Science
ENVS 3525 UCB Business Adapting to Climate Change Costs Analysis Questions

ENVS 3525

University of Colorado Boulder

ENVS

Question Description

I’m studying and need help with a Environmental Science question to help me learn.

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file:///Users/austinlackey/Downloads/Assignment3Clarifications-1.pdf

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Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Table 1: Net losses from extreme heat (millions of USD) Community A Community B Community C Baseline Option 1 Option 2 Baseline Option 1 Option 2 Baseline Option 1 Option 2 1.4 0.8 1.1 2.4 1.4 0.8 4.8 0.9 1.1 2.9 1.4 2.2 3.3 4.8 0.6 5.1 3.3 2.2 4 1.7 2.9 3.4 2.5 1.3 5.8 2.9 2.6 1.9 1.4 1.8 3.4 1.8 1 3.8 1.7 1.9 1.3 0.8 1.1 4 1.3 0.9 5.7 0.9 1.1 3.6 2.1 2.5 5.4 2.9 0.9 7.8 2.1 2.5 3.5 1.8 2.7 4.4 3.4 1 5.8 2.4 3.4 2 1.6 1.7 5.1 1.9 0.7 5.7 1.6 1.6 2.4 1.7 1.8 3.7 1.2 1.6 3.9 0.5 2 1.4 0.9 1.1 5.1 1.2 1.7 6.1 0.8 0.7 3.6 3.1 3.1 6.9 2 1.3 7.4 1.6 3.1 3.8 1.5 2 6.1 4.1 0.7 10.8 2.8 2.6 3.1 2.2 2.9 4.8 3.2 0.9 7.8 3.6 2.2 2.8 2.6 3 4.4 2.4 0.8 6.6 2.2 2.5 1.5 1.3 1.2 6.1 1.1 1 7.7 0.4 0.9 2.5 1.6 2.2 6.8 1.1 1.8 9.4 1.2 1.3 Question 1: Change in net loss (aka net benefit) Community A Community B Option 1 Option 2 Option 1 Option 2 Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Community C Option 1 Option 2 Question 2: Net Present Value Discount rate Year 0.02 Discount factor Community A Option 1 Option 2 Community B Option 1 Option 2 Question 3: Total NPV Question 4b Objective Community C Option 1 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 NPV Option 1 Option 2 Question 4a Objective Max NPV Question 5 Min NPV Community C Option 2 Question 5 Objective ENVS 3525: Adapting to a Warming World Assignment #3: Evaluating Adaptation Options Due March 16, 2020 by the start of class (9:30am) In this assignment, you’ll get some practice evaluating adaptation options. To do so, you’ll work with an Excel spreadsheet containing (hypothetical) data on health-related losses from heat for a baseline scenario and two competing adaptation options. The spreadsheet contains data for three different communities, in which the adaptation options can have different effects. Please use the Assignment3Starter.xlsx Excel spreadsheet to answer the following questions. You should upload your answers as a PDF to Canvas; you do not need to upload any modifications you make to the Excel spreadsheet. It is provided as a guide for how you might set up your calculations, but you are welcome to complete this set of questions however you wish. 1. Table 1 contains net losses from extreme heat under a baseline scenario and under two adaptation options. First, compute the change in net loss for each community and year under Option 1 and Option 2. That is, for each year, subtract the net loss for Option 1 from the net loss for the baseline scenario for each community, then repeat for Option 2. The values you calculate will be future values of net benefits for each adaptation option in each community and year. a) In which community and year are the benefits from Option 1 the greatest? b) In which community and year are the benefits from Option 2 the greatest? 2. Compute the Net Present Value (NPV) of the benefits for each adaptation option and community, using a discount rate of 2% per year. a. Report the per-community NPVs you calculate in the table below. (Hint: if you’re having trouble figuring out how to do this, see the worksheet we used in class on March 4 as a guide). Community A Community B Community C Adaptation Option 1 Adaptation Option 2 b. Based on the table you filled out in part a, and assuming each community makes decisions using a cost-benefit analysis, which adaptation option would each community prefer? Report three answers: one per community. 3. Suppose that all we care about is the overall NPV, i.e., we simply add up the NPV values across the three communities. a. What are the total NPV values for each adaptation option? b. Based on your answer for part a, which adaptation option would we prefer if we are simply conducting a cost-benefit analysis? 4. In reality, decision makers might not care only about overall NPV. Suppose the communities agree to give more weight to community C, since its heat-related losses in the absence of adaptation are the largest. Specifically, suppose the communities decide on the following formula for evaluating adaptation options: π‘œπ‘π‘—π‘’π‘π‘‘π‘–π‘£π‘’ = 0.2 βˆ— 𝑁𝑃𝑉𝐴 + 0.2 βˆ— 𝑁𝑃𝑉𝐡 + 0.6 βˆ— 𝑁𝑃𝑉𝐢 a. Based on this objective, which adaptation option would be preferred? b. Repeat part a, but for the following weights π‘œπ‘π‘—π‘’π‘π‘‘π‘–π‘£π‘’ = 0.1 βˆ— 𝑁𝑃𝑉𝐴 + 0.1 βˆ— 𝑁𝑃𝑉𝐡 + 0.8 βˆ— 𝑁𝑃𝑉𝐢 Which adaptation option would be preferred? 5. In a true Multi-Criteria Analysis, we can move beyond simply giving different weights to each community NPV. Suppose that, to ensure the benefits from adaptation are (in some way) equitable, the community doesn’t want the differences in NPV across communities to be too large. Specifically, they propose the following objective: π‘œπ‘π‘—π‘’π‘π‘‘π‘–π‘£π‘’ = 0.2 βˆ— 𝑁𝑃𝑉𝐴 + 0.2 βˆ— 𝑁𝑃𝑉𝐡 + 0.4 βˆ— 𝑁𝑃𝑉𝐢 βˆ’ 0.2 βˆ— (MaxNPV βˆ’ MinNPV) where MaxNPV is the largest NPV across the three communities and MinNPV is the smallest NPV across the three communities. Using this objective, which adaptation option would be preferred? ...
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ENVS 3525: Adapting to a Warming World
Assignment #3: Evaluating Adaptation Options
Due March 16, 2020 by the start of class (9:30am)
In this assignment, you’ll get some practice evaluating adaptation options. To do so, you’ll work
with an Excel spreadsheet containing (hypothetical) data on health-related losses from heat for a
baseline scenario and two competing adaptation options. The spreadsheet contains data for three
different communities, in which the adaptation options can have different effects.
Please use the Assignment3Starter.xlsx Excel spreadsheet to answer the following questions.
You should upload your answers as a PDF to Canvas; you do not need to upload any
modifications you make to the Excel spreadsheet. It is provided as a guide for how you might set
up your calculations, but you are welcome to complete this set of questions however you wish.

1. Table 1 contains net losses from extreme heat under ...

Chancellor_Ivy (22030)
Boston College

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