The Real World Costs of Heavy-Handed Chemical Regulation

Over the last few months, people around the world have learned more about the global supply chain than they’d ever thought necessary.

Why couldn’t we just quickly “get” more N95 masks? How long would it take to make more ventilators if needed?

One of the many factors limiting manufacturing is the limited supply of components.

Just as it is difficult to bake bread if there’s a shortage of flour, it is difficult to manufacture many complex products if there is a shortage of any of their parts, many of which are themselves complex parts. And these parts are often made of synthetic products which make use of manufactured chemicals.

Nonetheless, environmental activists in the European Union are expanding their campaigns to ban more and more of the chemicals that serve as building blocks for our modern world. Environmental groups are targeting chemicals such as siloxanes, which are critical components in a wide range of products, from personal care products to energy efficient light bulbs.

These activist groups and their allies at the European Commission are putting diplomatic pressure on the United Nations to urge other countries to adopt EU-style regulatory schemes.

In countries like Brazil and India, where governments are developing new chemical regulatory frameworks, European activists see an opportunity to export the overly-restrictive EU model to developing countries.

The campaign exposes dramatic differences in how the United States, Canada, and Australia regulate chemicals and how the risk-averse EU system does so, through its REACH system.

The two approaches have led to starkly different outcomes in terms of the permissibility of a wide range of products essential to a safe and sustainable world. 

Chemical regulation in the United States is governed largely by the Frank R. Lautenberg Chemical Safety for the 21st Century Act of 2016. The law requires that the Environmental Protection Agency evaluate chemicals by doing “risk-based chemical assessments.”

Risk assessments are a scientific process whereby experts identify a hazard, evaluate the likelihood of harm being caused by the hazard, and consider what steps can be taken to reduce the chance of that harm being caused.

It’s important to remember that a hazard is the potential that something may cause harm. Risk is the likelihood that the harm will take place under a set of conditions. Crossing the street presents the hazard of being hit by a truck. Looking both ways and waiting for the light reduces (but does not eliminate) the risk of being hit by the truck. 

At its heart, a risk-based chemical regulatory system doesn’t just consider the fact that a product could cause harm, but it takes into account real-world exposures to those chemicals in a range of settings where exposures occur.

So a risk-based approach like the United States’ often allows for the largely safe use of a wide range of useful chemicals, while ensuring that the risk is very low. The EU approach focuses instead on the hazards of a chemical and fails to take into account the actual levels of exposure people or the environment truly face. 

Figuratively speaking, the EU approach is to simply avoid crossing streets, rather than finding ways to do it safely. Proponents argue that this hazard-based approach keeps risk as low as possible.

If activists in the EU succeed in exporting their hazard-based approach to chemical regulation to other countries, the costs to society will outweigh the miniscule reductions in risk. The application of EU-style chemical regulation in emerging economies would reduce the number of jobs available and increase the cost of living in already struggling communities. 

A risk-based approach like that of the United States is the best way for Brazil, India, and other countries to raise standards of living while protecting their citizens.