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Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm?

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Author Info
Palmer, Karen
Oates, Wallace E
Portney, Paul R

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Abstract

This paper takes issue with the Porter-van der Linde claim that traditional benefit-cost analysis is a fundamental misrepresentation of the environmental problem. They contend that stringent environmental measures induce innovative efforts leading to improvements in abatement and production technologies that offset the costs of the regulations. Drawing both on basic economic theory and existing data on control costs, the authors argue that such offsets are special cases. The data indicate offsets are minuscule relative to control costs. There is no free lunch here: environmental programs must justify their costs by the benefits that improved environmental quality provides to society. Copyright 1995 by American Economic Association.

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Publisher Info
Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 9 (1995)
Issue (Month): 4 (Fall)
Pages: 119-32
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Handle: RePEc:aea:jecper:v:9:y:1995:i:4:p:119-32

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This page was last updated on 2009-11-16.


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