ESSAY
Due Date: Friday 13th May by 5:00pm
Upload the essay to the upload link on LMS as a pdf file.
Weighting: 30% of mark
Length: 3000 words, excluding diagrams.

Objective of Essay
The aim of the essay is to illustrate how theory can be used to improve our understanding of resource management issues.

Essay Guide
The focus of the essay should be on the use of an appropriate economic model to develop policy solutions to the problems identified. At a minimum your essay should include.

• A brief description of the problem (without too much technical/scientific detail – this is an economics essay).
• A brief explanation as to why this problem is an “economic” problem (there should be some market failure or resource misallocation identified).
• A brief exposition of the conceptual tools in resource and environmental economics that seem most appropriate for policy analysis in respect of the problem (e.g. theory of externalities, demand supply analysis, environmental standards models).
• An assessment of how well the actual/proposed policy matches theory, and what other considerations/complications might need to be considered in deciding on the most appropriate policy solution (e.g. is there an equity issues that needs to be addressed?)

If you have not already done so you might like to check out the UWA guide to writing essays at:
https://www.uwa.edu.au/students/-
/media/Project/UWA/UWA/Students/Docs/STUDYSmarter/ES3-Structuring-Essays.pdf

Referencing and Plagiarism

Your essay needs to use referencing appropriately and avoid plagiarism

The University offers a range of guides and if you have not done so, it is worth checking these out at

https://www.student.uwa.edu.au/__data/assets/pdf_file/0011/1861319/R4-Paraphrasing.pdf

and

https://www.student.uwa.edu.au/__data/assets/pdf_file/0006/2748138/R1-Avoiding-Plagiarism.pdf

Essay Topics

1. British Columbia in Canada has a particular structure for its mineral taxation. A mineral tax is paid when a mine is more than covering current operating costs. The amount of tax paid depends on whether the operator has recovered the capital invested in the mine. A Cumulative Expenditure Account (CEA) exists for each mine and tracks the capital expenditure that has not yet been recovered. While there is a balance in the mine’s CEA meaning there are capital costs to recover, the tax rate is 2% of net current proceeds – the Net Current Proceeds (NCP) Tax. Once the balance in the CEA is zero, the tax rate increases to a 13% Net Revenue Tax. On the other hand, the province of Quebec has changed its mining royalty regime from one based on taxing profits to one based on a fixed percentage of the value of the ore being produced at a mine. Examine how well these two models accord with the economic theory of the ideal royalty, and what might justify differences between the theory and the actuality in these two schemes.
2. Suppose households in an area are issued with three garbage bins – green for recyclable garden waste, yellow for recyclable paper/plastic waste and red for food and non-recyclables. Households pay a fixed annual charge for waste disposal, which does not vary with the volume of waste or the composition. The municipal government pays a firm to collect and dispose of household waste recyclables to a processing plant, non-recyclables to landfill. The firm is paid a variable fee, proportional to the quantity of waste it collects to cover costs, is paid a separate fee by the processor for recyclable waste it delivers to the processor and is charged a fee per unit of waste disposed of at a municipal waste landfill site. Assess the economic efficiency of these arrangements and recommend a policy that would generate efficiency gains in handling the waste.
3. Single use plastic bags have been used extensively by supermarkets and other retailers. In recent years, many jurisdictions have banned single use bags. Others have implemented “bag taxes.” Ireland introduced a EUR 0.15 plastic bag levy in 2002. The tax, levied on consumers, applied to bags made wholly or partly of plastic, sold at any sales outlet. The tax was set at nearly six times the value that consumers had stated in surveys they were willing to pay for plastic bags, which was around EUR 0.024. Examine the economic case for such as a levy and the impact of the levy in Ireland. Is there evidence that a levy is likely to produce a more efficient outcome that than the outright ban that other jurisdictions have implemented?
4. Taking a specific example, of your choosing (e.g., oil leases in the Gulf of Mexico), examine the merits of using upfront bidding for mineral/oil leases as an alternative to a per unit royalty applied to price or production, with the emphasis on how this policy choice affects risk sharing between the government and miner/oil producer.
5. Many jurisdictions now actively support the switch to electric vehicles with a range of concessions. These include purchase subsidies, exemptions from congestion taxes and preferential use of some restricted road lanes. Using South Australia’s $3,000 subsidy for electric vehicles purchase as an example, examine how well these policies to subsidise electric vehicles accord with the theory of sustainability. How efficient is the subsidy approach likely to be compared say to having pollution taxes on diesel and petrol vehicles?
6. Pesticide and herbicide use in agriculture is widespread. Examine how the lack of well-defined property rights in pesticide use risks market failure. Given this, assess the relative merits of a standard setting a limit on the use of these chemicals compared to levying a usage tax as alternatives ways to remedy this externality. Choose one country as an example and evaluate the economic merit of their policies for dealing with these pollutants.
7. Using mine rehabilitation as a case study, evaluate the merits of a performance bond versus strict liability for the clean-up costs associated with mine rehabilitation. As part of the analysis examine the concept of pooling bonds paid by companies to facilitate clean-up of abandoned mines. Take as a case study, the current policy in Western Australia