Informational Regulation

Informational regulation (IR) refers to regulation that requires that specific information be provided to affected stakeholders, which may include the general public. It is an alternative or supplement to third-party regulatory monitoring and enforcement because the assumption is that interested parties will use the disclosed information to reduce harmful activities, such as releasing hazardous wastes into the environment. IR plays a large role in the management of environmental risks and is an approach that appeals to many because it avoids command and control mechanisms, still requires some degree of corporate accountability, while the provision of information theoretically places power directly in the hands of the people affected by pollution. Examples of informational regulation include the Toxics Release Inventory, a publicly accessible database maintained by the U.S. Environmental Protection Agency (EPA) that includes information on the release of over 650 hazardous chemicals, and food labels mandated by the U.S. Food and Drug Administration (FDA) that contain information about risks (such as mercury contamination in fish).

Informational regulation is intended to achieve two goals: informing individuals of the risks and/or environmental costs associated with a product, and providing an incentive for manufacturers to reduce risks and environmental harm. IR is best suited for situations, such as the example of mercury contamination of fish, where the risk applies only to a small part of the population (e.g., children and pregnant women) or where consumer choice is considered important (for instance, labeling paper products as recycled or not). In such cases, informational regulation may be more efficient than more coercive alternatives, such as outlawing the sale of nonrecycled paper.

IR preserves individual autonomy by allowing individuals to evaluate risks and environmental costs relative to their specific set situation and values, and may strengthen the democratic process by providing all parties with essential knowledge. Finally, IR creates incentives for self-regulation by industry: because many consumers prefer to patronize products from environmentally friendly companies, some corporations have reduced emissions of hazardous chemicals listed in the TRI and stated this fact in their annual reports and advertising campaigns. Although IR is usually considered less coercive than command-and-control legislation, industry often fights the requirement for reporting by claiming that the expense involved is burdensome or that the mere existence of labeling will unduly frighten away customers. From the consumer's point of view, IR is an imperfect solution, in many cases, because the information provided is often incomplete and may be insufficient to truly empower private citizens to make informed choices or to exert pressure on corporations. Consumers may not be able to use the information provided effectively: for [Page 329]instance, studies have found that most consumers say they read nutritional labels on foods, but do not have a comprehensive understanding of their importance. An additional problem is that as the number of warnings increase, each becomes less effective as consumers cease to pay attention to them.