Assignment
Explain the following with examples and diagrams where necessary
10 marks each:
• The Precautionary Principle
• The Coase Theorem
• Willingness To Pay
• Valuation of Life
• Life Cycle Assessment
• Externalities
• Polluter Pays Principle
• Cost Benefit Analysis
Q1 Critically evaluates the concept of an "optimal" level of pollution, and discusses how economic instruments can be used to achieve this.
Include:
• Coverage of marginal costs of pollution damage and marginal costs of pollution abatement- can use diagram (from lecture 2 slides)
• Economic idea of optimal pollution level, which may be disputed by environmentalists
• Externalities (Pigou approach)
• Polluter Pays PrincipleInstruments: Explanation of various methods, with emphasis on the move from command and control to market based instruments.
• Firms with differing abatement costs.
• Tradable permits, pollution taxes.
• Examples can be used.
Q2 Evaluate the economic and environmental arguments for the construction of a new generation of nuclear powered electricity generation plants in the UK.
Include:
• Environmental and Economic arguments
• Background of rising energy demand
• Limits of fossil fuels - peak oil (?)
• Need to reduce CO2 emissions
• Nuclear power reducing reliance on other countries for energy
• Question deals with UK, but examples can be used from other countries
• Environmental and Economic arguments
• Economics of nuclear- fixed and variable costs
• Construction and financing costs
• Disposal and decommissioning costs
• Reliance on public subsidies
• Political opposition
• Safety concerns (Fukushima, Chernobyl)
Q3. Evaluate the economic case for taking radical policy measures to avert climate change. Refer to the effectiveness of the EU emissions trading system in your answer.With reference to the recommendations of the Stern Report (2006), consider the economic case for taking radical policy action to avoid climate change.
Include :
• Greenhouse gases and global climate
• Dangers of rising temperatures
• Economic impacts
• Refer to Stern Review (2006) and the key findings
• Stern Review attempts to quantify costs of climate change, and costs of reducing emissions
• Note- there are summaries of the Stern Review
• The methods used in Stern Review should be discussed critically- especially the use of discounting
• Issues of uncertainty can also be highlighted
• Problems of Carbon tax and emissions trading
• Abatement costs from reducing emissions
• Higher energy bills
• Investment in new energy technologies
• Lower consumption
• Compare Damage Costs with Abatement Costs (can use diagram)
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also include a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also Include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.