Lecture 13

Question 1

Define global warming potential?

Answer 1

The relative strength of one unit of each gas in contributing to global warming

Question 2

2 greenhouse gases currently increasing?

Answer 2

CO2

N2O

Question 3

2 greenhouse gases currently decreasing?

Answer 3

Decreasing methane (some countries)
CFCs

Question 4

Explain how GW is amplified by positive feedback?

Answer 4

Increase warming -> decrease in ice cover -> decrease heat reflected -> increase warming

Question 5

Explain how GW is counteracted by negative feedback?

Answer 5

Increase warming -> increase humidity -> increase clouds -> decrease warming

Question 6

2 consequences of global warming?

Answer 6

Increase sea levels - large problem for low lying countries

Increase temperatures - more storms and hurricanes, problems for agriculture

Question 7

3 issues with policy responses to GW?

Answer 7

• long time lag
• difficult to reduce CO2 (either have to decrease energy use or increase amount absorbed by trees)
• policies have to be accepted and used globally tf difficult to implement

Question 8

Define carbon tax?

Answer 8

Tax on fuel in proportion to the carbon content of that fuel

Question 9

What is the idea behind a carbon tax?

Answer 9

Price paid doesn’t normally reflect full cost, only private cost tf tax internalises external cost to society

Question 10

3 advantages of carbon tax?

Answer 10

Low cost way to reduce emissions
Allows firms to reduce pollution to the point where MAC=tax
Encourages both industry and household to use less energy/switch to cleaner fuels

Question 11

4 disadvantages of carbon tax?

Answer 11

Regressive tax
Difficult to set right level of tax
Identifying MEC is difficult
Countries free riding from other countries abating (could lead to fall in competitiveness)

Question 12

PED equation?

Answer 12

PED = (%ΔQd)/(%ΔP)

Question 13

XED equation?

Answer 13

XED = (%ΔQD(a))/(%ΔP(b))

Question 14

Learn carbon tax diagram

Answer 14

Now

Question 15

What are international marketable permits?

Answer 15

Permits scheme except acts between countries instead of firms

Question 16

Advantages of international permits scheme?

Answer 16

• emissions ceiling can be set
• emissions ceiling attained at least cost
• developing countries may have excess permit supply tf developed countries may move production there
• CO2 has no local impact tf emission concentrated in certain regions isn’t a problem
• USA prefers permits to taxes tf likely to be successful

Question 17

3 disadvantages of international permits scheme?

Answer 17

Allocation can be difficult (grandfathering, based on GDP/population?)
Would need a global institution to make it work
Sanctions would have to be agreed, put in place and enforced, also emissions monitored in order for it to work