Complete 9 page APA formatted essay: Economics of the Environment.Download file to see previous pages... Particular issues include the cost and benefits of alternative environmental policies to deal w

Complete 9 page APA formatted essay: Economics of the Environment.

Particular issues include the cost and benefits of alternative environmental policies to deal with air pollution, water quality, and toxic substances, Solid waste, and global warming (Hanely, Shogern &amp. White, 2001). Some of the major projects, which have substantial environmental impacts, is Afforestation of Surplus agricultural land, hydroelectric schemes, Building, or widening roads, constructing a new Airport and Manufacturing cars. All the above projects are likely to generate substantial Environmental costs and/or benefits, and they can be considered as Potential Investment. Potential Investment: A Potential Investment can be defined as the Investment made by an investor for growth (profit) of his/her investments in a firm or in a project. Investors look for evidence that, we can really produce growth in our project, and they look for three important things before investing, excellent growth potential, exceptional return on investment, up to 25% to 45% and a way to get their money out. We have to show them how our opportunity will deliver all three, and doing so will be a potential investment made by an investor in our firm or in a project. A Potential Investment can also be a huge project, which has a substantial impact on the environment. It can be a Hydroelectric project, Afforestation project, Building or widening roads, constructing a new airport, and Manufacturing cars. As these projects, have many impacts such as on environment, for profit of an investor, public convenience and many more. When a project is been started, they are many calculation done for different purpose, such as profit, low initial cost, higher efficiency of the project, easy maintenance, etc... In

addition, for doing such calculation different numerical, theoretical, ratio analysis and analytical

methods such as CBA (cost beneficial analysis) and CEA (cost effectiveness analysis) are been

use.

For this assignment, we select Afforestation of surplus agricultural land as our major

project, which deals with planting of trees on land that did not carry forest for centuries, i.e.

Afforestation is a clear shift in land use of a certain area. Afforestation in form of planting trees

and future maintenance is an investment for landowner, and possible forgone revenues from

Agriculture need to be included. Afforestation of former arable land will have many positive

environmental effects. The change from agriculture to forestry means less input of pesticides and

Fertilizers that may possibly leach to ground water reserves and the establishment of habitat for

species associated with forest. Forest's also able to better retain nitrogen from arable use in the

ecosystem, thereby avoiding eutrophication of water reserves. In this paper, we show how CBA

can be used as a decision support mechanism for the location of new (urban) forestland, starting

from the multifunctional role of these new forests. We start with a simple presentation of the

Cost-benefit analysis (CBA) technique. Key features of these evaluation techniques are that (i)

assess the monetary value of all benefits and cost (ii) the issue of discounting and (iii) the

decision rules used in CBA. Finally, we apply the CBA to a real life policy problem. We

investigate the net benefits per Hectare of combinations of potential forests that meet the surface

restriction of 540 ha. We show the importance of including recreation benefits in the evaluation

of afforestation projects and more specifically the role of alternative forests (substitutes) in the

valuation of one specific Forest.