environmenteconomics期中复习资料

1、1. Why would a tax on gasoline provide a larger incentive to reduce air emissions from motor vehicles than an annual tax on owning a vehicle?Total quantity of emissions = Number of vehicles * Average kilometers travelled * Emissions per kilometerIncrease the cost of driving per kilometer can reduce

2、air emissions from vehicles. This provides an inventive for people every time they drive their vehicle to minimize the number of trips, thereby reducing their direct costs.The answer depends upon the magnitude of the fuel tax relative to the vehicle tax. Afuel tax targets the three components of emi

3、ssion reduction (i.e. a) number of vehicleson the road; b) miles per vehicle; and c) emissions per mile).On the other hand, an annual tax affects only the marginal decisions to put a car onthe road (including purchases or retirement of a car). However, if the vehicle tax wassufficiently high such th

4、at very few people put a car on the road, then, emissionsmight fall relative to a low fuel tax as people can only drive a given car a maximumamount per day. Since such a high vehicle tax is politically unfeasible (equityreasons), then, it is still likely that a fuel tax will have larger impact on em

5、issionsreduction.2. What factors influence the trade-off illustrated in the production possibility frontier? How can environmental policy affect these trade-off?The PPE illustrates possible trade-offs between goods produced in the market and environmental quality. As society consumes more goods, it

6、gives up environment quality. Below e, no goods can be produced because environmental quality is too low to sustain production. Community indifference curves (CICs) indicate a countrys choice of the mix of goods and environmental quality. Country A chooses more goods/less environmental quality than

7、Country B. Both technological capacity of the economy and ecological facts could influence thetrade-offs along PPF. Adverse impacts on the environment occur due to flows ofresources from the natural world into the economy and the release of residualsduring production and consumption. Any technologic

8、al innovations that reduceinputs or residuals per unit output would shift the PPF upwardswhich means moregoods are being produced per unit of environmental quality. This is the case fromrecycling and re-using technologies.Policy can also influence tradeoffs by providing incentives to consumers and f

9、irms toconduct research and development (R & D) and adopt technologies that reduce theenvironmental impacts per unit of output. Governments may also conduct their own R& D and provide information about available technologies so that potential PPFs areactually realized (e.g. potential from Clean Deve

10、lopment Mechanism for bothdeveloped and developing countries).Finally, the role of improving the ecology to decrease trade-offs can be discussed.The idea is that organisms that are in ecological equilibrium do produce wastes anduse inputs that facilitate the workings of the ecosystem as a whole.3. S

11、uppose there is a technological change that allows firms to produce goods and services with less pollution. Show graphically and explain how this will alter the PPF and a societys potential choice of where to locate on the PPF.The PPF in panel (a) presents a pessimistic scenario, in which the PPF sh

12、ifts inward due to environmental degradation. This means that the country can no longer consume at both C2 and e2; one must decline. Panel (b) is more optimistic. The PPF may shift out due to technological development. Now consumption of goods and environmental quality can both rise over time. More

13、goods can potentially be produced with a given amount of environmentalquality so that PPF (see Figure 1.1 in F & O) pivots upward, with the environmentalquality intercept remaining the same. Whether environmental quality rises or fallswould depend upon the community/social indifference curve (CIC).

14、Suppose that theincrease in technology allows people to have more children. Decreased consumptionper capita should increase the value of goods relative to environmental quality sothat CICs may become flatter reflecting an increased marginal willingness to tradeenvironmental quality for goods. In thi

15、s case, environmental quality may fall relativeto before the technology short. This is what has happened throughout most history.On the other hand, if people are richer on average, they may get increased valuefrom environmental quality relative to consumption. In this case the CIC shouldbecome steep

16、er reflecting a lower marginal willingness to trade environmentalquality for goods.4. If produced capital is not readily substitutable for environmental capital (natural resources, air and water quality), how will this affect the trade-off between economic growth and the environment?5. Why might cou

17、ntries want to become pollution halos?They may wish to attract “clean” industries and appeal to people who value a high level of environmental quality by having very strict environmental policies.6. A given quantity of a residual discharged at one time and place can be a pollutant; if it is discharg

18、ed at another time or place it may not constitute a pollutant. Why is this true?This question is meant to emphasize that it is not just the type of residual that matters, but when and where it is discharged. A pollutant is something that causes damage, and the amount of damage cause depends on the a

19、ssimilative capacity of the environment as well as the population and ecosystem resources exposed to the discharge. Examples are: noise from an airport close to a city vs. same level of noise at a remote airport; airborne emissions during temperature inversions as compared to windy days, etc7. Why a

20、re long-lived cumulative pollutants so much harder to manage than short-lived,non-accumulative pollutants?A short-lived, non-cumulative pollutant does its damage and then disappears, so thatif we want to reduce damages we need only reduce current emission levels. But acumulative pollutant stays arou

21、nd to cause damages in the future, so foresight isneeded to manage damages, and that is usually difficult to get. It is hard because thescience becomes more difficulthaving to predict effects that are a long time and inthe future; and it is hard because people ordinarily discount the future.8. Suppo

