on DDT, PCBs, and CFCs High level of certainty over the outcome, which is particularly relevant for chemicals for which the likelihood of irreversible damage is high Liability Liability rules for hazardous wastes in U.S. CERCLA Enhances compliance with conventional instruments through fines or compliance incentives Economic instruments Taxes, fees, or charges Taxes on fertilizers and pesticides in Europe; Swedish tax on bromine-, chlorine-, and phosphorous-based substances used in electronics Spurs substitution towards safer chemicals. If differentiated, can reduce overall toxicity Tradable permits Phasing out of CFCs and asbestos in the early 1980s The outcome of the regulation can be effectively predicted Deposit–refund schemes Lead–acid batteries, pesticide and propane gas containers, waste oil, and tires of vehicles Provides incentives for proper disposal Engaging the public Information disclosure, voluntary agreements, certification and labeling Toxic Release Inventory, U.S. EPA 33/50, Greenpeace Detox Campaign, cancer warning labels under California’s Safe Drinking Water and Toxic Enforcement Act Enhances compliance with conventional instruments. Provides proactive firms with the opportunity to improve their public image Notes: CFCs = chlorofluorocarbons; CERCLA = Comprehensive Environmental Response, Compensation and Liability Act; DDT = dichlorodiphenyltrichloroethane; PCBs = polychlorinated biphenyls;. Source: Sterner and Coria (2012). View Large Appendix Table 1 Policy options for the control of chemical substances Instruments Examples Strengths Direct controls Emission and exposure standards, bans on products/processes EPA emission standards for chlorinated solvents; U.S. Occupational Safety Act limits to exposure to chemicals in the workplace; bans on DDT, PCBs, and CFCs High level of certainty over the outcome, which is particularly relevant for chemicals for which the likelihood of irreversible damage is high Liability Liability rules for hazardous wastes in U.S. CERCLA Enhances compliance with conventional instruments through fines or compliance incentives Economic instruments Taxes, fees, or charges Taxes on fertilizers and pesticides in Europe; Swedish tax on bromine-, chlorine-, and phosphorous-based substances used in electronics Spurs substitution towards safer chemicals. If differentiated, can reduce overall toxicity Tradable permits Phasing out of CFCs and asbestos in the early 1980s The outcome of the regulation can be effectively predicted Deposit–refund schemes Lead–acid batteries, pesticide and propane gas containers, waste oil, and tires of vehicles Provides incentives for proper disposal Engaging the public Information disclosure, voluntary agreements, certification and labeling Toxic Release Inventory, U.S. EPA 33/50, Greenpeace Detox Campaign, cancer warning labels under California’s Safe Drinking Water and Toxic Enforcement Act Enhances compliance with conventional instruments. Provides proactive firms with the opportunity to improve their public image Instruments Examples Strengths Direct controls Emission and exposure standards, bans on products/processes EPA emission standards for chlorinated solvents; U.S. Occupational Safety Act limits to exposure to chemicals in the workplace; bans on DDT, PCBs, and CFCs High level of certainty over the outcome, which is particularly relevant for chemicals for which the likelihood of irreversible damage is high Liability Liability rules for hazardous wastes in U.S. CERCLA Enhances compliance with conventional instruments through fines or compliance incentives Economic instruments Taxes, fees, or charges Taxes on fertilizers and pesticides in Europe; Swedish tax on bromine-, chlorine-, and phosphorous-based substances used in electronics Spurs substitution towards safer chemicals. If differentiated, can reduce overall toxicity Tradable permits Phasing out of CFCs and asbestos in the early 1980s The outcome of the regulation can be effectively predicted Deposit–refund schemes Lead–acid batteries, pesticide and propane gas containers, waste oil, and tires of vehicles Provides incentives for proper disposal Engaging the public Information disclosure, voluntary agreements, certification and labeling Toxic Release Inventory, U.S. EPA 33/50, Greenpeace Detox Campaign, cancer warning labels under California’s Safe Drinking Water and Toxic Enforcement Act Enhances compliance with conventional instruments. Provides proactive firms with the opportunity to improve their public image Notes: CFCs = chlorofluorocarbons; CERCLA = Comprehensive Environmental Response, Compensation and Liability Act; DDT = dichlorodiphenyltrichloroethane; PCBs = polychlorinated biphenyls;. Source: Sterner and Coria (2012). View Large Footnotes 1 POPs are a group of organic compounds that are resistant to environmental degradation. Because of their persistence, POPs bioaccumulate, with potential adverse impacts on human health and the environment. 