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emissions by Ell-ti units? :iAlways alert to the distributional effects of Island Council policy decisions, the highlanders retained an economics consulting rm to examine the
emissions by Ell-ti units? :iAlways alert to the distributional effects of Island Council policy decisions, the highlanders retained an economics consulting rm to examine the net benefits tn the residents living in the two regions of the country. First they found that the timber and copra industries were owned enb'rely by highlanders, and the gin and hog industries were owned entirely by lowlanders. The consultants further concluded that the costs of abatement for a given industry would be home entirely by the owners of that industry. Check their conclusion that for each of the groups, the aggregated present value of net benefits of making a reduction of 61:1 units will be NHL = $20,240,000 NEH = s4,rss,t05 Show how they derived their results. 5. Based on the conclusion that the lowlanders receive the majority of benets, while the highlanders bear most of the costs, the highlanders retained a law firm to examine the common law of nuisance. The legal eagles found that under ancient but still applicable law, the lowlanders had no power to control the activities of the highlanders in matters of industry, commerce, and trade, unless the highlanders voluntarily agree to such restrictions. Using this as a basis for their refusal to cooperate with emissions reductions, the highlanders refuse to make emissions reductions. They suggest instead that the lowlanders should discuss with them \"mutually beneficial" arrangements, which in their language is code for "bribe us." a. Assuming that the highlanders' claims would hold up in court, and assuming that the conditions for Coasean bargaining between highlanders and lowlanders are met, what is the lilrely level of abatement to which the two groups will agree? b. 1iiihat is the range of bribes, E, that the lowlanders might pay to induce the highlanders to cooperate
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