ABSTRACT
The preceding chapters have considered the use of economic incentives as alternatives to command-and-control regulation of the undesirable health or environmental effects that might be asso ciated with the production and use of chemicals. Our discussion has sought to tailor general prescriptions from the economics literature on environmental regulation to accommodate the special character istics of toxic substances. The general literature typically assumes a fairly homogeneous pollutant associated with one stage of production (or use) at a somewhat readily identifiable source. The following characteristics of toxic substances challenge these assumptions, how ever:
1. The potential for health and environmental risks to occur at multiple stages of the life cycle of the substance;
2. Significant variation in the distribution of potential risks across a multitude of heterogeneous products and applications; and
3. The potential for exposure to other hazardous substances or processes that may be substituted for a regulated substance.
