The economics of regulating hazardous chemicals in Europe: Why (and how) persistence matters - Seminar by Silke Gabbert

Organised by Section Economics, Hollandseweg 1, 6706 KN Wageningen

Thu 9 October 2014 12:30 to 13:30

Room C83


Under the European chemicals’ legislation, REACH, substances that are identified to be of “very high concern” will de facto be removed from the market unless the European Commission grants authorisations permitting specific uses. Companies who apply for an authorisation must demonstrate that the risks of a continued use can be adequately controlled. Since for the subgroup of toxic and persistent chemicals an adequate control of risks is considered impossible, authorisation can only be granted if applicants show by means of a socio-economic analysis that benefits of use outweigh damage costs society. The current setup of the REACH authorisation process and guidelines for performing a socio-economic analysis ignores that persistent chemicals are stock pollutants. Their pollution patterns, therefore, differ fundamentally from non-persistent chemicals. The paper includes stock pollution effects in a socio-economic modelling approach for balancing benefits and damage costs of chemicals. We identify the decision-rules for granting or refusing an authorisation and compare them with the current authorisation process in REACH. We show that ignoring stock pollution effects in a SEA may lead to erroneous and biased decisions on the use of persistent chemicals because long-term impacts are ignored. Furthermore, whether or not persistent chemicals should be authorised, and for what period, crucially depends on the shape of the damage function. Using a case of DDT soil contamination in Nowshera/Pakistan as an illustrative example, we discuss practical steps and challenges for applying the model, and implications for the authorisation of persistent chemicals.