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Abstract
Environmental policy evaluation is characterised by a paucity of information. The
novel technique of robust mathematical programming is introduced as a means to
proactively account for this uncertainty in policy analysis. The procedure allows
identification of expected bounds on the range of abatement costs associated with
environmental policy. It also has the advantage of not limiting conclusions to realisations
of specific point estimates or probability distributions. Empirical insights are
provided in an application to a New Zealand inland lake threatened by nitrate pollution
from dairy farming. Overall, this novel framework is demonstrated to have
several key advantages, including explicit treatment of severe uncertainty, capacity
to bound the range of expected abatement costs accruing to a given policy instrument,
and the opportunity to identify robust plans that are immune to parametric
variation.