Regulatory effectiveness and the long-run policy horizon: The case of U.S. toxic chemical use

This paper employs state-of-the-art time series analysis to examine the long-run economic and institutional drivers of toxic chemical use behavior in the U.S. Toxic chemicals are classified into growth, Environmental Kuznets Curve (EKC), and kinked-growth chemicals, according to their long-run use trend behavior. Cointegration analysis shows that while some toxic chemicals have been successfully reduced by regulatory efforts, a majority of the toxic chemicals used in commercial products share a long-run equilibrium with national accounts and industrial production, suggesting that toxic chemical use has been largely driven by changes in GDP, industrial production, and private R&D investments, rather than by government regulations. Estimated structural break results indicate that the 1986 Emergency Planning and Community Right-to-Know Act, which created the Toxic Release Inventory has had impact on the consumptive use of more poisonous industrial chemicals than command-and-control regulations.