Many chemical substances cause significant diffuse emissions when emitted over wide areas at individually low concentrations. These emissions are typically very difficult and costly to control. The targeted chemical may exist in many products as well as in a wide variety of end uses. However, the current regulatory instruments used are primarily bans or quantitative restrictions, applied to individual chemicals and very specific uses. Policy makers in the area of chemicals management have focused almost solely on chemicals with a very steep marginal damage cost curve leading to low use of price regulations.
The growing concerns about cumulative effects and combination effects from low dose exposure from multiple chemicals can motivate a broader use of market-based instruments in chemicals management. In this paper, we review the use of market-based instruments in the management of pesticides and other hazardous chemicals. We also discuss economic principles and practical constraints for further use of market-based instruments in chemicals management.