Question

1The state of Rhode Island is considering taking action to reduce health and climate change risks associated with diesel powered school buses by replacing them with electric school buses.

If you were to do a Cost Benefit Analysis of a policy that incentivizes Lisbon' school districts to purchase electric school buses, what would be considered the status quo (purchase) in your analysis.

a)What alternative to the electric school bus policy in 7 would you consider in your analysis? How many alternatives would you be able to consider? Why?

B)If you were doing the analysis from a state of Rhode Island viewpoint and your state received a federal grant to aid with the adoption incentive, how would you account for this grant? A benefit, cost, no impact?

Answer 1

1. In this case, the state of Rhode Island is considering to replace the old traditional school buses with electric and energy-efficient school buses in order to reduce the health and climate-related risks and dangers. Now, with regards to the cost-benefit analysis of the concerned or proposed state project, a status quo analysis can possibly imply that the current state of the affairs could remain unchanged signifying that the state could continue to operate the traditional diesel-operated school buses and maintain the existing state of affairs. The status quo analysis, in this instance, could provide a general overview to the state legislator regarding both the positive and negative consequences or repercussions of the state policy and conduct a comparative analysis with the same in the case of implementation of the concerned policy or measure. Therefore, a status quo analysis, in this case, could practically enable an evaluation of the subsequent effectiveness of the replacement of the old traditional buses with the electric school buses.

a) With consideration to the main objectives or goals of the proposed or concerned state policy, the justification of any alternative to the electric school buses essentially implies net benefit analysis of all the alternatives under consideration. In this context, some of the alternative measures or policies might possibly include the transformation of the existing diesel-operated traditional buses into battery-operated ones to make them more energy-efficient and environmental or eco-friendly. Alternatively, the state legislator can also officially mandate the old traditional school buses to have a mandatory monthly fuel and emission check-up in order to control or reduce the pollution emission level in the environment. Furthermore, the state legislator can also alternatively enforce a pollution tax for all the existing school buses for their regular operation in the roads or streets in order to compensate for the negative environmental and health externalities caused due to the same. However, all of these practical alternatives to the proposed state policy or measure would ideally depend on the overall or total net benefit of all of these alternatives given the total subsequent benefits of these considerations and the total economic and social cost incurred from their implementation.

B) A federal grant received by the state legislator in order to implement the adoptive incentive in the state school districts could be ideally considered as liquidation or financing of the concerned project. It does not necessarily constitute a benefit nor cost of the concerned policy or measure as the potential benefits of advantages of the policy would include the positive impacts or repercussions of the policy from both the economic, social, and environmental viewpoint. However, the federal grant can be expectedly used by the state legislator to officially implement the concerned policy and enforce it through proper supervision and monitoring and hence, from the perspective of the state legislator, it can somehow be considered as an economic cost of the concerned or proposed measure or policy, in this instance.