Lecture 4 Flashcards

1
Q

Define government failure wrt the environment?

A

Government intervention into markets that has the unintended consequence of damaging the environment

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2
Q

Define genetic diversity?

A

Variation between individuals and between populations within a species

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3
Q

Define species diversity?

A

Variation between different types of plant, animal and other life forms within a region

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4
Q

Define ecosystem diversity?

A

Variation of habitats found within an area

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5
Q

Why is MEC upward sloping?

A

Because there is a greater cost to biodiversity as land conversion increases

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6
Q

Learn land conversion diagram that explains:

Why is land conversion occurring?

A

Now

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7
Q

Why does MNPB fall as land conversion increases?

A

Because firms have to travel further go get to newly converted land tf less profitable

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8
Q

Why is the gov subsidy to promote agriculture and food security not efficient?

A

From the producer’s point of view the optimum level of output is L(sub) tf more conversion tf government failure

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9
Q

Solution to land conversion problem?

A

1) remove subsidy tf shift L(sub) to L(p)

2) then (somehow) shift back to L* eq instead of L(p) (internalise cost to society)

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10
Q

What does CAP do?

A

Gives farmers a guaranteed price for their product

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11
Q

Who is CAP bad for and why? (2)

A

Consumers - pay higher prices for food

Tax payers - tax revenues used to offer higher price (buy excess food)

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12
Q

CAP encourages overproduction, explain two ways this occurs?

A

Expanding land area that is farmed

Farming existing land more intensively (tf more fertilisers tf more damage)

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13
Q

2 ways countries indirectly encourage fossil fuel consumption?

A

Tax concessions

Direct budgetary transfers (subsidies)

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14
Q

What does the international energy agency estimate?

A

Estimates polices that support the use and production of fossil fuels amount to $580bn dollars in 2013

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15
Q

Production side issues of fossil fuels? (3)

A

Mining -> land subsiding
Oil spill -> contamination of ground and water
Extracting techniques such as fracking requires lots of water tf aggravating stress on water resources

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16
Q

Consumption side issues of fossil fuels? (3)

A

Pollutants can:
Cause acid rain
Damage health
Damage the environment

17
Q

Which consumers benefit most from fossil fuel subsidies and why?

A

The richer consumers benefit more since they tend to spend more on goods (eg. Petrol) so a reduction in price benefits them the most

REGRESSIVE POLICY

18
Q

3 problems with fossil fuel subsidies?

A

Bad for gov. budget
Bad for environment
Socially regressive

19
Q

3 problems with subsidies in developing countries?

A

Use up financial resources that are needed elsewhere
Encourages overproduction/over use of resources that are subsidised
Make activity in receipt of the subsidy artificially attractive as potential profits are greater