Pareto Policy Solutions, LLC

advancing innovation through smart regulation

Pareto Policy Solutions, LLC is a policy analysis and advocacy firm committed to advancing sustainability through “smart” regulation: regulation that rewards, and does not penalize, superior performance.  Often, such actions leverage advances in science and technology and make the regulatory program itself more effective as well as more efficient.

Sustainability and TSCA Reform

The current Congress has spent a fair amount of time considering reform of the Toxic Substances Control Act (TSCA).  But the kind of political imperative necessary for enactment remains elusive.

TSCA requires EPA to review every new chemical against a safety standard before it enters commerce.  But there is no mandate to review “existing chemicals”, those tens of thousands of chemicals in commerce when TSCA was first enacted and which still dominate commerce today.  

The task is seemingly daunting:  each chemical in commerce has multiple uses, each use must be considered independently when assessing safety, and risk assessment for each chemical-use combination takes time.  

How much time?  EPA recently identified 83 chemicals as high priority for risk assessment; it will take an estimated ten years for EPA to do this.  So how long will it take to evaluate tens of thousands?  Decades.  And this is just the time needed for risk assessment, not the time needed to regulate those that fail a safety evaluation.  

This is not a sustainable approach.

Is there any way to speed things up?  I think so, and the solution lies in leveraging market forces to do the heavy lifting.

First, the federal government need not itself evaluate the safety of all chemicals in commerce.  But it can and should develop clear criteria that can be used by others to evaluate safety.  If there were both clear criteria and a standard for risk assessment, the market would use such information to self-identify those chemicals that do not pass muster, and the market share of these chemicals would decline dramatically, even without federal regulation. 

Of course, EPA could regulate these chemicals that fail the safety evaluation.  What then?  EPA says that current TSCA requires a lengthy, time-consuming analysis of costs and benefits that undermines, if not impedes, regulation.  But allowing EPA to regulate without any standard is unacceptable to both business and environmental groups because neither trusts the Agency to regulate at “just about the right” level of stringency.

In such cases, there ought to be agreement on the high-level principle of “do no net harm”.  This would, of course, require some degree of analysis.  To avoid concerns that such an analysis would be time consuming and costly, Congress could invoke the concept of “proportionality”, ensuring a small level of effort for relatively minor regulations, and a greater level of effort for major regulations.

Now don’t get me wrong:  The Gordian Knot that is TSCA reform does not lend itself to so simple a solution.  It is no easy matter to develop clear criteria for chemical safety, nor is it easy to develop a standard for risk assessment (has there ever been one?).

The whole concept of sustainability requires a symbiotic relationship between regulation and market forces.  Here is the big question in TSCA reform:  What should this relationship look like?

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