Costs of Inaction on Key Environmental Challenges

image of Costs of Inaction on Key Environmental Challenges

Countries today face numerous environmental policy challenges, such as climate change, air and water pollution, natural-resource management, natural disasters and environment-related hazards. The costs of not responding to them can be considerable, in some cases representing a significant drag on OECD economies. Estimation of these costs can be an important part of identifying areas in which policy interventions are required, as well as of establishing priorities for future action. There is, however, considerable uncertainty associated with all stages of “costing” the impacts of  environmental and resource degradation. Even when the costs of inaction are deemed important, identifying the areas where environmental policies need to be strengthened still requires careful comparison between the marginal costs of inaction versus action. This report provides introductory perspectives on the costs of inaction and discusses some of the future problems likely to be encountered in this very complex area.

English Also available in: French

Costs of Inaction with Respect to Climate Change

The potential costs of inaction with respect to climate change are considerable. Some of these costs are already being felt in both OECD and non-OECD economies. Inaction (and action) with respect to climate change is likely to have non-marginal impacts. Policy decisions concerning the climate have the potential to shift the entire trajectory of economies, with the macroeconomic context turning out to be very different under different scenarios. However, there is considerable uncertainty about all of the cost estimates discussed in this Chapter. Assessments need to be undertaken (and results presented) in a manner which takes due account of the uncertainties involved.

English Also available in: French

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