Question

Suppose that you are asked to conduct a cost-benefit study of a proposed coal-fired power plant. The plant will be built on the outskirts of a residential area and will emit a certain volume of pollutants. It will require a substantial amount of water for its cooling system. Industries in the region argue that the additional power is urgently needed, but local residents oppose construction. How would you evaluate social and environmental costs and weigh them against economic benefits? Make sure to mention potential costs, potential benefits, and techniques used in your answer.

"Solving the problems of environmental economics is simple. It is just a matter of internalizing the externalities." What is your reaction to this statement? Does the theory of externalities apply to most or all environmental issues? What are some practical problems involved in internalizing externalities? Can you think of some examples in which the principle works well and others in which it is more problematic?

How can the fracking controversy be viewed according to the safety standard?

As part of conducting a cost benefit analysis the present value of benefits are compared to the present value of costs. How would the choice of a higher or lower discount rate affect the present value of the calculated costs of hydrofracking? (For example, health costs are likely to occur later in people’s lives. How does the use of a higher discount rate affect how those costs are weighed in considering the value of fracking?) Give three examples.

Answer 1

Answer:

"in" (and any subsequent words) was ignored because we limit queries to 32 words.