Bans

Bans involve the outright prohibition of inputs, processes, products or outputs. Bans have been shown to be effective when the objective of regulation is for an activity to cease altogether, with a key advantage being that their predictability (OBR, 2021). In addition, regulatory instruments can be as efficient as alternatives like price-based instruments under conditions including total abatement costs being low or similar between those subject to the regulation. Evidence suggests that bans can encourage innovation over time. At the same time, the effectiveness of bans can be limited by encouraging change in relatively narrow areas. A lack of flexibility can also lead to high costs of abatement, and substitution and unintended effects.

How the tool works and current applications in the UK

Bans work as an outright prohibition on inputs, processes, products, outputs. Examples of bans introduced across the UK include:

the 1999 ban on the import, supply and use of asbestos in the UK;
2020 ban on single-use plastic straws, drinks stirrers and cotton buds in England and consultation on banning single-use plastic plates, cutlery, balloon sticks and expanded and extruded polystyrene cups and food and beverage containers. Call for evidence on tobacco filters, wet wipes, single-use plastic sachets and plastic cups
Ban on biodegradable municipal waste going to landfill by 2025 in Scotland;
UK-wide ban on the disposal of untreated industrial and automotive batteries to landfill under the Batteries and Accumulators and Waste Batteries and Accumulators Directive; and
The ban called for by the environment, food and rural affairs (EFRA) committee on the export of all plastic waste from the UK by 2027.
Workplace Recycling Regulations Wales - include a ban on food waste disposal to sewer, and landfill and incineration bans on selected materials.

Fig. Examples of bans applied in the UK

Performance assessment

Environmental effectiveness

Bans can be efficient when MACs are low e.g. through substitution or production/consumption abatement. In addition, regulatory approaches can be statically efficient when all abatement channels need to be engaged as relative cost differences between MBIs and performance standards may decline significantly as abatement levels approach 100% (Goulder and Parry, 2008).

Effectiveness in attaining outcomes aided by 1) predictability - Critical when dealing with environmental pollutants and management whose optimal level of pollution is extremely low if not 0, due to human health and ecosystem risks. C&C is the best tool when efficient levels of emissions are at or near zero, or cannot go above efficient levels e.g. in cases of emergencies and certainty of outcome is most important (Perman, 2011). Previously a downside with price-based instruments was the lack of certainty, undermining the use of MBIs, though quantity-based instruments now provide the same assurance. Familiarity stems from regulators and regulates knowing what is required and what outcomes are likely to be Technology and performance standards will be more predictable than price-based instruments in a context of uncertainty over abatement costs (Bergquist et al. 2013). In a context of inflation, technology and performance standards can also more robustly generate environmental impact than price-based instruments without the need for updates (Bye and Klemetsen, 2016).; 2) immediacy - argued that by imposing fixed standards with the force of law behind them, CAC can respond more quickly to activities which do not abide by the set standards (Baldwin, Cave and Lodge, 2011) though timeliness may be offset by resistance from regulatory targets and hasn’t been seen by some researchers e.g. Harrington (Perman, 2011) Regulatory approaches have also been often preferred for their ability to deliver desired outcomes quickly (following point of regulatory introduction). In phasing out leaded gasoline in Europe for instance, progress would have been slowed without mandating the use of catalytic converters and maximum lead content in fuel, as well as tax differentials. At the same time, Stricter standards create incentive for polluters to seek relief from authorities by delaying their application date.; and 3) familiarity and political willingness - Can be more palatable for industry because total costs from C&C can be lower than taxes for instance as price up to the efficient level doesn’t have to be paid.

C&C seen early on as way to achieve desired outcomes quickly. In phasing out leaded gasoline in Europe, progress would have been slowed without mandating catalytic converters, maxim lead content and tax differentials for instance. Evidence for swiftness being better under C&C than MBIs is mixed, with evidence supporting C&C e.g. the phase out of TCE by the EPA, with limits proving effect, while MBIs in other contexts e.g. effluent fees on organic waste-loads in Netherlands produced swift results.

As regulations often need to be highly specific in their terminology, this can limit their impacts to specified sectors (Anderson et al. 2011).

Allocative/cost-efficiency

According to the standard economic account, C&C tools such as bans are inefficient and should grow increasingly inefficient as additional pollution controls become more costly.