2 These substances are usually referred to as substances of very high concern. These include genotoxic carcinogens; persistent, bioaccumulative, and toxic (PBT) chemicals; and very persistent and very bioaccumulative (vPvB) chemicals. 3 See Appendix table 1 and Sterner and Coria (2012) for an overview of policy alternatives. 4 In Denmark, for instance, the toxicity tax is based on a pesticide risk indicator that accounts for environmental toxicity load, human health load, and environmental fate and behavior load (Finger et al. 2017). Moreover, the heterogeneity in tax levels is high, ranging from €25.5/ha to €0.57/ha, and this heterogeneity has played a major role in achieving the Danish government’s objective of reducing the total amount of pesticides applied by 40 percent from 2013 to 2015 (e.g., Böcker and Finger 2016). 5 One key argument for the UK to leave the EU has been the burdensome environment, health and safety regulations (Gamble 2012). However, all existing EU regulations will continue to apply until the UK actually leaves the EU. If, after that, the UK retains access to the European market as part of the European Economic Area, then business will continue as usual. If it does not, all UK companies will become non-EU companies and will not be allowed to register their substances directly with the European Chemicals Agency (the agency that manages REACH; see discussion in the next section), thus requiring either that part of their organization that is based within the EU to register them or they work with their customers to help them register as importers. 6 To avoid additional animal experiments, alternative testing methods could be developed and the results of all existing animal testing disseminated through public databases. 7 Established in 1991, the EPA’s 33/50 program was one of the first voluntary pollution reduction programs in the United States. The program derives its name from its overall goals: an interim goal of a 33 percent reduction by 1992 of direct environmental releases and off-site transfers of 17 priority toxic chemicals and an ultimate goal of a 50 percent reduction by 1995 (see, e.g., Zatz and Harbour 1999). 8 Substances are deemed dangerous based on the criteria set forth in 67/548/EEC, the Dangerous Substances Directive. These include substances that are explosive, oxidizing, flammable or easily flammable, toxic, harmful, corrosive, or that have irritant effects. 9 An example of a substance currently restricted is asbestos, which causes malignant diseases such as lung cancer, pleural mesothelioma, and peritoneal mesothelioma and is the number one cause of occupational cancer in the world (Goodman et al. 1999). 10 Such communication and cooperation must also comply with applicable competition/antitrust laws. 11 These include risks to vulnerable groups like children and the elderly, and to workers who use chemicals daily as part of their jobs. References Abelkop A. D. K. , Graham J. D. . 2015 . Regulation of chemical risks: lessons for reform of the Toxic Substances Control Act from Canada and the European Union . Pace Environmental Law Review 32 : 108 – 224 . Backhaus T. , Arrhenius Å. , Blanck H. . 2004 . Toxicity of a mixture of dissimilarly acting substances to natural algal communities: predictive power and limitations of independent action and concentration addition . Environmental Science & Technology 38 : 6363 – 70 . Google Scholar CrossRef Search ADS PubMed Bergkamp L. , Herbatschek N. . 2014 . Regulating chemical substances under REACH: the choice between authorization and restriction and the case of dipolar aprotic solvents . Review of European, Comparative & International Environmental Law 23 2 : 221 – 45 . Google Scholar CrossRef Search ADS Birnbaum L. S. 2012 . Environmental chemicals: evaluating low-dose effects . Environmental Health Perspectives 120 4 : A143 – 44 . Google Scholar CrossRef Search ADS PubMed Böcker T. , Finger R. . 2016 . European pesticide tax schemes in comparison: an analysis of experiences and developments . Sustainability 8 4 : 378 . Google Scholar CrossRef Search ADS Bourguignon D. 2016 . EU policy and legislation on chemicals: overview, with a focus on REACH. Brussels: European Parliamentary Research Service. http://www.europarl.europa.eu/RegData/etudes/IDAN/2016/595861/EPRS_IDA(2016)595861_EN.pdf (accessed May 7, 2018). Brown V. 2003 . REACHing for chemical safety . Environmental Health Perspectives 111 14 : A766 – 9 . Google Scholar CrossRef Search ADS PubMed Bui L. T. M. , Mayer C. J. . 2006 . Regulation and capitalization of environmental amenities: evidence from the toxic release inventory in Massachusetts . Review of Economics and Statistics 85 3 : 693 – 708 . Google Scholar CrossRef Search ADS Cattermole A. 2016 . A catalyst for change . AATCC Review 16 2 : 31 – 38 . Google Scholar CrossRef Search ADS Coria J. , Autade A. . 