Deck 12: Environmental Management and Sustainability

Question 1

Political leaders and economists all over the world are of the opinion that the Kyoto Protocol was widely successful.

Answer 1

False

Question 2

An emissions tax is considered superior to a tradable permits system because it is impossible to know the amount of abatement in advance with a permits system.

Answer 2

False

Question 3

The Coase theorem pertains to market imperfections, including externalities and public goods.

Answer 3

True

Question 4

A market is the logical extension of a decentralized system in which entitlements are assigned and can be traded.

Question 5

Kyoto mechanisms referred to credits bought by countries to help finance projects in developing countries that would reduce greenhouse gases.

Question 6

The first component of the control of an externality in a tradable permits system involves reflecting in the prices of goods and services, the costs of abatement and the social costs of the harm from the remaining pollution.

Question 7

The Kyoto Protocol had strong backing in the U.S. Senate, which in 1997 adopted a resolution in support of the protocol.

Question 8

With the growing scientific evidence indicating global climate change, the George W. Bush administration made the political and economic choice to support the Kyoto Protocol.

Question 9

An emissions tax is favored by some economists because it is transparent and easy to implement compared to having to develop a market.

Question 10

The signatories to the Kyoto Protocol agreed to use an emissions permits trading system to reduce the cost of achieving their commitments.

Question 11

The Coase theorem does not apply to a tradable permits system.

Question 12

In a cap-and-trade system, companies are charged hefty fees for the permits.

Question 13

Due to the very high transaction costs, automobile emissions are controlled through private regulations.

Question 14

Population growth and economic growth are the two most important factors contributing to the increase in greenhouse gas emissions.

Question 15

The Kyoto Protocol targets expire in 2014.

Question 16

When the Obama administration took office, its EPA declared that CO₂ and other greenhouse gases were pollutants and subject to regulation.

Question 17

Aggregate well-being does not take into account the harm from an externality and the social costs of reducing that harm.

Question 18

From the Coasean perspective, social efficiency is a problem only when there are no impediments to bargaining.

Question 19

Command-and-control regulation does not impose uniform controls and standards on dissimilar sources of pollution.

Question 20

The Coase theorem implies that when bargaining between two parties to an externality is possible, social efficiency can be achieved.

Question 21

Which of the following is true of the Coase theorem?

A) It pertains to distributive objectives and social justice.
B) It addresses the private attainment of social efficiency and the conditions for its attainment.
C) It implies that when bargaining between the parties to an externality is possible, social efficiency cannot be achieved.
D) It underrates the role of government in assigning entitlements to private parties.

Question 22

The NIMBY movement focuses on local environmental concerns, particularly as they involve possible risks to person or property.

Question 23

Cap-and-trade systems are also called ________.

A) market systems
B) governmental systems
C) life-expectancy systems
D) tradable permits systems

Question 24

From the Coasean perspective, social efficiency is a problem only when there are impediments to ________.

A) growth
B) bargaining
C) expansion
D) diversification

Question 25

Which of the following is a distinctive trait of incentive approaches?

A) Incentive approaches impose a cost on pollution-causing activities, leaving it to individual polluters to decide how best to respond.
B) Incentive approaches attain social efficiency by requiring polluters to externalize the social costs of pollution externalities.
C) Incentive approaches does not take into account the benefits and costs of attaining environmental objectives.
D) Incentive approaches centralize pollution-control decisions.

Question 26

The third component of the control of an externality in a tradable permits system ________.

A) is allowing parties to respond to incentives by choosing the most efficient means of abatement
B) involves providing incentives for abatement by internalizing the cost of the harm done by the pollution.
C) involves reflecting in the prices of goods and services, the costs of abatement and the social costs of the harm from the remaining pollution.
D) is allowing states to decide how best to decrease dangerous air pollution in the most cost effective manner.

Question 27

Although the concept of sustainability is appealing, it is subject to two principal issues, ________ and ________.

A) the lack of private initiatives; high budget deficits
B) how to increase the current employment rate; the challenges of attracting foreign investments
C) how to think about population growth; the difficulty of predicting future technological progress and innovation
D) the slow growth of the renewable energy industry; the difficulty in curbing emissions of greenhouse gases in developing countries

Question 28

The control of an externality in a tradable permits system has three components. The first component ________.

A) is allowing parties to respond to incentives by choosing the most efficient means of abatement
B) is providing incentives for abatement by internalizing the cost of the harm done by the pollution.
C) involves reflecting in the prices of goods and services, the costs of abatement and the social costs of the harm from the remaining pollution.
D) is allowing states to decide how best to decrease dangerous air pollution in the most cost effective manner.

Question 29

The Environmental Protection Agency defines ________ as that which creates and maintains the conditions under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic and other requirements of present and future generations.

A) stability
B) sustainability
C) an ecosystem
D) the Superfund

Question 30

Social efficiency is attained when ________.

A) aggregate well-being is minimal
B) aggregate economic inequities are maximal
C) aggregate well-being is maximal
D) aggregate costs negative externalities are maximal

Question 31

________ prohibits other parties from infringing the entitlement without the consent of the party holding it.

A) The Environmental Protection Agency rule
B) The Clean Air Interstate Rule (CAIR)
C) A property rule
D) A liability rule

Question 32

The EPA enforcement process requires the filing of a notice of a complaint and a hearing before an administrative law judge.

