Exam

Question 1

In practice, it is difficult to achieve the socially efficient outcome through standards because ________.

Answer 1

the informational requirements about marginal abatement costs and marginal damages are difficult to meet1`

Question 2

A polluter with MAC = 650 – 5E will abate ________ when faced with an emissions tax of $80 per unit of emissions

Answer 2

16 units

Question 3

Which of the following statements about abatement subsidies is true?

Answer 3

Abatement subsidies create perverse incentives for firms to increase emissions when their base levels are being set.

Question 4

When ranking environmental policies from most centralized to least centralized, the correct list is ________.

Answer 4

*Standards; taxes and permits; liability laws and property rights

Question 5

An emission permit scheme ________.

Answer 5

results in the same level of abatement as an emission tax

Question 6

The two areas over which the Constitution grants the Canadian federal government powers to set environmental regulations include ________.

Answer 6

*Peace, Order and Good Government; and ocean and inland fisheries, navigation and shipping

Question 7

________waterborne pollutants undergo a variety of biological, chemical, and physical processes that change their characteristics after emission until they are assimilated by the water body into which they are released.

Answer 7

Degradable

Question 8

The federal government has the jurisdiction to ban or severely limit the release of toxic substances such as dioxans and furans into any waterways under the authority of the ________

Answer 8

Fisheries Act of 1868

Question 9

The Ozone Annex to the 1991 Canada-US Air Quality Agreement addresses the problem of ________.

Answer 9

transboundary smog

Question 10

Section 91 of the ________ gives the ________ powers to enact environmental legislation.

Answer 10

*Constitution Act; federal government

Question 11

The fact that neither producers nor consumers factor the costs of disposal into the costs of goods is ________

Answer 11

all of the above

Question 12

The passage of environmental legislation that reduces the value of property in private use is known as ________.

Answer 12

an environmental taking

Question 13

When transferrable emission allowances are distributed to firms for free according to some allocation rule determined by the regulator this is known as ________.
A. auctioning

Answer 13

grandfathering

Question 14

Which of the following international treaties is widely viewed as a success at achieving its objectives

Answer 14

The Montreal Protocol.

Question 14

Which of the following international treaties is widely viewed as a success at achieving its objectives

Answer 14

The Montreal Protocol.

Question 15

Suppose there are two firms in an industry with marginal abatement cost curves:
MACA = 400 ˗ 0.25EA
MACB = 200 ˗ EB
If the government regulator has chosen a target level of total emissions to be 800 units per year, ________ permits will need to be issued and they will trade for ________ per permit.

Answer 15

800; $200

Question 16

When marginal damages for a pollutant vary by region a(n) ________ will not be socially efficient but ________that are set up such that each region’s MAC curve is equal to each MDC curve are socially efficient

Answer 16

*Uniform standard; individual standards

Question 17

A polluter will ________ its emissions and sell its excess permits on the market if the market price is ________ or equal to its MAC at its chosen emission level.

Answer 17

Reduce; greater than

Question 18

The following equations describe the marginal abatement costs of air pollution from industrial sources (I) and vehicles (V). Before abatement industrial sources emitted 6,000 tonnes and vehicles emitted 2,000 tonnes, what is the industry TAC if each source of emissions is required to abate 25% of initial emissions under a uniform standard?
MACI = 1,200 – 0.2EI MACV = 800 – 0.4EV

Answer 18

$275,000

Question 19

Constraints and difficulties facing environmental policymaking under the Canadian parliamentary system of government include all of the following except _____

Answer 19

frequent conflicts arise between the legislative and executive branches of government.

Question 20

In Ontario, the phasing in of technology-based standards to cover agricultural practices, focusing particularly on storage of waste and the use of manure on fields is a response to ________.

Answer 20

E. coli contamination of the water supply in Walkerton

Question 21

________waterborne pollutants undergo a variety of biological, chemical, and physical processes that change their characteristics after emission until they are assimilated by the water body into which they are released.

Answer 21

Degradable

Question 22

Because dioxans and furans ________ the impact of banning these substances on improving environmental quality is ________.

Answer 22

bioaccumulate; uncertain

Question 23

The argument that the marginal abatement costs of existing plants are higher than those of new plants used as a justification for less restrictive emission standards for the former than for the latter is known as ________.

