### Bilateral Transboundary Pollution and the Economics of Reaching an Agreement**Refer to figure 19.1 Bilateral Transboundary Pollution and the Economics of Reaching an Agreement**#### Description of the GraphThe graph represents the economic considerations in managing bilateral transboundary pollution between two hypothetical countries, Country A and Country B. The x-axis (horizontal) represents the emissions of Country A, while the y-axis (vertical) represents the associated costs in dollars ($).- **MAC_A:** Marginal Abatement Cost for Country A, which shows the cost associated with reducing one unit of pollution for Country A.- **MD_A:** Marginal Damage Cost to Country A, which is the harm caused to Country A by additional units of pollution.- **MD_T:** Marginal Damage Cost to both countries combined (total damage for Country A and Country B).#### Key Points on the Graph- **Intersection Points and Ranges:** - Emissions at $ e_1 $ and $ e_2 $ - Costs associated with emissions marked by areas a, b, c, d, f, and g.**Explanation of Areas:**- **Area a, b, d:** Represent various economic costs and benefits at differing levels of emissions of Country A.- **Area c, f, g:** Indicate economic impacts when considering the interaction and total damage implications on both countries.#### Discussion QuestionsTo understand the economic trade-offs and negotiations for reaching an agreement, consider the following:1. What are the implications of the points where the different cost curves intersect?2. How do the areas under the curves reflect the economic costs and benefits associated with different levels of emissions?3. How might countries negotiate to minimize overall damage costs (MD_T) while considering their own abatement costs (MAC_A) and damage costs (MD_A)?This graphical exploration helps in understanding the economic dynamics and intricacies involved in bilateral agreements aimed at mitigating transboundary pollution. **Environmental Economics Examination****Question 4:**How would you find the added abatement costs for Country A to consider damages it causes in Country B and produce at the globally efficient level of emissions?**Question 5:**How could you assess the total reduction in damages when Country A considers damages it causes in Country B and produces at the globally efficient level of emissions?**Question 6:**What is the total reduction in damages accruing directly to Country A when it considers the damages it causes in Country B and produces at the globally efficient level of emissions?

Marginal abatement cost (MAC) refers to the additional cost incurred to reduce one unit of pollution…

Refer to figure 19.1 Bilateral Transboundary Pollution and the Economics of Reaching an Agreement $ CA 0 MACA b g e₂ e₁ Emissions of Country A MDT MDA The graph above represents a bilateral transboundary pollutant and the economics of reaching an agreement between two countries, Country A and Country B. MD, represents total damages of A and B. Answer the following discussion questions:

Refer to figure 19.1 Bilateral Transboundary Pollution and the Economics of Reaching an Agreement $ CA 0 MACA b g e₂ e₁ Emissions of Country A MDT MDA The graph above represents a bilateral transboundary pollutant and the economics of reaching an agreement between two countries, Country A and Country B. MD, represents total damages of A and B. Answer the following discussion questions:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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