22、se that we observe that emissions of pollutants have decreased but thatenvironmental quality has not increasedwhat might be the explanation?Some reasons are listed: 1) the rate of emissions release may fall, but the pollutantmay be accumulative so that the level of the pollutant increases. In order

23、for thepollutant to fall, the rate of decay or absorption by nature needs to be greater thanthe rate of residual release. 2) Environmental quality may have deteriorated so muchbefore the emission reduction, that the low levels of emissions cause as much damageto the environment as high levels of emi

24、ssions did when the environment as morerobust. 3) There may be time lags between the release of emissions andenvironmental deterioration due to complexity of ecosystems. Ecosystems may reachthreshold levels of damage after which they rapidly deteriorate. 4) Environmentaldamages may be due to synergi

25、stic effects from various pollutants. For example,scientists report that high CO2 levels appear to speed up the rate of ozone holeformation. 5) Although emissions of a particular pollutant are lower, firms may findsubstitutes that are also damaging. There may be a lag time before the governmentregul

26、ates such substitutes.9. The logic of equating benefits with willingness to pay could lead us to theconclusion that cleaning the air to which low-income people are exposed wouldprobably create fewer benefits than if it were done for high income people. Does thisundermine the idea of defining benefit

27、s as equal to willingness to pay? How shouldeconomists deal with this potential dilemma?Distributional considerations do not undermine the notion of willingness to pay butdo imply that it must be used with caution, especially in cases where different incomeclasses are involved. There are plenty of c

28、ases where this is not an important issue.Examples are comparing WTP for something (like environmental quality) by aparticular group, and looking at differences in WTP across groups that do not differsubstantially in terms of income. One way to deal with distributional issues involvingdiverse income

29、 groups is to assign welfare weights to marginal WTP. This amounts togiving a poor person a higher marginal utility for a dollar than a rich person.Aggregation of MB should then take into account the different ability to pay vs.willingness to pay.10. What sort of factors will influence the shape of

30、marginal cost curves? Will theydiffer substantially within industries?The shapes of the MCs ultimately depend upon the technology utilized. Issues toconsider are fixed factors, long run versus short-run, diminishing versus increasingor constant returns to scale. Some industries may have more factors

31、 that are difficultto increase in the short-run causing more rapidly increasing short run MC curves.Substitutability of factors, increased distance to input supplies, lack of availability oflabor or the decreased quality of available labor will all affects the costs ofincreasing production.12. Expla

32、in to a non-economist why marginal values are so important in economicanalysis. How would you counter the argument of a non-economist that he or shenever makes decisions based on a marginal valuation?Economists assume that agents attempt to act in self-interested manners although thisdoes not necess

33、arily imply pure egoism. They also assume that activities have benefitsand costs and there is often a tradeoff. Ask the students to imagine a day in whichthey did not make tradeoffs. For example, although getting up might give morebenefits than sleeping another minute, if they were not acting in a s

34、elf-interestedmanner, they might stay in bed. They might not drink a coffee, even though theexperience has told them that without the coffee, they are likely to get a headache andso on. You might also consider that for many of these actions, they may not haveengaged in a process of conscious optimiz

35、ation. However, if they look back on theday, they will realize that without even thinking they often acted in a mannerconsistent with attempting to get marginal benefits and costs into closecorrespondence.13. What is the relationship between public goods and open-access resources?When people are ove

36、rusing an open access resource, restraint by any individual user will confer benefit on all other users; individual restraint, in order words, is a public good, the under supply of which (because of free riding) leads to over-use of the resource.14. Why should we care about attaining social efficien

37、cy?Social efficiency (SE) provides one means of evaluating how well society is workingand whether policy changes might result in” improvements”. SE is particularlyrelevant for environmental economics because it attempts to place value onenvironmental amenities that do not have a market price. In doi

38、ng so, it drawsattention to numerous and substantial market failures, In case of highly inequitablewealth distributions, SE can be modified by assigning weights to people of differentincome levels (see below). It is important to stress that although policy makers canchoose to make this distinction,

39、markets do not. Although, ordinal utility cannot intheory be aggregated, probably the best we can so from a perspective of fairness iscount utility from each person equally.15. Are socially efficient outcomes necessarily equitable? Should they be?Socially efficient allocation need not be equitable.

40、If people are motivated by selfinterest and are motivated to work harder based on different compensation, thenaggregate output may be higher. Higher production levels can result in ore trade sothat there are more opportunities to specialize and therefore more jobs in theeconomy. Hence, in an inequit

41、able society, the poorest members may be materiallybetter off than in an equitable society. Profit incentives (unequal compensation) mayprovide stimulation for R&D into new technologies. Incentives to cut costs maydecease adverse environmental impacts using fewer inputs per unit output, morehand, ev

42、en though each unit of output may be less residual intensive, more outputincrease external costs to the environment (for example the USA is the largestproducer of CO2 in the world). Even if the poor are not absolutely better off, as the“aggregate pie” is bigger, compensation may be made in principle. For example,high tax rates may lead to relocation of business. Social efficiency can be adjusted totake into account equity by assigning wel