Sample/practice exam 11 November 2019, questions PDF

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S2 2019...

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ILLUSTRATIVE SHORT ANSWER QUESTIONS 1. In the absence of an international agreement on climate change, is it economically efficient for a country to act alone in trying to mitigate climate change? Why or why not? 2. What is the difference between autonomous adaptation and planned adaptation? 3. What is carbon leakage and how can it be addressed? 4. Explain the concepts of efficient versus equitable international agreements and their role in securing international agreements on climate change. 5. Does grandfathering of emission allowances lead to a different market outcome than an equal allocation of permits across all regulated entities? Will each firm be equally well off under these different allocation mechanisms? Explain using a graph. 6. Briefly characterise the flow of future emissions – where do they come from (sectors, regions) and which policies would you propose to reduce them? 7. What is the IPAT equation? Apply it to provide your best estimate of the global CO2e emissions from car travel in 2030. What assumptions have you made regarding technological progress? 8. What is the clean development mechanism (CDM) and should it be retained? 9. Explain the concept of the social cost of carbon. How does it incorporate the dynamic aspects of carbon emissions? 10. How does the choice of discount rate affect the optimal level of climate change mitigation in a cost-benefit analysis? Use a graph to illustrate 11. Outline and contrast the two approaches economists have taken to arrive at an optimal level of greenhouse gas stabilization. What are the advantages and disadvantages of each approach? 12. What trade-offs should be considered when deciding on adaptation investment in coastal areas? How can economic valuation inform such investment?

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ILLUSTRATIVE ESSAY QUESTIONS 1. Compare the different types of emission pathways that could be followed in order to stabilise the stock of greenhouse gases in the atmosphere at a level that is broadly consistent with 2-3 degrees of warming (2-3°C relative to pre-industrial levels). 2. Discuss the following statement: ‘The neoclassical approach to choosing discount rates is perfectly adequate in the context of weighing the global costs of climate change mitigation against its global benefits.’ 3. There are a range of estimates of how much temperature change will be experienced due to climate change. Explain the implications of this for estimating the costs of climate change in a ‘business as usual’ world and the consequences for choosing an appropriate stabilisation target? 4. Discuss the following statement: The Kyoto Protocol was a milestone in international climate change negotiations and continues to shape international agreements on emission reductions today. 5. Discuss the following statement: Carbon leakage is a major problem for domestic industries and warrants that national carbon pricing schemes be deferred until there is a global carbon price. 6. Detail the barriers and limitations to adaptation. What are the implications of these for both developed and developing nations? 7. What are the key challenges to reducing greenhouse gas emissions in Australia’s energy sector? Which climate change policies would you propose to address these challenges and why?

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