5) Suppose that an international agreement requires exporters to reduce their carbon emissions. In this context, government subsidies are provided to R&Ds that will enable green-friendly production in exporting industries that produce high-tech. a) Explain what might be the reasons for the implementation of such an activist policy. (Answer this question with the arguments of your main course book, (Krugman; Obstfeld; Melitz; 2015)) b) Describe how the Environmental Kuznet curve works. Let's assume that there is a green-friendly technology transfer from developed countries to less developed countries in order to achieve the goal of a decrease in emission, then what will happen to the curve?

5) Suppose that an international agreement requires exporters to reduce their carbon emissions. In this context, government subsidies are provided to R&Ds that will enable green-friendly production in exporting industries that produce high-tech. a) Explain what might be the reasons for the implementation of such an activist policy. (Answer this question with the arguments of your main course book, (Krugman; Obstfeld; Melitz; 2015)) b) Describe how the Environmental Kuznet curve works. Let's assume that there is a green-friendly technology transfer from developed countries to less developed countries in order to achieve the goal of a decrease in emission, then what will happen to the curve?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5) Suppose that an international agreement requires exporters to reduce their carbon emissions. In this context, government subsidies are provided to R&Ds that will enable green-friendly production in exporting industries that produce high-tech.a) Explain what might be the reasons for the implementation of such an activist policy.(Answer this question with the arguments of your main course book, (Krugman; Obstfeld; Melitz; 2015))b) Describe how the Environmental Kuznet curve works. Let's assume that there is a green-friendly technology transfer from developed countries to less developed countries in order to achieve the goal of a decrease in emission, then what will happen to the curve?
To evaluate potential policy options that address emissions and climate change, economists often recommend a thorough cost-benefit analysis, in which the avoided environmental and human health damages are weighed against the["marginal abatement costs", "marginal abatement benefits"] . Most estimates by environmental economists suggest that the benefits of emission reduction are somewhere between 5-20% of world GDP, while the costs are between 1-4%. Using a cost-benefit analysis, this would imply that these policies ["should", "should not"] be implemented. The resulting policies can take the form of ["preventive", "adaptive"] strategies, those that reduce damages resulting from climate change, or ["preventive", "adaptive"] strategies that reduce emissions.
Portland is trying to reduce annual NOx emissions by 200 units. Its environmental planners are now deciding how to allocate the abatement mandate between cars and power plants. The marginal costs of abatement from cars (Qc) and abatement from plants (Qp) are MACC = 3Qc and MACP = Qp. Each source is currently emitting 200 units (so total emission from both sources are 400). (Note: Q is the quantity of abatement and the goal is to abate a total of 200 units). %3D (a) On your work sheet Graph the two marginal cost lines (on two separate graphs). (b) The traditional approach has been to assign all 200 units of abatement to the power plants, i.e. Qc = 0 and Qp = 200. What is the total cost of abatement under this system? Show your calculations on your work sheet and enter the total cost in the blank below. (c) The planners have hired you to tell them what the cheapest way is for the city to divide the 200 units of abatement between the two sources. What do you tell them? (ie. what are Qc"…
Consider the problem of carbon dioxide emissions. We will abstract away from the problem slightly, assuming there are polluters and consumers in two regions, the OECD (O) and the rest of the world (R). Suppose the marginal cost of controlling CO₂ emissions is $10 per ton of emissions. Let the marginal willingness to pay for pollu- tion reduction be 13 - Q for region O and 12 - 2Q for region R, where Q is the amount of pollution reduction. The United Nations is considering two proposed methods for controlling CO₂ emissions, both involving polluters paying for the damage they cause. Proposal A involves the polluters paying damages to each region for the pollu- tion generated Proposal B involves the polluters in each region independently nego- tiating pollution reductions, assuming the other region is not undertaking pollution reduction. a. Graph the marginal abatement cost and the total marginal willingness-to-pay schedules. What is the socially efficient level of emission reductions, Q?…
Give only typing answer with explanation and conclusion Suppose there are two industries with MAC functions as follows: MACA = 240-3EA and MACB=160-2EB And suppose the local government wished to reduce the total industry emissions by 50% (from the uncontrolled level) by implementing a uniform standard. How much emission would be reduced and what would be the total abatement costs for each industry under this uniform standard?
