ABSTRACT
The role of uncertainty in abatement costs related to prevention of environmental degradation-especially in the context of climate change-has become an increasingly important element in developing optimal environmental protection strategies and policy tools. In determining the role of uncertainty and analyzing the behavior of risk-averse firms with regard to greenhouse gas (GHG) emissions abatement costs, it is useful to review the research on the more general questions of price and quantity instruments, general equilibrium modeling and uncertainty. Although we do not provide a full literature review, it can be found in other papers (see Pizer, 2002; Newell et al., 2003).
