Exam Flashcards
In practice, it is difficult to achieve the socially efficient outcome through standards because ________.
the informational requirements about marginal abatement costs and marginal damages are difficult to meet1`
A polluter with MAC = 650 – 5E will abate ________ when faced with an emissions tax of $80 per unit of emissions
16 units
Which of the following statements about abatement subsidies is true?
Abatement subsidies create perverse incentives for firms to increase emissions when their base levels are being set.
When ranking environmental policies from most centralized to least centralized, the correct list is ________.
*Standards; taxes and permits; liability laws and property rights
An emission permit scheme ________.
results in the same level of abatement as an emission tax
The two areas over which the Constitution grants the Canadian federal government powers to set environmental regulations include ________.
*Peace, Order and Good Government; and ocean and inland fisheries, navigation and shipping
________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.
Degradable
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 ________
Fisheries Act of 1868
The Ozone Annex to the 1991 Canada-US Air Quality Agreement addresses the problem of ________.
transboundary smog
Section 91 of the ________ gives the ________ powers to enact environmental legislation.
*Constitution Act; federal government
The fact that neither producers nor consumers factor the costs of disposal into the costs of goods is ________
all of the above
The passage of environmental legislation that reduces the value of property in private use is known as ________.
an environmental taking
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
grandfathering
Which of the following international treaties is widely viewed as a success at achieving its objectives
The Montreal Protocol.
Which of the following international treaties is widely viewed as a success at achieving its objectives
The Montreal Protocol.
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.
800; $200
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
*Uniform standard; individual standards
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.
Reduce; greater than
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
$275,000
Constraints and difficulties facing environmental policymaking under the Canadian parliamentary system of government include all of the following except _____
frequent conflicts arise between the legislative and executive branches of government.
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 ________.
E. coli contamination of the water supply in Walkerton
________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.
Degradable
Because dioxans and furans ________ the impact of banning these substances on improving environmental quality is ________.
bioaccumulate; uncertain
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 ________.
New-source bias
According to the textbook, ________ make(s) up the largest percentage of all materials, by weight, recycled in Canada at close to 29%
Organics
Employing a global CO2 price to contain mean projected warming to a specific target at least cost is an example of ________.
a climate stabilization goal
The Canadian province with the highest greenhouse gas emissions is ________.
Alberta
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.
ozone-depleting potential
All of the following are limitations of our analysis of environmental problems discussed in the online notes except ________.
the assumption of increasing returns to scale in production and abatement
Canadian federal policies implemented after the Paris Accord to combat global warming include ________.
all of the choices are correct
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 ________
a decentralized approach
Moral objections to the use of effluent subsidies to help firms reduce their emissions arise from the idea that ________.
the polluter should pay
A polluter with MAC = 1,200 ˗ 5E will emit ________ when faced with an emissions tax of $75 per unit of emissions.
225 units
The socially efficient equilibrium emission standard sets the maximum rate of emissions equal to ________.
the level of emissions that equates MAC and MDC
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.
concurrency; paramountcy
Ontario’s command-and-control program to deal with all types of water pollution is known by the acronym ________.
MISA
________ is an example of a non-point source pollutant
Urban stormwater runoff
Which of the following is NOT one of the “Big Five” criteria air contaminants?
carbon dioxide
Uniform national standards for air quality will not be efficient unless ________.
marginal abatement costs happen to be the same in all regions
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 _______.
burden of proof
Because the burden of proof is on ________, CEPA regulations tend to be ________ in nature.
the government to prove a substance is toxic; reactive
Which of the following is NOT a policy option for incorporating ecological values into land use?
policies to promote the conversion of wetlands to meet agricultural needs
The two ways to reduce the use of virgin materials include reducing the _____ and increasing the _____.
overall quantity of materials used; rate of reuse
________ 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.
Habitat destruction; developing countries
The passage of environmental legislation that reduces the value of property in private use is known as ________.
an environmental taking
The Bill Nye video discusses how:
increased greenhouse gases contribute to global warming by absorbing more of heat from the sun and radiating this to the earth’s surface.
Which of the following statements about Canada’s carbon dioxide emissions is true?
*Canadian emissions of CO2 rose by nearly 20% between 1990 and 2000.
In the article, “The Evolution of Canada’s International and Domestic Climate Policy” which of the following is NOT one of the eras discussed?
The Copenhagen Accord Years
The social cost of carbon is _________
the external costs of one additional ton of greenhouse gases released
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
permits covering 280 million tonnes of CO2
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
Region 1 abates 6 Mt, Region 2 abates 3 Mt and Region 3 abates 2 Mt.
