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Water based paints are not only beneficial for the environment, but typically are less messy and easier to dispose of. They also should be a benefit to your property insurance rates.
Keep in mind if you use a water based stain/paint and still finish with an oil based varnish/lacquer/topcoat, this will still keep your insurance rates up!
This has already happened to the vehicle industry – they use water based paints but the topcoat is still oil based.
Lastly, keep in mind that in an atomized state even lower volatile products become flammable – I used to demonstrate this by lighting a match to a small pile of flour (it would not ignite however if I threw it up in the air and lit the flour it would burn quite impressively).
Isocyanate paint is still hazardous to human exposure and adequate protection still is required.
Hopefully I’ve answered the question for you.