Cost Benefit Analysis and Risk Assessment Essay

The purpose of this section is to set standards for federal agencies to follow in regards to global issues. Climate change and clean energy efforts are of great importance in regards to environmental assessment law. International treaties to lower greenhouse gases (GHG) are of special importance. Therefore, it has become evident that federal agencies will be forced to play a global role in the decades to come. ‘Public involvement in regards to environmental decision-making increases environmental awareness,

For example, in an effort to lower the carbon footprint from factory smoke stacks, the government can mandate a new expensive piece of equipment to be installed. If this equipment poses a financial burden on the regulated firm, the regulation can be inefficient; however, if regulated factories are able to reduce their footprint through other lower cost options such as using less harmful raw materials or installing solar panels; then that would be an efficient way of utilizing resources and enforcing the

“The Clean Air Act has worked for America. It has protected the public health without holding our economy back. In fact, since 1970, emissions of the six major air pollutants have dropped by 29% while the population has grown by 28% and the gross domestic product has nearly doubled” (para. 12). In other words, if this has already worked for the United States in the past, why not try updating it and incorporating it into our current lifestyles? With the Clean Air Act, Browning hopes that the Environmental Protection Agency, or the EPA, will stop thinking about the cost it would take to improve public health and increase just do whatever it takes. There is no monetary to human life, no matter how many people think

The issue of carbon emissions is an important one not only from an environmental perspective but also an economic one. While reducing carbon emissions is an important one for the health of human beings as well as that of the environment, the larger question is what type of policy strategy is best for both reducing such emissions which might have an impact on efforts to mitigate the effects of pollution on climate change. While ther are options to consider which does not rely on economics-- technological or output standards achieved by command and control regulations--they are often fraught with political resistance by industry because they do not allow industry to make any choices or play a role in solving the problem of

The economic efficiency should be balance in a way that the producer can make profits, the public can benefit with the services, the government collect the taxes from production and the most important is the health of the population and the environment. Unfortunately, we have to keep our economy in good status and continue helping our country to improve in the economic status view. New technology and environmental laws has helped improved the way producers do business and perform their natural product extraction. I will use for example fracking. Oil and gas companies have found a way to produce natural gas by performing fracking practice. This practice is very controversial because it uses a great amount of water and may cause earthquakes.

A cap-and-trade program sets a maximum level of pollution, and distributes emission permits among firms that produce emissions (Carbon Tax, 2013). The purpose of which is regulation of specific emissions by stationary and mobile sources, and setting a specific level which all emitters are re-quired to meet. Cap-and-trade possibly has less of a direct economic component to it than the other alternatives to reducing emissions described due to the ability to trade permits versus the expendi-ture of resources improving technology, with some arguing it is to the detriment of the environment. As stated in the article found in Reclaiming the Environmental Agenda, by Ashford, N. et al., 2008, “being a market-based instrument, ‘the cap-and-trade option suggests that at least this form of MBI may be more environmentally effective than the usual command-and-control alternatives, in addition to being more economically efficient.” (Ashford, N. and Caldart, C., 2008, p. 908).

The industrial revolution in the 1800s enhanced the lives of the American citizens. No longer were cultivation and farming a chief concern; instead, manufacturing and machinery were the major improvements of that time. Still today, big corporations are looking for the next big thing that could aid citizens in their everyday lives. What is often ignored, however, are the environmental factors that are being affected by the decisions made by these industries. Harmful acid rain, smog, and buried nuclear wastes diseased the Northern continent where some places were deemed uninhabitable to the public because of the threatening health risks. Environmental laws and agencies were then created in the 1970s to shift the impact that corporations have on the environment. The unchecked power that big corporations have exhausted has enhanced the decline of environmental stability and initiated many territorial restrictions due to the careless actions of the company.

“The Climate Casino” book by William Nordhaus talks about the dangers of climate change, and the affects it has on our world. Nordhaus uses the comparison about dealing with these dangers of climate change by relating it to a climate casino. Understanding the future damages carbon dioxide does to our environment, that are increasing the negative externalities of global warming. Creates warmer temperatures, abnormal weather, and damaging our ecosystems. Particularly in chapter nineteen of the book Nordhaus emphasizes ways to effectively control the carbon emissions, and start pricing the emissions of carbon dioxide that people put into the air. Pricing people for their carbon emissions can have its complications, but it could also help people understand why they should be concerned about putting carbon dioxide into the air. Nordhaus provides data which shows the impacts on when there is a price on carbon emissions. Looking into it pricing carbon emissions could influence people to reduce the amount of carbon dioxide they are releasing, or increase effective ways to avoid releasing carbon dioxide into the air.

It is becoming increasingly certain that climate change will have severe adverse effects on the environment in years to come. Addressing this issue poses a serious challenge for policy makers. How we choose to respond to the threat of global warming is not simply a political issue. It is also an economic issue and an ethical one. Responsible, effective climate change policy requires consideration of a number of complex factors, including weighing the costs of implementing climate change policies against the benefits of more environmentally sustainable practices. Furthermore, this analysis must take place amidst serious gaps in the existing research and technology concerning the developing climatic condition.

The Hamilton Project, CATO Institute, Stanford and Harvard all agree that policymakers should set the price of the carbon tax equal to the social cost of carbon (P=SCC). The Cato institute defines SCC or the social cost of carbon as “the present‐discounted value of the net future external damages from an additional unit of carbon dioxide emissions” (Murphy). This is one of the key concepts that is examined when it comes to economic and/or environmental policy decisions regarding CO2 emissions. This in turn means that a hypothetical carbon tax would be equal to the environmental and social negative externalities that are produced by each additional ton on CO2 emissions (marginal cost). The Hamilton project gives a hypothetical tax scenario of $16 per ton and increasing by 4% per year or so in accordance with the inflation rate. The reason for the incremental increase is because $16 is still far below the Government’s central estimate of $23 and below Canada and British Columbia’s carbon tax policies (“New”). Starting at a lower rate will allow for the gradual assimilation into this new tax policy, if it were implemented.

Society’s marginal benefit from pollution reduction is given by MB = 590 – 3Qtot, where Qtot is the total

A federal law known as “The Clean Air Act” is intended to protect the environment from air pollution and its effect on human health (UCSUSA). This act is enforced by creating direct commands to firms know as standards, these standards are able to reduce emissions, by requiring people to do things that result in less pollution. For example, one way pollution can be reduced is through public transportation, which saves money and energy. Four standards that can be used are ambient standards, emission standards, input standards, and a technology standards. These control standards can be evaluated to see which is more effective, this is done by comparing three things, which are technological improvement incentives, technological feasibility and

Identifying the costs and benefits of a project is the first step; the next step is to identifying the value of these components. Monetary values such as income and lost income can be assessed with current values. However to place a value on environmental benefits and costs is more difficult. Harris et al (2006) describes four categories of values they are direct use value which can use market price valuation. Indirect use value is the category used to describe how the project can benefit the environment such as carbon sequestration. Option value takes into account the benefits lost due to irreversibility

Risk management is the term applied to a logical and systematic method of establishing the context, identifying, analyzing, evaluating, treating, monitoring and communicating risks associated with any activity, function or process in a way that will enable organizations to minimize losses and maximize opportunities. (Lecture notes)Risk Management is also described as 'all the things you need to do to make the future sufficiently certain'. (The NZ Society for Risk Management, 2001)

“First, it neglects the fact that those who benefit may not be the same as those who pay the costs.