Disclosing Toxic Releases to Reduce Pollution

Following a tragic accident at a pesticide plant in Bhopal, India, in 1984, in which deadly gas killed more than two thousand people in surrounding areas and injured more than a hundred thousand, the U.S. Congress required manufacturers that produced or used large quantities of a selected list of toxic chemicals to report annually on quantities of their release into the air or water or onto land, chemical by chemical and factory by factory. The company disclosures were assembled by the federal Environmental Protection Agency (EPA) in a Toxics Release Inventory (TRI). The Bhopal disaster provided the immediate impetus for toxic pollution disclosure. But the idea that the public had a right to know about toxic pollution in communities was also rooted in a decade of work by labor and community groups aimed at disclosing workplace and community hazards.

The new requirement represented a hastily constructed political compromise tacked onto a larger legislative effort to provide an emergency response system for chemical accidents. Disclosure was supported by key senators—Robert Stafford (R-Vt.), Frank Lautenberg (D-N.J.), and Lloyd Bentsen (D-Tex.)—and by right-to-know and environmental groups. However, manufacturers sought successfully to narrow its scope by limiting the chemicals to be reported and the manufacturers required to report, excluding reporting of toxic chemical use (as opposed to release into the environment), and allowing companies to estimate releases using a variety of techniques that could be changed without notice. The EPA initially saw the disclosure system as a burdensome paperwork requirement.

Over time, however, toxic pollution disclosure provided an important bridge between traditional right-to-know measures and newer targeted transparency systems. When disclosure caused some large companies to make voluntary, immediate, and drastic reductions in toxic pollution, federal officials began to refer to the requirement as one of the nation’s most successful environmental regulations. By the late 1990s, the disclosure system was credited with reducing toxic releases by nearly half in little more than a decade.

The dynamics of toxic pollution disclosure reflected shifting political priorities. In the 1990s, the Clinton administration substantially strengthened disclosure by increasing the number of chemicals covered, lowering thresholds for reporting of particularly hazardous chemicals, and requiring federal facilities, power plants, and mining operations to report. However, the George W. Bush administration asked for cutbacks in reporting in 2006. The administration proposed relieving nearly four thousand companies from detailed reporting and suggested reducing reporting to every other year as a cost-cutting measure.

Weaknesses in the disclosure system persisted. Disclosure metrics (releases in pounds) did not help citizens assess toxicity or exposure and therefore could not create incentives to reduce risks efficiently. In addition, companies used different estimating techniques, data accuracy remained uncertain, and, despite advances in information technology that made near real-time reporting feasible, timeliness of disclosure remained a serious problem. Factory-by-factory toxic pollution for calendar year 2004 was not reported to the public until April 12, 2006.

This case study is drawn from Full Disclosure, Fung, Graham and Weil, 2007.