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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

Use Figure 2.6 to answer the following questions.

1)

According to the figure, the basis for government policy regarding environmental issues ________.

1)

_______ A)

comes from the sciences, with additional input from the public and private sectors B)

comes from both the public and the private sectors C)

comes only from the natural and social sciences and is acted upon without bias D)

is primarily driven by lobbying E)

comes primarily from the private sector 2)

The government's approach to resolving environmental problems usually includes all of the following except ________.

2)

_______ A)

punitive consumer laws, with fines for excessive use of a product B)

consumer incentives, such as rebates and tax breaks C)

punitive business laws, with fines for excessive pollution D)

consumer laws, such as banning certain products E)

business incentives, such as subsidies and tax breaks 3)

Regarding the issue of global warming, until the hurricane season of 2005, the federal government's official stance was that the information available from the scientific community was neither conclusive nor persuasive. This governmental position was probably due to ________.

3)

_______ A)

lobbying efforts on the part of environmental organizations B)

the lack of good, measurable data from the scientific community C)

laws passed by voters D)

the private sector's reluctance to change manufacturing and land use strategies E)

the consumer opinion polls 4)

Today, with conflicting scientific evidence about the the safety of many pharmaceutical products, industrial chemicals and pesticides, a line on the diagram could be drawn between ________ and ________, compromising the unbiased findings of the latter.

4)

_______ A)

policy and consumer choices B)

public and private sectors C)

private sector and natural/social,sciences D)

public sector and policy E)

sciences and policy

MATCHING. Choose the item in column 2 that best matches each item in column 1. Match the following.

5)

An institution that shapes environmental policy through funding of dams, irrigation, infrastructure, and other developmental projects

A)

EPA

5)

_______ B)

EU C)

6)

International Environmental Policy Agency An institution based in Geneva, Switzerland that represents multinational corporations and

enforces fairness among nations in trading practices

6)

_______ D)

NGO E)

World Bank

F)

7)

International organization based in Nairobi, Kenya that helps promote environmental sustainability through outreach and education about environmental issues

United Nations

7)

_______ G)

UNEP H)

World Trade Organization 8)

Organization that shapes policy through research, education, lobbying, or protest

8)

_______

9)

Institution established shortly after World War II by representatives of 50 countries to "maintain international peace and security"

9)

_______

10)

Organization responsible for issuing environmental regulations and enforcing the Clean Air Act

10)

______

SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.

11)

Briefly explain how the earth's ecological systems support world economies.

11)

_____________

12)

Briefly explain how cost-benefit analysis can be biased in favor of economic development and against environmental protection.

12)

_____________

13)

What is an environmental impact statement (EIS)?

13)

_____________

14)

Political boundaries do not always match environmental boundaries. What does this mean for environmental protection in each country?

14)

_____________

15)

What is a subsidy? Describe the role of subsidies in natural resource management.

15)

_____________

16)

Describe the process that resulted in funding for the Bajagua Project in California in 2006.

16)

_____________

17)

________ can occur when markets do not take into account the environment's positive effects on economies, or when they do not reflect the bad effects of economic activity on the environment and people.

17)

_____________

18)

________ is a method used by manufacturers that tells consumers which brands use manufacturing processes that are environmentally beneficial.

18)

_____________

19)

"________ flows" occur when heavy rains overwhelm the ability of sewage treatment plants to process wastewater.

19)

_____________

20)

All of the land from which water drains into a river is called a ________.

20)

_____________

21)

________ consists of a formal set of general plans and principles intended to address problems and guide decision-making. It requires input from science, ethics, and economics.

21)

_____________

22)

________ is a system where industries emitting below the allowed level of a pollutant sell "credits" to industries which do not meet the standards.

22)

_____________

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

23)

Which of the following is an assumption of neoclassical economics?

23)

______ A)

Long-term effects are important. B)

All citizens deserve just and equal treatment. C)

Resources are finite. D)

Growth is good. E)

External costs and benefits are valuable.

24)

________ is best defined as the study of how we decide to use scarce resources in the face of demand.

24)

______ A)

Environmental science B)

Ethics C)

Ethnobiology D)

Ecology E)

Economics

25)

In modern market capitalist economies, the government intervenes to provide all of the following except ________.

