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Jun 5, 2024

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B. 1. What are environmentalists calling a "planetary emergency"? Pollution – carbon dioxide emissions. They’re one of the primary greenhouse gases. These greenhouse gases basically blanket the earth and area causing climate change. CO2 levels are the highest they’ve been for millions of years which is why environmentalists consider it a planetary emergency. 2. Summarize the steps of the economic solution to this problem presented by the video. The video focuses on the efforts to reduce the number of new pollutants getting spewed into our atmosphere. Step 1: Identify the sources of the most air pollution (Factories that burn fossil fuels for energy, industries that use oil and coal to produce things and vehicles with internal combustion engines.) Step 2: Decrease the supply of these technologies and products or decrease the demand for them. 3. How does this solution become problematic? The implementation of these steps gets complicated. Step 1 - One of the biggest problems with having countries independently enforce environmental regulations is that Tragedy of the Commons. No one owns the atmosphere, so there is very little incentive for countries to keep it clean and switch to expensive green technologies if no one else is going to. There are no global environmental police punishing countries for polluting. Step 2 – We are already reliant on fossil fuels and markets have made the production of those fuels very cheap. Any new type of energy entering the market will have a hard time beating the established systems. We could either wait for new technologies to develop and get cheaper or we can speed up the process by manipulating markets with government subsidies, taxes, and regulations. 4. How does pollution relate to negative externality and market failure? What is the role of the government in this situation?
Negative externalities – When the full cost of a product doesn’t line up with the costs of manufacturers or consumers pay. Pollution represents a market failure – a situation where markets fail to produce the amount that society wants. Government intervention is justified and essential. There are all kinds of different ways intervention can happen. All of them meant to encourage producers and consumers to choose the pollute less. One solution is for the government to come out and set very specific rules about how much specific industries can pollute. Ignore the markets and follow the government pollution rules. Another way is to encourage people to pollute less is by providing price incentives. Those incentives can encourage individuals to make choices that are better for the environment. The government could add taxes to gasoline purchases or on the other hand provide subsidies for people who drive electric cars. Governments can also create permit markets – setting a limit on how much firms can pollute and allowing those firms to buy and sell pollution permits. Cap and trade – limit emissions without creating hard and fast rules that might hinder economic growth. people who drive electric cars. Governments can also create permit markets – setting a limit on how much firms can pollute and allowing those firms to buy and sell pollution permits. Cap and trade – limit emissions without creating hard and fast rules that might hinder economic growth. 5. Does the state of California impose price incentives to influence greenhouse gas emission control? What are they? Yes, California imposes price incentives to influence greenhouse gas emission control. I found this website that outlines all hydrogen laws and incentives in California. Some of the incentives include: Establishment of Zero Emission Vehicle (ZEV) and Near-ZEV Component Rebates. Alternative Fuel Vehicle (AFV) Parking Incentive Programs Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Grants Establishment of a Zero Emission Medium- and Heavy-Duty Vehicle Program C. 1. How do economists define environmental outcomes? How does it relate to market failure?
Environmental outcome is the study of the allocation of scarce resources, including how markets function and how incentives affect people’s, businesses and institutions’ behavior. Regarding public goods and common pool resources – Market failure is related to the problems in the negative and positive externalities. 2. What are externalities? How do they relate to pollution and resource availability? Externalities - a side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved. Negative externalities are rampant in environmental settings – for example Companies that spill oil into the ocean do not bear the full costs of the resulting harm to the marine environment, which include everything from degraded commercial fisheries to reduced endangered sea turtle populations). 3. Define public goods and common-property resources, under-provision, and over- exploitation. What is the relationship between these terms? Public goods - A good with two features: (i) it has a benefit that does not diminish with the number of people enjoying it, and (ii) no one can be excluded from consuming it. Common pool resource - A resource that is open to all users, but which is highly rival in use. Under-provision – to provide less that is necessary Overexploitation, also called overharvesting, refers to harvesting a renewable resource to the point of diminishing returns. One person’s use of a common-pool resource has negative effects on all the other users. Thus, these resources are prone to overexploitation 4. Define use and non-use valuation of environmental goods. Use values flow from services that affect people directly, such as food production, flood regulation, recreation opportunities, and potable water provision. Non-use values are less tangible: the desire for endangered tigers to continue to exist even on the part of people who will never see them in the wild; concern about bequeathing future generations a planet with healthy fish populations; a sense that people have an ethical responsibility to be good stewards of the earth 5. How do consumers play a role in valuation of environmental goods? How can our choices facilitate sustainability? We as a consumer play a role in valuations of environmental goods through supply and demand. “Willingness to pay” (WTP) is a budget-constrained measure of a change in welfare; a person cannot be willing to pay more money for a change than they have income. In contrast, “willingness to accept” (WTA) is not a budget constrained measure of value. you might have to
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