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Federal Government, Not States, Should Regulate Chemicals

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Federal Government, Not States, Should Regulate Chemicals

June 1, 2016

Writers at E21 have generally been critical of regulations issued by the Environmental Protection Agency (EPA). I argued that the Clean Power Plan, an EPA scheme to reduce carbon emissions, placed unjustifiably disparate burdens on different states. Senior Fellow Diana Furchtgott-Roth showed that the EPA used dubious methodology, including double- and triple-counting of benefits, in its cost-benefit analysis of the emissions regulations. However, in the case of the reform of the Toxic Substances Control Act (TSCA) currently moving through Congress, new powers granted to EPA are warranted.

The bill, passed by the House and awaiting final approval from the Senate, is sponsored by Illinois Congressman John Shimkus, a Republican. It authorizes the EPA to conduct testing of toxic chemicals used in common household products and determine whether they pose an unreasonable risk to public safety. If this determination is made, or if the EPA decides there is insufficient information to render a determination, the agency is authorized to regulate or prohibit manufacture of the chemical.

These are sweeping new powers, and advocates of limited government intervention are right to be skeptical of them. However, since the EPA is currently not authorized to regulate these chemicals, individual states have taken the lead. Since 2003, states have passed a grand total of 167 statutes regulating toxic chemicals, according to Safer States, an advocacy group. Over a hundred more bills pertaining to chemical regulation are currently working their way through state legislatures. California alone has 23 recent laws on the books pertaining to chemical regulation, with six more in the pipeline. And this does not even take into account the countless regulations issued by state agencies under the laws.

Number of Laws Regulating Toxic Chemicals by State, 2003-Present

Darker colors represent more laws. States in white have passed no recent chemical laws.

This creates an inconsistent patchwork of regulations that manufacturers must deal with individually. It is far easier for businesses to deal with a single regulation from the EPA than with up to 50 different regulations from the states. Under the TSCA reform bill, states cannot prohibit or restrict a chemical that the EPA has determined to be safe (with exceptions for grandfathered regulations).

While it does mean an expansion of federal power, the bill will reduce the cost, time, and uncertainty associated with bringing a chemical to market by largely superseding state requirements. This will lower costs for consumers and enable faster development of new wares. A company that can sell in every state, rather than just a handful, will be more inclined to invest in innovative products.

Currently, some states can shape the product market in others. When only a handful of states ban a product, such as dishwashing detergents containing phosphates, manufacturers just may take it off the market entirely.

The bill might appear to be a defeat for federalism. But the Constitution gives Congress the power to regulate commerce, and with good reason: so the United States can function as a single market rather than fifty. Congress absolutely has the power to fix the fragmented, state-driven regulatory regime for chemicals currently in place.

One area of potential improvement is a course of action for when the EPA is unable to determine whether a particular chemical poses an unreasonable risk. In these cases, the EPA must issue a regulation that could prohibit manufacture of the chemical if it will be produced in “substantial quantities” or if it poses a risk to a “susceptible subpopulation.”

However, what exactly these terms mean is left to the EPA’s discretion, meaning the agency will have wide latitude to ban harmless chemicals on the basis of unsubstantiated risks. This is the “precautionary principle” of regulation, or the idea that new innovations are guilty until proven innocent instead of the other way around. This not only inhibits innovation; it might actually harm public safety if newer, safer chemicals that might replace older, less safe ones in the market are held up during the approval process. Congress should consider amending the bill to more clearly delineate the EPA’s powers in such ambiguous cases.

Despite the bill’s flaws, it is certainly preferable to the patchwork system the country practices now. However, Congress and the public must remain vigilant to ensure the EPA does not overstep the bounds of its new authority. As the burden of federal regulations continues to grow, adding trillions in economic costs, the danger of too much regulation must be considered in concert with the danger of too little.

Preston Cooper is a policy analyst at the Manhattan Institute. You can follow him on Twitter here.

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