DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

NAME: ​TN Anusha Rao

ROLL NUMBER: ​2017099

SUBJECT: ​Economics

TOPIC ASSIGNED: ​Cost benefit analysis on ​Air (Prevention and Control of Pollution) Act,
1981
 TABLE OF CONTENTS

1) Summary of Abstract
2) Introduction
3) Methodology
4) Findings
5) Discussion
6) Conclusion
7) Recommendations
8) Appendix
9) References
 SUMMARY OF ABSTRACT

Air pollution​ in India is a serious issue with the major sources being fuelwood and biomass
burning, fuel adulteration, vehicle emission and traffic congestion.​[1]​ In autumn and winter
months, large scale crop residue burning in agriculture fields – a low cost alternative to
mechanical tilling – is a major source of smoke, smog and particulate pollution. India has a
low per capita emissions of greenhouse gases but the country as a whole is the third largest
after China and the United States. A 2013 study on non-smokers has found that Indians have
30% lower lung function compared to Europeans.

The Air (Prevention and Control of Pollution) Act was passed in 1981 to regulate air
pollution and there have been some measurable improvements. However, the 2016
Environmental Performance Index ranked India 141 out of 180 countries.

In 2015, Government of India, together with IIT Kanpur launched the National Air Quality
Index and was launched by Naman Singh Rajput
 INTRODUCTION

Cost–benefit analysis​ (​CBA​), sometimes called ​benefit costs analysis​ (​BCA​), is a

systematic approach to estimate the strengths and weaknesses of alternatives (for example in
transactions, activities, functional business requirements or projects investments); it is used to
determine options that provide the best approach to achieve benefits while preserving
savings. The CBA is also defined as a systematic process for calculating and comparing
benefits and costs of a decision, policy (with particular regard to government policy) or (in
general) project

Broadly, CBA has two main purposes:

1. To determine if an investment/decision is sound (justification/feasibility) –

verifying whether its benefits outweigh the costs, and by how much;
2. To provide a basis for comparing projects – which involves comparing the
total expected cost of each option against its total expected benefits.

CBA is related to (but distinct from) cost-effectiveness analysis. In CBA, benefits and costs
are expressed in monetary terms, and are adjusted for the time value of money, so that all
flows of benefits and flows of project costs over time (which tend to occur at different points
in time) are expressed on a common basis in terms of their net present value.
 METHODOLOGY

Methodology is the systematic, theoretical analysis of the methods applied to a field of study.
It comprises the theoretical analysis of the body of methods and principles associated with a
branch of knowledge. Typically, it encompasses concepts such a person thinks, feels and
acts.

Exploratory Research
Exploratory research is defined as the initial research into a hypothetical or theoretical idea.
This is where a researcher has an idea or has observed something and seeks to understand
more about it. An exploratory research project is an attempt to lay the groundwork that will
lead to future studies or to determine if what is being observed might be explained by a
currently existing theory. Most often, exploratory research lays the initial groundwork for
future research.

To make this a little more understandable, imagine you are blindfolded or placed into a room
without light. You are not told if something is in the room, but you have a suspicion there is
something in there. You shuffle out slowly into the room, exploring with the tips of your
fingers until you find something.

Exploratory research can come in two big forms: either a new topic or a new angle. A new
topic is often unexpected and startling in its findings. For example, American psychologist
John Watson really began his behaviorism research with a new topic on the study of human
behaviors and learning: rats! Because humans have brains and rats have brains, it makes a
certain kind of sense. There was an attempt to find the universal laws of learning in all brains.

New angles can come from new ways of looking at things, either from a theoretical
perspective or a new way of measuring something. For instance, computers have allowed
large populations to be looked at. Old experiments can now involve thousands of people from
around the globe instead of a few people from the local train station.
Descriptive Research

Once the groundwork is established, the newly explored field needs more information. The
next step is descriptive research, defined as attempts to explore and explain while providing
additional information about a topic. This is where research is trying to describe what is
happening in more detail, filling in the missing parts and expanding our understanding. This
is also where as much information is collected as possible instead of making guesses or
elaborate models to predict the future - the 'what' and 'how,' rather than the 'why.'

Remember that room you're blind in? Descriptive research is the act of exploring the thing in
the dark, creating a fuller picture of what you are looking at. It is not quite as tentative as
exploratory, but you still are not 100% sure what you've found, although you're starting to get
an idea. You begin to fill in what you know with what you find.

