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Essay Instructions

ECOS3013 Environmental Economics, Semester 2, 2022

Due Date

7 October 2022, 11:59pm

Form a Group

This is a group assignment, with a group size of 2 or 3.

Please form a group yourself and register your group on Canvas by 2 September. If you have not registered your group on Canvas by this date, then we will allocate a partner for you.

Select an industry

Select one of the following industries:

1. Air travel

2. Cement manufacturing

3. Fertilizer manufacturing

4. Logging of natural forest

You may choose an industry not listed above if you wish, but it must be approved before you start work. If you wish to choose an industry not listed above, email Kelly before 2 September with your proposed industry. (Your industry must be one that causes environmental damage.)

Write a short report

You work in a government department that is considering imposing regulations to reduce the environmental impact of your industry. Write a short report assessing whether environmental regulations are socially-desirable and proposing a policy response. Your audience are not economists, so avoid technical language and jargon.

Your report should address each of the following:

1. Describe/define the industry.

2. Discuss the private and/or social benefits of the activity (qualitative only)

3. Discuss the private and/or social costs of the activity (qualitative only)

4. Do we expect an unregulated market to result in the socially-desirable level of activity in your industry? Remember to use language that a non-economist can understand.

When assessing social desirability, use two different perspectives:

a. economic efficiency (i.e. pareto optimality)

b. one other perspective of your choosing. You can choose one of the perspectives discussed in class (biocentricism, anthropocentricism, precautionary principle, weak sustainability, strong sustainability) or choose and define your own criteria.

5. If you find that a competitive market does not result in the socially-desirable level of activity, then propose a government policy that could correct the problem. Explain why your policy proposal would achieve the socially-desirable level of activity.

Length

The text of your report must be 500- 1000 words, and must not be longer than 2 pages. (References and any diagrams are not included in the 2 page limit.) The report must use non-technical language.