Question

Compare and Contrast the following pairs of terms.

1. Dynamically efficient allocation and Sustainability criterion
2. Criteria pollutants and Regional pollutants
3. Efficient allocation of surface water and Efficient allocation of groundwater 4. Rotation age and Discount rate

Answer 1

The contrast of following pairs of terms are as mentioned:

• Dynamic efficiency balance present and future uses of a depletable resource by maximizing the present value of the net benefits derived from its use; this implies a particular allocation of the resource across time. It allows an efficient evaluate resources allocation across Time period  It is all most impossible to implement because it requires to know the preferences of the future generation. A more operational version of sustainablity criterion. “Hartwick’s Rule”. (Weak Sustainability) A constant level of consumption can be maintained perpetually from an environmental endowment if all scarcity rent is invested in capital. If all scarcity rent is invested in capital, the value of the total capital stock will not decline. If the principal or the value of total capital is declining,

• the criteria pollutants are the harmful natural pollutants which are in the form of carbon monoxide, lead, nitrogen dioxide, ozone, particulate matter, and sulfur dioxide.EPA reports that releases of all criteria air pollutants except nitrogen oxides have been in decline since the passage of the 1970 CAA. Overall air quality has improved significantly nationwide since the 1980s. These improvements, however, have not eliminated air quality problems, and major efforts to control pollution sources are still required to ensure everyone breathes air that meets CAA standards.Population growth and economic expansion increasingly are stressing water resources in southern Alberta, Canada. Adopting market mechanisms may improve water use efficiency. Utilizing a novel network model of an entire river basin, we quantify the short-run efficiency gains (over one growing season) from reallocating surface water. Employing a standard welfare maximizing objective, and observing essential institutional and hydrologic structures, we find the relative efficiency gains from introducing market pricing to be under 3% for a year of surplus water flows, about 6% for a mean flow year, and more than 15% for a drought flow year. Although such gains exclude the costs of the current water allocation policy, as well as those of moving to market pricing, results tend to support the present cautious approach by the Alberta government to modify the mechanisms for allocating surface water.

• In forestry rotation analysis, economically optimum rotation can be defined as “that age of rotation when the harvest of stumpage will generate the maximum revenue or economic yield”. In an economically optimum forest rotation analysis, the decision regarding optimum rotation age is undertake by calculating the maximum net present value.

• The discount rate is a financial term that can have two meanings. In banking, it is the interest rate the Federal Reserve charges banks for overnight loans. Despite its name, the discount rate is not reduced. In fact, it’s higher than market rates, since these loans are meant to be only backup sources of funding. During major financial crises, though, the Fed may lower the discount rate – and lengthen the loan time. In investing and accounting, the discount rate is the rate of return used to figure what future cash flows are worth today.