example for #1 – this is most obvious as the following; there’s a toxic spill somewhere, and the government needs to clean it up. the cost is thus the pricetag of the cleanup.

example for #2 – if the gov’t passes legislation that limits car emissions, detroit must do more research into making cleaner and more efficient cars. that is one way of viewing cost. the other is the amount of people you’ll annoy in terms of getting the law enacted – the cost in that sense is goodwill.

the statement is pretty broad – it totally depends on how you conceive of “cost,” but in every instance, it’s what you had to give up.