Europe - the costs of EU environmental policies to
A project carried out by a European consortium compared ex-ante and    
ex-post estimates of environmental regulation costs and offered a number    
of recommendations to improve their accuracy. The impact of    
implementing environmental policies is central to the debate on economic    
competitiveness and environmental sustainability. The project reports    
conclude that some ex-ante overestimation is inevitable, and that the new    
EU regulatory flexibility could make accurate predictions even more di   
fficult. Nevertheless, a number of recommendations are offered which, the    
authors say, could improve accuracy levels:   
•Cost estimates should draw on as many sources as possible   
•As green policies become more flexible, cost estimates should be    
updated frequently. 'Feedback loops' should be set up to update    
cost predictions in light of experience   
•This could eventually lead to 'rules of thumb' for factoring as yet    
unknown technological innovation, economies of scale and 'learning    
curve effects' into initial cost estimates   
•It should be mandatory to analyse actual, as well as predicted, costs    
of policies so comparisons can be made and lessons learned.    
'Before-and-after' comparisons must compare like with like   
•Sensitivity analyses should be used to identify the parameters most    
likely to influence costs. A better understanding of business    
behaviour and likely responses to policy is also urged   
•Finally, costs must be clearly defined and should always include    
avoided costs such as lower energy usage.   
The report The costs of EU environmental policies to business (0.3 MB)    
can be collected from: ...  
Extracted from e-news from Resource Recovery Forum, 
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Ex-post estimates of costs to business of EU environmental legislation
Posted: 31/10/2006 By: Professor Paul Bardos