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Oppurtunity Cost - Term Paper Example

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In Sazlo et al (2014), the authors identify the government decision to shift from exploring their oil reserves and embrace renewal energy. The article identify…
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Download file to see previous pages The articles also indicate how the country has decreased revenue generated from local consumption. The change in energy sources are triggered by the fact that most of the countries are embracing green energy and attributes to the future benefits the energy could have to the environment (196). The environmental benefits according to the article are of environmental benefits are far more important than economic benefits.
The country has two energy alternatives. The choice to use renewal energy rather than the natural oil and gas are based on environmental factors rather than the economical value. The natural oil contributed largely to the national income. The country being among the largest producers of oil, the government’s decision to cut off their second largest source of revenue and invest on other sources indicates how choices where triggered by other factors. The decision has nothing t do with the economic benefit but the environmental factors. The decision is triggered by the world millennium development goals. The initial investments may be high and the country may take a longer period to realize the economical benefit to their planned investment. New infrastructure could consume half of the revenue invested by the government towards the sector. Choosing the option would mean that the governments revenue on oil and natural would dwindle.
The country depends on agriculture and oil export to contribute to the national revenue. The elimination of natural oil will mean that the country depend mostly on agriculture as their main economic activity. The national expenditure will increase meaning resources allocated to national development. This means their opportunity cost would be the revenue collected from the renewable energy subtracted from the income that would otherwise be collected from exports of natural oil and gas. The result is the sacrifice foregone by the government to ensure a sustainable environment. The new investment ...Download file to see next pagesRead More
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