25)

______ A)

pollution mitigation B)

national defense C)

resource allocation D)

medical care and education E)

management of the commons

26)

External costs include ________.

26)

______ A)

wages B)

environmental damage C)

utility expenses D)

workers compensation and insurance E)

raw materials

27)

"If domestic fuel prices rise to $5/gallon, conservation will increase, alternative fuels will be developed, and energy efficiency and our quality of life will improve as new technologies are developed." This philosophy is consistent with ________ economics.

27)

______ A)

classical B)

environmental C)

subsistence D)

database E)

cooperative

28)

The economic philosophy developed by Adam Smith ________.

28)

______ A)

proposes maintenance of economies through government regulation B)

assures equality between rich and poor C)

advocates laissez-faire policies that many credit for the tremendous gains in material prosperity of industrial nations

D)

is often called "steady-state economics" E)

argues that individuals acting in their own self-interest harm society

29)

Maquiladoras are ________.

29)

______ A)

Mexican subsistence farmers B)

an invasive species C)

an endangered species D)

U.S.-owned factories in Mexico E)

Mexican citizens who work illegally in factories

30)

Environmental economists ________.

30)

______ A)

advocate use of cost-benefit analysis to ensure market fairness B)

is based on the concept that human economies depend crucially on their environment C)

favor emphasis of internal costs rather than external costs D)

maintain that we cannot create sustainable economies within our current economic system E)

favor the discounting of future events relative to current events

31)

________ economists maintain that we must reduce population growth, but we can keep our economies growing as technology improves the efficiency and novelty of resource use.

31)

______ A)

Environmental B)

Classical C)

Steady-state D)

Social E)

Ecological

32)

Restrictive use and active management describe concepts that ________.

32)

______ A)

promote free-riders B)

were opposed by Garrett Hardin C)

are favored by most free-market economists D)

aim to reduce internal costs E)

are central to current environmental policy in the United States

33)

________ considered the "fourth branch" of government and the source of a great deal of policy.

33)

______ A)

Congress is B)

Lobbyists are C)

The Supreme Court is D)

NGOs are E)

Administrative agencies are

34)

The book Silent Spring ________.

34)

______ A)

awakened the public to the negative effects of pesticides B)

discusses the pollution problems in the Tijuana River watershed C)

describes how environmental and economic concerns are intimately connected D)

describes how people survive in subsistence economies E)

warns of the "Tragedy of the Commons"

35)

The Cuyahoga River ________.

35)

______ A)

supplies most of the water to the Everglades National Park ecosystem B)

is the site of the largest hydroelectric dam in the world C)

is a tributary of the Mississippi River that was recently diverted to prevent further flooding of New Orleans

D)

watershed is a transboundary watershed with approximately 70% of its area in Mexico E)

caught fire several times in the 1950s and 1960s due to oil and industrial waste pollution

36)

The National Environmental Policy Act (NEPA) ________.

36)

______ A)

aimed to reduce emissions that contribute to global climate change B)

requires the preparation of an environmental impact statement for federal actions that affect environmental quality

C)

established a system of U.S. national parks, forests, and wildlife refuges D)

established the United Nations Environment Programme (UNEP) E)

was a 1987 accord among more than 160 nations to reduce the emission of airborne chemicals that thin the ozone layer

37)

The United Nations ________.

37)

______ A)

provides subsidies to businesses to promote environmentally sustainable activities B)

is headquartered in Geneva, Switzerland C)

is headquartered in Washington, D.C. D)

plays an active role in shaping international environmental policy E)

seeks mainly to promote economic equity among European nations

38)

The role of green taxes is to ________.

38)

______ A)

create national parks B)

educate children about recycling C)

pave roads in national forests D)

create greenbelts for movement of organisms between preserves E)

penalize environmentally harmful activities

39)

The first U.S. national park was ________.

39)

______ A)

Glacier B)

Grand Canyon C)

Acadia D)

Yosemite E)

Yellowstone

40)

The revolving door ________.

40)

______ A)

allows illegal immigrants access to jobs and healthcare in the United States B)

allows lobbyists to work for many political entities at the same time C)

describes illegal dumping of pollutants in foreign countries D)

is the movement of powerful officials between the private sector and government agencies E)

pairs environmental causes with lobbyists already working on other causes

41)

Ecological economists argue that ________.

