ECONOMICS 1370
SUPPLEMENTARY READINGS QUESTIONS-PART 1
01.
In Lawrence Reed’s article “Privatization: Best Hope of a
Vanishing Wilderness”:
a. Why does Reed argue that privatization is the best hope
for preserving environmental assets? Use two or three
examples from the article to make your point. What role do
property rights play in such preservation?
02.
In Michael De Alessi’s article “Wildlife Enrichment and Oil
Exploration--a 2-for-1 Deal at the Welder Wildlife Refuge”:
a. Briefly explain what the Welder Wildlife Refuge is and
what the aims of the Foundation are.
b. Why has the number of wells in the Refuge declined
recently?
c. What lessons does the Welder Refuge have for ANWR?
03.
In Dwight Lee’s article “To Drill or Not to Drill: Let the
Environmentalists Decide”:
a. How do the Audubon Society’s statements about oil
drilling in ANWR differ from their actions in wildlife
areas that they own? Explain why these two things are
different.
b. Explain how the Nature Conservancy of Texas deals with
the tradeoff between preserving wildlife and drilling for
oil.
c. Lee says: “I am confident that environmentalists would
immediately see the advantages of drilling in ANWR if they
were responsible for both the costs and the benefits of
that drilling.” Conversely, why might environmentalists
overstate the environmental amenities put at risk by
drilling for oil in ANWR when ANWR is a publicly owned
asset? Explain.
d. What is the evidence for claiming that the risks of
drilling for oil in ANWR are significantly less than
environmentalists assume? (Note: Include a discussion of
the effect on caribou herds.)
04.
In Richard Stroup and Jane Shaw's article "Environmental
Harms from Federal Government Policy":
a. How does government contribute to losses of wetlands?
Explain. (HINT: Subsidies play a big role here.)
b. How do farm programs affect wildlife habitat on farms?
c. How does the Bureau of Reclamation affect the
environment?
d. What effect do subsidies have on those who build on
coastal barriers?
e. Why does government pursue so many environmentally
unsound policies? Explain in public choice terms. Apply
these concepts to the Park Service and the problem of wild
horses and burros.
05.
In Robert Crandall's article "Clean Air and Regional
Protectionism,":
a. What is the non-degradation policy? What is the new
source policy? (Hint: It is one of the policies
incorporated into the Clean Air Act of 1977.)
b. Why are these two policies potentially disastrous for
economic growth in the southern and western regions of the
country?
c. Are these two policies working to produce cleaner air?
Why does Congress spend so much on programs that attempt to
control air pollution but does nothing to ascertain whether
the programs are producing clean air? Explain using public
choice concepts.
d. Congress, under pressure from environmentalists,
required all new source emitters of sulfur oxides to reduce
emissions by the same fixed percentage. Why does this
result in more air pollution? (Hint: There are two
reasons.)
06.
In Edward Krug’s article “Fish Story: The Great Acid Rain
Flimflam,”:
a. What other way can a lake become acidic besides acid
rain?
b. Is acid rain responsible for the increased acidity in
the lakes in the Adirondacks?
c. What does the NAPAP study conclude about the effect of
acid rain on Eastern lakes? Was the 1990 legislation
necessary to reduce acid rain?
07.
In George Berger’s article “Chapter 2: Supply and Demand-A
Review,”:
a. Explain the difference between a movement along a curve
and a shift in a curve.
b. If A and B are substitutes (in consumption) explain what
happens when the cost of producing A increases.
c. Explain why a subsidy causes a welfare loss
(misallocation of resources).
d. If recycled paper and new paper are close substitutes,
what will mandatory paper recycling laws do to the planting
of new trees (which would be used to make new paper)?
(Hint: What effect does mandatory recycling have on the
recycled paper market? What if the price of recycled paper
becomes negative?)
08.
In Roger Meiners and Bruce Yandle's article "The Common
Law: How It Protects the Environment":
a. How did the common law protect property owners from
unwanted pollution? Explain briefly. (Hint: What is a
nuisance [or a trespass] and how can property owners be
protected from them?)
b. Illustrate how the common law works by summarizing a few
of the cases (Surface Water, Land, Air and Underground
Water) which the authors discuss.
c. What are the limitations of the common law? Explain.
(Hint: Do NOT just repeat what the author writes. Think
about these.)
d. How did statute law (designed law) come to be
substituted for the common law? What is the lure of central
planning and how does it play a part in this substitution
of statute for common law? Explain.
09.
In the Institute for Energy Research article “Carbon Taxes:
Reducing Economic Growth-Achieving No Environmental
Improvement”:
a. Why will GDP/output be significantly lower if carbon
taxes are imposed?(Hint: Use a supply demand analysis.)
b. Will carbon taxes in the US make any significant impact
on the global climate?
c. What effect may carbon taxes have on domestic
industries? Explain why using supply demand analysis.
d. Why did Ken Green change his mind about carbon taxes?
10.
In Kenneth Green, Steven Hayward and Kevin Hassett’s article
“Climate Change: Caps versus Taxes”:
a. Explain what some of the drawbacks of using emission
trading (cap and trade) are.
11.
In Peter Hill's article "Environmental Problems Under
Socialism":
a. What are some of the environmental problems that have
been observed since the collapse of the Soviet Union?
b. Why do centrally planned economies generate all sorts of
negative externalities?
c. Explain what incentive problems occur in centrally
planned economies and why they occur. How do these problems
lead to environmental problems?
d. Explain what problems arose because a centrally planned
economy did not generate good information. (Be sure you can
explain why such a result occurred.)
e. Why do the externalities produced by socialism persist?
f. Why does state ownership of property inhibit the
development of private property rights to resources?