Auckland Coffee has evaluated the social and environmental costs of its coffee roasting facility. The costs are listed below.

Cost ($)

Depreciation of oven fume extractor system - 4,000

Employee training costs to reduce environmental accidents -5,600

Monitoring systems to detect fumes -4,800

Fine from Auckland city council for dumping coffee grounds into the sewer -5,600

Inspection of drainage systems to detect problems with discharge -1,500

Reduction in value of nearby houses due to odour -53,000

Routine cleaning of extractor system to remove coffee residues - 2,500

Disposal of waste coffee grounds- 5,600

Lost sales due to poor environmental reputation- 8,000

Obtaining ISO 14001 certificate- 10,000

Workers' compensation claims due to poor environmental practices -7,000

Medical costs relating to communities inhaling polluting air caused by Auckland Coffee -7,500

Required

1. calculate the social costs that relate to the operation
2. Explain the link between social costs and environmental costs
3. an environmental cost report showing Environmental cost classification suggested by the Environmental Protection Agency (EPA). In your report also state the reasons for your categorization
4. Provide one example of tier 3 and tier 5 that may have been overlooked in the analyses. Also, outline the steps management would take to reduce these costs.