Review of climate change impacts estimates.

  Part I: Short Answers 1. (6 points) Tol (2018) describes two important conclusions from his review of climate change impacts estimates. Briefly describe them, distinguishing between short- and long-term where necessary. 1. ______________________________________________________________________ ______________________________________________________________________ 2. ______________________________________________________________________ ______________________________________________________________________ 2. (6 points) There are three main types of government action: 1) Influence private production; 2) Provide social insurance and safety nets; 3) Produce public goods and services. Provide an example that illustrates each type of potential government action a. ______________________________________________________________________ ______________________________________________________________________ b. ______________________________________________________________________ ______________________________________________________________________ c. ______________________________________________________________________ ______________________________________________________________________ Part II: Longer Answers 3. (12 points) Policy Scenario I In the following short-run policy scenarios, explain how the policy described might cause a shift of the supply and/or the demand curve in the market specified, using terms like “outward/inward” or “up/down.” Background: Currently, the safety, purity and efficacy of products known as ‘nutritional supplements’ (e.g. vitamins, minerals, proteins etc.) are only loosely regulated in the U.S. Scenario 1: In response to concerns for public safety, Congress passes strict new legislation and provides funding for enforcement, including a ban on the import of any such products from outside the country (including those sold online or in person). Scenario 2: Strict new efficacy, safety and labelling standards for products manufactured in the U.S. (similar to those applied to prescription only or over-the-counter medicines). Policy Scenario II (12 points) Some evidence suggests that firefighters may experience significantly higher lifetime risks of certain cancers. This may be because they are frequently exposed to carcinogens in the form of smoke from burning materials, particularly those containing plastics or other manmade materials (externality). Workmen’s Compensation insurance claims to cover job-related disability of this sort are often denied because individual cases cannot be definitively tied to on-the-job conditions. Young people training for and entering the trade are generally unaware of this potential hazard (information asymmetry) . Describe at least 3 market failures underlying in the problems described above (information asymmetry, externalities etc.), and describe policy approaches that might be appropriately applied to solve each market failure you identify.