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
They will need to issue 2,000 permits and they will trade for $1,500 each.
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?
high GWP HFCs
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?
b) to help develop new pharmaceuticals
c) to provide genetic diversity for agricultural breeding purposes
d) both b) and c)
In the context of environmental policy, about which of the following policy choice questions does economics NOT say much?
How should the burdens of a policy choice be distributed among nations, citizens, firms and generations?
Dichlorodiphenyltrichloroethane or DDT is:
a powerful insecticide that was in wide use from the 1940s until its eventual ban in 1972
In Canada, the key federal legislation dealing with toxic substances is:
the Canadian Environmental Protection Act of 1999.
The effectiveness of the Canadian Environmental Protection Act of 1999 has been questioned because:
it continues to rely on command-and-control rather than incentive-based policies
The toxic intensity of Canadian industry is highest in the:
chemicals sector.
RCRA stands for:
Resource Conservation and Recovery Act
Which of the following is NOT one of the reasons why the US developed CERCLA?
to design standards for treatment, storage, and disposal of hazardous waste
When comparing Canadian and US policies on toxic and hazardous waste, which of the following statements is true?
The US approach to dealing with toxic waste is more proactive than that taken by Canada
Which of the following statements about the economics of municipal solid waste management is NOT true?
Municipalities have limited powers of taxation to deal with this issue
Which of the following is NOT an example of Canadian natural capital threatened by land-use changes?
the Great Lakes
Which of the following is an argument against requiring the government to compensate private parties for an environmental taking?
The government would be reluctant to pass any environmental legislation, since it could often be interpreted as taking some private party’s property rights.
Over which of the following areas does the Constitution NOT grant the provinces and territories the power to set environmental regulation?
migratory birds
Which of the following statements about negotiating international environmental agreements is NOT true?
Only the federal government has the power to implement a carbon tax to help the country meet international climate change treaty obligations
Under the Constitution, when both levels of government have laws governing the same area, this is known as:
concurrency
Constraints and difficulties facing environmental policymaking under the Canadian parliamentary system of government include all of the following EXCEPT:
The frequent conflicts between the legislative and executive branches of government
Which of the following statements about Environment Canada is NOT true?
If Agriculture Canada introduces water regulations that impact the environment, Environment Canada has the ability to rewrite the legislation
Which of the following is NOT a core principal of the CCME?
decision-making based on majority voting
Which of the following statements about the NRTEE is NOT true?
*The NRTEE consists of the provincial and territorial Ministers of the Environment and the federal Minister of the Environment.
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?
*The EPA manages the US federal nuclear waste cleanup program
Which of the following statements about the debate over oil sands development is NOT true?
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.
Which of the following statements about Canadian environmental policy is NOT true
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
Which of the following statements about incentive-based policies is NOT correct?
With incentive-based schemes a regulatory authority needs knowledge of the marginal abatement cost curve in order to design a cost-effective policy.
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:
10 units.
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?
$260
Which of the following statements about abatement subsidies is NOT true?
Governments like abatement subsidies because they are relatively inexpensive to implement.
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:
an emission rate trading system
Allowing others to participate in the market for emission permits other than polluting firms is a way to:
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).
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?
360 permits
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
They will abate 750 at B1, 1,500 at C1 and 1,000 at Z1.
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
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.
uniform standard
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):
bubble standard.
When CARP was introduced 80 percent of Ontario’s emissions of the main acid precipitation causing substance were from:
Ontario Hydro, Algoma Steel, Inco and Falconbridge Metals.
US states are responsible for regulating the TMDL into specific water sheds under the:
Clean Water Act.
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.
mission standard; technology-based standard
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?
The socially efficient standard will be 500 units of emissions.
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
They will abate 400 at B1 and 400 at C1.
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
Firm B’s TAC is $1,600.
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
Remaining emissions will be 1,920 at B1, 1,680 at B2 and 1,800 at C1.
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
TAC for Firm B will be $1,280.
A socially efficient pollution control policy would be one that moved the economy to the point where
marginal abatement costs equal marginal damage costs.
Which of the following is NOT an economic criterion used to evaluate a pollution control policy?
The political acceptability of the policy.
Which of the following is NOT an economic criterion used to evaluate a pollution control policy?
The political acceptability of the policy.
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
the polluter pays principle.
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?
Very few people are involved.
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?
Very few people are involved.
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:
green goods.
_______ suggest(s) that in the presence of an externality, bargaining can achieve the socially efficient equilibrium regardless of the initial allocation of property rights
The Coase Theorem
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?
150 tonnes
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?
$160,000
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?
200 tonnes
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?
$12,500
