Hussein, A. KAP 6-8.

Question 1

TEC?

Answer 1

Transferable emissions credits.

Question 2

6. Pollution right?

Answer 2

A credit, consist of a unit (tons/year) of a specific pollutant.

Question 3

6. Grandfathering principle?

Answer 3

Credits are related to size of firms historical level of emissions. Only have to pay for additional credits they need. New firms need to pay for all credits.

Question 4

6. Bubble Policy?

Answer 4

Company with several sources, factory can treat all as a single one = can emit more than others. Factory remains within emission standards + don’t need to meet standard for each source.

Question 5

6. Banking Policy?

Answer 5

Pollution credits can be saved for later use, when needed.

Question 6

6. Market power?

Answer 6

Old firms can refuse to sell to new firms, limit competition & a barrier to enter market.

Question 7

6. Relocation effect?

Answer 7

Risk that firm sell/not buy credits & move factory to less regulated area/country.

Question 8

6. Hot-spots?

Answer 8

High local concentration of pollution. Firms with many factorys, can choose to emit bigger amounts in 1 location by offset it by reduction in another location.

Question 9

6. What is TEC?

Answer 9

A market based pollution control & policy instrument. A artificial market for pollution rights, traded. Credit = permit of unit of X pollution.

Question 10

6. Porter Hypothesis?

Answer 10

That regulations force firms to become more productive & innovative.

Question 11

7. Market pricing?

Answer 11

Env improvement causes in/decrease in real in/outputs.
Timber /minerals = market goods.

Decrease in extraction of raw materials = measure loss in C Surplus.
Also a opportunity cost included.

Question 12

7. Willingness to pay?

Answer 12

Maximum amount of $$ that member are WTP for improvment in env or reduce x/damage.
Wtp= area under MDC curve.

Question 13

WTA?

Answer 13

Minimum monetary compensation that member need to accept Env projects.

Question 14

7. Revealed Preference?

Answer 14

WTP = by observing ‘actually purchasing behavior of resource users, in real-market. Used in:

Market pricing
Hedonic pricing
Household production
Aversive expenditures
Travel cost

Question 15

7. Consumers Surplus?

Answer 15

Diff between what C are WTP & what they actually pays for X in a market.

Question 16

7. Replacement cost?

Answer 16

measure of benefits when damage has been avoided, by improved Env conditions + market value of cost to restore / replace the damage.

Question 17

7. Replacement cost + WTP = ?

Answer 17

Measures gain from avoided damage & replacing lost service. Assuming that public will accept trade-offs between lost & gained due to restoration.

Question 18

7. Hedonic Pricing?

Answer 18

Statistiv method. How diff
Env features can increase/decrease land/house value. Lakes - landfill.

Question 19

7. Hedonic pricing + WTP =?

Answer 19

Their WTP for avoiding X associated with undesirable feature/landfill, by paying higher prices for house farther away.

Question 20

7. Household Production?

Answer 20

Looking at households expenditures on goods/service, how they value something.
Benefits from improvement in Env quality. $$ spent on goods/services to avoid damage. Ex: soundproofing, water filters.

Question 21

7. Household Production + WTP = ?

Answer 21

WTP - pay money/price to avoid specific Env damage.

Question 22

7. Travel cost method?

Answer 22

Measures benefit/ WTP for experience, looking at cost of travel to site.

Question 23

7. Different methods in Revealed Preference valuation?

Answer 23

Replacement cost.
Hedonic pricing.
Household Production.
Aversive expenditures.
Travel costs.

Question 24

SP - Stated preference valuation?

Answer 24

Estimate non-use values of Ecosystem services. WTP = asking people to state their preferences by using surveys.

Question 25

7. CVM method?

Answer 25

Contingent valuation method: asking to provide monetary value of Env resources.

Question 26

8. CBA - Cost-benefit analysis?

Answer 26

Tool used to appraise (bedömma) policies & public projects. Bridges, roads, dams, airports. And their net contribution to social benefits. -> investment is profitable if ''monetary'' value **exeeds** the costs vs social benefits.

Question 27

8. P1: Actual Pareto Improvement?

Answer 27

No members of a society become worse of, and at least 'one' becomes better off = project should be accepted.

Question 28

8. P2: Potential Pareto improvement?

Answer 28

(Kaldor-Hicks): Gains from the project can compensate the losers, and they still remain better off in their economic condition, than they were before. (teoretiskt, ingen komp behöver utgå..)

Question 29

8. Net Present value?

Answer 29

- value of things today AND to things/project in the future. - present value of benefits, minus - present value of cost = X. -If Net present value is positive, the project is profitable.

Question 30

8. Public & Private sectors uses which analysis method?

Answer 30

Public: CBA, Cost-benefit analysis. Private: Capital budgeting.

Question 31

8. Double counting?

Answer 31

Risk to count some internal/ external/social cost more than once. Ex: timber + conservation= decline in supply - increase $ in construction/furniture. But, the increase should not be incl pga. secondary effects = $ increase in the economy.

Question 32

8. What is Discount rate??

Answer 32

% rate, decide how to value future events, compared to events taking place today..

Question 33

8. Precautionary Principle?

Answer 33

Action against certain practices, potential for damage & consequences. No scientific proof needed. Ex: Global warming, ozone, new species.

Question 34

8. CEA, Cost-effectivness analysis?

Answer 34

A least-cost methods, too achieving stated Env goals etc. Ex: Clean up of a river + specific water quality. Cost is more important, than benefits: bang for the buck.

Question 35

8. EIA, Environmental Impact analysis?

Answer 35

Tracing the relevant physical/ Ecological linkages to Env impact of different projects.

Question 36

8. Risk Assessment?

Answer 36

Scientific aspect, including data to describe the form & characteristics of risks, vs harm to nature/env/humans. -How risky is the situation?

Question 37

8. Risk Management?

Answer 37

The process incl. Risk Assessment and its used with other information (data, costs, economic/social consequences) to make regulatory decisions.

Question 38

7. Use value?

Answer 38

what we get from Env/nature: fishing, hiking, raw materials/using inputs from env.

Question 39

7. Non-use values?

Answer 39

Option v: for future, Grand Canion, may wisit in the future. Bequest v: selfish value, like the idea of a rainforest. Existence: for others, animal, people in the rainforest.

Question 40

7. Aversive expenditures?

Answer 40

Households are wtp to avoid damage & get a specific Env standard. Ex: install ventilation system, water filters.

Question 41

8. 2 NPV, Net present value types?

Answer 41

- NPV > 0: project is societal profitable. - NPV < 0: project is not societal profitable.

Question 42

8. Difrent types of Discount rates?

Answer 42

Used to calculate present values (nuvärden) of cost & benefits. * +rate: events in the future, has a **lower** value, than if it occurred today. * 0 rate: events in the future, has the **same** value, as if it occurred today. * -rate: events in the future, has a **higher** value, than if it occurred today.

Question 43

8. What is Discounting, in CBA?

Answer 43

Calculate backwards, to get future costs in present value/nuvärden.