Environmental and Resource Economics

Questions

 

 

Question 1: (100 marks)

 

Assume that the UK government drastically increases taxes on emissions and use the resulting tax revenues to evenly cut corporate taxes.

 

  1. Critically analyse the economic rationale that could underpin such a policy. In particular, critically assess the efficiency of such a policy. Use relevant diagrams to support your reasoning. (40 marks)

 

  1. Critically assess how such a policy would reshape the UK economy as a whole? In this context, consider the implications for different industries, different regions in the UK, and different skill groups and generations. How would it affect investment and international trade? (60 marks)

 

Question 2: (100 marks)

 

Economists employ treaty participation games to analyse the success and failure of international environmental agreements (see, for instance, Barrett, 2003/2005).

 

  1. Explain the assumptions and the decision structure that underlie this type of model. Also, explore the concept of self-enforcing international environmental agreements (IEAs) and its importance for the analysis of IEAs. Outline the general idea of the model and its key conclusions. (40 marks)

 

  1. Construct a numerical example in which (i) four out of eight countries sign an IEA, (ii) all signatories play ‘Abate’, and (iii) all non-signatories play ‘Pollute’. Explain all results, and use relevant diagrams to illustrate them. These diagrams should reflect your specific numerical example. (60 marks)

 

Reference: Barrett, S. (2003/2005), Environment and Statecraft. The Strategy of Environmental Treaty-Making, Oxford: Oxford University Press (Hardcover/Paperback).

 

Deadline: Thursday 12th August 2021, 3:00 pm Submission procedure: Via the module page on the DLE

 

 

Question 3: (100 marks)

 

A county council plans to build a marine park to attract recreational visitors and is interested in assessing the economic feasibility of such a project over a 10-year period. The estimated costs (construction and recurring) and benefits (revenues from tourists) for each year over the 10-year period (where year 0 is the initial time) are indicated in Table I below.

 

 

Table I: Costs and benefits of a proposed marine park over a 10-year period

Construction and

Year             recurring

expenditures                                    Tourists revenues

(Costs) (£’000)                                     (Benefits) (£’000)

  • 2000 0
  • 700 700
  • 700 800
  • 700 900
  • 700 1000
  • 700 1100
  • 700 1200
  • 700 1300
  • 700 1400
  • 700 1500

 

On the assumption of a discount rate of 5%;

 

  1. Estimate the discount factor for each year of the project. (10 marks)
  2. Estimate the present value of cost for each year of the project. (10 marks)
  3. Estimate the present value of benefits for each year of the project. (10 marks)
  4. Estimate the sum of the present value of net benefits for the whole period of 10 years of the project. (20 marks)

Deadline: Thursday 12th August 2021, 3:00 pm Submission procedure: Via the module page on the DLE

 

  1. Following the result in (d), that is, the estimated sum of present value of net benefits, do you think the marine park project should go ahead? Explain the reasoning behind your answer. (10 marks)
  2. Assume a different discount rate of 10% was used in the analysis above, what will be its impact on the estimated sum of the present value of net benefits and will the marine park be built? Explain the reasoning behind your answer. (20 marks)
  3. Assume it is possible to estimate the costs and benefits of the non-market services of the proposed marine park, and these were included in the above analyses. How would these values influence the estimates and decisions in 3(e) and 3(f)? (20 marks)

 

Question 4: (100 marks)

The Maximum Sustained Yield (MSY) criterion is an appropriate basis for an efficient management of a stock of fishery resource. Critically examine this statement.  

Good Luck!

 

Assessment Criteria

 

Marks will be awarded according to the following main criteria:

 

  • Achievement of the objectives of the question
  • Accurate explanation and use of relevant economic theories, concepts and methods
  • Logical structure of the arguments
  • Critical analysis of relevant arguments
  • Clarity of explanation – fluency of written exposition, grammar and correct spelling
  • Demonstrated knowledge of the relevant literature and proper citation of sources.
  • Keeping to the word limit, inclusion of word count.

 

Further Information

 

Work submitted within 24 hours of the due date will receive a mark, but it will be capped at the pass mark of 40%. Work that is submitted more than 24 hours after the official deadline will receive an automatic mark of zero. If you have valid extenuating circumstances for late work, the actual mark achieved will be recorded against that

Deadline: Thursday 12th August 2021, 3:00 pm Submission procedure: Via the module page on the DLE

 

submission, no capping will apply. The additional 24 hours will run from the original hand in date and time to the next University working day.

 

Coursework including feedback will normally be returned within four working weeks of the due date.

 

Academic Offences

 

Academic offences, including plagiarism, are treated very seriously.  A student who is proven to have committed an academic offence may be placing his or her degree in jeopardy. It is your responsibility as a student to make sure that you understand what constitutes an academic offence, and in particular, what plagiarism is and how to avoid it.

 

All your work must contain references to your sources, however acquired. To copy another person’s work is viewed as plagiarism and is not allowed in UK academic institutions. All your work must be your own and other sources must be identified as being theirs, not yours. The copying of another person’s work will result in you receiving a zero for your assignment and could result in expulsion from the university altogether.

 

Some useful guidance on how to reference correctly, and avoid plagiarism can be found on the following websites:

 

https://www.plymouth.ac.uk/student-life/your-studies/essentialinformation/regulations/plagiarism

 

http://www.learnhigher.ac.uk/referencing/

 

Students are strongly recommended to self-review coursework prior to submission using the University’s Turnitin software. You can get information here. This tool assesses the originality of pieces of academic writing and detects potential academic offences such as plagiarism. The use of Turnitin is becoming standard practice at most UK universities as a way of ensuring academic standards. Plymouth Business School has introduced the sampling system following recommendations from our external

Deadline: Thursday 12th August 2021, 3:00 pm Submission procedure: Via the module page on the DLE

 

examiners about the use of Turnitin. If you have any concerns about the use of Turnitin please contact your Programme Manager and/or personal tutor.

 

Extenuating Circumstances

 

If you have extenuating circumstances that prevent you from submitting your work on time or taking an exam, you will need to fill an extenuating circumstances form and submit corroborative evidence. If your extenuating circumstances for late work are deemed valid, you will receive the actual mark achieved (i.e. no capping will apply).

 

For further information on the Extenuating Circumstances Policy and Procedures, as well as the required form(s), check the Plymouth Business School UG Students’ Handbook, contact the Student Reception and/or check the following link:

 

https://www.plymouth.ac.uk/student-life/your-studies/essential-

information/exams/exam-rules-and-regulations/extenuating-circumstances

 

You are strongly advised to carefully pay attention to all additional University information and emails on the revision of the academic regulations pertaining to Extenuating Circumstances as a result of the current disruptions.

 

 

See module handbook for further information.