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 the hazardous solvent Trichloroethylene (TCE). Sweden is alone in completely prohibiting its use. The ban has been at best a partial success and illustrates the dilemmas of policymaking. Use has declined but not stopped, largely because the decision to ban TCE was challenged in the courts. Recently, the EU Court of Justice decided in favor of Sweden’s right to have a ban. This article analyzes abatement cost data to show that the cost of replacing TCE is low for most plants, although there appear to be a few firms for which it may be quite high. A crosscountry comparison indicates that the Swedish ban was less effective than the very strict technical requirements in Germany or the tax used in Norway. A tax (or deposit refund scheme) would be a good mechanism to achieve a swift phaseout.