“…Adverse effects of regulatory uncertainty on efficient policymaking are especially critical in this case, as ineffective regulation could have severe and possibly irreversible consequences (Faucheux and Froger 1995). Nevertheless, environmental regulation is a particular source of such uncertainty (Tarui and Polasky 2005), mainly because it is typically based on very longterm considerations, with science playing an important role in agenda setting, policymaking, and evaluation (Arentsen et al 2000;Van den Hove 2000).…”
“…Lastly, high uncertainty over the parameter underlying a strategic decision makes it difficult for firms to actually make this decision and increases the need to instead derive solid assumptions to base the decision on (Faucheux and Froger 1995). To this end, firms can disregard uncertain decision parameters by substituting them with the results obtained from applying analytical tools and methods, such as real options or scenario planning (Amram and Kulatilaka 1999).…”
Section: Degree Of Regulatory Uncertainty Perceivedmentioning
A better understanding of firms' response strategies to regulatory uncertainty enables policymakers to improve policymaking efficiency and to enhance the effectiveness of regulation. Based on a literature review, we categorize responses according to their objective toward regulatory uncertainty into four strategies: avoidance, reduction, adaptation, and disregard strategies. Unique data from a worldwide cross-industry survey show that firms predominantly pursue reduction, and to a lesser extent adaptation and disregard strategies, in response to post-Kyoto regulatory uncertainty. Surprisingly, firms in fact only sporadically pursue avoidance strategies, in contradiction to their own public announcements commonly made during policymaking to realize such strategies. The degree of regulatory uncertainty perceived and its interpretation as a threat increase the pursuit of most of these strategies. In addition, firms' response strategies to post-Kyoto regulatory uncertainty differ across industries and partly across regions.
“…Adverse effects of regulatory uncertainty on efficient policymaking are especially critical in this case, as ineffective regulation could have severe and possibly irreversible consequences (Faucheux and Froger 1995). Nevertheless, environmental regulation is a particular source of such uncertainty (Tarui and Polasky 2005), mainly because it is typically based on very longterm considerations, with science playing an important role in agenda setting, policymaking, and evaluation (Arentsen et al 2000;Van den Hove 2000).…”
“…Lastly, high uncertainty over the parameter underlying a strategic decision makes it difficult for firms to actually make this decision and increases the need to instead derive solid assumptions to base the decision on (Faucheux and Froger 1995). To this end, firms can disregard uncertain decision parameters by substituting them with the results obtained from applying analytical tools and methods, such as real options or scenario planning (Amram and Kulatilaka 1999).…”
Section: Degree Of Regulatory Uncertainty Perceivedmentioning
A better understanding of firms' response strategies to regulatory uncertainty enables policymakers to improve policymaking efficiency and to enhance the effectiveness of regulation. Based on a literature review, we categorize responses according to their objective toward regulatory uncertainty into four strategies: avoidance, reduction, adaptation, and disregard strategies. Unique data from a worldwide cross-industry survey show that firms predominantly pursue reduction, and to a lesser extent adaptation and disregard strategies, in response to post-Kyoto regulatory uncertainty. Surprisingly, firms in fact only sporadically pursue avoidance strategies, in contradiction to their own public announcements commonly made during policymaking to realize such strategies. The degree of regulatory uncertainty perceived and its interpretation as a threat increase the pursuit of most of these strategies. In addition, firms' response strategies to post-Kyoto regulatory uncertainty differ across industries and partly across regions.
“…where X i is the i-th variable, and DX i and DDX i are the first qualitative and the second qualitative derivations, respectively, with respect to time t. An important aspect of sustainability models is the quantification of specific variables, namely (see [33]):…”
Sustainability processes are complex and therefore ill-known, inconsistent, and subjective, and must be studied despite a shortage of information. It is prohibitively difficult to study them on quantitative levels using quantitative methods. The presented qualitative approach enables us to solve these issues. There are just three values used to describe the qualitative variables and their derivatives, plus/increasing, zero/constant, and negative/decreasing. An n-dimensional equation-less qualitative model is a set of pairwise relations. Such relations represent a shallow knowledge of the sustainability systems being studied. The solution of the qualitative model is a set of scenarios. The behaviour of this model is described by all of the possible transitions among these scenarios. A decision maker can easily compile a decision tree if he/she knows all of the possible transitions. The generated tree can be evaluated using traditional methods if all of the relevant probabilities are known. Otherwise, some heuristics are used to evaluate the best decision.
“…2 An example of such a long-term adaptive management planning model is provided by Faucheux and Froger (1995), who advocate a decision-making process of procedural rationality as an appropriate means to address many long-range environmental problems that involve uncertainty or irreversibility. OConnor (1993,1996) expands on the treatment of economic values within such a long-term framework.…”
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