Answer to Question #211346 in Economics for Pinky Aggarwal

Question

) Environmentalists and tribals protested against the mining of bauxite as it led to various kinds of environmental degradations. In comparison, the benefit to the State of Orissa (now Odisha) was estimated at INR 1.92 billion at NPV through royalties and cess.” [Para 3, 4 & 5 of the section “Assessing the Vedanta Alumina Project” of the case study]. What are the environmental costs vis-à-vis benefits of the Vedanata Alumina industry?

Answer 1

Considering quite a big opportunity cost of mining operations, the company can include significant environmental protection measures in the project's budget. So that it can both bring financial benefits and minimize environmental risk for locals.