MBA (BE) II Sem.

– May/June 2021

Business Economics--Course 424801204

Paper Name: Environmental Economics

Time : 3+1 hours Maximum Marks : 70

Answer any 4 questions. All questions carry equal marks

1. (a) “Unfortunately, there is still a lack of awareness about pollution and environmental hazards
among the masses in India. Even after the calamitous incident of the Bhopal Tragedy in 1984, many
companies are still disinclined to realize the importance of environmental management.” Suggest the
possible solution(s) through which firms can avoid such incidents in future.

(b) State the generally-accepted definition of sustainable development and explain how this relates to
depletion of fossil fuel reserves.

2. (a) The stage of ‘On-Site Visit’ is considered to be the most important stage in the process of
environmental auditing. Do you agree? Explain your answer.

(b) “According to the Intergovernmental Panel on Climate Change, for the planet to have a 50%
chance of avoiding a dangerous global average temperature rise of 2 degrees Celsius (2 °C) or more
above pre-industrial levels, greenhouse gas concentrations must stabilize at 450 ppm CO 2e.”
In light of this statement briefly describe the scientific concept based on which the remaining quota of
carbon emissions needs to be divided among nations.

3. (a) “In order to meet the GHG emission targets, Kyoto protocol didn’t leave Annex I countries on
their own, in fact, developed as well as developing countries have been empowered to help each other
in order to achieve the targets.” Explain.

(b) “Producers may want to ensure that they use inputs that are produced in an acceptable way, or
that they source them from suppliers who can be trusted with regard to environmental and/or ethical
concerns. And if they do, they are likely to want to tell their customers about it”

In light of this statement describe the method based on which the producers can develop such an
assessment for their products. Also comment on two useful applications of this method for a firm in
business.

4. Write short notes on the following:

(a) “National Environmental Policy (NEP), 2006 is the first initiative in strategy formulation for
environmental protection in a comprehensive manner.” Comment.
(b) The three pillars of sustainable development. Elaborate

(c) Kyoto protocol is based on the principle of “Different but common responsibilities.” Explain.

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5. Four hypothetical situations are given below where some kind of environmental damage has
occurred. For each of these cases choose the best techniques to estimate the cost of damage in
question and provide a brief justification of your choice:
a) decline in property value due to severe air pollution
b) damage to the scenic value of a lake shore due to development of a housing project on opposite
shore
c) loss of habitats for rare plant species due to development projects on ecologically sensitive wetland
d) damage due to devastating fires in the Amazon rain forest

6. “Until recently governments around the world emphasised on traditional command and control
regulations. It has now become apparent that market-based instruments (MBIs) may turn out to be
more efficient than such traditional regulation in reducing pollution levels.” Comment - either argue
for or against the given proposition.

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