ECONOMICS 1370
SUPPLEMENTARY READINGS QUESTIONS-PART I

01. In Lawrence Reed’s article “Privatization: Best Hope of a Vanishing Wilderness”:

a. Why does Reed argue that privatization is the best hope for preserving environmental assets? Use two or three examples from the article to make your point. What role do property rights play in such preservation?  

02. In Robert J. Smith’s article "Hawk Mountain Sanctuary Association":

a. Briefly explain how Rosalie Edge saved the hawks and the importance of property rights to her efforts.

03. In Michael De Alessi’s article “Wildlife Enrichment and Oil Exploration--a 2-for-1 Deal at the Welder Wildlife Refuge”:

 

a. Briefly explain what the Welder Wildlife Refuge is and what the aims of the Foundation are.

 

b. Why has the number of wells in the Refuge declined recently?

 

c. What lessons does the Welder Refuge have for ANWR?

 

04. In Dwight Lee’s article “To Drill or Not to Drill: Let the Environmentalists Decide”:

 

a. How do the Audubon Society’s statements about oil drilling in ANWR differ from their actions in wildlife areas that they own? Explain why these two things are different.

 

b. Explain how the Nature Conservancy of Texas deals with the tradeoff between preserving wildlife and drilling for oil.

 

 

 

 

 

c. Lee says: “I am confident…that environmentalists would immediately see the advantages of drilling in ANWR if they were responsible for both the costs and the benefits of that drilling.” Conversely, why might environmentalists overstate the environmental amenities put at risk by drilling for oil in ANWR when ANWR is a publicly owned asset? Explain.

 

d. What is the evidence for claiming that the risks of drilling for oil in ANWR are significantly less than environmentalists assume? (Note: Include a discussion of the effect on caribou herds.)

 

05. In Terry Anderson and Donald Leal’s article “Energy and Ecology: Prospecting for Harmony”:

 

     a. Explain some of the ways that energy resources can be developed in an environmentally sensitive manner.

 

     b. How should the tradeoff between energy production and environmental amenities be resolved on public lands? What are some objections to this solution and how do the authors respond to those objections?

 

06. In Roger Meiners and Bruce Yandle's article "The Common Law: How It Protects the Environment":

a. How did the common law protect property owners from unwanted pollution? Explain briefly. (Hint: What is a nuisance [or a trepass] and how can property owners be protected from them?)

b. Illustrate how the common law works by summarizing a few of the cases (Surface Water, Land, Air and Underground Water) which the authors discuss.

c. What are the limitations of the common law? Explain.

d. How did statute law (designed law) come to be substituted for the common law? Does the lure of central planning play any part in this substitution of statute for common law? Explain.

 

 

07. In Robert Crandall's article "Clean Air and Regional Protectionism,":

 

a. What is the non-degradation policy?  What is the new source policy? (Hint: It is one of the policies incorporated into the Clean Air Act of 1977.)

b. Why are these two policies potentially disastrous for economic growth in the southern and western regions of the country?

c. Are these two policies working to produce cleaner air? Why does Congress spend so much on programs that to control air pollution but does nothing to ascertain whether the programs are producing clean air? Explain using public choice concepts.

d. Congress, under pressure from environmentalists, required all new source emitters of sulfur oxides to reduce emissions by the same fixed percentage. Why does this result in more air pollution? (Hint: There are two reasons.)

08. In Richard Stroup and Jane Shaw's article "Environmental Harms from Federal Government Policy":

a. How does government contribute to losses of wetlands? Explain. (HINT: Subsidies play a big role here.)

 

b. How do farm programs affect wildlife habitat on farms?

c. How does the Bureau of Reclamation affect the environment?

d. What effect do subsidies have on those who build on coastal barriers?

e. Why does government pursue so many environmentally unsound policies? Explain in public choice terms. Apply these concepts to the Park Service and the problem of wild horses and burros.

 

 

09. In Peter Hill's article "Environmental Problems Under Socialism":

 

a. What are some of the environmental problems that have been observed since the collapse of the Soviet Union?

b. Why do centrally planned economies generate all sorts of externalities?

c. Explain what incentive problems occur in centrally planned economies and why they occur. How do these problems lead to environmental problems?

d. Explain what problems arose because a centrally planned economy did not generate good information. (Be sure you can explain why such a result occurred.)

e. Why do the externalities produced by socialism persist?

f. Why does state ownership of property inhibit the development of private property rights to resources?

10. In the Institute for Energy Research article “Carbon Taxes: Reducing Economic Growth-Achieving No Environmental Improvement”:

 

a. What is most likely to happen to other taxes if a carbon tax is imposed? (What will politicians do with the new revenue?)

 

b. Why will GDP/output be significantly lower If carbon taxes are imposed?

 

c. Will carbon taxes in the US make any significant impact on the global climate?

 

d. What effect may carbon taxes have on domestic industries?

 

e. Why did Ken Green change his mind about carbon taxes?

 

 

 

11. In Kenneth Green, Steven Hayward and Kevin Hassett’s article “Climate Change: Caps versus Taxes”:

 

a. Explain what some of the drawbacks of using emission trading (cap and trade) are.

 

12. In Kenneth Green’s article “Climate Policy: What’s Best—Emission Reduction or Adaptation and Sequestration”:

 

a. Explain some of the consequences of CO2 emissions reductions for the individual, firm, and nation.

 

b. Do CO2 emissions reductions make sense in light of other countries (particularly the developing countries) possible responses?

 

c. Are “human emissions of greenhouse gases…causing abnormal temperature change”? How does Green argue against this view? Explain.

 

d. Explain what adaptation and sequestration are and why they may be a better approach than emissions reductions.

 

13.  In Ronald Bailey's article "The Progress Explosion: Permanently Escaping the Malthusian Trap":

 

a. Briefly summarize what Malthus and his modern counterparts have to say about population and the availability of resources. Explain what role the concept of diminishing marginal returns plays in this view.

b. The evidence appears to contradict the predictions of the concept of diminishing marginal returns. Explain how Bailey arrives at this conclusion.

c. What contributions have Paul Romer and the New Growth Theorists made and how do they explain the puzzle that arises in part b?

d. Explain some of the "surprising solutions" that the New Growth Theory makes possible.

e. Have we permanently escaped the Malthusian Trap? Explain.

14.  In David Osterfeld's article "Chapter 4: Resources":

 

a. Have catastrophists ever correctly predicted the depletion of resources? Do the Post-1970s data indicate that they might now be correct? Explain.

b. What methodological mistakes do catastrophists commit when making their predictions?

c. What does Osterfeld mean by the growing abundance of resources? Explain.

d. What role does science and technology play in this growing abundance? Explain.

e. Explain what role the market and entrepreneurs play in making this growing abundance possible.

15. In Daniel K Benjamin’s article “Eight Great Myths of Recycling”:

 

a. Do we squander irreplaceable resources when we don’t recycle? Explain Benjamin’s answer being sure to outline the role that prices, innovation and substitution play.

 

b. Explain these two claims by Benjamin:

(1) Many trees in the US would not exist if recycling rates increase.

(2) The desire to use natural resources creates incentives for people to conserve them as well as create more of them.

 

c. Does recycling always protect the environment? Does it always save resources? Explain.

 

d. Are recycling mandates necessary? Explain. (Be sure you understand his point in the first paragraph of the conclusion—in your own words.)

 

e. How do your answers to parts b. and e. relate to the points made by Bailey and Osterfeld in Readings 14 and 15 above?