case study on environmental pollution economics project.i will mark as brainliest
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Measurement of Net National Product (NNP) taking in to account the externalities of
using natural resources requires the generalization of conventional national income
accounts for the economy. Conceptually these generalizations could be done as in the UN
methodology of integrated environmental and economic accounting (UN, 1993) and in
other recent attempts using input-output models. However, there is a large gap between
what empirically achieved so far and the requirement of these generalized methods of
accounting. These methods require the aggregation of changes in the natural resource
stocks at the micro level or the aggregation of changes over the firms and households to
arrive at the changes at the level of sectors and from the sector to the macro or national
level aggregates. There are formidable empirical problems in measuring the changes in
resource stocks introduced by firms or projects and the monetary valuation of these
changes.
The UN methodology describes the generalization of production and use accounts for
different sectors in the economy with out explaining how the aggregation of changes in
natural resources stocks introduced by firms and households could be done. The
depletion of resource stock at macro level could be unambiguously measured in the case
of exhaustible natural resources while there are difficulties in measuring the depletion in
the case of environmental resource stocks. Production and use accounts at the sector or
macro level could be prepared by simply adding the firm level production and uses of
fossil fuels or minerals or ores. The market determined resource rents could be used to
prepare the monetary accounts of depletion of exhaustible resources. However in the case
of environmental resource stocks, the depletion and the monetary valuation of it could be
firm or region specific. For example, in the case of atmospheric quality measured in
Particulate Matter (PM10) the depletion should be with reference to an air-shed and the in
the case of water quality measured in Biological Oxygen Demand (BOD) it should be in
the context of a watershed. The valuation of environmental quality measured either in
terms of cost of improving it or in terms of benefits to the households could be also
region or site specific. Therefore for the environmental resource stocks, region or project
specific physical and monetary accounts have to be developed. The national level