Analyzing Environmental Policies for Chlorinated Solvents with a Model of Markets and Regulations

This Note concerns the regulation of the five most widely used chlorinated solvents. These chemicals cause known health and environmental problems, and substitute chemicals or processes are often unsafe, unaffordable, or unavailable. Government and industry officials face the challenge of developing policies to reduce overall environmental hazards rather than to change from one to another. The economic model described here can account for solvent substitutions and suggest the direction and magnitude of those substitutions; it can aid public policy development by simulating regulations and their effects on chlorinated solvent markets. The model consists of three major components: (1) a characterization of all substitute solvents and processes in the major cleaning applications, (2) economic equations that represent all of the solvent substitutions mathematically, and (3) a large group of parameters that numerically specify the degree of substitution represented by the economic equations. The author applies the model to metal parts cleaning, electronic parts cleaning, dry cleaning, and paint removal.