Case Study Module #8

1. Analyze different methods of economic development and the impact on the environment.

2. Estimate willingness to pay as a measure of the benefits of pollution reduction in developing countries.

3. Summarize recommendations on the emissions policies of different countries, using ambient indices to influence company executives who are considering expansion into a developing country.

Prompt: The objective of this case study is to analyze the governmental policies of different countries and their willingness to pay for economic and environmental qualities. You will make recommendations in one to two paragraphs to influence the policy makers or executives of expanding corporations. You must address each part of the case study as described below.

 Part 1: Analyze Different Governmental Policies

In Chapter 18 of the course textbook, the authors emphasize effective means to reduce environmental degradation. One approach is command and control (CAC), which many believe is the most effective. Chapter 18 provides an example in Exhibit 18.2 (p. 386). It provides a lesson on rapid economic development and CAC. In the example, the government is not focused on economic preservation during rapid economic development but instead takes a risk. The Aral Sea is the price for the recommended economic growth.

There are strategies a country can use to repair or control for these types of environmental disasters. Create a short presentation with four to six slides on effective strategies for the economic redevelopment of the Aral Sea. Design your presentation as though you have been tasked with influencing government leaders and interested constituents. The contents of your presentation should include the following:

Slide 1

This is the title page. Include your name and the course title.

Slide 2

Problem (title): Introduce problems from designated areas of the northern and southern areas of the Aral Sea (Table 18.3, p. 385).

Slide 3

Solutions (title): Emphasize just one of the three strategies listed on page 387 of the textbook, and add an example using data or images to make a strong recommendation.

Slide 4

Summarize the content in a conclusion by identifying the long-run or short-run approaches.

Part 2: Estimate Environmental Cost-Benefits by Identifying Willingness to Pay (WTP)

Willingness to pay (WTP) provides environmental economists with information that can be used to estimate environmental cost benefits. Chapter 18 of the course textbook provides data on environmental benefits from various countries that have invested in WTP to make improvements on specific environmental issues. The following countries use benefit-measurement studies to determine WTP: Australia, Finland, France, Germany, Israel, the Netherlands, Norway, Sweden, and the United Kingdom.

Directions: Use the data from Table 18.3 (Chapter 18, page 385) to create a table or graph to show each country’s WTP for environmental benefits. Then, in one to two paragraphs, describe how an environmental economist would use this data to influence policy.

Part 3: Executive Summary: Proposal for Effective Strategies for Economic Development in Developing Countries We has discussed many factors that affect ambient pollution levels. The differences are described on page 376 of your textbook in two ways:

*As differences in the efficient, or desired, levels of ambient quality

* As differences in the extent to which each country, through policy and enforcement, has achieved these efficient levels.

Yet there are other factors to consider as well, such as the emissions and the assimilative capacity of the environment. Another factor is the opportunity costs of pollution control and differences between relatively rich and the other relatively poor countries (p. 378). For example, consider the phenomenon of SO2 pollution, which typically gets worse as countries initially begin to develop and then improves as development leads to higher per capita incomes.

Directions: Imagine that a multinational business firm has hired you to write an analysis. The company is making plans to move some of its operations into a developing nation. Make recommendations on whether the company should be held to the environmental standards of its country of origin (the United States) or to those of the country in which it is operating. Use the data on environmental quality from Shapiro Library resources, such as Data-Planet Statistical Datasets (database) to analyze the emissions output and policies of different countries.

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