Chapter 6 - Frameworks of Analysis Flashcards
What is EIA?
Environmental Impact Assessment
What is (NEPA)?
National Environmental Policy Act
What is RIA?
Regulatory Impact Analysis
What do RIA do?
Estimates the impacts flowing from regulations
What kind of costs do RIAs normally involve?
Benefit-cost Analyses
What does a Cost-Effectiveness Analysis look at?
Takes the objective as given, then costs out various alternative ways of attaining that objective.
Being cost-effective means getting ______________________.
the biggest bang for the buck
What is the objective of a Damage Assessment?
To estimate the value of the damages to an injured resource so that these amounts can be recovered from those held liable by the courts.
What is the CERCLA?
Comprehensive Environmental Response, Compensation and Liability Act
What are the two conditions considered by the DOI?
- Lost value of the resource
- Value of restoring the resource
What four components are considered in Restoration?
- Restoration
- Rehabilitation
- Replacement
- Acquisition of Equivalent Resources
What are three common difficulties in estimating restoration costs?
- Determination of baseline resource
- Choice among alternatives
- Determining equivalent of what is lost
Benefit-cost analysis is an analogous exercise for programs in the __________ sector.
public
What are the four steps in a Benefit-cost Analysis?
- Specify project/program
- Describe inputs & outputs
- Estimate value of social cost and benefits
- Compare costs & benefits
What are the two types of programs for which benefit-cost analyses are done?
- Physical Projects
- Regulatory Projects
How do you calculate Net Benefits?
Total Benefits - Cost
How is the scope of a Benefit-cost Analysis determined?
By the population directly affected
What is a sensitivity analyses?
Recalculating benefits and costs for programs somewhat larger or smaller.
What do we use to compare costs and benefits that occur at very different points in time?
Discounting
What is PV?
Present Value
Why is Discounting used in Benefit-cost Analyses?
Help in aggregating a series of costs or benefits that are strung out over the life of a project.
The higher the discount rate, the more we would be ___________________
encouraged to put our resources into programs that have high payoffs
The lower the discount rate, the more we would be ___________________
led to select programs that have high net benefits in the more distant future
What are two reasons why someone would choose one discount rate over the other?
Real vs. Nominal Interest
