Question

2-4

Explain in one short paragraph how less reliable climate change forecasts of what will happen in the future cause less effort to reduce the impacts of climate change. 2. 3. Consider the impacts of using land for fruits and berries rather than a park. Turning the land into a park would lower benefits of these healthy foods for consumers by $10 million per year and that impact would last forever. (Assume farmers and other businesses would make equal profit with or without the ban.) The social discount rate for considering future consumer welfare is 5%. The city offers $100 million for the land to build the park. Is the park the best use of the funds? Explain. a. b. What would the city have to offer to make society better off, given the facts? Explain. 4. Assume you are selfish and know you will die in 10 years. How does this affect your support for regulations that raise costs of all goods in the economy to reduce emissions that may affect climate after year 2050? a. Explain why many old people are the strongest supporters of climate-related programs of rescarch and other efforts? b.

Answer 1

2. Less reliable forecast on climate change example could be a forecast that pollution level will rise by 50% in the next 10 years where it actually happens in the next 2 years. Such forecasts, will lead to some sort of planning. However, if the forecast is not in the vicinity of correct information, we will not be able to plan our effort correctly. This will mean that there may be lesser effort and in return lesser impact to climate change.

3. a) The park is not the best use of the funds. Converting the land into the park will reduce benefits of healthy foods by $10 million per year. And this is permanent. A mere $100 million monetary benefit will be exhausted by loss of dietary benefit by 10 years. Post that it will be a loss.

3. b) Given the facts, the city should maintain the status quo of lands and parks. Converting lands into parks does not seem to be a good choice. On the other hand the $100 million could be spent for initiatives to reduce pollution, provide better welfare etc.

4. a) Increase in cost will make me angry. Especially because I will not be able to benefit from the program to improve the climate. (Also considering I am selfish)

4. b) Many old people are strongest supporters of climate-related programs for their future generation. While they realize, that they may not be able to benefit from the program, they want to leave the earth inhabitable for their children.