The Social cost of environmental quality regulations: A general equilibrium analysis*

Hazilla, M. and Kopp, R.P. (1989) The Social cost of environmental quality regulations: A general equilibrium analysis*. Discussion Paper. Resources for the Future, Inc., Quality of the Environment Division, Washington, D.C., USA.

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The use of cost-benefit analysis by U.S.Federal regulatory agencices has greatly expanded in both scope and sophistication since Ronald Reagan's 1981 executive order requiring such analyses of most major government regulations. However, these agencies continue to employ estimates of private cost rather than correct estimates of socialcost in their analyses. In addition, general equilibrium effects and intertemporal consequences of the regulations are rarely analyzed. In this paper the authors perform a social cost analysis of the government regulations required by the Clean Air and Water Acts. Our analysis suggests that truesocial cost bears little resemblance to estimates of private cost, casting doubt on the usefulnesss of cost-benefit studies based on private cost. Moreover, general equilibrium effects of government regulations are found to be significant and pervasive, and intertemporal consequences of the - 2 - regulations, ignored until now, are quite large

Item Type: Monograph (Discussion Paper)
Uncontrolled Keywords: Environmental Protection; Legislation; USA; Social Costs, RP6961
Author Affiliation: Department of Economics American University
Subjects: Social Sciences
Environmental Science > Environment
Divisions: General
Depositing User: Mr T L Gautham
Date Deposited: 20 May 2014 10:39
Last Modified: 20 May 2014 10:42

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