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Model, Model on the Screen, What's the Cost of Going Green?

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  • Dowlatabadi, Hadi
  • Boyd, David
  • MacDonald, Jamie
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    Abstract

    How much a policy is expected to cost and who bears the brunt of that cost play a significant role in the debates that shape regulations. We do not have a good track record of predicting costs and their ultimate distribution, but systematic reviews of past assessments have identified some of the factors that lead to errors. A wide range of expected costs of climate policy have been hotly debated, but all are likely to be wrong. This does not mean that we should continue a debate using ill-informed analyses. On the contrary, we need early small experiments to shed light on key unknowns. Environmental stewardship is a long-term challenge and an adaptive regulatory approach promises to inform policy targets and improve controls through sequential regulatory phases that promote: innovation, flexibility and diffusion of best technologies.

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    Bibliographic Info

    Paper provided by Resources For the Future in its series Discussion Papers with number dp-04-17.

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    Date of creation: 08 Apr 2004
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    Handle: RePEc:rff:dpaper:dp-04-17

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    Keywords: cost estimation; climate policy; modeling; adaptive management;

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    1. Hazilla, Michael & Kopp, Raymond J, 1990. "Social Cost of Environmental Quality Regulations: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 853-73, August.
    2. Morgenstern, Richard & Harrington, Winston & Nelson, Per-Kristian, 1999. "On the Accuracy of Regulatory Cost Estimates," Discussion Papers dp-99-18, Resources For the Future.
    3. Dowlatabadi, Hadi, 1998. "Sensitivity of climate change mitigation estimates to assumptions about technical change," Energy Economics, Elsevier, vol. 20(5-6), pages 473-493, December.
    4. Burtraw, Dallas, 1998. "Cost Savings, Market Performance and Economic Benefits of the U.S. Acid Rain Program," Discussion Papers dp-98-28-rev, Resources For the Future.
    5. Dowlatabadi, Hadi & Morgan, M. Granger, 1993. "A model framework for integrated studies of the climate problem," Energy Policy, Elsevier, vol. 21(3), pages 209-221, March.
    6. Christoph Böhringer & Thomas Rutherford, 2002. "Carbon Abatement and International Spillovers," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 22(3), pages 391-417, July.
    7. DeCanio, Stephen J, 1998. "The efficiency paradox: bureaucratic and organizational barriers to profitable energy-saving investments," Energy Policy, Elsevier, vol. 26(5), pages 441-454, April.
    8. Richard D. Morgenstern & William A. Pizer & Jhih-Shyang Shih, 2001. "The Cost Of Environmental Protection," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 732-738, November.
    9. Ellerman, A. Denny & Montero, Juan-Pablo, 1998. "The Declining Trend in Sulfur Dioxide Emissions: Implications for Allowance Prices," Journal of Environmental Economics and Management, Elsevier, vol. 36(1), pages 26-45, July.
    10. Boyd, James, 1998. "Searching for the Profit in Pollution Prevention: Case Studies in the Corporate Evaluation of Environmental Opportunities," Discussion Papers dp-98-30, Resources For the Future.
    11. William D. Nordhaus, 1976. "Economic Growth and Climate: The Carbon Dioxide Problem," Cowles Foundation Discussion Papers 435, Cowles Foundation for Research in Economics, Yale University.
    12. Weber, Christoph & Perrels, Adriaan, 2000. "Modelling lifestyle effects on energy demand and related emissions," Energy Policy, Elsevier, vol. 28(8), pages 549-566, July.
    13. Felder Stefan & Rutherford Thomas F., 1993. "Unilateral CO2 Reductions and Carbon Leakage: The Consequences of International Trade in Oil and Basic Materials," Journal of Environmental Economics and Management, Elsevier, vol. 25(2), pages 162-176, September.
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