relevant theories

Please answer the following questions within the stated word limits. In your answers, be careful to explain the relevant theories in sufficient details, and it will be beneficial if you incorporate statistical / empirical support to your arguments. You should answer the questions within the context of this unit, and draw on theories / concepts covered in this unit as far as you can. You may also include your own views on the topics, but you should clearly draw a distinction between your opinion and what can be said scientifically. When citing references, you may follow any of the common citation styles (e.g. MLA, APA, Chicago, etc.) – you just have to be consistent in the style that you use.

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Question 1 (10 marks) In the absence of a worldwide agreement to reduce greenhouse gases (GHG) emissions through an emissions tax, how effective might it be if just a group of countries instituted such a tax unilaterally? (Word limit = 350)

Question 2 (10 marks) The following table shows the energy efficiency improvement opportunities available to Country X given current technologies. Area of improvement Cost per MWh saved Potential energy saving (MWh) Air conditioning $15 500 Window sealing $80 200 Clothes washers $45 400 Water heaters $100 100 Lighting efficiency $25 200 Refrigerators $5 400 a) Derive the market supply curve for energy efficiency and draw the supply curve on a fully labeled diagram. (4 marks) b) With the supply curve derived in (a), explain the effect of a rise in electricity price on the adoption of the energy efficiency improvements. (3 marks) c) Using any of the above areas of improvement, explain why the adoption of the technologies may eventually result in a rise in energy consumption. (3 marks)

Question 3 (20 marks) As an aide to the NSW Premier you are given the task of recommending whether or not NSW should locate a low-level nuclear waste facility in the Illawarra. The Centre for Neutral and Independent Analysis of Nuclear Issues (CNIANI) has conducted (and transmitted to you) the following CBA study. Conclusion: The project will generate net benefits of $3 bn. and a BCR of 13. While these attractive figures depend on our assumptions, their striking magnitude indicates that the project will remain beneficial to NSW under most plausible assumptions. We therefore strongly recommend adopting the proposal. Assumptions: 1. Social discount rate: 10% 2. PVC: i. Risk of worker exposure through waste transport; ii. Risk of accident; iii. Reduction to zero of Illawarra real estate near the site iv. Construction and maintenance 3. PVB: i. Reduced exposure at current site (far from Illawarra) ii. Job creation in the Illawarra: 1000 temporary; 200 permanent iii. Saves 7,000 jobs and lowers electricity price iv. Increased profits for local service industries 4. Risk Assessment: i. Exposure / fatality assessment by Dept of Energy ii. P [fatal exposure due to transport accident] = 1/100m. km iii. Value of a statistical life = $1m. Do you believe the report? Can you spot particular problems with the study? What further information do you want prior to talking to the Premier? (Word limit = 700