A psychological example is the use of CT scans, MRI, fMRI, PET, and SPECT imaging to
describe the living brain. We now have the clearest picture in all of history of the thinking,
living brain. Just a few decades ago, a person who wanted to look at a living brain had two
options: a really blurry CT scan without any detail or to crack open the skull and peel back
the protective layers around the brain.

Both options are better than a century ago, where you kind of had to wait for someone to die
to examine their brain. Research over the last few decades has been expanding our
understanding, providing descriptions of the active processes in the brain.

One field that is quickly growing is the field of forensic psychology. Over the last few
decades, studies exploring the decision making process of police officers, the techniques used
to question witnesses and the jury processes are all being examined. There has been an active
interest in many researchers to explore the field that the judicial system needs.

For instance, looking into eyewitness memory studies reveals research explaining and
describing the factors that influence what people see. For example, did you know that a
person with different lights shining at different angles on a person's face can alter a person's
entire look, including their ethnicity? How about that, even in broad daylight, people still get
gender of perpetrators and victims mixed up?

Explanatory Research

Explanatory Research is the conducted for a problem which was not well researched before,
demands priorities, generates operational definitions and provides a better-researched model.
It is actually a type of research design which focuses on explaining the aspects of your study
in a detailed manner. The researcher starts with a general idea and uses research as a tool
which could lead to the subjects that would be dealt in the incoming future. It is meant to
provide details where a small amount of information exists for a certain product in mind of
that researcher. For starting your research, you need to create a research outline or speech
outline to pitch your research idea to your professor or a boss or in a board meeting.

Explanatory Research is conducted in order to help us find the problem that was not studied
before in-depth. The Explanatory research is not used to give us some conclusive evidence
but helps us in understanding the problem more efficiently. When conducting the research,
the researcher should be able to adapt himself/herself to the new data and the new insight that
he discovers as he/she studies the subject.
It does not aim to provide final and conclusive answers to the research questions but allows
the researcher to explore the research with a varying level of depths. “It has been noticed that
“exploratory research is the examination, which shapes the base for different inquiries about,
it is the building obstruct for alternate looks into.”, it is the building block for the other
researchers. It can even help in deciding the exploration configuration, testing philosophy and
information gathering strategy”. Research allows the researcher to tackle such problems
where no or less research has been done.

The historical method comprises the techniques and guidelines by which historians use
historical sources and other evidence to research and then to write history. There are various
history guidelines that are commonly used by historians in their work, under the headings of
external criticism, internal criticism, and synthesis. This includes lower criticism and sensual
criticism. Though items may vary depending on the subject matter and researcher, the
following concepts are part of most formal historical research.

1) Identification of origin date

2) Evidence of localization
3) Recognition of authorship
4) Analysis of data
5) Identification of integrity
6) Attribution of credibility
 FINDINGS

SWOT ANALYSIS

Topic assigned:​ ​Air (Prevention and Control of Pollution) Act, 1981

COST BENEFIT ANALYSIS AND ITS SIGNIFICANCE

The value of a cost–benefit analysis depends on the accuracy of the individual cost and
benefit estimates. Comparative studies indicate that such estimates are often flawed,
preventing improvements in Pareto and Kaldor-Hicks efficiency. Causes of these
inaccuracies include:

● Over-reliance on data from past projects (often differing markedly in function or

size and the skill levels of the team members)
● Use of subjective impressions in assessment
● Inappropriate use of heuristics to derive money cost of the intangible elements
● Confirmation bias among project supporters (looking for reasons to proceed).

Interest groups may attempt to include or exclude significant costs from an analysis to
influence the outcome.

In the case of the Ford Pinto (where, because of design flaws, the Pinto was liable to burst
into flames in a rear-impact collision), the company's decision was not to issue a recall. Ford's
cost–benefit analysis had estimated that based on the number of cars in use and the probable
accident rate, deaths due to the design flaw would cost it about $49.5 million to settle
wrongful death lawsuits versus recall costs of $137.5 million. Ford overlooked (or considered
insignificant) the costs of the negative publicity that would result, which forced a recall ​and
damaged sales.

In health economics, some analysts think cost–benefit analysis can be an inadequate measure
because willingness-to-pay methods of determining the value of human life can be influenced
by income level. They support use of variants such as cost–utility analysis, QALY and
DALY to analyze the effects of health policies.

For some environmental effects cost-benefit analysis can be substituted with

cost-effectiveness analysis. This is especially true when there is only one type of physical
outcome that is sought, such as the reduction of energy use by increasing energy efficiency.
Using cost-effectiveness analysis is less laborious and time-consuming as it does not involve
the monetization of outcomes, which can be difficult in some cases.

