Environmental ECON

The present value of $525 received one year from today, assuming an annual rate of return is 5% is

$500

The present value of benefits (PVB) is found as

Σ(bt/[1+rs]t), with bt = Bt/(1 + p)t

In a benefit-cost analysis, the determination of feasibility

both A and C, can be made by finding out if PVB/PVC is greater than unity can be accomplished by finding out if PVNB is greater than zero.

to achieve cost effectiveness among options that satisfy the benefit objective

PVC must be minimized

Among the chief concerns about the use of benefit-cost analysis is that

all of the above

If (PVB/PVC) for a given policy option equals 5.5, this means that

the policy option is feasible

Natural Pollutants

are those arising from nonartificial processes in nature

Geographic areas in which pollution is greater than what is allowed by national ambient air quality standards are referred to as

nonattainment areas

If an area or region meets or exceeds the NAAQS, it is called a(n)

prevention of significant deterioration area

Portney's research of the 1990 Clean Air Act Amendments (CAAA) finds that MSC exceeds MSB. Based on this finding, one can conclude that

the CAAA over-regulate society

An important observation about the NAAQS is that

all regions must meet the same standard, making efficiency achievement highly unlikely

Which one of the following faces the strictest government regulations?

New facility in a PSD area

The Air Quality Index (AQI) in the United States

shows the highest level of concentration of pollution among major pollutants

Mobile sources

are major contributors to the formation of photochemical smog

Reformulated gasoline

refers to formulations that release less hydrocarbons, toxics, and CO than conventional gasoline

Mobile source standards in the U.S. are solely benefit-based, which means they are set

to maximize total social benefits

Uniform standards

have been shown to be more costly than a two-tiered standard on motor vehicles

The new car bias refers to the fact that

The new cars have to meet the latest standards, which make them more expensive; so people prefer to buy older, cheaper cars

Primary sources of SO2 emissions are

fossil-fuel burning power plants and refineries

PSD areas

none of the above

Which of the following is INCORRECT?

The government never uses technology-based standards

Consider the following two statements to answer this question:

(1) The bubble policy allows a facility to measure its emissions as an average of all emission points from that facility.

(2) Netting was developed as a trading program to control emissions in PSD areas.

(1) is true and (2) is false

Under the national Acid Rain Program (ARP)

a cap-and-trade program was defined only for SO2

Suppose the Clean Air Act calls for a rise in NO2 abatement (A) from 50 to 60 percent and that the MSC (in millions) is MSC = 12 + 0.8A, where A is measured in percent. Then, the incremental cost of this policy change is

$560 million

Using the labels on the graph below, the total cost for both firms at the cost-effective solution is ________, and the excess cost from using the uniform standard is___________

ACH; CDE

The first international agreement to limit ozone depleters is

The Montreal Protocol

Which of the following statements is INCORRECT?

The ozone layer has been restored to its original condition, because ozone depleting substances are so short-lived.

All of the following are major greenhouse gases (GHGs), EXCEPT

volatile organic compounds (VOCs)

Currently, which country emits the largest amount of carbon dioxide (CO2)?

China

President Bush removed the United States from the Kyoto Protocol because

the protocol did not impose emissions cuts on developing countries

To meet their obligation under the Kyoto Protocol, member countries of the European Union (EU) in 2005 devised

a GHG pollution permit trading program

From an economic standpoint, the most relevant tax approach to reducing carbon dioxide emissions is a

carbon tax

In the market for fossil-fuel-based electric power,

none of the above

All of the following are point sources, EXCEPT

urban runoff

What has been the typical characteristic of the UN Climate Change meetings, such as Kyoto and Copenhagen?

non-binding agreements