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Toxic inhalation hazard (TIH) chemicals such as chlorine gas and anhydrous ammonia are among the most dangerous of hazardous materials. Rail transportation of TIH creates risk that is not adequately reflected in the costs, creating a TIH safety and security externality. This paper describes and evaluates policy alternatives that might effectively mitigate the dangers of TIH transportation by rail. After describing the nature of TIH risk and defining the TIH externality, general policy approaches to externalities from other arenas are examined. Potential risk reduction strategies and approaches for each segment of the supply chain are reviewed.
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