ABSTRACT
This chapter examines the potential cost impact of increasingly stringent environmental regulations on the costs of industrial production. It evaluates the costs of compliance with environmental regulation from a macro perspective and it finds the magnitude of the costs to be small in comparison to the costs of production. The chapter reviews data, primarily within the UN system, that address the macro and micro impact of environmental regulations on production costs of industry in developing countries. It also reviews the potential macro impact and the potential micro impact. The chapter suggests measures that developing countries could take to ensure that environmental regulations in developing countries are not only effective, but also have the least cost impact on industrial production costs. The circumstances need to be addressed by changes in government policy and are yet another indication of the need for international transfer of environmental management experiences and environmentally sound technology.
