Costs of Inaction on Key Environmental Challenges Countries today face numerous environmental policy challenges such as climate change air and water pollution natural resource management natural disasters and environment related hazards. The costs of not responding to them can be considerable in some cases representing a significant drag on OECD economies. Estimation of these costs can be an important part of identifying areas in which policy interventions are required as well as of establishing priorities for future action. There is however considerable uncertainty associated with all stages of “costing” the impacts of environmental and resource degradation. Even when the costs of inaction are deemed important identifying the areas where environmental policies need to be strengthened still requires careful comparison between the marginal costs of inaction versus action. This report provides introductory perspectives on the costs of inaction and discusses some of the future problems likely to be encountered in this very complex area.