highly sensitive to uncertainty. We briefly summarize the theory, stressing its empirical implications. We then use cross …-section and time-series data for a set of developing and industrialized countries to explore the relevance of the theory for … - affects investment as the theory suggests, but the size of the effect is moderate, and is greatest for developing countries …

In a world of certainty, the design of environmental policy is relatively straightforward, and boils down to maximizing … the present value of the flow of social benefits minus costs. But the real world is one of considerable uncertainty …