An Incentive-Conscious Approach to Toxic Chemical Controls

Regulation of toxic chemicals has traditionally been pursued through a strict command-and-control model, and market-based mechanisms have been assumed to be unworkable in the toxic chemical context. However, a new California law makes conscious use of marketplace incentives to achieve health protection goals. Despite bitter opposition, the strategy at this early stage appears to be working. Major industries have adopted "self-policing" measures in order to comply with the law, and government agencies are being relieved of primary enforcement burdens. The new law, Proposition 65, also consciously seeks to reverse an important disincentive to effective regulation that is inherent in traditional command-and-control structures for toxic chemical control. In response to the changed structural incentive, California's progress in solving long-delayed regulatory issues has been impressive, particularly in comparison to the federal record.