Implementation of policy instruments for chlorinated solvents. A comparison of design standards, bans and taxes to phase out trichloroethylene

This paper studies the Swedish prohibition of trichloroethylene (TCE). TCE is a common solvent and in some uses a substitute for solvents such as the CFCs that were phased out internationally due to their ozone depleting effect. TCE is a strong solvent and hazardous to health and, therefore, more strictly controlled in most countries. Sweden is however alone in prohibiting its use completely. The ban has been at best a partial success and this illustrates the dilemmas inherent in the implementation of policy instruments in real world situations. Use has declined but not stopped, largely since the decision to ban TCE was challenged in the courts. The ban was also a point of contention in the membership negotiations that Sweden held when entering into the EU. Recently the EU Court of Justice decided in favour of Sweden's right to have a ban. There are however clear indications that the ban was not the best possible policy. It led to considerable energy being spent on litigation, resulting in a loss of prestige for the chemicals inspectorate. It also appears to have been less effective at reducing the use of TCE than the very strict technical requirements in Germany or the tax used in Norway. The article analyses a data set covering a large number of firms to discuss the marginal costs in different cases. Typically the cost of replacing TCE is low but there appear to be a few firms where it may be quite high. For the former, a tax (or deposit refund scheme) would be a good mechanism to achieve a swift phase‐out. For the latter, it may be more rational to require extremely low emission values (through technical standards). Copyright © 2001 John Wiley & Sons, Ltd. and ERP Environment