End semester exam HSMI14 Environment and Sustainable Development.

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C Yashwant kumar

1. (c) Organization for Economic Cooperation and Development

2. (b) Total value of market-traded goods and services produced and consumed in the
economy in a given year.

3. (a) 2007

4. (a) Slowdown in the rate of GDP growth over the course of a year

5.(b) GDP

6. (c) Neither‘a’nor ‘b’

7. (c) Exxon Valdez

8. (b) Positive

9. (b) False

10. (c) 4%

12. What is Environmental Economics?

Environmental economics is a sub-discipline of economics that aims to understand, and

influence, the economic causes of human impacts on the non-human world, such as
atmospheric pollution. It seeks to apply the main concepts and methods of economic
thought to environmental goods. In Other words it applies the values and tools of
mainstream macroeconomics and microeconomics to allocate environmental resources
more efficiently. One of the foundations of environmental economics is the idea that
environmental problems are a form of market failure. This is the inability of the market
to account for the full environmental costs of economic production of goods and
services.
13. Explain positive economics.

Economics has science side where its based with facts and statistics and an art side
where its based on opinions based approach. The side is called the positive economics
and its objective and facts based. This a scientific approach. Positive economics
statements need not be always true but they do need to be validated as correct or
incorrect. Positive economics uses step by step procedure to validate statement in a
similar way to the physical sciences.
Conclusions drawn from positive economics analyses can be tested and supported by data
Positive economics tells you exactly how it is, was or will be, while normative economics
expresses value regarding economic fairness or what policymakers’ goals and outcomes
should be or should have been

14. Distinguish between Continuous versus Episodic emissions

• There are two sources of air pollution – continuous and episodic. Continues
sources are those that emit all-round the year like transport, power plants etc.
Episodic sources are those that emit a certain time of the year like crop burning,
Diwali etc.
• The fact that emissions are continuous does not mean that damages are also
continuous.
• Control groups are often easier to carry out when emission are not subject to large
scale fluctuations.
• Many pollutants are emitted on an episodic basis. -E.g. accidental oil or chemical
spills.
• The policy problem here is to design and manage a system so that the probability
of accidental discharges is reduced.
• To measure the probability of episodic emissions we have to have data on actual
occurrences over a long time period, or we have to estimate them from
engineering data and similar information.
• Spatially differentiated: emissions of a pollutant have a different impact on
ambient environmental quality depending on where they are released.
• Uniformly mixed: emissions of a pollutant have the identical impact on ambient
environmental quality independent of where they are released.
15. Mention and elaborate two incentives that can help reduce environmental
degradation.

One simplistic incentive-type statement that one often hears is that pollution is a result of
the profit motive. According to this view, in private enterprise economies such as the
Western industrialized nations, people are rewarded for maximizing profits, the
difference between the value of what is produced and the value of what is used up in the
production process. Furthermore, the thinking goes, the profits that entrepreneurs try to
maximize are strictly monetary profits. In this headlong pursuit of monetary profits,
entrepreneurs give no thought to the environmental impacts of their actions
By “institutions” we mean the fundamental set of public and private organizations, laws,
and practices that a society uses to structure its economic activity. Markets are an
economic institution, for example, as are corporations, a body of commercial law, public
agencies, and so on because it “does not pay.” Thus, in this uncontrolled striving for
monetary profits, the only way to reduce environmental pollution is to weaken the
strength of the profit motive.
An economic incentive is something in the economic world that leads people to channel
their efforts at economic production and consumption in certain directions. We often
think of economic incentives as consisting of payoffs in terms of material wealth; people
have an incentive to behave in ways that provide them with increased wealth. But there
are also nonmaterial incentives that lead people to modify their economic behavior; for
example, self-esteem, the desire to preserve a beautiful visual environment, or the desire
to set a good example for others.

16. What is globalization?

• Globalization can be defined as a process of rapid economic, cultural, and

institutional integration among countries.
• This unification is driven by the liberalization of trade, investment and capital
flow, technological advances, and pressures for assimilation towards international
standards.
• Globalization makes the world more accessible to everyone.
• There are 3 types of globalization
o Economic: Countries that trade with many others and have few trade
barriers are economically globalized.
 o Social: A measure of how easily information and ideas pass between
people in their own country and between different countries.
o Political: The amount of political co-operation there is between countries.

• Few Impacts of globalization - Rapid growth of business, Opportunity to go

global, Introduction of various new technology, Rise in access of technology in
rural area, New technology in the agriculture, Literate farmers, Rise in the literacy
rate and quality

17. Briefly explain different subdivisions of Natural Resource Economics.

There are a lot of subdivisions of natural resources, they include the source of origin, the
state of development, and the renewability of the resources.
The most common subdivision is based on renewability of resources
• Renewable natural resources: these are resources that can be replenished.
Examples of renewable resources include sunlight, air, and wind. They are
available continuously and their quantity is not noticeably affected by human
consumption. However, renewable resources do not have a rapid recovery rate and
are susceptible to depletion if they are overused.
• Non-renewable natural resources: these resources form extremely slow and do not
naturally form in the environment. A resource is considered to be non-renewable
when their rate of consumption exceeds the rate of recovery. Examples of non-
renewable natural resources are minerals and fossil fuels.

