EC238 Lecture 5: EC238 Week 5
Document Summary
We will learn about how we can measure the potential environmental damages and abatement costs, introduced in the previous lesson of a proposed environmental project. Benefit cost analysis links the theoretical models developed in the course up to this point to empirical measurement. 4 steps for conducting a bca: 1. Specifying the project, its scale and perspective: 2. Describing the inputs and outputs of the project quantitatively: 3. Estimating the social costs and benefits of the inputs and outputs: 4. Net benefits = total benefits total costs = a. Discounting and choosing among projects with the same policy goal. Issues of equity: horizontal vs. vertical equity. Possible distributional impacts: regressive, proportional and progressive. Ren reduce emissions now: this strategy makes the bulk of its abatement efforts in the present. Rtr research then reduce: efforts in the present are directed towards research into alternative emission reduction strategies. Further reductions occur later in time and are less costly: 3.
