ECON 315/ENVI 315 Environmental Economics; Policy, strategy and Tactic
Ben Kahn
MCLA
Final Exam Part I
Name: __________________________Student ID#:________________
DISCLAIMER:
I declare the following to be my own work, unless otherwise referenced.
Signed:
Please respond to all 25 essay questions. To receive full credit, provide complete
response to each question.
Theory of Environmental Policy
1. What is environmental economics and what are the three fundamental issues?
2. What are economic criteria for environmental policy evaluation?
3.What are the different types of pollutants? Explain and give examples.
4. Use production possibilities curve to demonstrate the trade-off between
“economic goods” and “environmental quality.”
5. What is the difference between a residual and a pollutant? Illustrate this in the
context of a common airborne emission such as sulfur dioxide, with noise, and with
junk automobiles.
6. Define and explain the five (5) Types of Environmental Policies & List and explain
the three (3) Criteria’s for choosing the Environmental policies.
Command and Control Standards
7. Define the command and control policies. What are the Several Types of
Environmental Standards? Explain
Transferable Discharge Permits
8. Define Transferable Discharge Permits incentive-based policy. What are the
four (4)
Components of a transferable discharge permit policy. Explain.
Environmental Policy in the Developing World
9. Explain the challenges we face on Environmental Policy and regulation in the
Developing World. What are the developing world’s constraints impinge on these
capabilities? Explain.
“Staged approach to environmental policies
10.“ in the Developing World is a more important criterion than efficiency for
choosing policies that are consistent with existing institutional capabilities and to build
institutional capabilities. List and explain the three stages of environmental policies in
the Developing World. Explain
Electronic waste
11. Electronic waste or E-waste is the most rapidly growing waste problem in the
world. It is a crisis not only of quantity but also a crisis born from toxic ingredients such
as the lead, beryllium, mercury, cadmium, and brominated –flame retardants that pose
both an occupational and environmental health threat.
To date, industry, government and consumers have only taken small steps to deal with
this looming problem.
Review the “EXPORTING HARM” article by The Basel Action Network (BAN) and Silicon
Valley Toxics Coalition (SVTC), and provide sufficient response to each question.
a. What is “E-WASTE”, where does it come from, how much is being produce, and
where does it go?
b.
Is E-Waste a Hazardous Waste? Can it be recycle?
c.
Describe the U.S. Policy and Law, Chinese Law on the “ E-Waste” Exporting
d.
Provide a brief executive summary of Basel Convention, and its implication to
U.S. “E -waste” Export.
e. New Development and Update
f. State and explain your recommendation for Action.
Efficiency, Equity, and Reaching Agreement
12. Three households live on the shores of a freshwater lake. These people use
the lake for recreation. Tte lake is contaminated by an old industrial plant that is
now closed.
Below is the households’ marginal willingness to pay schedules for reducing
contamination of the lake, and the marginal cost of reducing contamination.
Level of
contaminant
(ppm)
4
3
2
1
0
Marginal Willingness to Pay
Household
Household B
A
110
85
70
55
45
Household C
60
35
15
0
0
Aggregate
Marginal WTP
30
20
15
10
5
Please provide full response to each question.
a. Compute What is the efficient level of the contaminant?
b. Explain the differences in the households’ marginal willingness to
pay?
c. Is this a public good or private good? Explain.
Marginal
Cost of
Cleanup
50
65
95
150
240
Massachusetts vs. Environmental Protection Agency (EPA)
13. Protection Agency (EPA), asking EPA to regulate emissions of carbon dioxide
and other gases that contribute to global warming from new motor vehicles.
Massachusetts argued that EPA was required to regulate these "greenhouse gases" by
the Clean Air Act - which states that Congress must regulate "any air pollutant" that can
"reasonably be anticipated to endanger public health or welfare."
EPA denied the petition, claiming that the Clean Air Act does not authorize the Agency
to regulate greenhouse gas emissions. Even if it did, EPA argued, the Agency had
discretion to defer a decision until more research could be done on "the causes, extent
and significance of climate change and the potential options for addressing it."
