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Implementation of Policy Instruments for Chlorinated Solvents: A Comparison of Design Standards, Bans, and Taxes to Phase Out Trichloroethylene

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  • Sterner, Thomas
  • Slunge, Daniel

Abstract

This paper studies the Swedish prohibition of the hazardous solvent Trichloroethylene (TCE). Sweden is alone in completely prohibiting its use. The ban has been at best a partial success and illustrates the dilemmas of policymaking. Use has declined but not stopped, largely because the decision to ban TCE was challenged in the courts. Recently, the EU Court of Justice decided in favor of Sweden’s right to have a ban. This article analyzes abatement cost data to show that the cost of replacing TCE is low for most plants, although there appear to be a few firms for which it may be quite high. A crosscountry comparison indicates that the Swedish ban was less effective than the very strict technical requirements in Germany or the tax used in Norway. A tax (or deposit refund scheme) would be a good mechanism to achieve a swift phaseout.

Suggested Citation

  • Sterner, Thomas & Slunge, Daniel, 2001. "Implementation of Policy Instruments for Chlorinated Solvents: A Comparison of Design Standards, Bans, and Taxes to Phase Out Trichloroethylene," RFF Working Paper Series dp-01-32, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-01-32
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-01-32.pdf
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    References listed on IDEAS

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    1. Xepapadeas, Anastasios & de Zeeuw, Aart, 1999. "Environmental Policy and Competitiveness: The Porter Hypothesis and the Composition of Capital," Journal of Environmental Economics and Management, Elsevier, vol. 37(2), pages 165-182, March.
    2. Dario Bonato & Armin Schmutzler, 2000. "When do Finns Benefit from Environmental Regulations? A Simple Microeconomic Approach to the Porter Controversy," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 136(IV), pages 513-530, December.
    3. Catherine Liston-Heyes & Anthony Heyes, 1999. "Corporate Lobbying, Regulatory Conduct and the Porter Hypothesis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 13(2), pages 209-218, March.
    4. Harrington, Winston, 1988. "Enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, vol. 37(1), pages 29-53, October.
    5. Seema Arora & Timothy N. Cason, 1996. "Why Do Firms Volunteer to Exceed Environmental Regulations? Understanding Participation in EPA's 33/50 Program," Land Economics, University of Wisconsin Press, vol. 72(4), pages 413-432.
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    Cited by:

    1. Daniel Slunge & Francisco Alpizar, 2019. "Market-Based Instruments for Managing Hazardous Chemicals: A Review of the Literature and Future Research Agenda," Sustainability, MDPI, vol. 11(16), pages 1-20, August.
    2. Birkenfeld, Florian & Gastl, Daniel & Heblich, Stephan & Lienert, Ferry & Maergoyz, Mascha & Mont, Oksana & Plepys, Andrius, 2005. "Product ban versus risk management by setting emission and technology requirements: The effect of different regulatory schemes taking the use of trichloroethylene in Sweden and Germany as an example," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-37-05, University of Passau, Faculty of Business and Economics.

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    More about this item

    Keywords

    hazardous chemicals; regulation; environmental tax; solvents;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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