Question 1

Increases in global temperatures are likely to result in larger economic losses for the countries in Eastern Europe than for the countries in Asia and Africa that are close to the equator.

Accepted Answer

Countries in Asia and Africa that are close to the equator are generally more vulnerable to the impacts of climate change, including extreme weather events, sea-level rise, and agricultural disruptions, which can lead to larger economic losses compared to countries in Eastern Europe.

Question 2

A rise in income unambiguously leads to less pollution.

Accepted Answer

While a rise in income may lead to increased consumption and production, which could result in more pollution, it can also lead to increased awareness and demand for cleaner technologies, products and services, and regulation, thus ultimately leading to less pollution. The relationship between income and pollution is therefore complex and context-dependent.

Question 3

Suggest a remedial measure for each of the following externalities if: (1) the whole world had only one government and (2) a particular nation is harmed and is acting alone. The individual situations are as follows:
a.Pollution from domestic consumption
b.Pollution from foreign consumption
c.Pollution from world consumption

Accepted Answer

The answer of Suggest a remedial measure for each of...

Question 4

NAFTA established processes that have substantially reduced transborder pollution along the Mexico-U.S. border.

Accepted Answer

NAFTA primarily focused on trade liberalization and did not directly establish processes aimed at substantially reducing transborder pollution along the Mexico-U.S. border. Environmental concerns were addressed more directly in side agreements.

Question 5

Changing property rights as a way to correct externalities is always preferred to the use of government taxes and subsidies.

Accepted Answer

The choice between changing property rights and using government taxes or subsidies to correct externalities depends on the specific circumstances, including the nature of the externality, administrative costs, and the effectiveness of each approach in achieving desired outcomes.

Question 6

Research supports the claim that there are significant compliance costs associated with environmentally friendly production in countries with strong environmental laws, so that there are significant incentives for firms to produce in countries with lax environmental laws.

Accepted Answer

The answer of Research supports the claim that there are...

Question 7

What elements does a solution to excessive global warming include? Explain each of these briefly.

Accepted Answer

The answer of What elements does a solution to excessive...

Question 8

An increase in per capita incomes can be expected to have little effect on reducing emissions that lead to global warming.

Accepted Answer

An increase in per capita incomes can lead to increased consumption and economic activity, which can result in higher emissions.

Question 9

Why will the Kyoto Protocol have a small impact on overall global greenhouse-gas emissions? Cite examples from countries that struggle to meet their targets.

Accepted Answer

The answer of Why will the Kyoto Protocol have a...

Question 10

"A country can be left worse off as a result of free trade and/or exporting the wrong products if there are no policies that force market decision-makers to internalize the costs associated with the production of certain goods and services." Do you agree or disagree with the statement? Illustrate your answer with the help of relevant diagrams.

Accepted Answer

The answer of "A country can be left worse off...

Question 11

Externalities are direct benefits or costs accruing to individuals or groups of individuals who were not participants in the activity.

Accepted Answer

That is the definition of externalities. They are unintended consequences, positive or negative, of economic activities that affect people who are not directly involved in those activities.

Question 12

Do you think the GATT and WTO rulings on the U.S. efforts to reduce the number of dolphin and sea turtle mortalities were justified? In your answer be sure to explain the rulings and reasons behind these rulings. How might the United States have changed its policies so that it did not violate WTO rules?

Accepted Answer

The answer of Do you think the GATT and WTO...

Question 13

If the production of a good creates a negative externality, exports can be damaging to a nation.

Accepted Answer

If a nation is producing a good that creates a negative externality, such as pollution, then exporting that good can lead to the spread of the externality to other countries. This can have negative impacts on the environment and the health of people in those countries, potentially damaging the reputation of the exporting nation and leading to trade restrictions.

Question 14

Suppose the U.S. government is about to ban the importation of Nicaraguan steel. The reason cited is that the production of steel contributes to substantial environmental pollution. At the same time, the U.S. government offers subsidies to domestic steel producers. Under such a situation WTO rules permit the U.S. government to implement the ban on the import of Nicaraguan steel

Accepted Answer

WTO rules generally prohibit import bans based on the production methods of goods (in this case, environmental pollution from steel production). The U.S. would need to justify the ban under specific exceptions, such as measures necessary to protect human, animal, or plant life or health, and even then, the measure must not be a disguised restriction on international trade. Offering subsidies to domestic producers does not provide a basis under WTO rules to justify a ban on imports.

Question 15

World Trade Organization rules allow a government to take actions to control environmental damage caused by its own firms' production.

Accepted Answer

This is true under WTO rules, which include provisions allowing for environmental measures such as restrictions on the use of certain substances, product labeling requirements, and measures to control air and water pollution. However, such measures must be applied in a non-discriminatory manner and cannot be used as a disguised protectionist measure.

Question 16

When the Japanese imposed a VER on automobile exports in the 1980s, the environmental conditions in the U.S. improved.

Accepted Answer

The imposition of a VER on automobile exports by Japan in the 1980s did not have a direct impact on environmental conditions in the U.S. The VER was meant to reduce the number of Japanese cars being sold in the U.S. market, which had a significant impact on the U.S. automobile industry but not on the environment.

Question 17

Give a brief account of each of the following international agreements with respect to the environment. What externalities do they cover? Have each of these agreements been successful?
a.CITES
b.Montreal Protocol
c.Kyoto Protocol

Accepted Answer

The answer of Give a brief account of each of...

Question 18

A ban on exportation of ivory by itself restricts legal supply, raises the world price, and encourages illegal trade.

Accepted Answer

When the exportation of ivory is banned, legal supply decreases, which results in a higher world price for ivory. This increased price creates an incentive for poachers to engage in illegal trade, as the potential rewards become greater. Therefore, a ban on exportation of ivory can inadvertently encourage illegal trade.

Question 19

Which countries are most and least likely to be harmed by adverse climate changes? What progress that has been made to find a comprehensive way to address global warming?

Accepted Answer

The answer of Which countries are most and least likely...

Question 20

The Montreal Protocol bans international trade in endangered species.

Accepted Answer

The Montreal Protocol is actually an international agreement aimed at reducing the production and consumption of certain chemicals that lead to ozone depletion. It has nothing to do with endangered species or their trade.

Quiz 13: Trade and the Environment