Question
If a firm is involved in mining at a biodiverse ecosystem which is a livelihood providing zone for the communities traditionally dependent on it. The
If a firm is involved in mining at a biodiverse ecosystem which is a livelihood providing zone for the communities traditionally dependent on it. The following scenario is expected during the resource extraction: The value of flow damage operating on utility is INR. 10,000 per ton, extraction cost is INR. 260000 per ton, value of flow damage operating on production is INR. 20000 per ton, value of stock damage is INR. 270 per ton with the net price of extraction being INR. 200000 per ton, respectively. Calculate the socially optimal gross price of extraction process, loss of utility arising from the impact caused by the marginal unit of resource use on environmental pressure and stock pollutant damage. While calculating the necessary conditions for a social welfare maximum of a current valued Hamiltonian of pollution damage caused by resource extraction, the observations are: the shadow price of capital stock is calculated as INR. 170 per ton and change of Hamiltonian w.r.t defensive expenditure is INR. 200 per ton. Hence, calculate the shadow price of pollution and tax rate per unit of resource extracted. Calculate the shadow price of pollution. Calculate the impact of utility w.r.t environmental pressure if the production change w.r.t environmental pressure is INR. 40 per ton. Do represent this entire scenario in terms of optimal time paths for the variables of the pollution model.
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