Answer 23

New-source bias

Question 24

According to the textbook, ________ make(s) up the largest percentage of all materials, by weight, recycled in Canada at close to 29%

Answer 24

Organics

Question 25

Employing a global CO2 price to contain mean projected warming to a specific target at least cost is an example of ________.

Answer 25

a climate stabilization goal

Question 26

The Canadian province with the highest greenhouse gas emissions is ________.

Answer 26

Alberta

Question 27

Environment Canada’s quota system to phase out ozone depleting chemicals did not restrict the supply of specific CFCs or halons; rather it was set in terms of ________ allowing for flexibility in meeting the target.

Answer 27

ozone-depleting potential

Question 28

All of the following are limitations of our analysis of environmental problems discussed in the online notes except ________.

Answer 28

the assumption of increasing returns to scale in production and abatement

Question 29

Canadian federal policies implemented after the Paris Accord to combat global warming include ________.

Answer 29

all of the choices are correct

Question 30

When people can negotiate with each other to come up with mutually satisfactory ways to deal with environmental externalities with little or no involvement of the government this is referred to as ________

Answer 30

a decentralized approach

Question 31

Moral objections to the use of effluent subsidies to help firms reduce their emissions arise from the idea that ________.

Answer 31

the polluter should pay

Question 32

A polluter with MAC = 1,200 ˗ 5E will emit ________ when faced with an emissions tax of $75 per unit of emissions.

Answer 32

225 units

Question 33

The socially efficient equilibrium emission standard sets the maximum rate of emissions equal to ________.

Answer 33

the level of emissions that equates MAC and MDC

Question 34

When both the provinces and the federal government have laws over the same area this is known as ________ and the doctrine of ________ describes the situation where federal law takes precedence over provincial law when the laws are in conflict.

Answer 34

concurrency; paramountcy

Question 35

Ontario’s command-and-control program to deal with all types of water pollution is known by the acronym ________.

Answer 35

MISA

Question 36

________ is an example of a non-point source pollutant

Answer 36

Urban stormwater runoff

Question 37

Which of the following is NOT one of the “Big Five” criteria air contaminants?

Answer 37

carbon dioxide

Question 38

Uniform national standards for air quality will not be efficient unless ________.

Answer 38

marginal abatement costs happen to be the same in all regions

Question 39

In the decision of whether or not to regulate a chemical, the question of which party has the responsibility of providing information to decide a chemical’s safety level is called the _______.

Answer 39

burden of proof

Question 40

Because the burden of proof is on ________, CEPA regulations tend to be ________ in nature.

Answer 40

the government to prove a substance is toxic; reactive

Question 41

Which of the following is NOT a policy option for incorporating ecological values into land use?

Answer 41

policies to promote the conversion of wetlands to meet agricultural needs

Question 42

The two ways to reduce the use of virgin materials include reducing the _____ and increasing the _____.

Answer 42

overall quantity of materials used; rate of reuse

Question 43

________ is a particular problem in ________ which contain a disproportionately large share of the world’s wild species, but which are also under great pressure to pursue modern economic development.

Answer 43

Habitat destruction; developing countries

Question 44

The passage of environmental legislation that reduces the value of property in private use is known as ________.

Answer 44

an environmental taking

Question 45

The Bill Nye video discusses how:

Answer 45

increased greenhouse gases contribute to global warming by absorbing more of heat from the sun and radiating this to the earth’s surface.

Question 46

Which of the following statements about Canada's carbon dioxide emissions is true?

Answer 46

*Canadian emissions of CO2 rose by nearly 20% between 1990 and 2000.

Question 47

In the article, "The Evolution of Canada's International and Domestic Climate Policy" which of the following is NOT one of the eras discussed?

Answer 47

The Copenhagen Accord Years

Question 48

The social cost of carbon is _________

Answer 48

the external costs of one additional ton of greenhouse gases released

Question 49

Given the following hypothetical information about four provinces considering participation in a cap-and-trade scheme for carbon dioxide emissions, how many permits would need to be issued if emissions were capped at 80% of current emissions? E (MT) R1 70 R2 20 R3 180 R4 80 Total. 350

Answer 49

permits covering 280 million tonnes of CO2

Question 50

Given the following information about the carbon dioxide emissions and marginal abatement costs for three regions, how much would each region abate under a carbon tax of $30/tonne? E (MT) MAC R1 100 5A R2 200 10A R3 300 15A Total. 600

Answer 50

Region 1 abates 6 Mt, Region 2 abates 3 Mt and Region 3 abates 2 Mt.

