What drives the substitution of hazardous flame retardants in electronic appliances in Sweden?

Highlights

• We identify the relative importance of different drivers of firms’ preferences for chemical substitution.
• The avoidance of health and environmental hazards is the most important driver of chemical substitution.
• Firms are reluctant to tax policies that might lead to increases in the price of the product being sold.
• Reluctance to chemical taxes can be reduced by using labels disclosing the use of less hazardous chemicals in the products.

Abstract

Chemical substitution can mitigate risks from chemical substances for individuals and the environment. This study investigates the preferences of companies regarding the adoption of safer alternatives to hazardous flame retardants in electronic appliances in Sweden. Through a choice experiment, we assess the relative importance of four key factors determining firms’ preferences for chemical substitution: health and environmental hazards, the likelihood of chemical regulations, product pricing, and the presence of a label indicating the use of safer alternatives. Our findings indicate that the avoidance of health and environmental hazards is the primary motivator for firms to pursue chemical substitution. Our study also shows that companies are hesitant to accept tax policies that may result in price increases for their products. However, we propose that this reluctance could be mitigated through the implementation of a label that informs consumers about the utilization of less hazardous chemicals in the products. Such a label would not only serve as a means of product differentiation but also discourage consumers from opting for cheaper alternatives offered by competitors.