Estimating the Hidden Costs of Environmental Regulation
Estimating the Hidden Costs of Environmental Regulation

Author: Satish Joshi

Publisher:

Published: 2009

Total Pages: 47

ISBN-13:

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This paper examines the extent to which accounting systems separately identify all the costs of environmental regulation. We estimate the relation between the quot;visiblequot; cost of regulatory compliance (costs that firms' accounting systems correctly classify as quot;environmentalquot;), and quot;hiddenquot; environmental costs embedded in other accounts. We use plant-level data from 55 steel mills to estimate hidden costs, and we follow up with structured interviews of corporate-level managers and plant-level accountants. Empirical results show that a $1 increase in the visible cost of environmental regulation is associated with an increase in total cost (at the margin) of $10-11, of which $9-10 are hidden in other accounts. The findings suggest that inappropriate identification and accumulation of the costs of environmental compliance are likely to distort costs in firms subject to environmental regulation.

Environmental Regulation
Environmental Regulation

Author: Tholkappian Sundararajan

Publisher:

Published: 2005

Total Pages:

ISBN-13:

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Many studies that have analysed the cost of compliance with environmental regulation have invariably confined themselves to the direct costs involved. However, a few studies have attempted to examine the effect of regulation on the production process of the firm and considered it as the additional unaccounted cost of compliance. This study, following the method developed by Morgenstern and others in 1998, estimates the hidden costs involved due to environmental regulation. Using firm-level primary survey data, this study of the Karur textile industrial cluster finds that there are hidden costs involved in complying with environmental regulation; the policy-maker has to take these additional costs into consideration.

Economic Costs and Consequences of Environmental Regulation
Economic Costs and Consequences of Environmental Regulation

Author: Wayne B Gray

Publisher: Routledge

Published: 2018-01-18

Total Pages: 808

ISBN-13: 1351741829

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This title was first published in 2002. How expensive is environmental regulation and how does it affect the economy? A proper understanding of the costs imposed by environmental regulation is important for policy-makers and others concerned with regulatory design. This book focuses on empirical studies of the impact of environmental regulation on the economy, exposing the reader to a variety of estimation methodologies and datasets that have been used in this area. Three basic sources provide information on the costs of environmental regulation: surveys; engineering studies; and econometric analysis. This text draws on all three in its investigation.

The Costs and Benefits of Environmental Regulation
The Costs and Benefits of Environmental Regulation

Author: Imad A. Moosa

Publisher: Edward Elgar Publishing

Published: 2014-11-28

Total Pages: 352

ISBN-13: 1782549242

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øThe authors present an extensive survey of the empirical evidence on the determinants of environmental performance as well as the effects of environmental regulation on the costs of production, plant location, firm-level productivity, stock prices and

Hidden Costs of Energy
Hidden Costs of Energy

Author: National Research Council

Publisher: National Academies Press

Published: 2010-05-26

Total Pages: 506

ISBN-13: 0309155800

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Despite the many benefits of energy, most of which are reflected in energy market prices, the production, distribution, and use of energy causes negative effects. Many of these negative effects are not reflected in energy market prices. When market failures like this occur, there may be a case for government interventions in the form of regulations, taxes, fees, tradable permits, or other instruments that will motivate recognition of these external or hidden costs. The Hidden Costs of Energy defines and evaluates key external costs and benefits that are associated with the production, distribution, and use of energy, but are not reflected in market prices. The damage estimates presented are substantial and reflect damages from air pollution associated with electricity generation, motor vehicle transportation, and heat generation. The book also considers other effects not quantified in dollar amounts, such as damages from climate change, effects of some air pollutants such as mercury, and risks to national security. While not a comprehensive guide to policy, this analysis indicates that major initiatives to further reduce other emissions, improve energy efficiency, or shift to a cleaner electricity generating mix could substantially reduce the damages of external effects. A first step in minimizing the adverse consequences of new energy technologies is to better understand these external effects and damages. The Hidden Costs of Energy will therefore be a vital informational tool for government policy makers, scientists, and economists in even the earliest stages of research and development on energy technologies.

Efficiency in Environmental Regulation
Efficiency in Environmental Regulation

Author: Ralph A. Luken

Publisher: Springer Science & Business Media

Published: 2012-12-06

Total Pages: 380

ISBN-13: 9400907370

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A management agency --such as a publicly or privately owned electric utility -- must, if it is to be efficient in carrying out its day-to-day tasks, have a means of monitoring its performance to assess the efficiency of its operations and the effectiveness of its planning. For example, how did the demand for electricity compare with that assumed in planning? How effective were the incentives applied to induce energy conservation by users? Such ex post analyses are essential for improving the planning process and hence for improving decisions with respect to efficiency and resource allocation. Unfortunately, it seems to be very difficult for public agencies to make such ex post evaluations an integral part of agency activities, whether the agencies are "producers," e. g. , the Corps of Engineers or the Bureau of Reclamation with respect to water resources management, or are regulatory agencies such as the Environmental Protection Agency or the Food and Drug Administration. Here and there a few ex post analyses of agency programs have been done, but rarely by the responsible agency itself. These analyses have attempted to compare the results actually achieved with the results estimated in planning, either in terms of project outputs or in terms of effectiveness of regulatory and/or economic incentives in inducing desired changes in behavior.

The Costs of Environmental Regulation in a Concentrated Industry
The Costs of Environmental Regulation in a Concentrated Industry

Author: Stephen P. Ryan

Publisher:

Published: 2005

Total Pages: 58

ISBN-13:

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The typical cost analysis of an environmental regulation consists of an engineering estimate of the compliance costs. In industries where fixed costs are an important determinant of market structure this static analysis ignores the dynamic effects of the regulation on entry, investment, and market power. I evaluate the welfare costs of the 1990 Amendments to the Clean Air Act on the US Portland cement industry, accounting for these effects through a dynamic model of oligopoly in the tradition of Ericson and Pakes (1995). Using a recently developed two-step estimator, I recover the entire cost structure of the industry, including the distribution of sunk entry costs and adjustment costs of investment. I find that the Amendments have significantly increased the sunk cost of entry. I solve for the Markov perfect Nash equilibrium (MPNE) of the model and simulate the welfare effects of the Amendments. A static analysis misses the welfare penalty on consumers, and obtains the wrong sign on the welfare effects on incumbent firms.