41)

______ A)

technological solutions will always be found to overcome resource depletion B)

population growth will produce more workers able to produce more goods C)

increased human resources can replace natural resources D)

the economy must be driven exclusively by market growth E)

if nothing is done to rein in population growth and increased resource consumption, human economies will plunge into ruin

42)

In the United States, enforcement of statutory law is primarily the responsibility of ________.

42)

______ A)

the Supreme Court B)

district courts C)

the Congress D)

the President E)

administrative agencies

43)

Affluenza is ________.

43)

______ A)

flooding labor markets with illegal workers B)

a viral disease ravaging developed nations C)

a computer virus D)

failure of excess material possessions and power to bring real satisfaction in life E)

the growing anger and frustration developing in low-income families and nations

TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 44)

Economists study the household of human society and ecologists study the household of life.

44)

______

45)

Conventional law is international law that arises from long-standing practices, or customs, held in common by most cultures.

45)

______

46)

Conventional law is international law that arises from international treaties.

46)

______

47)

Marketable emissions permits prevent increases in total pollution.

47)

______

48)

In a subsistence economy, buyers and sellers interact to determine which goods and services to produce and how these goods and services should be produced and distributed.

48)

______

ESSAY. Write your answer in the space provided or on a separate sheet of paper. 49)

Explain how environmental and ecological economists assign values to ecosystem services.

50)

Describe the development of U.S. environmental policy.

51)

Explain how economic and environmental concerns are intimately connected. Give an example from your text.

52)

Describe the steps in the environmental policy process.

53)

Briefly explain how governments can intervene to counter market failure and attain environmental policy goals.

54)

What are non-market ecosystem services? Why are they an important, and why are they a vital component of environmental economics?

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Read the following scenario and then answer the questions below.

Burning fossil fuels and their derivatives produces, among other things, harmful pollutants such as particulates, acid rain-producing sulfur and nitrogen oxides, and carbon oxides. These air pollutants threaten ecosystems all over the world, and high carbon dioxide levels contribute to global climate change. Furthermore, fossils fuels have a limited supply. The market price of fossil fuels, especially crude oil, have continued to rise in recent years. Despite this, Americans continue to consume fossil fuels at alarming rates. We rely upon fossil fuels for most of our energy needs, and continue to drive bigger and less fuel-efficient vehicles. At various times, the federal government has considered mandating higher fuel efficiency standards for American vehicles as a possible solution to this environmental energy crisis. Most auto manufacturers, however, are opposed to the imposition of standards.

55)

Which of the following has contributed to the rapid increase in crude oil prices over the past decade?

55)

______ A)

increased gas taxes B)

increased demand for oil C)

decreased demand for oil D)

increased availability of alternative fuels E)

increased supply of oil

56)

Which of the following represents one possible explanation for why the federal government has not been successful at mandating higher fuel efficiency standards for American vehicles?

56)

______ A)

The cost-effectiveness of operating smaller vehicles. B)

Exemption of auto manufacturers from federal laws. C)

America's dependence on oil from the Middle East. D)

The high demand from American consumers for larger vehicles. E)

The cost-effectiveness of producing smaller vehicles.

57)

What factors might lead to more political support for higher fuel efficiency standards?

57)

______ A)

higher oil prices B)

lower oil prices C)

decreased demand for oil D)

an end to political instability in the Middle East E)

release of oil from the national petroleum reserves

58)

What environmentally beneficial alternative measures might the government take to aid in the fossil fuel crisis?

58)

______ A)

Provide subsidies for more oil exploration. B)

Abolish green taxes. C)

Enact laws at the state and local level. D)

Build more oil refineries. E)

Reopen closed coal mines.

59)

What environmentally beneficial measures might consumers take to aid in the fossil fuel crisis?

59)

______ A)

Lobby the government to stop industry permit-trading. B)

Use and lobby for funding for public transportation. C)

Only purchase domestic fuel. D)

Only purchase imported fuel. E)

Protest high taxes on fossil fuels.