Please respond to the following Statements:
a. May the EPA decline to issue emission standards for motor vehicles based on policy
considerations not enumerated in the Clean Air Act?
b. Does the Clean Air Act give the EPA authority to regulate carbon dioxide and other
greenhouse gases?
c. What are the recent developments on these issues? Explain.
Benefit-Cost Analysis
14. Complete the table, and respond to the questions:
a. If activity X is increased from 3 to 4 units, total benefit ___________ by $
_________.
b. If X is increased from 3 to 4 units, total cost ___________ by $ _________.
c. If X is decreased from 6 to 5 units, total benefit ___________ by $ _________, and
total cost ___________ by $ _________. Thus, net benefit _____________.
d. The optimal level of activity is ___ units of activity X, and net benefit at the optimal
level of X is $ ____________.
15. Berkshire Environmental Protection Agency, A decision maker can choose
the levels of two activities: solid waste (A) and liquid waste (B) cleanup. Activity A has
the following marginal (MB) and marginal cost (MC) functions:
MB = 2,500 - 20A
MC = 500 + 30A
where MB and MC are measured in dollars.
a. The 10th unit of the activity increases total benefit by $ _________ and increases
total cost by $ _________. Since marginal benefit is _________ (greater, less) than
marginal cost, adding the 10th unit of activity _________ (increases, decreases) net
benefit by $ _________.
b. The 50th unit of the activity increases total benefit by $ _________ and increases
total cost by $ _________. Since marginal benefit is _________ (greater, less) than
marginal cost, subtracting the 50th unit of activity _________ (increases, decreases) net
benefit by $ _________.
c. The optimal level of the activity is ________ units. At the optimal level of activity,
marginal benefit is $ _________ and marginal cost is $ __________. The total benefit
(TB) and total cost.
16. Massachusetts Environmental protection Agency , A decision maker can
choose the levels of two activities: solid waste (A) and liquid waste (B) cleanup.
To maximize net benefits. The marginal benefit functions of A and B are
Activity A costs $160 per unit and activity B costs $540 per unit.
a. The optimal level of activity A is _________ units.
b. The optimal level of activity B is _________ units.
c. Determine the total cost of each activity.
Overview of the Theory of Environmental Policy
17. Define and explain:
a. The five (5) Types of Environmental Policies.
b. List and explain the three (3) Criteria’s for choosing the Environmental policies.
c. What are the developing world’s constraints impinge on these capabilities? Explain.
Environmental Policy in the Developing World
18. How does the climate change affect the poor nation’s food supply
production, their economy, health, and resources?
19. Explain the terms:
Climate Change and Global South?
Climate Debts?
Environmental Justice?
Environmental refugees?
What are Ecosystems?
www.earthtrends.wri.org/
Efficiency, Equity, and Reaching Agreement
20.Three households live on the shores of a freshwater lake. These people use
the lake for recreation, but the lake is contaminated by an old industrial plant that is
now closed.
Below are the households’ marginal willingness to pay schedules for reducing
contamination of the lake, and the marginal cost of reducing contamination.
Marginal Willingness to Pay
Household
Household B
A
Level of
Household C
contaminant
(ppm)
4
220
120
60
3
170
70
40
2
140
30
30
1
110
0
20
0
90
0
10
Please provide complete response to each question.
What is the efficient level of the contaminant?
Why the differences in the households’ marginal willingness to pay?
Is this a public good? Explain.
Aggregate
Marginal WTP
Marginal
Cost of
Cleanup
100
130
190
300
480
CASE ANALYSES:
21. West Virginia chemical spill
How the Coal Industry Impoverishes West Virginia
The recent chemical spill is the latest chapter in a very old story: total
capitulation to industry by state officials.
Analyze the following statement . Please provide sufficient response to each issue.
“Fifty years ago, Michael Harrington authored his incisive depiction of poverty in the
United States, aptly titled The Other America. The bestselling book—named one of the
ten most influential books of the twentieth century by Time—is widely believed to
have inspired John F. Kennedy’s commitment to addressing the dire conditions of the
“invisible poor,” whom Harrington noted generally lived in rural or inner-city isolation,
making them easier to ignore. After Kennedy’s assassination, this commitment was
passed on to his successor, culminating in Lyndon Johnson’s declaration of an
“unconditional war on poverty.
