The political economy of a global ban on mercury-added products: positive versus negative list approaches.

Abstract: The main objective of this paper is to discuss and compare two regulatory options commonly used in multilateral environmental agreements. The analysis is largely conceptual but we focus in particular on the recent global efforts to gradually phase-out the use of mercury-added products. In the first regulatory approach no mercury-added products would be allowed unless they are listed in an annex (the negative list), while in the second case all mercury-added products would be allowed unless they are listed in an annex (the positive list). In both cases countries may have time to make the transition away from these products through the use of exemptions. The paper provides first a conceptual discussion of bans as regulatory instruments and of the use of technology-forcing standards to attain deep reductions in the reliance on hazardous substances. We outline a simple theoretical framework within which different regulatory options for mercury-added products can be analyzed. This framework is employed to analyze some overall pros and cons of the negative and the positive list approaches. Specifically, we address a number of generic factors that may differ across the two options, such as: (a) the potential presence of different types of information inefficiencies; (b) the flexibility in compliance measures granted by the two approaches; (c) the significance of administration costs as well as other relevant policy implementation issues. The analysis indicates that the negative list approach could facilitate a more cost-effective phase-out of mercury, in part since in this case an individual country seeking exemption would bear the burden of identifying the need for the exemption. This requires, though, the use of long-term compliance periods for selected product groups. With the positive list approach, the one currently adopted in the so-called Minamata Convention on mercury, it may be more difficult to induce mercury users to reveal their true costs of substituting to other products. Further empirical analysis is, however, needed to clarify the pros and cons of each option in different contexts. [Copyright &y& Elsevier]