1)

A 2)

A 3)

D 4)

C

5)

E 6)

H 7)

G 8)

D 9)

F 10)

A 11)

Ecosystems provide many goods and services. Nature is the source of our food, water, building materials, and energy. The earth's ecological systems purify the air and water. Microorganisms decompose organic substances to make soil. Nature cycles nutrients such as nitrogen, carbon, sulfur, and phosphorous needed for crop growth. Animals such as birds, bats, and insects pollinate crops and other plants. Ecosystems also provide recreational and educational opportunities. These are economically valuable goods and services.

12)

Not all costs and benefits can be easily quantified, identified, or defined. For instance, it is difficult to assess the cost of a valued landscape scarred by development or the cost of contamination of waterways due to pollution. Economic benefits are usually more easily quantified than environmental costs and economic benefits tend to be overrepresented in traditional cost-benefit analysis. Assumptions of neoclassical economics (infinite resources, focus on the short term, ignorance of external costs, and growth) can conflict with environmental concerns favoring preservation of tangible and intangible resources for future generations. However, the environmental economic cost-benefit analyses proposed by Robert Constanza and associates are beginning to provide methodologies for valuing both tangible (e.g. pollination) and intangible ecosystem services (e.g. peace of mind). The total value of these services in 2009 dollars is estimated at $44 trillion.

13)

An environmental impact statement is a report required by the National Environmental Policy Act of 1970. It requires filing of a public report of studies that assess the potential impacts on the environment that would result from development projects undertaken or funded by the federal government. EISs must be filed by government agencies or the businesses that contract with them to evaluate environmental impacts before proceeding with a new dam, highway, or construction project.

14)

Countries are often dependent on each other for solving environmental problems, as in the case of pollution. Pollution that is a cause of concern for one country may have originated in another country. In such cases, international cooperation is required to correct the problem.

15)

A subsidy is a government giveaway of publicly owned resources, a giveaway of cash, or tax break, intended to encourage certain activities while discouraging others. Subsidies can be used to promote sustainable activities, but sometimes they are not used that way. Examples include subsidies for nonrenewable fossil fuels, road-building in national forests, and mining on public lands.

16)

Two processes aided the funding for this project. First, proponents made substantial contributions to the campaign funds of pro-Bajagua state legislators. Second, professional lobbyists were hired to promote the project with government officials. In February, 2006, these efforts paid off when the project was approved.

17)

Market failure 18)

Ecolabeling 19)

Rogue 20)

watershed 21)

Policy 22)

Emissions trading or Cap-and-trade 23)

D 24)

E 25)

C 26)

B 27)

B 28)

C 29)

D 30)

B 31)

A 32)

E 33)

E 34)

A 35)

E 36)

B 37)

D 38)

E 39)

E 40)

D 41)

E 42)

E 43)

B 44)

TRUE 45)

FALSE 46)

TRUE 47)

TRUE 48)

FALSE 49)

Ecosystem services can be assessed by economists in several ways. They can measure the cost to restore damaged natural ecosystems or to mitigate harm from pollution. They can use surveys to determine how much people are willing to pay to protect a resource or to restore it after it is damaged. They can measure the money, time, or effort people expend to travel to places for recreation. They can analyze housing prices, comparing homes with similar characteristics but different environmental settings to infer the dollar value of landscapes, views, and peace and quiet. In the 1990s, one economist, Robert Constanza, published a study on the value of the Earth's ecosystems. He worked with other scientists to try to quantify the costs associated with duplicating all the goods and services that nature provides, including tangible resources like food, clean water, and shelter, as well as intangible services like recreational opportunities and spiritual renewal. Costanza's study, published in Nature, indicated that, annually, trillions of dollars would be needed to supply the goods and services that nature provides. The question of how to quantify these things is debatable. However, a follow-up study published in Science in 2002 similarly concluded that our natural environment is worth trillions of dollars. These studies show that conservation is a bargain, and nothing is worth nature's destruction.

