Please give answers of the following questions:
1. What are the strengths and limitations of using estimates oftotal economic value to
develop environment policy recommendations? How does your answerrelate to your
worldview (anthropocentric or ecocentric)?
2. Do you think contingent valuation should be widely used as atool for developing environmental policy recommendations? What doyou think is the main strength of CV?
What do you think is its main weakness?
3. Suppose that you are asked to conduct a cost-benefit study ofa proposed coal-fired
power plant. The plant will be built on the outskirts of aresidential area and will emit a
certain volume of pollutants. It will require a substantialamount of water for its cooling
system. Industries in the region argue that the additional poweris urgently needed, but
local residents oppose construction. How would you evaluatesocial and environmental
costs and weigh them against economic benefits?
4. As mentioned in the text, under U.S. law federal agenciesmust use cost-benefit analysis to evaluate major policy proposals.Do you agree with this requirement, in particular for environmentalpolicies? How much weight do you believe should be given to theresults of cost-benefit analyses when making policy decisions?Discuss how economic, health, and environmental criteria should bebalanced in formulating regulations.
5. Suppose that the government of a developing country isconsidering the establishment of a national park in a scenicforested area. Local opposition arises from those who wish to usethe forest land for timbering and agriculture. But the nationalpark would draw both local and foreign visitors as tourists. Couldcost-benefit analysis aid the decision on whether to establish thepark? What factors would you consider, and how would you measuretheir economic value?
6. In what respects is “natural capital†similar to human-madecapital, and in what respects does it differ? We often speak of a“return to capital,†meaning the stream of income generated by acapital investment. Can we speak of a return to natural capital?What are examples of investment in natural capital? Who ismotivated to make such investments? Who would suffer if suchinvestments were not made, or if “disinvestment†occurs due toresource depletion or environmental degradation?
7. Is the concept of optimal scale for an economy useful? If so,how would you go about
determining it? Do you think that economies such as those in theUnited States, Europe,
and Japan have reached optimal scale? Exceeded it? How about theeconomies of Latin America, Asia, and Africa? How would you relatethe concept of optimal scale in the global economy to economicgrowth in national economies at different levels ofdevelopment?
8. Distinguish the concepts of strong and weak sustainability,and give some practical examples, other than those cited in thetext, for their application. Where is each concept mostappropriate? Which economic policy measures are relevant toachieving sustainability?
