EC238 Chapter Notes - Chapter 6: Greenhouse Gas, Discounting, Discount Window
Document Summary
Two different critical differences between bca and private investment: Bca tool in public sector help policy analysts choose among different environment projects. Total benefits = total damage costs reduced: area under mdc curve, total benefits = a + b. Total costs of project = total abatement costs: area under mac curve, total abatement = b + c. Net benefits = total benefits total costs. Different discount rates mess with different policy decisions. Environmentalist say we shouldn"t discount too much use 0 discount rate. High discount rates undervaluing potential large-scale impacts. High current costs and high future benefits rejected b/c of bca for more conservative projects. Who receives benefits who pays for costs. Reduce emissions now ren: bulk effort to get rid of abatement in present maybe high cost in future. Research then reduce rtr: research for alternative emission reduction strategies reductions happen later but less costly. Discounting and choosing among projects with same policy goal: