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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.

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Costs of Inaction with Respect to Natural Resource Management

The costs of inaction with respect to natural resource management arise as a consequence of a rate of exploitation of the resource which does not optimise returns. Unfortunately, many of the world’s fisheries and aquifers are being exploited at unsustainable (and inefficient) rates, even though over-exploitation has been identified for many years as a major problem in both cases. In the case of fisheries management, there are already examples of fish stocks which have been driven to commercial extinction. In the case of groundwater, there are many examples of “mining” of aquifers, with the development of urban agglomerations and agricultural systems becoming more dependent upon a depleting resource.

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