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(solution) Econ 3060A Assignment 2 Fall 2016 Due 10/13/2016 by 10:55am


i need help with these 7 questions .the answers should be correct and from the slides i'm attaching. 


Econ 3060A Assignment 2

 

Fall 2016

 

Due 10/13/2016 by 10:55am (Electronic submission in Blackboard is

 

required)

 

1. A) What was the rationale behind enacting the Clean Air Act of 1970 at

 

the federal level, rather than allowing individual states to set air pollution

 

regulations? B) What are the major environmental policies regarding air

 

quality in the U.S.?

 

2. A) Define fund pollutants and stock pollutants with an example for each

 

type of pollutants. B) What are the main policy concerns for stock

 

pollutants? C) Identify the condition that determines the cost-effective

 

allocation of uniformly mixed fund pollutants across multiple sources.

 

3. A) Briefly describe the Kyoto Protocol. B) What are ways to improve the

 

effectiveness of this international agreement?

 

4. Read the paper ?The integration of water quality into transboundary

 

allocation agreements: lessons from the southwestern United States? by

 

Lynne Lewis Bennett, published in Agricultural Economics, Vol 24, 2000. A)

 

Use Figure 1 in the paper to explain why the efficient allocation requires

 

less water to the upper basin. B) What is the policy implication based on

 

this study?

 

Figure 1 5. A) Distinguish between static efficiency and dynamic efficiency. B) How

 

would the dynamically efficient allocation of scarce natural resources across

 

generations respond to changes in interest rates? Explain. 1 6. Suppose a city government is trying to determine how to deal with

 

pesticide contamination of its water supply. It decides to undertake a

 

benefit-cost analysis of two alternative policy options for controlling

 

pesticides:

 

- Upgrading its city water treatment plant to remove the pesticides, or

 

- Banning the use of the offending pesticide in the metropolitan area.

 

The costs of these control options are as follows:

 

- City treatment upgrades: Capital costs = $20 million. The new plant is

 

constructed over the course of the initial year. It starts operating at the end

 

of this year. Once the plant begins operation, it has operating costs of $1

 

million per year. One constructed, the plant lasts for five years, and then

 

must be replaced with a new plant.

 

- Pesticide ban: annual operating costs due to substitution of non-toxic

 

methods of controlling ?pests? = $3.5 million each year.

 

Let the discount rate be 5 percent. The city?s planning horizon is 10 years

 

(Year 0-Year 9). Suppose the PV of the benefits of the project are $40

 

million. Which project should the city prefer?

 

7. A) Identify possible biases associated with contingent evaluation method.

 

B) What are possible ways to eliminate those biases? 2

 


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