Question 51

Given the following information about the emissions and MAC of two regions considering participation in a cap-and-trade scheme for carbon dioxide emissions, if the regulator wishes to reduce emissions by 1,000 in total, how many transferrable emission permits will it need to issue and at what price will they trade? E (MT) MAC R1 2000 2A R2 1000 6A Total. 3000

Answer 51

They will need to issue 2,000 permits and they will trade for $1,500 each.

Question 52

Which of the following is NOT one of the low global warming potential alternatives to HCFCs mentioned in the United Nations video about the Montreal Protocol?

Answer 52

high GWP HFCs

Question 53

In addition to protecting endangered species and the ecosystems in which they live, what else is important about preserving the stock of genetic material found in nature?

Answer 53

b) to help develop new pharmaceuticals c) to provide genetic diversity for agricultural breeding purposes d) both b) and c)

Question 54

In the context of environmental policy, about which of the following policy choice questions does economics NOT say much?

Answer 54

How should the burdens of a policy choice be distributed among nations, citizens, firms and generations?

Question 55

Dichlorodiphenyltrichloroethane or DDT is:

Answer 55

a powerful insecticide that was in wide use from the 1940s until its eventual ban in 1972

Question 56

In Canada, the key federal legislation dealing with toxic substances is:

Answer 56

the Canadian Environmental Protection Act of 1999.

Question 57

The effectiveness of the Canadian Environmental Protection Act of 1999 has been questioned because:

Answer 57

it continues to rely on command-and-control rather than incentive-based policies

Question 58

The toxic intensity of Canadian industry is highest in the:

Answer 58

chemicals sector.

Question 59

RCRA stands for:

Answer 59

Resource Conservation and Recovery Act

Question 60

Which of the following is NOT one of the reasons why the US developed CERCLA?

Answer 60

to design standards for treatment, storage, and disposal of hazardous waste

Question 61

When comparing Canadian and US policies on toxic and hazardous waste, which of the following statements is true?

Answer 61

The US approach to dealing with toxic waste is more proactive than that taken by Canada

Question 62

Which of the following statements about the economics of municipal solid waste management is NOT true?

Answer 62

Municipalities have limited powers of taxation to deal with this issue

Question 63

Which of the following is NOT an example of Canadian natural capital threatened by land-use changes?

Answer 63

the Great Lakes

Question 64

Which of the following is an argument against requiring the government to compensate private parties for an environmental taking?

Answer 64

The government would be reluctant to pass any environmental legislation, since it could often be interpreted as taking some private party’s property rights.

Question 65

Over which of the following areas does the Constitution NOT grant the provinces and territories the power to set environmental regulation?

Answer 65

migratory birds

Question 66

Which of the following statements about negotiating international environmental agreements is NOT true?

Answer 66

Only the federal government has the power to implement a carbon tax to help the country meet international climate change treaty obligations

Question 67

Under the Constitution, when both levels of government have laws governing the same area, this is known as:

Answer 67

concurrency

Question 68

Constraints and difficulties facing environmental policymaking under the Canadian parliamentary system of government include all of the following EXCEPT:

Answer 68

The frequent conflicts between the legislative and executive branches of government

Question 69

Which of the following statements about Environment Canada is NOT true?

Answer 69

If Agriculture Canada introduces water regulations that impact the environment, Environment Canada has the ability to rewrite the legislation

Question 70

Which of the following is NOT a core principal of the CCME?

Answer 70

decision-making based on majority voting

Question 71

Which of the following statements about the NRTEE is NOT true?

Answer 71

*The NRTEE consists of the provincial and territorial Ministers of the Environment and the federal Minister of the Environment.

Question 72

Which of the following activities does the US Environmental Protection Agency NOT do in order to accomplish their mission of protecting human health and the environment?

