Natural Resource Economics

Business

Quiz 10 :

Replenishable but Depletable Resources: Water

Quiz 10 :

Replenishable but Depletable Resources: Water

Question Type
search
arrow
Is a "Public Purpose"? The U.S. Constitution only allows the eminent domain power to be used to accomplish a "public purpose." What exactly is a public purpose? Although acquiring land for typical facilities such as parks and jails is settled terrain, recent decisions that justify the use of eminent domain to condemn private neighborhoods to facilitate urban renewal by private developers are much more controversial. For example, in Kelo v. City of New London, Conn. 125 S.Ct. 2655 (2005) the court upheld the city's development authority to use eminent domain to acquire parcels of land that it planned to lease to private developers in exchange for their agreement to develop the land according to the terms of a development plan. Can private development such as this fulfill the "public purpose" test? Those who support this decision point out that large-scale private developments face many of the same market power obstacles (such as "holdouts") as faced by the public sector. Furthermore, since large-scale private developments of this type provide such societal benefits as jobs and increased taxes to the community, eminent domain is seen as justified to prevent inefficient barriers that inhibit development. Opponents suggest that this is merely using governmental power to favor one set of private landowners (the developers) over others (the current owners of the land). Should the scope of "public use" include large-scale private developments such as this? When it is allowed, should the developers be under any special requirements to assure that the public benefits are forthcoming?
Free
Essay
Answer:

Answer:

In our views, scope of "public use" should not include large - scale private development. It is true that large - scale private development face many of the same market power obstacles (such as "holdouts") as faced by public sector but these private projects are meant to earn private profit which will enrich the particular individual or set of individuals whereas public projects are meant to earn public profit which will enrich the whole society.
Secondly, if government acquires property or land in name of "public use" then actual market value of land does not get ascertained leading to discontent among landowners whose land is being taken. This fuels social unrest as seen in many developing countries where acquisition of land by government for private developers has led to many agitations against such practice and some are really violent ones leading to many casualties.
Moreover, since private project will earn profit they should be ready to incur substantial cost as well and thus government should remain separate and let market does it own work that is private developers should negotiate directly with landowners to ascertain true value of land so that people selling their land believe that they have got fair price.
Furthermore to say that since these large private projects provide societal benefits such as jobs and increased taxes to the community therefore these should be considered under scope of "public use" and government should use of eminent domain to acquire parcel of land to be given to the private landowners is also a wrong statement because if these projects accrue these benefits then instead of using eminent domain and forcing current landowners to part with their land government can induce the private landowners to acquire property under free market norms and can aid the private projects through tax incentives or credit at concessional rates.
These steps will also be more than fair steps to prevent inefficient barriers that inhibit development.

Tags
Choose question tag
close menu
arrow
pollution officials in California's Central Valley have opened a new front in the war against urban sprawl, and regulators and environmental advocates throughout the state are watching closely. Starting in March 2006 the San Joaquin Valley Air Pollution Control District in California became the first regulatory body in the country to impose fees on new residential and commercial development specifically focused on reducing air pollution. Critics argue that this is an ineffective way to control pollution and will mainly drive up housing prices, making housing less affordable for the poor. Is this policy a good idea or not?
Free
Essay
Answer:

Answer:

Urban sprawl implies expansion of the city in a disorganized manner. When city expands in an unplanned manner, the construction around the city happens without effective planning. This means necessary infrastructure in terms of proper roads, water system, sanitation facilities etc. is not properly planned.
Also, related with problem of sprawl is problem of leapfrogging. Leapfrogging implies a situation in which instead of developing sites within or on the edge of the city, sites farther out of the city are developed.
Sometimes land very far away from the centre of economic activity is developed even if land within or at the edge of city is available.
Sprawl and leapfrogging both tends to intensify the environmental problem especially problem of air pollution.
Haphazard development in case of sprawl leads to inefficient road planning. This means that due to disorganized expansion enough roads do not get constructed. In many areas, required passages that connect important roads do not get constructed due to space crunch - an effect of disorganized expansion of city. This compels the people to take long detours to reach their destination. Moreover, construction of new developments farther away from the city also results in longer trip in relation to work, shop or any other work that requires a person to visit the city.
These longer trips both due to sprawl and leapfrogging result in more energy being consumed. Also, longer trips induce the commuters to use heavy polluting modes of transport such as car, motorcycles, buses etc. Increased use of these modes results in higher air pollution emission levels.
This increase in air pollution emission levels could be avoided if effective town planning is undertaken. This implies a check on sprawl and leapfrogging.
While undertaking new development outside the city or even within city (without efficient town planning), developers does not internalize external cost such as cost of increased pollution etc.
If these costs are internalized then this will definitely affect the location choices and would result in organized expansion of city as well as development of contagious region rather than farther region from the centre of economic activity.
As the fees imposed by the San Joaquin Valley Air Pollution Control District in California on new residential and commercial development internalize the external cost (Air Pollution), it is a good idea.
Also, people would like to live near their area of work so that they could save time on commuting and thus have more time for leisure.
It is true that this will result in increase in prices of housing units but accompanying benefits in terms of reduced transportation costs, reduced fuel cost and decreased pollution will balance the increase and may accrue net benefits as well.
Moreover, government can subsidize the housing for poor to negate the increase in price due to levying of such fees.

Tags
Choose question tag
close menu
arrow
Should Landowners Be Compensated for "Regulatory Takings"? When environmental regulations, such as those protecting wetlands, are imposed, they tend to restrict the ability of the landowner to develop the land subject to the regulation. This loss of development potential frequently diminishes the value of the property and is known in the common law as a "regulatory taking." Should the landowner be compensated for that loss in value? Proponents say that compensation would make the government more likely to regulate only when it was efficient to do so. According to this argument, requiring governments to pay the costs of the regulation would force them to balance those costs against the societal benefits, making them more likely to implement the regulation only where the benefits exceeded the costs. Proponents also argue that it is unfair to ask private landowners to bear the costs of producing benefits for the whole society; those costs should be funded via broad-based taxes on the beneficiaries. Opponents argue that forcing the government to pay compensation in the face of the severe budget constraints, which most of them face, would result in many (if not most) of these regulations not being implemented despite their efficiency. They also argue that fairness does not dictate compensation when the loss of property value is due to simply preventing a landowner from causing societal damage (such as destroying a wetland); landowners do not have an unlimited right to inflict social damage. Furthermore, landowners are typically not expected to compensate the government when regulation increases the value of their land. Current judicial decisions tend to award compensation only when the decline of value is so severe as to represent a virtual confiscation of the property(100 percent loss in value). Lesser declines are typically not compensated. Disagreeing with this set of rulings, voters in Oregon in 2004 approved Measure 37, which allowed individual landowners to claim compensation from the local community for any decrease in property value due to planning, environmental, or other government regulations. After witnessing the effects of that measure, voters passed Measure 49 in 2007, which had the effect of narrowing the impact of Measure 37. Which sets of arguments do you find most compelling? Why?
Free
Essay
Answer:

Answer:

Critics correctly argue that the imposition of fees on new commercial or residential development is inefficient and misguided. The reason is the presence of externality. The theory suggests that the creator of the externality should be held responsible and should be charged. In that sense, those who are responsible for creating pollution should face the cost of their action.
What happens with this fees is that people who buy homes and companies who sign the leasing agreements are not the only ones responsible for the air pollution. Instead, if they are paying fees, they are more likely to create pollution rather than reducing it. The logic is that the buyers and the companies are paying pollution fees in advance so the incentive they receive encourages them to create pollution.

Tags
Choose question tag
close menu