Why Environmental Management May Yield No-regret Pollution Abatement Options

摘要

Empirical evidence supports the existence of pollution abatement possibilities at negative costs, the so-called 'no-regret options'. We provide a microeconomic rationale for the existence of such potential at the firm level. An econometric application confirms that pollution abatement cost curves with no-regret options are compatible with a standard production function, as stated in our theoretical model.