Answer 72

*The EPA manages the US federal nuclear waste cleanup program

Question 73

Which of the following statements about the debate over oil sands development is NOT true?

Answer 73

Determining the scale and size of its environmental impact is not contentious due to the high degree of transparency and accessible public information about emissions.

Question 74

Which of the following statements about Canadian environmental policy is NOT true

Answer 74

The Canadian approach to environmental policy setting is much less successful in reducing pollution and achieving higher levels of environmental quality than in the US

Question 75

Which of the following statements about incentive-based policies is NOT correct?

Answer 75

With incentive-based schemes a regulatory authority needs knowledge of the marginal abatement cost curve in order to design a cost-effective policy.

Question 76

If a firm has a marginal abatement cost curve equal to: MAC = 250 – 5E and the regulator sets an emission tax equal to $50 per unit of emissions, its abatement level will be equal to:

Answer 76

10 units.

Question 77

If the industry marginal abatement cost curve equals: MAC = 400 – 2E and the marginal damage cost curve is MDC = 50 + 3E, what is the socially efficient emission tax rate?

Answer 77

$260

Question 78

Which of the following statements about abatement subsidies is NOT true?

Answer 78

Governments like abatement subsidies because they are relatively inexpensive to implement.

Question 79

A market trading system that sets its greenhouse gas emissions rate in terms of tons of CO2 per megawatt hour of power production is known as:

Answer 79

an emission rate trading system

Question 80

Allowing others to participate in the market for emission permits other than polluting firms is a way to:

Answer 80

a) Increase the price of permits ensuring additional abatement takes place. b) decrease the supply of permits ensuring additional abatement takes place. d) both a) and b).

Question 81

If the industry marginal abatement cost curve is equal to: MAC = 300 – .5E and the regulator wants to reduce emissions by 40%, how many permits would need to be distributed among the firms in the industry?

Answer 81

360 permits

Question 82

Given the following information about an industry with three firms, what is the level of abatement by source if an effluent fee of $15 is charged by the regulatory authority? Marginal Abatement Cost B1 MAC = 40 - 0.02E C1 MAC = 20 - 0.01E Z1 MAC = 30 - 0.015E

Answer 82

They will abate 750 at B1, 1,500 at C1 and 1,000 at Z1.

Question 83

Given the following information about an industry with two firms, how many permits need to be issued and at what price would they trade to achieve a reduction in industry emissions of 75%? Marginal Abatement Cost B1 MAC = 40 - 0.02E C1 MAC = 20 - 0.01E

Question 84

Comparing a uniform standard, an emission tax, a transferable emission permit scheme where permits were given away and a transferable emission permit scheme where permits were auctioned that all achieve the same level of industry abatement, the _____ has the highest social compliance costs.

Answer 84

uniform standard

Question 85

When a multi-plant firm is allowed to treat the emissions of all of their facilities together when considering how to achieve a total abatement target in a cost-effective manner this is called a(n):

Answer 85

bubble standard.

Question 86

When CARP was introduced 80 percent of Ontario’s emissions of the main acid precipitation causing substance were from:

Answer 86

Ontario Hydro, Algoma Steel, Inco and Falconbridge Metals.

Question 87

US states are responsible for regulating the TMDL into specific water sheds under the:

Answer 87

Clean Water Act.

Question 88

A(n) _____ performs better than a(n) _____at giving firms an incentive to find a lower cost way of achieving their abatement target since they could reduce their total compliance costs by doing so.

Answer 88

mission standard; technology-based standard

Question 89

If the marginal abatement cost function for a given industry is given by MAC = 2,100 - 0.2E and the marginal damage cost function for the same industry is known to be MDC = 4E, what is the socially efficient equilibrium standard?

Answer 89

The socially efficient standard will be 500 units of emissions.

Question 90

Given the following information about an industry with two firms, what is the level of abatement by source if a uniform command-and-control (CAC) standard requires each firm to reduce emissions by 20% at each source? Marginal Abatement Cost B1 MAC = 10 - 0.005E C1 MAC = 20 - 0.01E

Answer 90

They will abate 400 at B1 and 400 at C1.

