xid-8846250_2 - T hursday, Nov. 3 1. Costs of environmental...

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T hursday, Nov. 3 1. Costs of environmental regulation: Cost Benefit Analysis When done correctly - measurement of marginal costs and benefits of a project or policy How can it be done correctly? Use accepted economic theory and accepted procedures for estimation. Collect data according to accepted statistical methods. Estimation of costs and benefits should follow accepted statistical and econometric methods. Statement of assumptions and conditions Statement of uncertainties Statement of statistical margins of error and sensitivity to other factors, variable, influences. Federal regulation and B/C analysis Plays a role, but not necessarily the primary consideration Clean Air Act, Clean Water Act, hazardous waste regulations rely primarily on 'safety standard,' costs and benefits play secondary role. Clean Air Act: air standards must protect human health. Clean Water Act: 'fishable and swimmable" waters. Resource Conservation and Recovery Act (RCRA), 'cradle to grave' approach to treatment, storage, and disposal of hazardous waste Safety standard may result in regulations whose costs exceed its benefits; Example - EPA smog standards - est. benefit of $100 m - $1.5 B; est. cost of $600 m - $2.5 B.
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Pesticide, insecticides, toxic substances under efficiency standard - requires that benefits exceed costs. Every federal regulation > $100 million in costs requires regulatory impact analysis (RIA) EPA must evaluate methods of compliance and achieve the most efficient of them, even in cases of efficiency standards Cost or benefit? Suppose the Leon County commission announces that it will purchase land in the northern area of the county and make it a softball/baseball/sports complex. The new park will have softball, baseball, football, and basketball facilities, and will also have
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This note was uploaded on 04/05/2012 for the course ECP 3302 taught by Professor Staff during the Fall '11 term at Florida State College.

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xid-8846250_2 - T hursday, Nov. 3 1. Costs of environmental...

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