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Consider expected BCA. Le. calculating expected net benefits, of possible legislation to reduce greenhouse gases such as the Waxman-Markey bill. If people are risk averse regarding future environmental damages from cimate change O a. then expected BCA will understate the true benefits from reducing greenhouse gases. O b. then high discount rates should always be used. Oc. then expected BCA will overstate the true benefits from reducing greenhouse gases. Od. then expected BCA will aocurately portray the benefits trom reducing greenhouse gases, as risk-aversion is property considered.

Consider expected BCA. Le. calculating expected net benefits, of possible legislation to reduce greenhouse gases such as the Waxman-Markey bill. If people are risk averse regarding future environmental damages from cimate change O a. then expected BCA will understate the true benefits from reducing greenhouse gases. O b. then high discount rates should always be used. Oc. then expected BCA will overstate the true benefits from reducing greenhouse gases. Od. then expected BCA will aocurately portray the benefits trom reducing greenhouse gases, as risk-aversion is property considered.

Applications and Investigations in Earth Science (9th Edition)
Applications and Investigations in Earth Science (9th Edition)
9th Edition
ISBN:9780134746241
Author:Edward J. Tarbuck, Frederick K. Lutgens, Dennis G. Tasa
Publisher:Edward J. Tarbuck, Frederick K. Lutgens, Dennis G. Tasa
Chapter1: The Study Of Minerals
Section: Chapter Questions
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Consider expected BCA. i.e. calculating expected net benefits, of possible legislation to reduce greenhouse gases such as the Waxman-Markey bill. If people are risk averse regarding future environmental damages from climate change O a. then expected BCA will understate the true benefits from reducing greenhouse gases O b. then high discount rates should always be used. O c. then expected BCA will overstate the true benefits from reducing greenhouse gases. O d. then expected BCA will accurately portray the benefits from reducing greenhouse gases, as risk-aversion is property considered.
Transcribed Image Text:Consider expected BCA. i.e. calculating expected net benefits, of possible legislation to reduce greenhouse gases such as the Waxman-Markey bill. If people are risk averse regarding future environmental damages from climate change O a. then expected BCA will understate the true benefits from reducing greenhouse gases O b. then high discount rates should always be used. O c. then expected BCA will overstate the true benefits from reducing greenhouse gases. O d. then expected BCA will accurately portray the benefits from reducing greenhouse gases, as risk-aversion is property considered.
Regarding expected BCA and the example of climate change, O a. reducing greenhouse gases now can be thought of as cheap insurance to rule-out the possibility of a low probability, but very high damages contingency. O b. uncertainty is excellent economic excuse for inaction. O.c. the expected net benefits of reducing greenhouse gases are negative since there is a high probability that the costs outweigh the benefits. O d. using a larger discount rate increases the expected net benefits.
Transcribed Image Text:Regarding expected BCA and the example of climate change, O a. reducing greenhouse gases now can be thought of as cheap insurance to rule-out the possibility of a low probability, but very high damages contingency. O b. uncertainty is excellent economic excuse for inaction. O.c. the expected net benefits of reducing greenhouse gases are negative since there is a high probability that the costs outweigh the benefits. O d. using a larger discount rate increases the expected net benefits.
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