The right chemistry

©Henry Romero/Reuters

What do sports shoes, cars, processed foods, cooking utensils, buildings, roads, medicines, mobile phones and the computer this article was written on have in common? A simple answer is chemicals.

Chemicals are used everywhere, from major industrial processes to pharmaceuticals and paint coatings. They form a two trillion dollar industry, with three quarters of the world’s chemicals produced in OECD countries. However, this proportion is set to drop to around 60% by 2030 as players like China, Brazil and Russia increase their share.

The American Chemistry Council expects world growth in chemicals production to average around 3.5% per year in the next decade, mainly in the Asia-Pacific region. China’s industry is now bigger than Germany’s by turnover, driven largely by US and Japanese investment. The OECD, whose projections are not far different, gives this rapid expansion a red warning light for urgent policy action, demanding more data, management and oversight as globalisation accelerates. Why?

Almost every man-made product contains chemicals and modern society relies on them. However, rather than being locked safely within the products, chemicals carry danger in several ways: they can leak into the environment during production, use or when goods are thrown away; their use can damage health; and their production emits CO2. The chemicals industry is a major user of fossil fuels too, alongside smelting and other heavy industries.

Then there are persistent organic pollutants (POPs). These remain intact in the environment for long periods, become widely distributed geographically, accumulate in the fatty tissue of living organisms and are toxic to humans and wildlife. For instance, polychlorinated biphenyls (PCBs) have been widely used in coolants, insulating fluids, flame retardants, adhesives, carbonless copy paper, etc. Dichlorodiphenyltrichloroethane (DDT) is a chlorinated hydrocarbon, once widely used as a pesticide in agriculture. The production and use of these substances have been banned internationally under a convention agreed in Stockholm in 2001, though DDT continues in limited use in some countries to control malaria-bearing mosquitoes.

No one would question that releases of certain substances, such as PCBs and DDT have caused serious damage to human and animal health, and the environment. Chemicals travel across borders, and affect marine life too. Some alkylphenols used to produce detergents, polymer additives, lubricants and the like have been found to cause endocrine disruption in fish.

Some trends in decreasing pollution by chemicals have been positive, with sharp drops in emissions of hazardous substances from chemical plants in the OECD area. In Japan, for instance, the chemicals industry reported a drop of 54% from 2000 to 2004 in the emissions of 354 substances listed in a national law. The EU has also noted sharp drops in the likes of acid rain and ozone depletion agents, while the US and Canada have recorded falls in the release and transfer of over 150 chemicals that are monitored by both countries.

How can such improvements be built on? The key is more information and more cooperation. Though we may be familiar with chemicals, it may seem surprising that there is still a lack of information on the health and environmental effects of many chemical substances on the market and on the products in which they are used. Several policy initiatives have been taken, such as the 2006 Dubai Declaration on International Chemicals Management and the so-called Overarching Policy Strategy.

Other UN agreements include the Basel Convention on Transboundary Movements of Hazardous Wastes, the Montreal Protocol on Substances that Deplete the Ozone Layer and the Stockholm Convention on Persistent Organic Pollutants. The OECD has led chemical policy work for four decades, with acts on accident prevention, preparedness and response, release and transfer registers and sound waste management, not to mention its testing guidelines that save governments and industry millions of dollars in safety testing costs.

There are several regulatory programmes in place in member countries too, on pesticides for instance, and on high volume chemicals, which represent the bulk of total production. We still need to better understand the sources of exposure and to manage the environmental effects of chemicals worldwide. One challenge is to extend the OECD’s seminal work on the Mutual Acceptance of Data (called MAD) to non-OECD countries, so that all countries monitoring and assessing the industry work from the OECD chemical safety benchmarks.

Other government policies for the chemical industry could include taxation on products to reflect their environmental impacts, and incentives to encourage research and adoption of more environmentally-friendly alternatives. Voluntary practices are also important, particularly exchange of information and communication between governments, industry and the public. While cultural and legal barriers make this harder than it sounds, voluntary industry approaches overseen by governments can achieve quite a lot. In Korea, for instance, some 160 companies have voluntarily agreed to reduce chemical releases by 30% by 2007 and 50% by 2009 from 2004 levels.

Rewarding innovation and encouraging better technology is also important. Policymakers can issue models which companies can use as a reference at design stage to help find more benign chemicals or other alternatives. Governments can also encourage chemical firms to use energy efficient technologies during production. New technology brings challenges too. Nanotechnologies for instance have proved valuable for industry, in lightweight materials, inks and protective coatings. But they may bring health and environmental hazards and so demand more monitoring, and this is another area where OECD has taken a lead.

The chemical industry’s rapid expansion both geographically and technologically underlines the need for more data and cooperation. This will be a major global policy challenge as the industry expands to emerging markets. As many investment projects are yet to unfold, the window to act in the interests of good practice is now.

RJC

References

Visit the OECD chemicals pages at www.oecd.org/env.

See American Chemistry Council at www.americanchemistry.com.

See Stockholm Convention on POPs at www.pops.int.

©OECD Observer No 266 March 2008




Economic data

GDP growth: +0.6% Q2 2018 year-on-year
Consumer price inflation: 2.9% Aug 2018 annual
Trade: +2.7% exp, +3.0% imp, Q4 2017
Unemployment: 5.3% Aug 2018
Last update: 10 Oct 2018

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly


Online edition
Previous editions

Don't miss

  • Globalisation will continue and get stronger, and how to harness it is the great challenge, says OECD Secretary-General Gurría on Bloomberg TV. Watch the interview here.
  • OECD Secretary-General Angel Gurría with UN Secretary-General António Guterres at the 73rd Session of the UN General Assembly, in New York City.
  • The new OECD Observer Crossword, with Myles Mellor. Try it online!
  • Watch the webcast of the final press conference of the OECD annual ministerial meeting 2018.
  • Listen to the "Robots are coming for our jobs" episode of The Guardian's "Chips with Everything podcast", in which The Guardian’s economics editor, Larry Elliott, and Jeremy Wyatt, a professor of robotics and artificial intelligence at the University of Birmingham, and Jordan Erica Webber, freelance journalist, discuss the findings of the new OECD report "Automation, skills use and training". Listen here.
  • Do we really know the difference between right and wrong? Alison Taylor of BSR and Susan Hawley of Corruption Watch tell us why it matters to play by the rules. Watch the recording of our Facebook live interview here.
  • Has public decision-making been hijacked by a privileged few? Watch the recording of our Facebook live interview with Stav Shaffir, MK (Zionist Union) Chair of the Knesset Committee on Transparency here.
  • Can a nudge help us make more ethical decisions? Watch the recording of our Facebook live interview with Saugatto Datta, managing director at ideas42 here.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Rousseau
  • Do you trust your government? The OECD’s How's life 2017 report finds that only 38% of people in OECD countries trust their government. How can we improve our old "Social contract?" Read more.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at www.oecd.org/careers .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2018