Charging the chemical: An analysis of when and how economic market-based

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Economic market-based instruments (MBIs) are widely adopted in environmental policy. However, adoption in chemical management is minimal. Scientific knowledge lacks regarding the preconditions, design, and (potential) outcomes. This study helps understanding when and how economic MBIs can lead to a reduction of hazardous chemicals. Based on an interpretivist paradigm, this qualitative study includes fourteen interviews, a case study on the Swedish Chemicals Tax, and document review. This study shows that before economic MBIs can be implemented in chemical management, the following preconditions should be met: 1) sufficient information base and administrative capacity; 2) strong legal structure; 3) competitive markets; 4) political feasibility. Furthermore, economic MBIs could effectively reduce hazardous chemicals once the following nine design characteristics are included: 1) knowledge; 2) linking costs to externality; 3) equal level playing field; 4) combining instruments; 5) flexibility; 6) administration costs; 7) integral approach; 8 enforcement and control; 9) group approach. If these preconditions and design characteristics are met, the instrument could 1) internalize externalities; 2) increase policy reflexivity; 3) stimulate innovation; 4) decrease of administrative costs. However, if they are not present, it could lead to 1) regrettable substitution; 2) not internalizing externalities; 3) increase of administration costs; 4) leakage effects.
Faculteit der Managementwetenschappen