Environmental economics

1. While elephant is threatened by its commercial value of ivory, why cow population, however, is not threatened given huge amount of beef demand? What are some of the successful ways of protecting elephant that have been implemented in Africa. (20pts) 2. What does “collective action problems” mean? Give me an example (tell me a story) of a collective action problem? Why do you think this story is an example of a collective action problem? (20pts) 3. Without any government involvement, can common pool resources be well managed? Why or why not? (20pts) 4. What are some of the arguments that argument that social discount rate should be lower than financial discount rate? What are some of the arguments that social discount rate should be higher than financial discount rate? (20pts) 5. Consider a situation where the state of Washington is trying to determine whether, due to budget issues, it should close down a state park. The cost of “decommissioning” the park –removing the campsite, restroom facilities, etc. –is $2.2 million incurred in the current year (year 0). On the other hand, the budgetary savings would be $100,000 every year for year 0, year 1 and year 2. (a) From a purely budgetary perspective, should the park be closed down if the discount rate is 3%? (10pts) (b) Now suppose the annual benefit of the park to park visitors is $40,000 (including year 0, year1, and year2). In this case, what is the social net benefit of closing the park if the discount rate is 3%? (10pts)