Question

What valuation technique would you use to measure the benefits of improving the environment to a defined level (e.g., improving urban smog in the city, improving water quality to recreational use or drinkable level, reducing impacts of plastic litter on marine life, etc..)? What are some drawbacks to using the benefit valuation technique(s) that you select? What issues might you anticipate with the benefit valuation method(s) that you propose to use and how might you minimize problems associated with the technique(s)?

Answer 1

Marginal social benefit and marginal social cost and marinal private cost calculations can be done to evaluate the benefits of improving the environment . Increase in standard of living can also be measured . Parts per particle can be calculated to check reduction in air pollution etc .

Drawbacks are : statistical discrepancy , welfare loss or production cost higher than free market production etc .

Minimization of problems associated with the issue can be made by giving tradable pollution permits , fixing optimal level of production after controlling pollution . Demand supply measurements for such goods .