(Cole & Grossman, 1999) argues C&C can be efficient, producing social benefits in excess of costs and can be more efficient that alternative economic approaches. Because of the environmental costs they help avoid, even if they are not welfare maximizing due to inefficiencies, they still generally are welfare improving (Anderson et al. 2011). They create stable environment for the development and adoption of fuel-saving technologies.

Where regulation is so stringent that all available abatement measures must be taken and there is little scope for choosing the most cost-effective ones, MBIs aren’t significantly more cost-effective (kemp and Pontoglio, 2011). Cost efficiency to regulator - monitoring requirements of MBIs not found to be more demanding than C&C because they require credible and quantitative emission estimates which are exacting.

Abatement and compliance costs to industry - total cost to industry can be lower with CC than MBIs because no taxes for emissions up to efficient pollution level have to be paid.

Long-run effects

Bans and standards have historically been critiqued for providing limited incentive to innovate. For instance, Jaffe and Stavins (1994) suggest that technology standards may give poor incentives for technical or managerial innovation as there is no financial incentive to go beyond the standard, and there may even be a non-compliance penalty to doing so (van den Bergh, 2011; Requate, 2005). Performance standards perform better, particularly if compliance charges can be lessened through innovation.

However, Begquist et al. (2013) find C&C can be flexible and effective when well implemented inc. with dynamic efficiency benefits in the form of innovation, though they are generally less statically efficient than MBIs.

Costly regulation generally does provide a spur to find less costly ways of complying generally but technology standards can discourage research.

Measuring persistent environmental performance in terms of emission intensity across range of pollutants in Norway using panel data, find positive and significant effects of non-tradable emission quotas and technology standards much like with taxes. However, the persistence of effects come as standard with C&C while taxes need to be continually increased (Bye and Klemetsen, 2016). Even if a quota is fixed, non-tradable quotas can create an incentive for a firm to reach this level at the lowest cost by reorganize the production process or investing in new technologies.

Weiss and Anisimova (2018) found Swedish environmental regulation aimed at pulp & paper mills based on flexible prescriptive regulation e.g. the use of extended compliance periods induced long-term process-based innovation offsets to compliance costs. Putting in place stretching standards far in advance of implementation can encourage firms to make long-term investments for transforming a sector via innovation.

Has been shown that performance and technology standards can pressure firms to develop products and processes to meet requirements (Grubb and Ulph, 2002).

A 2014 study by Ecofys found innovation effects of EU Ecodesign Directive varies with sectors – some have responded with innovation while others have been more defensive (Ecofys 2014).

In circumstances of firms being reluctant or unable to innovate, technology-based can subsidise R&D that may not otherwise happen (Perman et al. 2011; Dasgupta, ). Technology standards effectively subsidise firm-level R&D, helping overcome a lack of information which can have catalytic effects for innovation (Perman et al. 2011).

Distributional and equity effects

Bans and standards subject regulated parties to the same substantive requirements, helping avoid e.g. spatial reallocation of environmental loading. At the same this, these can be economically regressive. Bans and standards can be introduced with certain compensatory measures. For example, the mayor of London’s office has a £23m scrappage scheme for “microbusinesses” and charities, while a separate £25m scheme for low-income Londoners will open later this year in order to compensate for deadweight losses to low-incomes.

Evenhandedness - all regulated parties are subject to the same substantive or procedural requirements, useful for avoiding reallocation of environmental loading to pollution hotspots and on the basis of justice. Issue with evenhandedness however is that the effects can still be regressive. In addition, MBIs can create geographical pollution hotspots more easily.

Spillover and interaction effects

While bans can be particularly effective in delivering a sought outcome, substitution and unintended effects need to be carefully considered. A 2015 study by Zero Waste Europe warns against the use of landfill bans due to their potential negative spillover effects through significant increases in treatment approaches such as waste to energy which offer only marginal environmental benefits.

Depending on design of regulatory and adjacent measures, negative interactions with other policy instruments are possible. For example, in the US, when tax credits for hybrid vehicles increased their market penetration, incentives to improve fuel efficiency in ICE vehicles decreased due to fuel consumption reductions being met through growth in hybrids (McConnell and Turrentine, 2010).