The assessment of chemicals management options and environmental policies can be considerably improved by better estimating their costs and benefits. Financing national chemicals management programmes also often requires economic justification of the benefits of such investments. However, there has historically been insufficient data to support such analyses.
The costs and benefits of regulating chemicals
Chemicals play an important role in the everyday life of people around the world. However, they must be soundly regulated to avoid risks to human health and the environment.
The OECD has worked with governments and industry since the 1970s to improve chemical safety and harmonise approaches for their assessment and regulation.
Why are chemicals regulations important?
How is the OECD addressing this issue?
The OECD is:
Bringing together chemicals regulators and economists
Improving the information base to assess the social benefits of regulating chemicals for both health and environmental impacts
Establishing internationally comparable willingness-to-pay values
The OECD's work centers around two projects. The first on Surveys on Willingness-to-Pay to Avoid Negative Chemicals-Related Health Impacts (SWACHE) focuses on health impacts of chemicals. The second on Surveys of willingness-to-pay to Avoid negative Chemicals Related Environmental endpoints (SACRE) focuses on the environmental impacts of chemicals. In conjunction, these initiatives provide important data to policy makers to create better and more appropriate chemicals regulations.
Explore the data
People are willing to pay a lot to protect their health
People are willing to pay a significant amount to reduce their risk of developing various negative health effects. The value of a statistical case is estimated in USD Purchasing Power Parity (PPP) from USD 91 000 for infertility to USD 1 194 000 for very low birth weight, on average, across countries surveyed. The second highest value is found for serious kidney disease (USD 805 000) followed by childhood asthma (USD 430 000) and adult asthma (USD 280 000). The mean WTP for reducing asthma severity equals USD 529 per year for adults and USD 948 per year for children. People living in OECD countries are also willing to pay USD 3 050 to avoid the loss of 1 IQ point in their children.
People support additional and stronger action to reduce exposures to harmful chemicals
The SWACHE surveys reveal that the public is generally aware of chemical hazards and exposure risks, actively takes measures to reduce exposure and strongly supports increased action from governments and industry to reduce the presence and emissions of harmful substances. Key findings include:
- High awareness: Almost 75% of respondents know about the health risks of chemicals, with a minimum of 50% awareness across all countries. 62% say they understand how they can be exposure but with more uncertainty.
- Proactive measures: Over two-thirds take daily steps to reduce exposure and older individuals are more proactive
- Protecting future generations: More than 82% agree that we have an obligation to future generations to do whatever we can to reduce exposures to harmful chemicals .
- Regulatory scepticism: There is moderate uncertainty about the sufficiency of chemical regulations with significant variation by country. However, there is overwhelming support for stronger governmental (82%) and business (84%) actions to reduce exposures to harmful chemicals with support increasing with age.
How can policymakers use these data?
The values produced by the OECD can be used in benefit-cost analyses of chemicals management options. They enable the comparison of the economic benefits of different risk management options to the costs of enacting such regulatory measures.
Overall, the OECD's estimates provide significant evidence that chemicals management systems are worth implementing.
