External Costs and Optimum Use of Nitrogen Fertilizer Based on the Balance of Economic and Ecological Benefits in the Paddy Field System of the Dongting Lake Area, China

The external costs and the optimum use of nitrogen fertilizer based on the balance of economic and ecological benefits was studied with the paddy field system of Dongting Lake area, one of the main food production regions in China. The environmental impact was economically evaluated using methods of the environmental impact economical evaluation. The optimum use of nitrogen fertilizer was calculated based on the exterior diseconomy theory and by using the production function model. Both ecological benefits and farmers＇ economic benefits were considered. It was calculated on the data from 2002 that the losses caused by inappropriate utilization of nitrogen fertilizer in the process of food production were fishery, 0.1 × 10^7 RMB yuan; water treatment, 1.02 × 10^8 RMB yuan; tour business, 0.11 ×10^8 RMB yuan, and habitation environment, 0.3 × 10^7 RMB yuan, totally equivalent to 0.41 RMB yuan kg^-1 N. The economically satisfactory and the ecological agronomic nitrogen fertilizer dose for current production was 138 and 137 kg ha^-1, respectively. The research showed that the actual nitrogen fertilizer application amount in the paddy field system of the Dongting Lake area already reached or exceeded the farmers＇ economic satisfaction and the ecological agronomic nitrogen fertilizer dose for current production. An environmental tax is suggested to impose on over-use of nitrogen fertilizer.

Quantifying social costs of coal-fired power plant generation

Coal has been dominating the electricity supply in Indonesia,especially in long-term power generation from fossil energy.This dominance is due to lower production costs in coal-fired power plant generation.However,this low price is only based on monetary costs and ignores the social costs.Therefore,this study aims to quantify the social costs of coal-fired generation.Using QUERI-AirPacts modeling,the present study quantifies the social costs resulting from the Tenayan Raya coal-fired generation in Riau,Indonesia.It includes the levelized cost of electricity and health costs into the generation costs.After that,this study calculates the net present value,internal rate return,and project payback period.The study found that as much as$50.22/MWh was the levelized cost of electricity.While$15.978/MWh or$0.015978/kWh was the social cost that was not included in the generating cost.At the electricity production level of 1,380,171.69 MWh per year,there is an expected extra cost of$22,052,383.30 uncounted when externalities are included.For instance,the net present value(NPV)is lower and even negative when external costs are included(-$24,062,274.19)compared to$176,108,091.52 when externalities are not considered.The internal rate of return(IRR)is much higher when the social costs are not considered.The payback period is also shorter when the social costs are excluded than when the externalities are included.This global number indicates that the inclusion of external costs would impact NPV,IRR,and the payback period.This result implies that the government should internalize the external cost to stimulate the electricity producers to conduct cost-benefit analyses.The cost-benefit analysis mechanism would lead the producers to be more efficient.

The Management of Environment Cost Caused by Ballast Water

According to classical economic theory,external cost is the indirect,and uncompensated,social or environmental cost caused to an uninvolved third party that arises as an effect of another party’s activity.In light of this,the environmental cost caused by ballast water is considered as a negative externality.This paper aims to contribute by proposing that the environmental cost caused by ballast water can be determined through questionnaires,and that the imposition of a Pigouvian retributive tax is required to compensate for the environmental damage caused.The paper proceeds as follows.Firstly,ballast water management is discussed.Second,the environmental cost is discussed and it is asserted that it is important to have clear regulations and to update them frequently to prevent or minimize ballast water’s negative impact on the environment.Finally,it is suggested that the environmental cost caused by ballast water can be determined by questionnaires and,more specifically,by the WTP(Willingness to Pay)method,and that a special Pigouvian corrective taxation which can internalize this cost should be imposed.