The government is considering whether to approve and subsidise a major tidal lagoon energy project in an environmentally sensitive estuary. Proponents argue that the lagoon will generate predictable, low-carbon electricity for over 100 years, create thousands of jobs during construction, and provide regional flood defences. However, critics point to the massive upfront capital costs, potential damage to local marine ecosystems, and the disruption to commercial coastal fisheries.
Assess the usefulness of Cost-Benefit Analysis (CBA) in helping a government decide whether a major infrastructure project, such as a tidal lagoon energy scheme, should go ahead.
378 exam-style questions on AQA A Level Economics 1.8 The market mechanism, market failure and government intervention in markets, covering 1.8.1 How markets and prices allocate resources, 1.8.2 The meaning of market failure, 1.8.3 Public goods, private goods and quasi-public goods, 1.8.4 Positive and negative externalities in consumption and production, 1.8.5 Merit and demerit goods, 1.8.6 Market imperfections, 1.8.7 Competition policy (A-level only), 1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only), 1.8.9 Government intervention in markets, and 1.8.10 Government failure. Each one has a worked solution and a mark scheme showing where the marks go.