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Lecture

Feb 5th 2014.docx

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Department
Philosophy
Course
PP224
Professor
Melany Banks
Semester
Winter

Description
Feb 5  2014 Environment and Economics Cont.  Cost Benefit Analysis (CBA) ­ Weighing appropriate trade­offs  o Ex. Should Company X go ahead with produce ABC if that means  they will have to install scrubbers on their smokestacks? o Identify aggregate costs and benefits o If aggregate benefits greater than aggregate costs, then proceed with  product ABC  ­ Problems? o Use value  Cost to people because they would have used something and  now they cant use it because it is no longer there. o Non­use value   Loss of a wild space or a natural space  o Example: The Great Whale Complex (James Bay II)  Construction of a hydro­electric dam near Hudson Bay   “Quebec is a vast hydro­electric power plant in the bud, and  every day millions of potential kilowatt hours flow downhill  and out to sea. What a waste “ • CBA Analysis o Benefits  Cheap and reliable source of energy  Sell to US   Construction would put $2 million into  the economy  Lower rates for electricity intensive  industries o Costs  Loss of aquatic and terrestrial habitat  Drop in the Great Whale River would  result changes in water flow   Opportunity costs of forgoing alternative  energy sources  • How can we determine the Value of the James Bay  area? ­ Problems with the CBA (Kelman) o Presumption #1: An act out not to be undertaken unless benefits 
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