Question 91

Given the following information about an industry with two firms, what is the total abatement cost for Firm B if a uniform command-and-control (CAC) standard requires each firm to reduce emissions by 20% at each source? Marginal Abatement Cost B1 MAC = 40 - 0.02E C1 MAC = 20 - 0.01E

Answer 91

Firm B's TAC is $1,600.

Question 92

Given the following information about an industry with two firms, what is the level of remaining emissions at each source if a bubble standard requires each firm to reduce emissions by 10% allocating abatement at its sources as it sees fit? Marginal Abatement Cost B1 MAC = 40 - 0.02E B2 MAC = 10 - 0.005E C1 MAC = 20 - 0.01E

Answer 92

Remaining emissions will be 1,920 at B1, 1,680 at B2 and 1,800 at C1.

Question 93

Given the following information about an industry with two firms, what is the total abatement cost of Firm B if a bubble standard requires each firm to reduce emissions by 20% allocating abatement at its sources as it sees fit? Marginal Abatement Cost B1 MAC = 40 - 0.02E B2 MAC = 10 - 0.005E C1 MAC = 20 - 0.01E

Answer 93

TAC for Firm B will be $1,280.

Question 94

A socially efficient pollution control policy would be one that moved the economy to the point where

Answer 94

marginal abatement costs equal marginal damage costs.

Question 95

Which of the following is NOT an economic criterion used to evaluate a pollution control policy?

Answer 95

The political acceptability of the policy.

Question 96

Which of the following is NOT an economic criterion used to evaluate a pollution control policy?

Answer 96

The political acceptability of the policy.

Question 97

In southern California, fees are imposed on firms who don’t reduce their emissions of volatile organic compounds (VOCs) by 20% compared to a base year. This policy is an example of

Answer 97

the polluter pays principle.

Question 98

Which of the following is NOT one of the conditions that limits the ability of liability laws to lead to an efficient level of pollution?

Answer 98

Very few people are involved.

Question 99

Which of the following is NOT one of the conditions that limits the ability of liability laws to lead to an efficient level of pollution?

Answer 99

Very few people are involved.

Question 100

Goods that give the same level of pleasure as ordinary goods but that involve less environmental damage in either their production, use or disposal are known as:

Answer 100

green goods.

Question 101

_______ suggest(s) that in the presence of an externality, bargaining can achieve the socially efficient equilibrium regardless of the initial allocation of property rights

Answer 101

The Coase Theorem

Question 102

Suppose a chemical factory discharges waste products into a river resulting in significant damages to a local fishery. The marginal damage to the fishery (measured in terms of lost fish stocks) is represented by the equation, MDC = 5E. The chemical factory can reduce its effluent flows by treating its waste products. Its marginal abatement cost (MAC) function is given by the equation, MAC = 1,500 - 10E. What level of emissions (in tonnes) will occur if the chemical factory is not regulated?

Answer 102

150 tonnes

Question 103

Suppose a chemical factory discharges waste products into a river resulting in significant damages to a local fishery. The marginal damage to the fishery (measured in terms of lost fish stocks) is represented by the equation, MDC = 2E. The chemical factory can reduce its effluent flows by treating its waste products. Its marginal abatement cost (MAC) function is given by the equation, MAC = 800 - 2E. If no liability laws are in place, what damages will the chemical factory inflict on the fishery?

Answer 103

$160,000

Question 104

Suppose a chemical factory discharges waste products into a river resulting in significant damages to a local fishery. The marginal damage to the fishery (measured in terms of lost fish stocks) is represented by the equation, MDC = 4E. The chemical factory can reduce its effluent flows by treating its waste products. Its marginal abatement cost (MAC) function is given by the equation, MAC = 600 - 2E. If the government puts in place a liability law that requires the chemical factory to compensate the fishery for the damages it causes, what level of abatement will take place?

Answer 104

200 tonnes

Question 105

Suppose a chemical factory discharges waste products into a river resulting in significant damages to a local fishery. The marginal damage to the fishery (measured in terms of lost fish stocks) is represented by the equation, MDC = 5E. The chemical factory can reduce its effluent flows by treating its waste products. Its marginal abatement cost (MAC) function is given by the equation, MAC = 1,500 - 10E. If the government puts in place a liability law that requires the chemical factory to compensate the fishery for the damages it causes, what are the total abatement costs for the chemical factory?

Answer 105

$12,500