Question 33

________ take(s) into account the benefits and costs of attaining environmental objectives and achieve those objectives by aligning the social and private costs of pollution and its abatement.

A) Life-expectancy approach
B) Supply-chain approach
C) Command-and-control regulations
D) Incentive approaches

Question 34

The Regional Greenhouse Gas Initiative (RGGI) was formed to operate a cap-and-trade system for reducing greenhouse gases emissions.

Question 35

EPA regulation has largely been command and control, in which uniform rules or standards are ordered and then enforced.

Question 36

________ have become an effective means of achieving environmental goals at the least cost to society.

A) Command-and-control regulations
B) Incentive-based systems
C) Life-expectancy approaches
D) Supply-chain approaches

Question 37

The Coase Theorem pertains to ________.

A) distributive objectives and social justice
B) energy, forests, and the environment more generally
C) ecosystems, climate change, pollution, and habitats
D) market imperfections, including externalities and public goods

Question 38

The EPA was created by an executive order of President Clinton to control greenhouse gas emissions by the developing countries.

Question 39

____________ cap(s) the total allowed emissions of a particular pollutant and issue permits for that amount.

A) Life-expectancy systems
B) Command-and-control regulations
C) Tradable permits systems
D) The Superfund

Question 40

Due to the ________, automobile emissions are controlled through government regulation.

A) exorbitant costs associated with private bargaining
B) unwillingness of businesses to curb air pollution
C) low negative externalities associated with air pollution
D) general disagreement on the impacts of automobile emissions on the environment

Question 41

The Clean Air Act Amendments of 1990 addressed efficiency through a tradable permits system and the distributive consequences were addressed through a number of special provisions called ________.

A) permits
B) allowances
C) incentives
D) credits

Question 42

Which of the following is true with regard to the Environmental Protection Agency (EPA)?

A) The EPA typically seeks involuntary compliance.
B) The EPA enforcement process does not require the filing of a notice of a complaint and a hearing before an administrative law judge.
C) The EPA is responsible for administering the Food Quality Protection Act of 1996.
D) The EPA was created by an executive order of President Clinton to control greenhouse gases emissions by the developing countries

Question 43

State and explain the different components of the control of an externality in a tradable permits system.

Question 44

Write a short note on the Superfund outlining its significance.

Question 45

Which of the following is true with regard to the Regional Greenhouse Gas Initiative (RGGI)?

A) RGGI was formed to deal with the United State's solid waste disposal crisis.
B) RGGI failed to generate any funds through auctions.
C) In 2006, 35 U.S. states formed the RGGI to address the problem concerning the fast-dwindling capacity of the nation's landfills.
D) The failure of RGGI to affect environmental goals led states to consider withdrawing from the initiative.

Question 46

The EPA administers the ________ for the cleanup of existing toxic waste disposal sites.

A) Solid Waste Cleanup Fund
B) Superfund
C) Resource Conservation and Recovery Act of 1976
D) Toxic Substances Control Act of 1976

Question 47

How did the United States of America respond to the Kyoto protocol? What were the principal approaches adopted by the United States of America with respect to the protocol?

Question 48

The Kyoto Protocol is associated with ________.

A) reducing unemployment globally
B) privatization of the renewable energy industry
C) global climate change
D) the prevention of oil spillage in oceans

Question 49

Kyoto mechanisms referred to credits bought by countries to ________.

A) help finance projects in developing nations that would encourage the usage of coal and oil
B) help reduce the rate of unemployment in developing countries
C) help finance projects in developing nations that would reduce greenhouse gases
D) help developing nations diversify their businesses

Question 50

Write a short note on the Coase theorem.

Question 51

Which of the following is true about NIMBY?

A) The primary objective of the NIMBY movement is to eradicate unemployment in the United States.
B) The NIMBY movement focuses on local environmental concerns, particularly as they involve possible risks to person or property.
C) The primary objective of the NIMBY movement is to lobby for greater subsidization for renewable energy.
D) The NIMBY movement focuses on eradicating poverty in developing countries.

Question 52

Most of the costs of environmental protection are borne by __________.

A) the government
B) private parties
C) the EPA
D) solid waste disposal board

Question 53

The signatories to the Kyoto Protocol agreed to use a(n) ________ to reduce the cost of achieving their commitments.

A) life-expectancy system
B) emissions permit trading system
C) greenhouse gases reporting system
D) command-and-control system

Question 54

Which of the following is true with regard to the EPA enforcement process?

A) The EPA does not have the authority to forward cases to the Department of Justice.
B) As a rule, the EPA enforcement process does not allow the federal government to seek both civil and criminal convictions of polluters.
C) The EPA enforcement process requires the filing of a notice of a complaint and a hearing before an administrative law judge (ALJ).
D) Typically, the EPA seeks involuntary compliance.

Question 55

Write short notes on The Regional Greenhouse Gas Initiative (RGGI).