The implications of model complexity for environmental management

The purpose of this paper is to consider the implications of model complexity for the quality of the information provided by models of production activities that account for the processes involved in residuals generation and treatment. Using each of the three primary technologies for iron and steel-making industry and models of varying detail for each, the paper compares the estimated levels of residuals generated and treatment costs for both atmospheric and waterborne effluents. The findings suggest that there are strategic details in model construction which have fundamental implications for the design of environmental policies. Moreover, preliminary estimates of the costs of model construction and operation suggest that policymakers may not be able to afford complexity for its own sake. Rather these costs will require the development of methods to isolate the strategic details in each technology that are potentially important to environmental policies.