Lecture: Externality - Pigou8. All-Leather is a tanning company located on Lake Michigan in Chicago. Its total cost functionis C(QA) = 125 + 8QA + 5QA2, where QA is leather production per week in thousands of pounds.a) If leather sells for $408 per thousand pounds, how much leather will All-Leather produce?How much profit does All-leather earn?Enjoy is a beverage company located on Lake Michigan near All-Leather in Chicago. Enjoy’sproduction of beverages is negatively affected by water pollution from All-Leather’s productionof leather. Enjoy’s total cost function to produce beverages isC(QE) = 10QE +3QE2 + 3QA2where QE is Enjoy’s weekly production of beverages, in thousandsof gallons and, as above, QA is All-Leather’s weekly production of leather.b) Is this an example of a pecuniary externality or a real externality? Explain.c) What is the extra cost to Enjoy from an additional thousand tons of leather production by AllLeather (i.e., the external marginal cost of an extra unit of QA…
Based on what you saw in the videos about internalizing externalities, do you think that the "leaving it to the market" approach (i.e., market-based solutions, such as government-imposed incentives toward renewable energy initiatives) is sufficient to transition away from fossil fuels and a linear economy as we try to minimize the already visible impacts of climate change? Or, do you think that a command and control approach is warranted in this case? Explain. Note: I am not judging your position, but am looking at how you support your position given the fundamentals of command and control vs. market-based solutions given our current climate crisis.
Now assume the diagram illustrates a (negative) externality arising from carbon emissions, with MPC the private cost to a (perfectly competitive) company that emits carbon and MSC the social cost (once global warming costs are included). What is the optimal ‘carbon tax’ (called a ‘Pigouvian tax’)?
Consider the effects of pollution in a competitive market for paper, the production of which generates a negative externality (pollution or gunk, g). What are the optimal emissions fee and the optimal tax on output (assuming that only a single, constant fee or tax is applied)? MC$ = MCP + Mc MCP The tax (or emissions fee) that would generate the optimal outcome for society is a tax on paper production of t = $. (Enter your response as a whole number.) 282 240 MC9 198 84 84 105 Q, Tons of paper per day Price of paper, p, $ per ton వే
(Figure: Nail Polish Externalities) In the figure, Sp (MPC) represents the private supply curve of a particular type of nail polish, whose manufacture is associated with the release of toxic chemicals into the atmosphere. SS (MSC) includes the costs of that toxicity borne by others. What area represents the total externality cost of this nail polish? a) abdc b) abef c) defc d) the total externality cost is unknown. (the answer is NOT b)
Viral infections such as flu are highly contagious. The number of infections and thus the spread of the disease can be prevented by getting vaccinated. However, the decision to take vaccine is voluntary and some people choose not to go for it for various reasons.] [What type of externality occurs by getting vaccinated against contagious diseases? Explain your answer in 100 words or less. [In a diagram, show the market equilibrium quantity of the vaccine. Is the quantity also socially efficient? Explain in 100 words or less and demonstrate using the same diagram. [Suggest one method to achieve a socially efficient outcome. Explain your answer in 100 or less words.
With transferrable emissions permits, firms must have permits to generate emissions. If a firm emits less pollution than its permits allow, it can sell its leftover permits to another firm that wishes to emit more pollutions than its permits allow. Comment on the following: “These permits have the advantages of both standards and fees, therefore, they may be the best technique of controlling pollution.” (Hint: How do transferrable emissions permits reflect on each firm’s individual abatement costs?)