HL.b Environmental and ecological economicsIB Environmental Systems and Societies HL: Subtopic test

1. 1
   A paper mill on a river sells its paper at a price based only on the cost of wood, labour and energy. The mill discharges untreated waste water, which has killed fish for 20 km downstream, and downstream fishers have lost income. The mill advertises its paper as "planet-friendly" while continuing to discharge. The government now plans to charge the mill for each tonne of pollutant it releases.

   (a)

   Which term describes the allocation of paper by the free market when the mill's price does not include the cost of the damage to the river?

   [1 mark]

   • ATragedy of the commons
   • BEco-economic decoupling
   • CMarket failure
   • DEnvironmental accounting

   (b)

   What is the practice of advertising paper as "planet-friendly" while continuing to pollute called?

   [1 mark]

   • AGreenwashing
   • BThe polluter-pays principle
   • CDegrowth
   • DEnvironmental constitutionalism

   (c)

   Explain how charging the mill for each tonne of pollutant could reduce pollution of the river.

   [2 marks]

   Total for question 1: 4 marks

2. 2
   Fishers on a large inland lake have open access: there are no licences, no quotas and nobody owns the lake. Over ten years the number of fishers has doubled, while the mean catch per fisher has halved and the fish caught are smaller. Each fisher says that if they stopped fishing, others would simply take their fish.

   (a)

   Which concept does the situation on the lake illustrate?

   [1 mark]

   • AGreenwashing
   • BThe polluter-pays principle
   • CThe circular economy
   • DThe tragedy of the commons

   (b)

   Which statement best explains why individual fishers continue to fish even though the stock is falling?

   [1 mark]

   • AFishers are unaware that catches are falling
   • BEach fisher gains the full benefit of extra fish while the cost of overfishing is shared by everyone
   • CThe lake is privately owned and the owner charges for fish
   • DThe fish are too valuable to leave in the lake

   (c)

   Suggest how giving fishers clearly defined property rights, such as individual or community quotas, could reduce overexploitation of the lake.

   [2 marks]

   Total for question 2: 4 marks

3. 3
   A 500-hectare mangrove wetland lies on the coast of the Mekong Delta in Vietnam. A study of its annual use values per hectare gave: timber and fuelwood $120, nursery habitat for fish and crabs$300, storm protection $900 and tourism$80. A developer proposes converting the wetland to shrimp ponds, which would earn $1 500 per hectare per year, but ponds like these are typically productive for only about five years before disease and soil acidification force their abandonment. (The values are illustrative.)

   (a)

   Calculate the total annual use value of the whole wetland, and state why this figure underestimates the full value of the wetland.

   [3 marks]

   (b)

   Evaluate the use of environmental accounting to decide whether to convert the wetland to shrimp ponds.

   [4 marks]

   Total for question 3: 7 marks

4. 4
   Between 2005 and 2020 the gross domestic product (GDP) of Country P, a European country, grew by 25 %, while carbon dioxide emissions produced within its borders fell by 20 %, mainly because coal power stations were closed and renewable energy expanded. Over the same period its imports of manufactured goods rose strongly, and the emissions from making those goods occur in other countries. A group of ecological economists argues that the country should now aim for zero or slow growth. (The figures are illustrative.)

   (a)

   Compare and contrast environmental economics and ecological economics.

   [6 marks]

   (b)

   Evaluate whether the data for Country P show that eco-economic decoupling allows economic growth to continue without environmental degradation.

   [6 marks]

   Total for question 4: 12 marks

End of questions