50)

U.S. environmental policy laws were created in three general periods: Westward expansion was promoted during the first period (1780s-late 1800s). Environmental laws of this period included the General Land Ordinances of 1785 and 1787, the Homestead Act of 1862, the Mineral Lands Act of 1866, and the Timber Culture Act of 1873. These laws encouraged settlers, entrepreneurs, and land speculators to move west and extract natural resources, hastening the closing of the frontier, with little regard for environmental preservation. By the late 1800s, the West had become more populated and its resources were being exploited. The second period began at this time. Over the next several decades, national parks, forests, and wildlife refuges were established as people became more aware of the environmental problems associated with westward expansion. Sensible land management policies continued through the 20th century, targeting soil conservation in the Dust Bowl years and extending through the Wilderness Act of 1964. The third major period of U.S. environmental policy began in the 1960s as the country continued to become more populated and became driven by technology, heavy industry, and intensive resource consumption. A landmark event was the 1962 publication of Silent Spring by Rachel Carson, which awakened the public to the negative effects of industrial chemicals and pesticides. The public demanded a cleaner environment. In 1970, the first Earth Day was celebrated, and the National Environmental Policy Act, the Clean Air Act, the Clean Water Act, and the National Environmental Policy Act were established to strictly regulate industrial pollution and environmental destruction. The Environmental Protection Agency was established in 1970 to oversee policy.

51)

When we deplete natural resources and produce too much pollution, we can overwhelm ecological systems and degrade their ability to function properly. As development proceeds and populations continue to expand, we degrade ecosystems and deplete natural resources quicker than they can rebound. These resources and ecosystems are needed to sustain our economies. Problems in the Tijuana River watershed demonstrate this principle. Increased development and population density in this transboundary watershed region cause rogue flows which wash pollutants into local rivers and coastal waters in San Diego and Tijuana. Rogue flows cause beach closures as garbage washes up on beaches. Recreation, tourism, and other economic activity is thus significantly reduced. In addition, sewage-tainted water poses a health threat, leading to higher medical costs and fish kills. The area loses income and local economies are significantly affected. Economists realize that environmental protection is beneficial to economies.

52)

The first step in the environmental policy process is identifying the environmental problem. This requires observation and record-keeping. Step two is identifying the causes of the problem. The third step is envisioning a solution. This may involve scientific, social, or political action. The fourth step is organizing and raising funds. The fifth step is gaining access to political powerbrokers via lobbying and campaign contributions. Using the "revolving door"---assessing individuals who have knowledge of both industry and government policies is useful at this stage. The final step is shepherding a solution, which may involve preparing a bill or law which embodies the solutions and finding support in Congress.

53)

Governments can aim to promote fairness, resource conservation, and economic sustainability through legislation, regulation, and market incentives. Laws and regulations may restrict or limit resource extraction and release of harmful pollutants into the environment. Setting strict legal limits is called the "command-and-control" approach and it has been somewhat successful as evidenced by cleaner air and water in some places in the United States. This approach can fail if it generates opposition by special interest groups or causes citizens to view government intervention as restrictive. Governments can impose green taxes to penalize environmentally harmful practices. Taxing undesirable activities helps to "internalize" external costs by making them part of the overall cost of doing business. It is hoped that businesses will not pass on tax expenses to consumers. Governments can give tax breaks to businesses or individuals to promote environmentally friendly activities. They can subsidize green industries to offset economic losses in the marketplace. They can allow companies to trade marketable permission permits, which allow companies that emit under their allowable quota of pollution to sell permits to other companies. It is best when environmental organizations buy surplus permits and thus retire them, reducing overall pollution. Governments can allow ecolabeling to educate consumers on environmentally beneficial products. By preferentially buying ecolabeled products, consumers can provide businesses a powerful incentive to switch to environmentally friendly products such as dolphin-safe tuna, recycled paper, and organically grown food.

54)

Non-market or intangible ecosystem services are qualities such as peace of mind, beauty, cultural significance, educational values, awe, inspiration and meditative self-knowledge. For example, if you consider why people visit spots of natural beauty and solitude, many of these services are motives for vacations and hence of indirect value to the tourist industry. For indigenous peoples the world over , sacred sites in wild nature have great cultural, educational and spiritual value. The educational value of natural areas is an economic asset if you consider the result of people growing up without experiencing them, and then later making decisions about land use in which a value for the intangibles is not a factor.Since these intangibles a drivers of economic activity they obviously have a monetary value and have to be included in any comprehensive environmental economics.

55)

B 56)

D 57)

A 58)

C 59)

B