In environmental and occupational health regulation, it has been argued that if modern
cost–benefit analyses had been applied prospectively to decisions such as whether to mandate
the removal of ​lead​ from gasoline, block the construction of two proposed dams just above
and below the Grand Canyon on the Colorado River, and regulate workers' exposure to vinyl
chloride, these measures would not have been implemented even though they are considered
to be highly successful in retrospect. The Clean Air Act has been cited in retrospective
studies as a case where benefits exceed costs, but the knowledge of the benefits (attributable
largely to the benefits of reducing particulate pollution) was not available until many years
later.
 DISCUSSION

The objective of the Air Act 1981 is to preserve the quality of air and control of air
pollution.Chapter 3 of this act deals with powers and functions of boards.There are two
boards namely Central Board and State Boards. Some of their important functions are to
improve the quality of air and to prevent, control or abate air pollution in the country, to
advise the Government on any matter concerning the improvement of the quality of air and
the prevention, control or abatement of air pollution, to plan and executed a program for the
prevention, control or abatement of air pollution, to collect, compile and publish technical
and statistical data relating to air pollution and the measures devised for its effective
prevention, control or abatement and prepare manuals, codes or guides relating to prevention,
control or abatement of air pollution, to lay down standards for the quality of air, to inspect,
at all reasonable times, any control equipment, industrial plant or manufacturing process and
to give, by order, such directions to such persons as it may consider necessary to take steps
for the prevention, control or abatement of air pollution, to inspect air pollution control areas
at such intervals as it may think necessary, assess the quality of air therein and take steps for
the prevention, control or abatement of air pollution in such areas.The Central Board and
State Board work in collaboration of each other. The Central works throughout the nation
whereas State Boards work within its state.Likewise, chapter four states about the prevention
and control of air pollution. State Government after consultation with State Board can declare
any area or areas within the State as air pollution control area or areas for the purposes of this
Act, can alter any air pollution control area whether by way of extension or reduction, can
declare a new air pollution control area in which may be merged one or more existing air
pollution control areas or any part or parts thereof.
 CONCLUSION

CBA attempts to measure the positive or negative consequences of a project, which may
include:

1. Effects on users or participants

2. Effects on non-users or non-participants
3. Externality effects
4. Option value or other social benefits.

A similar breakdown is employed in environmental analysis of total economic value. Both

costs and benefits can be diverse. Financial costs tend to be most thoroughly represented in
cost-benefit analyses due to relatively abundant market data. The net benefits of a project
may incorporate cost savings or public willingness to pay compensation (implying the public
has no legal right to the benefits of the policy) or willingness to accept compensation
(implying the public has a right to the benefits of the policy) for the welfare change resulting
from the policy. The guiding principle of evaluating benefits is to list all (categories of)
parties affected by an intervention and add the (positive or negative) value, usually monetary,
that they ascribe to its effect on their welfare.

The actual compensation an individual would require to have their welfare unchanged by a
policy is inexact at best. Surveys (stated preference techniques) or market behavior (revealed
preference techniques) are often used to estimate the compensation associated with a policy.
Stated preference technique is a direct way of assessing willingness to pay. Because it
involves asking people directly to indicate their willingness to pay for some environmental
feature, or some outcome that is closely connected to the state of the environment. However,
survey respondents often have strong incentives to misreport their true preferences and
market behavior does not provide any information about important non-market welfare
impacts. Revealed preference technique is an indirect approaches to individual willingness to
pay. People make market choices among certain items that have different characteristics
related to the environment, they reveal the value they place on these environmental factors.
One controversy is valuing a human life, e.g. when assessing road safety measures or
life-saving medicines. However, this can sometimes be avoided by using the related
technique of cost-utility analysis, in which benefits are expressed in non-monetary units such
as quality-adjusted life years. For example, road safety can be measured in terms of ​cost per
life saved​, without formally placing a financial value on the life. However, such
non-monetary metrics have limited usefulness for evaluating policies with substantially
different outcomes. Additionally, many other benefits may accrue from the policy, and
metrics such as 'cost per life saved' may lead to a substantially different ranking of
alternatives than traditional cost–benefit analysis. See also: Statistical murder

Another controversy is valuing the environment, which in the 21st century is typically
assessed by valuing ecosystem services to humans, such as air and water quality and
pollution. Monetary values may also be assigned to other intangible effects such as business
reputation, market penetration, or long-term enterprise strategy alignment.
​APPENDIX
 REFERENCES

1) Wikipedia.org
2) Heinonline.in
3) Study.com