2018 . Analyzing the effects of the candidate list of substances of very high concern on chemical production in Sweden. Working paper. Department of Economics, University of Gothenburg, Gothenburg, Sweden. de Avila C. , Sandberg E. C. . 2006 . REACH: better knowledge and better use of chemicals in the European Union . CHIMIA International Journal for Chemistry 60 10 : 645 – 50 . Google Scholar CrossRef Search ADS Dechezleprêtre A. , Sato M. . 2017 . The impacts of environmental regulations on competitiveness . Review of Environmental Economics and Policy 11 : 183 – 206 . Google Scholar CrossRef Search ADS Denison R. 2017 . A primer on the new Toxic Substances Control Act (TSCA) and what led it to. Environmental Defense Fund . https://www.edf.org/sites/default/files/denison-primer-on-lautenberg-act.pdf (accessed November 15, 2017). European Chemicals Agency . 2016 . Evaluation under REACH. Progress Report 2016. https://echa.europa.eu/documents/10162/13628/evaluation_report_2016_en.pdf/f43e244f-7c90-75bd-e1b2-3771bcb1f8e8 (accessed April 12, 2018). European Chemicals Agency . 2017 . Socio-economic impacts of REACH authorisations – a meta-analysis of the first 100 applications for authorization. Helsinki : European Chemicals Agency . https://echa.europa.eu/documents/10162/13637/tecch_report_socioeconomic_impact_reach_authorisations_en.pdf/590f78da-56db-df06-71df-3ab51868829f (accessed May 7, 2018). Finger R. , Möhring N. , Dalhaus T. , Böcker T. . 2017 . Revisiting pesticide taxation schemes . Ecological Economics 134 : 263 – 66 . Google Scholar CrossRef Search ADS Fredslund S. O. , Bonefeld-Jørgensen E. C. . 2012 . Breast cancer in the Arctic – changes over the past decades . International Journal of Circumpolar Heath 71 1 : 19155 . Google Scholar CrossRef Search ADS Fromberg A. , Cleemann M. , Carlsen L. . 1999 . Review on persistent organic pollutants in the environment of Greenland and Faroe Islands . Chemosphere 38 13 : 3075 – 93 . Google Scholar CrossRef Search ADS PubMed Gabbert S. , Weikard H. P. . 2010 . A theory of chemicals regulation and testing . Natural Resources Forum 34 : 155 – 64 . Google Scholar CrossRef Search ADS Gamble A. 2012 . Better off out? Britain and Europe . Political Quarterly 83 3 : 468 – 77 . Google Scholar CrossRef Search ADS Geiser K. , Tickner J. , Edwards S. , Rossi M. . 2015 . The architecture of chemical alternatives assessment . Risk Analysis 35 12 : 2152 – 61 . Google Scholar CrossRef Search ADS PubMed Goodman M. , Morgan R. W. , Ray R. , Malloy C. D. , Zhao K. . 1999 . Cancer in asbestos-exposed occupational cohorts: a meta-analysis . Cancer Causes & Control 10 5 : 453 – 65 . Google Scholar CrossRef Search ADS PubMed Hansen S. F. , Carlsen L. , Tickner J. A. . 2007 . Chemicals regulation and precaution: does REACH really incorporate the precautionary principle . Environmental Science & Policy 10 5 : 395 – 404 . Google Scholar CrossRef Search ADS Hoang P. C. , McGuire W. , Prakash A. . 2018 . Reducing toxic chemical pollution in response to multiple information signals: the 33/50 voluntary program and toxicity disclosures . Ecological Economics 146 : 193 – 202 . Google Scholar CrossRef Search ADS Kaplow L. , Shavell S. . 1994 . Optimal law enforcement with self-reporting of behavior . Journal of Political Economy 102 : 583 – 606 . Google Scholar CrossRef Search ADS LeBlanc G. A. , Wang G. . 2006 . Chemical mixtures: greater-than-additive effects? Environmental Health Perspectives 114 9 : A517 – 18 . Google Scholar CrossRef Search ADS PubMed Macauley M. K. , Bowes M. D. , Palmer K. L. . 1992 . Using economic incentives to regulate toxic substances . Washington, DC : Resources for the Future . Nichols A. L. 1982 . The importance of exposure in evaluating and designing environmental regulations: a case study . American Economic Review 72 2 : 214 – 19 . Organization for Economic Co-operation and Development . 2003 . Voluntary approaches for environmental policy: effectiveness, efficiency and usage in policy mixes . Paris : OECD Publishing . Paxéus N. 1996 . Organic pollutants in the effluents of large wastewater treatment plants in Sweden . Water Research 30 5 : 1115 – 22 . Google Scholar CrossRef Search ADS Prüss-Ustün A. , Vickers C. , Haefliger P. , Bertollini R. . 2011 . Knowns and unknowns on burden of disease due to chemicals: a systematic review . Environmental Health 10 1 : 9 . Google Scholar CrossRef Search ADS PubMed Sadler T. R. 2000 . Regulating chemical emissions with risk-based environmental taxation . International Advances in Economic Research 6 2 : 287 – 305 . Google Scholar CrossRef Search ADS Sarigiannis D. A. , Hansen U. . 