Phasing Down Lead in Gasoline through Economic Instruments

The phaseout of leaded gasoline in the United States was accomplished through a series of measures known as the lead‐phasedown program. In accomplishing this program, the regulations promulgated by the Environmental Protection Agency (EPA) employed various methods of control from pure mandate to flexibility‐based rules employing economic incentives. This paper discusses the elements of the structure of a flexible system, describes EPA's evolution into such a structure, reviews the governmental administration of the program, and estimates some of the reduced costs and increased benefits that resulted. The lessons learned should be useful for applying flexible and incentive‐based regulations to other programs.