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dc.contributor.authorPindyck, Robert S.en_US
dc.contributor.otherMassachusetts Institute of Technology. Center for Energy and Environmental Policy Research.en_US
dc.date.accessioned2009-04-03T17:07:35Z
dc.date.available2009-04-03T17:07:35Z
dc.date.issued2006en_US
dc.identifier2006-017en_US
dc.identifier.urihttp://hdl.handle.net/1721.1/45063
dc.description.abstractIn a world of certainty, the design of environmental policy is relatively straightforward, and boils down to maximizing the present value of the flow of social benefits minus costs. But the real world is one of considerable uncertainty -- over the physical and ecological impact of pollution, over the economic costs and benefits of reducing it, and over the discount rates that should be used to compute present values. The implications of uncertainty are complicated by the fact that most environmental policy problems involve highly nonlinear damage functions, important irreversibilities, and long time horizons. Correctly incorporating uncertainty in policy design is therefore one of the more interesting and important research areas in environmental economics. This paper offers no easy formulas or solutions for treating uncertainty -- to my knowledge, none exist. Instead, I try to clarify the ways in which various kinds of uncertainties will affect optimal policy design, and summarize what we know and don't know about the problem.en_US
dc.format.extent28 pen_US
dc.publisherMIT Center for Energy and Environmental Policy Researchen_US
dc.relation.ispartofseriesMIT-CEEPR (Series) ; 06-017WP.en_US
dc.titleUncertainty in environmental economicsen_US
dc.typeWorking Paperen_US
dc.identifier.oclc159935044en_US


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