10.2 Market Failures & Solutions (DP IB Environmental Systems & Societies (ESS): HL): Flashcards
0Still learning
Know0
Define market failure.
Was this flashcard helpful?
Cards in this collection (25)
Define market failure.
A market failure occurs when the free market fails to allocate goods and services efficiently, leading to negative impacts on the environment and society.
What is an example of a market failure causing environmental damage?
An example is a factory releasing pollutants into the air and water, causing environmental damage and health hazards for local people without bearing the cost.
Burning of fossil fuels such as petrol for vehicle use and coal for industry leads to , which can cause health problems and environmental degradation.
Burning of fossil fuels such as petrol for vehicle use and coal for industry leads to air pollution, which can cause health problems and environmental degradation.
Why do market failures often lead to negative environmental impacts?
Market failures often lead to negative environmental impacts because the market does not reflect the true costs and benefits of production or consumption, resulting in overuse of resources and pollution.
Define polluter-pays principle.
The polluter-pays principle is the idea that those responsible for pollution should bear the costs of stopping, managing, and cleaning up their pollution.
What are two economic tools used to ensure the polluter pays for pollution?
Two economic tools are taxes on pollution and fines for exceeding pollution limits.
Tradable permits, such as , allow polluters to buy and sell rights to emit pollution, creating a market-based approach to pollution control.
Tradable permits, such as carbon credits, allow polluters to buy and sell rights to emit pollution, creating a market-based approach to pollution control.
True or False?
The polluter-pays principle means the government always pays for cleaning up pollution.
False.
The polluter-pays principle means those who cause pollution must pay for its clean-up, not the government.
Define carbon neutral certification.
A carbon neutral certification is awarded to products or companies that offset their carbon emissions through activities like reforestation or investing in renewable energy.
How does the European Union's Emissions Trading System (ETS) apply the polluter-pays principle?
The ETS sets a cap on carbon emissions and allows companies to trade emission allowances, making polluters pay for their emissions and incentivising reduction.
The High Seas Treaty holds nations accountable for pollution in the oceans beyond their and ensures they bear the costs of environmental harm.
The High Seas Treaty holds nations accountable for pollution in the oceans beyond their Exclusive Economic Zone (EEZ) and ensures they bear the costs of environmental harm.
Define polluter-pays principle.
The polluter-pays principle is the idea that those responsible for pollution should bear the costs of stopping, managing, and cleaning up the pollution they cause, especially when the market fails to account for negative environmental impacts.
Define tragedy of the commons.
The tragedy of the commons is when common resources are overused and depleted because individuals act in their own interest rather than considering the long-term good of the group.
Why can resources that are shared by everyone be at risk of depletion?
Shared resources are at risk of depletion because individuals may exploit them for their own gain, leading to degradation or exhaustion of the resource for all.
When no one owns a resource, individuals may exploit it for their , leading to its degradation or complete .
When no one owns a resource, individuals may exploit it for their own gain, leading to its degradation or complete depletion.
Give an example of the tragedy of the commons in international waters.
In international waters, fishing fleets exploit fish stocks without regulation or cooperation, leading to declining fish populations and unsustainable fisheries.
As each fleet seeks to maximise its catch, fish populations , disrupting marine and making fisheries increasingly unsustainable.
As each fleet seeks to maximise its catch, fish populations decline, disrupting marine ecosystems and making fisheries increasingly unsustainable.
True or False?
The tragedy of the commons only occurs when resources are owned by individuals.
False.
The tragedy of the commons occurs when resources are shared and not owned by individuals, leading to overexploitation.
How can clearly defined property rights help prevent the tragedy of the commons?
Clearly defined property rights assign responsibility for resources, encouraging individuals to manage them sustainably rather than overexploit them.
Without ownership or responsibility, the problem arises, where individuals benefit from the resource without contributing to its .
Without ownership or responsibility, the free rider problem arises, where individuals benefit from the resource without contributing to its maintenance.
What is one way local communities have successfully managed shared pastures in Switzerland?
Local communities in Switzerland manage shared pastures by creating and following collectively agreed rules that allocate grazing rights and prevent overgrazing.
Define free rider problem.
The free rider problem occurs when individuals benefit from a resource without contributing to its upkeep or preservation.
Who was Elinor Ostrom and what was her contribution to the study of commons management?
Elinor Ostrom was a Nobel Prize-winning economist who showed how local communities can manage common resources effectively through collective agreements and rules.
Ostrom's research highlighted that successful management of common resources can occur through and action by local communities.
Ostrom's research highlighted that successful management of common resources can occur through cooperation and collective action by local communities.
Define greenwashing.
Greenwashing is the practice where companies use marketing to appear environmentally friendly or sustainable without making real environmental improvements.
Sign up to unlock flashcards
or