FINANCING THE SOUND MANAGEMENT OF CHEMICALS BEYOND 2020

The report argues that current funding for chemicals and waste management is inadequate, particularly in developing and transition countries, and proposes a coordinated international tax on basic chemicals to operationalize the 'polluter pays' principle. It suggests that a 0.5% tax on the production value of basic chemicals could raise approximately $11.5 billion annually, significantly exceeding current funding from the Global Environment Facility (GEF) and the Special Programme. The authors recommend an origin-based excise tax on a specific list of basic chemicals (such as ammonia, benzene, and chlorine) to ensure administrative simplicity and minimize economic distortion. The document evaluates this option against other potential taxes—including income, asset, and transaction taxes—concluding that an excise tax is the most feasible and effective mechanism for internalizing the social and environmental costs of chemical production.

• Developing and transition countries lack the necessary infrastructure and financial resources for the sound management of chemicals and wastes, a gap that is widening rather than narrowing.
• Existing funding mechanisms are insufficient; for example, the GEF's tentative allocation of USD$392 million for the Stockholm Convention (2018–2022) is approximately 11 times lower than the estimated need of USD$4.4 billion.
• The global chemical industry is expanding rapidly, with sales totaling US$5.7 trillion in 2017 and projected to double by 2030, while China currently holds 37% of global chemical sales.
• National-level cost recovery mechanisms are deemed impractical because many management costs in developing countries stem from chemicals produced or sold elsewhere, and unilateral taxes may drive production to other territories.
• A proposed 0.5% tax on the production value of basic chemicals could generate $11.5 billion annually, which is roughly 85 times the combined annual assistance from the GEF and the Special Programme.
• The report recommends an origin-based excise tax on basic chemicals (feedstocks) because it is easy to administer, limits 'cascading' taxes, and encourages the internalization of social costs.
• An analysis of four tax options (income, asset, transaction, and excise) concluded that the excise tax is superior in terms of revenue potential, limiting distortions, technical/legal feasibility, and fidelity to the polluter pays principle.

APA

Eisen, N., Azoulay, D., & DiGangi, J. (2020). FINANCING THE SOUND MANAGEMENT OF CHEMICALS BEYOND 2020. Center for International Environmental Law. https://www.ciel.org/wp-content/uploads/2020/09/ipen-ciel-producer-responsibility-vf1_9e-web-en.pdf

Chicago

Eisen, Nathaniel, David Azoulay, and Joe DiGangi. FINANCING THE SOUND MANAGEMENT OF CHEMICALS BEYOND 2020. Center for International Environmental Law, 2020. https://www.ciel.org/wp-content/uploads/2020/09/ipen-ciel-producer-responsibility-vf1_9e-web-en.pdf.

Wikipedia

{{cite report |last1=Eisen |first1=Nathaniel |last2=Azoulay |first2=David |last3=DiGangi |first3=Joe |title=FINANCING THE SOUND MANAGEMENT OF CHEMICALS BEYOND 2020 |publisher=Center for International Environmental Law |date=September 2020 |url=https://www.ciel.org/wp-content/uploads/2020/09/ipen-ciel-producer-responsibility-vf1_9e-web-en.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{eisen2020financing, author = {Eisen, Nathaniel and Azoulay, David and DiGangi, Joe}, title = {{FINANCING THE SOUND MANAGEMENT OF CHEMICALS BEYOND 2020}}, institution = {Center for International Environmental Law}, year = {2020}, month = sep, url = {https://www.ciel.org/wp-content/uploads/2020/09/ipen-ciel-producer-responsibility-vf1_9e-web-en.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }