The United States Environmental Protection Agency has defined five tiers of environmental costs. The tier-4 'relationship and image costs' areQuestion 5Answercosts that organisations impose on the environment and society for which they may not be held legally responsiblecontingent costs arising from failure to clean up contaminated sitesdirect costs associated with capital expenditures, raw materials, and other operating and maintenance costshidden regulatory costs of monitoring and reporting environmental activities and emissionsless tangible costs relating to consumer perceptions, and employee and community relations

An example of a conventional environmental cost is:Question 4Answera.equipment to prevent environmental damageb.provision for potential oil-spill clean upc.costs of searching for environmentally friendly suppliersd.lost business because adverse television publicitye.when a firm produces a product that is difficult to dispose of safely

Define the term 'environmental responsibility'. For 2 marks

Which of the following is an example of an environmental external failure cost?Question 4Answercleaning up of environmental damage within the plantcost of disposing of chemicals in land filldesign and installation of environmentally responsible equipmentdepreciation of monitoring and testing equipmentlegal fees related to chemical spill during transport to landfill

The following is NOT true according to the cost-benefit approach of Environmental Ethics.a.does not take morality or ethics into account.b.derived from Kantian ethicsc.difficulty in accurately assessing costs and benefitsd.an implicit suggestion that cost is an important issue.

Agency costs are best defined as: