TSCA: Innovation Through Stronger Regulation?

The House Subcommittee on Commerce, Trade and Consumer Protection held a hearing on July 29, 2010 on H.R. 5820, recently-introduced legislation to revamp the Toxic Substances Control Act (TSCA). One recurring theme at the hearing was the contention that fuller information about chemicals and their potential health effects would encourage the development and commercialization of safer alternatives. It was suggested that this in turn would advance the innovation and competitiveness of U.S. chemical producers. In recent years, similar arguments have been made about the innovation and job-creation potential of carbon regulation and other environmental initiatives.

Let's not reflexively reject the notion that public policies can promote economic growth and competitiveness. Consider the Interstate Highway System. Is the nation’s economy healthier and its standard of living higher by virtue of the massive federal program to construct our network or highways, bridges, and roads? Economists across the political spectrum say “yes,” citing increased safety, workforce mobility, just-in-time delivery of industrial inputs, and the resulting growth of cities in the Sun Belt.

Turing our focus on chemicals policy, one can envision a regulatory framework that might help bring newer, safer products into the marketplace. It would require, on one hand, a fairly burdensome regimen of testing and reporting for existing chemicals (particularly those with indicia of hazard), and greater transparency into chemical formulations and other information now deemed proprietary. This would have to be coupled by more lenient treatment of new chemical formulations, including a comparatively expeditious path to market for those that are likely free of health and environmental concerns.

But is this type of framework embodied in H.R. 5820? Some proponents argue that it is. Dr. Richard Denison of the Environmental Defense Fund said at the hearing that the bill would allow “safer” chemicals to enter the market with less burdensome safety determinations. Stated that way, the argument appears internally inconsistent, because it is safety determinations that are chiefly relied upon to distinguish between good and bad chemical actors. Denison’s written testimony more explicitly defines what he means by “safer”: H.R. 5820 would allow new chemicals to enter the market without safety determinations if they are intrinsically low hazard, are safer for particular uses than chemicals already on the market, or serve critical uses.

What types of chemicals could be considered “intrinsically low hazard”? This category would include substances whose biological action is acknowledged to be benign and compounds with extremely low toxicity. However, most of the promising chemicals that have not yet been commercialized would fall outside of these relatively narrow classes. For these, structure-activity relationship (SAR) analysis would be needed to establish “intrinsically low hazard.” This type of analysis comes with its own complexities, and may not represent a significant decrease in burden as compared with traditional safety determinations. As such, it is not clear that chemicals in this category would benefit from an expedited route to market to the extent that the bill would promote innovation.