LAERE-EfD Seminar | Effects of the EU Chemical Regulation: Is there a Chemical Green Paradox?
We investigate the effects of the Candidate List of the European chemicals regulation REACH, which gives advanced safety information to downstream users about substances of very high concern posing risks to human health and the environment. The substances included on the Candidate List will progressively be put forward for inclusion on the Authorization List, implying that they cannot be manufactured in or imported into the EU from a sunset date, unless the companies have obtained an authorization for their specific use(s). Our theoretical model shows that the Candidate List affects the consumption of hazardous chemicals through different countervailing channels. On the one hand, disclosure about the hazard properties reduces the demand of the chemicals. On the other hand, stocks might built up to mitigate the risk that the chemical may be unavailable in the future. We test these theoretical predictions using official registry data on the consumption of hazardous chemicals in Sweden. Our findings suggest that reductions in consumption are only observed for chemicals for which the disclosure effect is large.