Calculating the Costs of Environmental Regulation
William Pizer and
Raymond Kopp ()
Chapter 25 in Handbook of Environmental Economics, 2005, vol. 3, pp 1307-1351 from Elsevier
Decisions concerning environmental protection hinge on estimates of economic burden. Over the past 30 years, economists have developed and applied various tools to measure this burden. In this chapter, we present a taxonomy of costs along with methods for measuring those costs. At the broadest level, we distinguish between partial and general equilibrium costs. Partial equilibrium costs represent the burden directly borne by the regulated entity (firms, households, government), including both pecuniary and nonpecuniary expenses, when prices are held constant. General equilibrium costs reflect the net burden once all good and factor markets have equilibrated. In addition to partial equilibrium costs, these general equilibrium costs include welfare losses or gains in markets with preexisting distortions, welfare losses or gains from rebalancing the government's budget constraint, and welfare gains from the added flexibility of meeting pollution constraints through reductions in the use of higher-priced, pollution-intensive products. In addition to both partial and general equilibrium costs, we also consider the distribution of costs across households, countries, sectors, subnational regions, and generations. Despite improvements in our understanding of cost measurement, we find considerable opportunity for further work and, especially, better application of existing methods.
JEL-codes: Q50 (search for similar items in EconPapers)
References: Add references at CitEc
Citations View citations in EconPapers (5) Track citations by RSS feed
Downloads: (external link)
http://www.sciencedirect.com/science/article/B7P5M ... b6d33c1f8c7eaf145908
Full text for ScienceDirect subscribers only
Working Paper: Calculating the Cost of Environmental Regulation (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:eee:envchp:3-25
Access Statistics for this chapter
More chapters in Handbook of Environmental Economics from Elsevier
Series data maintained by Zhang, Lei ().