The Economics of Climate Change: Checkpoint 1

Quick checkpoint - five questions on market failure, discounting, models, tipping points, net zero and carbon budgets.

Question 1 of 5 Why is climate change described as a market failure?

Because markets set fossil fuel prices too high Because the damage from emissions is not reflected in the prices of fossil fuels Because there are no markets for energy Because climate change helps markets

Emissions are a negative externality imposed on others.

Question 2 of 5 Why did Stern and Nordhaus reach different conclusions?

They used different data on temperature Largely because they used very different discount rates One of them ignored climate science They studied different planets

A lower discount rate gives more weight to future damages.

Question 3 of 5 What did Martin Weitzman's fat tails argument suggest?

Extreme outcomes are impossible Small chances of catastrophic outcomes can dominate the case for action, like insurance Climate change is certain to be mild Discount rates do not matter

Climate policy can be seen partly as insurance against catastrophe.

Question 4 of 5 What does net zero mean?

No emissions at all Remaining emissions balanced by equal removals from the atmosphere Emissions halved Only rich countries cut emissions

India has a net zero target for 2070.

Question 5 of 5 Why does the carbon budget matter?

Because warming depends on cumulative emissions, so every tonne uses up a limited budget Because it sets fuel prices Because it only applies to coal Because it is unlimited

The remaining budget for 1.5 degrees is small and shrinking fast.

← Back to The Carbon Budget Next lesson → Climate Finance: Who Pays?

EconReads

We believe knowledge should be open to everyone, not limited by barriers.

econreadsorg@gmail.com
Instagram @econreadsorg

Explore

Home
About
Curriculum
Our Work
News
Support Us
Testimonials

Take action

Donate
Sign our petition
Collaborate with us

Welcome to EconReads

This site is made for visually impaired learners, so our read-aloud reader is already switched on to help you explore hands-free.

You're in control - turn it off any time using the Reader button at the top of the page.

यह साइट दृष्टिबाधित शिक्षार्थियों के लिए बनाई गई है, इसलिए हमारा ज़ोर से पढ़ने वाला रीडर आपको बिना हाथ लगाए घूमने में मदद के लिए पहले से चालू है।

नियंत्रण आपके हाथ में है - पेज के ऊपर मौजूद रीडर बटन से इसे कभी भी बंद करें।

Don't show this message again

EconReader Reading speed Ready