2012 . Considering the cumulative risk of mixtures of chemicals – a challenge for policy makers . Environmental Health 11 ( Suppl 1 ): S18 . Google Scholar CrossRef Search ADS PubMed Schaafsma G. , Kroese E. D. , Tielemans E. L. J. P. , Van de Sandt J. J. M. , van Leeuwen C. J. . 2009 . REACH, non-testing approaches and the urgent need for a change in mind set . Regulatory Toxicology and Pharmacology 53 1 : 70 – 80 . Google Scholar CrossRef Search ADS PubMed Schwarzenbach R. P. , Escher B. I. , Fenner K. , Hofstetter T. B. , Johnson C. A. , Von Gunten U. , Wehrli B. . 2006 . The challenge of micropollutants in aquatic systems . Science 313 : 1072 – 77 . Google Scholar CrossRef Search ADS PubMed Scott J. 2009 . REACH: combining harmonization with dynamism in the regulation of chemicals. In Environmental protection: European law and governance . Oxford : Oxford University Press . Google Scholar CrossRef Search ADS Slunge D. , Sterner T. . 2001 . Implementation of policy instruments for chlorinated solvents. A comparison of design standards, bans and taxes to phase out trichloroethylene . Environmental Policy and Governance 11 5 : 281 – 96 . Sterner T. 2004 . Trichloroethylene in Europe: ban versus tax. In Choosing environmental policy. Comparing instruments and outcomes in the United States and Europe , ed. Harrington W. , Morgenstern R. D. , 206 – 21 . Washington, DC : Resources for the Future . Sterner T. , Coria J. . 2012 . Policy instruments for environmental and natural resource management , 2nd ed . New York : RFF Press . Strempel S. , Scheringer M. , Ng C. A. , Hungerbühler K. . 2012 . Screening for PBT chemicals among the “existing” and “new” chemicals of the EU . Environmental Science & Technology 46 11 : 5680 – 87 . Google Scholar CrossRef Search ADS PubMed Syberg K. , Jensen T. S. , Cedergreen N. , Rank J. . 2009 . On the use of mixture toxicity assessment in REACH and the Water Framework Directive: a review . Human and Ecological Risk Assessment 15 6 : 1257 – 72 . Google Scholar CrossRef Search ADS Söderholm P. , Christiernsson A. . 2008 . Policy effectiveness and acceptance in the taxation of environmentally damaging chemical compounds . Environmental Science & Policy 11 3 : 240 – 52 . Google Scholar CrossRef Search ADS United Nations Environment Programme . 2012 . Global chemicals outlook: towards sound management of chemicals. Synthesis report for decision-makers. Nairobi : United Nations Environment Programme . U.S. Environmental Protection Agency . 2003 . Framework for cumulative risk assessment. EPA/600/P-02/001F. Washington, DC : Office of Research and Development, National Center for Environmental Assessment . U.S. Environmental Protection Agency . 2010 . Toxic Release Inventory national analysis overview. Technical report. https://www.epa.gov/sites/production/files/documents/2010_national_analysis_overview_document.pdf. Uyesato D. , Weiss M. , Stepanyan J. , Park D. Y. , Yuki K. , Ferris T. , Bergkamp L. . 2013 . REACH’s impact on the rest of the world. In The European Union REACH Regulation for Chemicals: law and practice , ed. Bergkamp L. , 335 – 72 . New York : Oxford University Press . van Leeuwen C. J. , Vermeire T. G. , eds. 2007 . Risk assessment of chemicals: an introduction . Dordrecht : Springer . Google Scholar CrossRef Search ADS Vandenberg L. N. , Colborn T. , Hayes T. B. , Heindel J. J. Jr. , Jacobs D. R. , Lee D.-H. , Shioda T. , Soto A. M. , vom Saal F. S. , Welshons W. V. , Zoeller R. T. , Myers J. P. . 2012 . Hormones and endocrine-disrupting chemicals: low-dose effects and nonmonotonic dose responses . Endocrine Reviews 33 3 : 378 – 455 . Google Scholar CrossRef Search ADS PubMed Williams E. S. , Panko J. , Paustenbach D. J. . 2009 . The European Union’s REACH regulation: a review of its history and requirements . Critical Reviews in Toxicology 39 7 : 553 – 75 . Google Scholar CrossRef Search ADS PubMed Zatz M. , Harbour S. . 1999 . The United States Environmental Protection Agency’s 33/50 program: the anatomy of a successful voluntary pollution reduction program1 . Journal of Cleaner Production 7 1 : 17 – 26 . Google Scholar CrossRef Search ADS © The Author(s) 2018. Published by Oxford University Press on behalf of the Association of Environmental and Resource Economists. This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs licence (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial reproduction and distribution of the work, in any medium, provided the original work is not altered or transformed in any way, and that the work is properly cited. For commercial re-use, please contactjournals.permissions@oup.com

Journal

Review of Environmental Economics and PolicyOxford University Press

Published: Jul 1, 2018

There are no references for this article.

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create lists to
organize your research

Export lists, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off