18. Explain Benefit Cost Analysis with suitable examples

A cost-benefit analysis is a process businesses use to analyze decisions. The business or

analyst sums the benefits of a situation or action and then subtracts the costs associated
with taking that action. Some consultants or analysts also build models to assign a money
value on intangible items, such as the benefits and costs associated with living in a certain
town.
In other words, cost-benefit analysis is the process used to measure the benefits of a
decision or taking action minus the costs associated with taking that action. It involves
measurable financial metrics such as revenue earned or costs saved as a result of the
decision to pursue a project. It can also include intangible benefits and costs or effects
from a decision such as employee morale and customer satisfaction.
The advantages of cost benefit analysis:
• Ascertaining if any particular alternative has benefits exceeding its costs
• Identifying the set of alternatives with different objectives which have the lowest cost
benefit ratio
• Determination of the set of alternatives among different programmed areas e.g.
education, health, security, etc. having least cost benefit ratio for an overall analysis of
investment for the well being of the society as a whole.

20. What are cumulative pollutants?

Some pollutants which tend to accumulate in the environment. Radioactive waste, for
example, decays over time but at such a slow rate in relation to human life spans that for
all intents and purposes it will be with us permanently, it is a strictly cumulative type of
pollutant. Another cumulative pollutant is plastics. So far plastic is a substance that
decays very slowly by human standards thus, what we dispose of will be in the
environment permanently. Many chemicals are cumulative pollutants; once emitted they
are basically with us for a very long time.

19. Explain the relationship between emissions and ambient quality.

Emission standards are not to exceed levels applied to the quantities of emissions coming
from pollution sources, normally expressed in terms of the mass of material per some unit
time. As with ambient quality standards continuous emission streams such as gas
emissions may be subject to two averages, a short term and a long term average. It is
important to realize that meeting emission standards does not necessarily result in
meeting ambient quality standards.
Once a given quantity and quality of residuals have been introduced into a particular
environmental medium, it is the physical, chemical, biological, meteorological, and so
on, processes of the natural system that determine how the residuals translate into
particular ambient quality levels.
11. What is the moral approach to environmental degradation?

Environmental degradation is the result of human behaviour that is unethical or immoral.

Thus, for example, the reason people pollute is because they lack the moral and ethical
strength to refrain from the type of behaviour that causes environmental degradation. If
this is true, then the way to get people to stop polluting is somehow to increase the
general level of environmental morality in the society. In fact, the environmental
movement has led a great many people to focus on questions of environmental ethics,
exploring the moral dimensions of human impacts on the natural environment. These
moral questions are obviously of fundamental concern to any civilized society. Certainly
one of the main reasons environmental issues have been put on the front burner of social
concern is the sense of moral responsibility that has led people to take their concerns into
the political arena.

21. Suppose a factory is located in a village. This factory produces steel. This village
has fertile land on which good crops can be cultivated. The slug from the factory is
discharged on the soil. In light of this express your views on how an environmental
economist would come up with a solution to this problem?

First of all risk assessment should be done and the accurate measurements must be taken
to see how much pollution is happening and what type of pollutants are affecting the soil.
Soil analysis should also be done to gather data on how the soil is affected

The factory must make sure the slug is not released onto the soil directly without being
treated. The government should be notified to take action against the factory, There are
numerous laws and policies against pollution control.
If the factory doesn’t listen to the local village community a law suit must be filed against
the factory so that the village will be compensated for the pollution caused by the factory

There are a few things the factories must do for sure after correcting the waste disposal
Factories must provide workers and people in the communities around the factory with:
• information on the chemicals and materials used in the plant, and how they are
disposed of.
• results of regular government or independent testing of waste disposal through
smokestacks, ventilation systems, pipes, burial pits, and other methods.
 • proof that machinery and installations in the factory are safe, in good condition,
and that evacuation plans and resources for the area are ready in case of natural
disaster or serious accident.

Remediation of polluted soils is essential, and research continues to develop novel,

science-based remediation methods. Risk assessment approaches are similar worldwide
and consist of a series of steps to be taken to identify and evaluate whether natural or
human-made substances are responsible for polluting the soil, and the extent to which
that pollution is posing a risk to the environment and to human health. Increasingly
expensive physical remediation methods such as chemical inactivation or sequestration in
landfills are being replaced by science-based biological methods such as enhanced
microbial degradation or phytoremediation.

Other ways of getting factories in the future to not pollute are by providing the factory
with tax incentives to treat the waste before disposing it and it should be made sure that
the waste is disposed very safely so that it doesn’t affect the environment