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In the cases of climate change, overfishing of oceans, biodiversity loss, and land erosion and desertification, inadequate - or the complete lack of - environmental protection policies impose significant costs on the affected parties. In this scoping study the costs of policy inaction related to different environmental issues are explored. The emphasis is on methodological considerations such as the accrual and valuation of such costs and the use of the results to support policy making.

Through this scoping study ideas and methodological suggestions for the concept of the “Costs of Policy Inaction” are developed in order to support the work of DG Environment of the EU-Commission. In this context, the underlying basic concepts are considered, including the results of a workshop held at the OECD in April 2005. More notably, the project builds on the years of practical experience of the concerned institutions.

The main objective of the project is to illustrate how studies of the costs of policy inaction can be implemented, and what the policy implications are. Hence, the study seeks answers to question such as:

• In which areas, to which problems, and in which phases of the political decision-making process can DG Environment most reasonably employ detailed studies on the costs of policy inaction?
• What are the practical limitations and issues to bear in mind?
• In which areas would such studies not be useful?
• Where can they be qualitative, where quantitative and where monetary?
• What the are the practical restrictions and limitations of the concept, and what to do in the cases where restrictions arise?
• How can cost-of-inaction-studies support the policy making process and, for example, contribute to impact assessments?

The project report [pdf, 1.4 MB, English] is available for download.

Through this project Ecologic contributes its experiences with economic evaluation of soils, groundwater, floods and the loss of biodiversity as well as its expertise in producing environmental impact assessments at the EU level.

The project represents the ninth project within the framework agreement with the Environment Directorate-General of the Economic Analysis in the Context of Environmental Policies and of Sustainable Development.