Question

Suppose that 100 people live around a hazardous waste dump. If the people continue to live there for 20 years, one of them will likely contract a painful, non-fatal cancer that will lead to $1 million in health care costs, foregone wages, and pain and suffering. Assume this is all the damage this waste will ever do (the waste loses its toxicity after 20 years).

The Environmental Protection Agency has three choices:

a. Do nothing.

b. Clean up at a cost of $4 million

c. Relocate the families at a cost to taxpayers of $1 million; fence off the property for 20 years.

i. Rank the solutions in terms of efficiency. Explain your reasoning.

Hint: Do a cost-benefit analysis for a,b,c. Net benefits = Benefits - Costs

ii. Rank the solutions in terms of safety. Explain your reasoning.

Hint: Your basis of comparison is: Human health is more important than anything!

Answer 1

Ecological monetary science ponders the effect of the human activies on the enclosing climate and esteem and benefit examination to lessen the misfortune to the air.

1. Positioning as far as efficiency.

When we cross-check the costs identified with the risky waste being drop, we can rank the given decision as beneath:

a)Relocate the families in $1 million = this can spare an actual existence fromequivalent social insurance costs, compensation penances partner degreed physical a d mental misery.

b)Do nothing – this can costs the govt. exclusively lost wages of one individual and furthermore the costs of tending, that is up to the previously given decision. so this also costs for all intents and purposes indistinguishable

c) The latter is to clean up at the estimation of $4 million, this is frequently the first costly procedure as far as cost.