West Virginia’s problems figured prominently in Harrington’s narrative. In one
evocative passage, he describes the paradox of the state’s beauty and its grave
socioeconomic conditions.“Driving through this area, particularly in the spring or the
fall, one perceives the loveliness, the openness, the high hills, streams, and lush
growth.” However, “beauty can be a mask for ugliness,” and “this is what happens in
the Appalachians.”
“It couldn’t be clearer that any perceived short-term economic benefits of allowing
the coal industry to dominate the state’s political landscape in no way make up for the
tragic socioeconomic, health and environmental problems it creates. The recent
chemical spill, which brought the state’s capital and largest city to an eerie,
apocalyptic halt, should not be viewed as an isolated incident, or an “act of God,” as a
West Virginia coal company called an accident that left more than 123 dead in the
early 1970s. Rather, this incident is the latest example of what happens when industry
is allowed to purchase the complicity of the state officials who are supposed to keep it
in check. This should serve as a valuable lesson for all Americans, but West Virginians
should be especially wary, as history threatens to repeat itself with the rise of
fracking. In addition to coal, the Appalachian Mountains conceal an enormous reserve
of natural gas embedded in the Marcellus Shale. West Virginia sits at the heart of
these reserves, and the natural gas industry has them in its sights. If this industry is
allowed to reign over our beloved Mountain State in the same way that “King Coal”
has for the past century, it’s a safe bet that Michael Harrington’s description of the
state will be just as relevant in another fifty years.”
22. Bhopal India Disaster
In 1984 Bhopal India Disaster became one of the worst chemical industrial
disasters of the twentieth century:
Thirty (30) Years after Bhopal Disaster, one of the worst industrial disasters
of the twentieth century took place, Over 150,000 are still suffering chronic
and debilitating illnesses. In 1984, the city of Bhopal, India, tons of lethal
gases leaked from a pesticide factory run by the U.S. Company Union
Carbide. Between 8,000 to 10,000 people lost their lives within days.
Thousands more died in the following years.
A new report released has found that there are still high levels of toxic
chemicals in the drinking water supply in fifteen communities near the old
plant.”
Please respond to the following questions:
(i)
What Happened in Bhopal India in 1984?
(ii)
How did it happen?
(iii)
Who were responsibles?
(iv)
Have reparation to victims of the accident being made?
(v)
Have the environmental cleanup task being completed todate?
(vi)
Could the industrial accident have been prevented?
(vii)
Can these accident happen again? Why or why not?
(Viii) Update, New Development and update.
(Viiii) Commentary and personal perspective.
23. The Keystone Pipeline Project
.
List 5 arguments in favor of Energy and Oil Industry
Five arguments in favor of the oil industry are:
. List 5 arguments in favor of Environmentalist Activist.
. List 5 arguments in favor of U.S. Department of Energy and the Executive Office of
the Presidency.
. Evaluate the following statement:
"Pipeline Project Serves Canadian and Chinese Interests, But Likely Will Result in Higher
U.S. Energy Prices.”
EXPLAIN.
.
If you were an advisor to President Obama, what input do you provide?
Explain.
.
State your Personal Perspective and recommendation. Explain.
24. China’s Local problems leading to global disasters
For centuries, China has been the most populous nation on Earth. Today, its
population's impact on the environment is evident even in the most remote areas.
China’s unprecedented economic boom effects are taking very serious proportions.
While individual use of resources remains low, the cumulative impact of steady
growth in the consumption of over a billion people is tremendous.
This is felt far beyond China’s borders. Logging, fishing and hunting to meet demands
of the Chinese market pose threats to biodiversity as far away as Africa. It is estimated
that by 2025 the nation will be the world’s leading producer of greenhouse gases.
Please address the following Issues. Provide sufficient explanation and data to support
your statement.
a. Habitat and biodiversity loss
b. Air pollution
c. Water pollution
d. Desertification and erosion
e. Comment of the following statement:
“China produces a new coal-fired power station every week, and will be the world’s
biggest emitter of carbon-dioxide by 2030.
EU Trade Commissioner Peter Mandelson