In which scenario are environmental laws most likely to increase a business’s costs?

The scenario in which environmental laws are most likely to increase a business's costs is when compliance requires significant changes. This is because businesses often have to invest in new technologies, processes, or materials to meet regulatory standards. For instance, if a business is required to adopt cleaner production methods, it might need to purchase new equipment, retrain staff, or alter its supply chain, all of which can lead to substantial financial outlays.

In contrast, while the other scenarios can affect costs in different ways, they do not inherently lead to the same level of financial impact. Sustainable practices might help reduce long-term costs and improve efficiency. The market demanding greener products could lead to new opportunities and potential profitability, potentially offsetting any costs incurred. Laws being more lenient in certain regions may actually lessen compliance burdens and costs, rather than increase them. Therefore, when it comes to immediate financial burdens imposed by environmental laws, the need for significant changes is the most direct cause of increased costs for businesses.