L8 Green Paradoxes

Question 1

Where do we find evidence in climate change?

Answer 1

Anthropogenic greenhouse gas emissions have increased since the pre-industrial era, driven largely by economic and population growth, and are now higher than ever. This has led to atmospheric concentrations of carbon dioxide, methane and nitrous oxide that are unprecedented in at least the last 800,000 years. Their effects are extremely likely to have been the dominant cause of the observed warming since the mid-20th century.

Question 2

What are the current demand driven policies?

Answer 2

Curbing demand for fossil fuels: higher petrol taxes, home insulation, lighter cars; Green electricity: wind, water, solar, biomass, hybrid cars; Nuclear: electricity generation and hydro power; Other green energy sources: biodiesel, heat pumps, solar, geothermal; Efficient combustion: optimized power plants.

Question 3

At what speed should we extract oil, gas.. in a situation of perfect competition?

Answer 3

At the speed in which total extraction of oil wouldn’t be larger than the initial stock

Question 4

How can we explain optimum Hotelling’s rule?

Answer 4

We have to bear in mind that there are two periods of time p(1) and p(2) and an interest rate r. If supply is positive in both periods then it will be equal to the interest rate r.

Question 4

How can we explain optimum Hotelling’s rule?

Answer 4

We have to bear in mind that there are two periods of time p(1) and p(2) and an interest rate r. If supply is positive in both periods then it will be equal to the interest rate r.

Question 5

What if time is continuous?

Answer 5

Profit of units increase at a rate equal at a rate of time preference. Profit per unit increases at a rate equal to r.

Question 6

In which depends the extraction of fossil fuels?

Answer 6

The rate of extraction and the price is determine by the prevailing interest rate.