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


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


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.

Suggested Citation

  • Dowlatabadi, Hadi & Boyd, David & MacDonald, Jamie, 2004. "Model, Model on the Screen, What's the Cost of Going Green?," Discussion Papers dp-04-17, Resources For the Future.
  • Handle: RePEc:rff:dpaper:dp-04-17

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    References listed on IDEAS

    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 853-873, August.
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    6. 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.
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    More about this item


    cost estimation; climate policy; modeling; adaptive management;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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