CFA ESG - Chapter 3 Exam Questions & Answers Latest Updated

the definition of economics - Answer the relationship between ends and scarce means which have alternative uses the definition of environmental sustainability - Answer seeking to meet the needs and aspirations of the present without compromising the ability to meet those of the future according to an update by the Stockholm Resilience Centre from 2017, four of nine planetary boundaries have already been crossed as a result of human activity, what are they? - Answer climate change loss of biosphere integrity land system change altered biogeochemical cycles (phosphorus and nitrogen loading) when assessing risks and opportunities the CFA ESG course assesses environmental issues which are limited to - Answer A. Climate Change B. Pressures on Natural Resources C. Pollution, Waste and a Circular Economy climate change is defined as - Answer a change of climate, directly or indirectly attributed to human activity that alters the composition of the global atmosphere and which is, in addition to natural climate variability, observed over comparable time periods climate change involves many different dimensions including - Answer science, economics, society, politics and moral and ethical questions what is an example of a local manifestation? - Answer extreme weather events (tropical cyclones) what is an example of a global impact? - Answer rising global average temperature and sea levels the main man-made driver of the warming of the planet is what? - Answer rising emissions of greenhouse gasses (GHGs) Which GHG is the most significant driver to the warming event? - Answer CO2, because of its higher concentration in the atmosphere which is at levels not seen since before homo sapiens existed much of the increase in carbon dioxide has resulted from - Answer the industrial revolution - with more than half of the CO2 emissions from the late 17th century onwards occurring in the last 30-years Besides CO2, list some other important GHGs - Answer methane nitrous oxide other fluorinated gases although the other GHGs lifetime in the atmosphere is shorter than that of CO2, they tend to compensate by? - Answer having a higher warming potential - 30 times stronger in the case of methane Emissions of GHG come primarily from which sectors? - Answer Energy, Industry, Transport, Agriculture and Changes in Land Use certain tipping points associated with the changes of rising temperature include - Answer 1. melting of the permafrost 2. disintegration of the west Antarctic ice sheet 3. the dieback of the Amazon Rainforest 4. Melting ice sheets Melting of the permafrost is - Answer frozen ground in the Northern hemisphere, the thawing of which would release the vast amounts of carbon which it currently holds, thereby further accelerating climate change The disintegration of the West Antarctic ice sheet is - Answer a block of ice that holds enough ice to raise global sea levels by over three metres The dieback of the Amazon rainforest is - Answer changes in temperature and deforestation that would render the forest unable to sustain itself, making one of the worlds largest stores of carbon emit more carbon than it absorbs Melting Arctic ice sheets are - Answer causing a shutdown in the system of currents in the Atlantic Ocean that brings warm water up to Europe, which, among other consequences, may lead to widespread cessation of arable farming in the UK and parts of Europe In 2018 what did the Intergovernmental Panel on Climate Change estimate? - Answer that human activities have caused approximately 1degree of global warming about pre-industrial levels the Intergovernmental Panel on Climate Change has also estimated that - Answer Limiting warming to 1.5degrees by the end of this century could reduce climate related risks to health, livelihoods, food security, water supply, human security and economic growth What will happen to these vulnerable ecosystems at 2degrees? (Arctic and Warm Water Coral Reefs) - Answer disappear, or mostly Estimates of the economic costs of climate change vary, a report initially predicted in 2015 that there would be approximate losses/damages by 2100 of - Answer $4tn by 2100 in Net Present Value Now estimates of the economic costs of climate change as predicted by the IPCC suggests between - Answer $54tn-$69tn for a 1.5degrees and 2degrees scenarios respectively Martin Weitzman's dismal theorem - Answer suggests that standard cost-benefit analysis is inadequate to deal with the potential downside losses from climate change Nicholas Stern has argued that - Answer moral considerations warrant the use of a low discount rate when assessing future climate damages, in order to place adequate value on the lives and welfare of future generations The thrust of Stern and Weitzman's arguments is that - Answer society should invest more today in order to safeguard a liveable climate in the future Economic models used to calculate future climate change fail to take into consideration - Answer tipping points, they model a society that keeps warm and carries on, even though some of these scenarios approach limits of adaptability and habitability one economic model suggest that an increase of 6degrees would result in - Answer a sacrifice of only about 9% of the global income by the end of the century another economic model has also predicted that a global average warming of around 7degrees would result in - Answer human life average expectancy of a healthy adult to be measured in hours, as the human body can no longer cool itself through perspirations and breaks down Responding to climate change is usually presented in terms of two main approaches which are - Answer 1. climate change mitigation 2. climate change adaption climate change mitigation is defined as - Answer reducing and stabilizing the levels of heat-trapping GHGs in the atmosphere climate change adaption is defined as - Answer adapting to the climate change already taking place and increasing climate change resilience the goal of climate change mitigation is to - Answer 1. avoid significant human interference with the climate system 2. stabilize GHG levels in a timeframe sufficient to allow ecosystems to adapt naturally to climate change 3. ensure that food production is not threatened 4. enable economic development to proceed in a sustainable manner Examples of an energy strategy for climate change mitigation - Answer Deploying renewable energy sources such as wind, solar, geothermal and hydro or biofuels from sustainable resources Examples of a building strategy for climate change mitigation - Answer retrofitting buildings to become more energy efficient and using building materials and equipment that reduce buildings' carbon footprint Examples of a transport strategy for climate change mitigation - Answer adopting more sustainable transportation and infrastructure, particularly in cities such as electric vehicles, rail and metro and bus and rapid transit The International Chamber of Commerce predicts that how much is going to be needed in terms of additional annual investment in energy supply and demand to limit warming to 1.5degrees? - Answer $1-4tn in supply $1tn in demand How much is the world already investing into the energy sector per year? - Answer $1tn The United Nations Emissions Gap Report stated in 2020 that - Answer we are heading for a world that is 3.2degrees warmer by the end of this century, even with full implementation of unconditional nationally determined contributions (NDCs) The COVID-19 pandemic led to what? - Answer The largest recorded drop in yearly CO2 emissions (circa 7%) similar reductions would be required each year to reach the agreement of the Paris Accord One of the most obvious examples of climate change adaption is - Answer the use of air conditioning, which is becoming increasingly common as incomes and populations rise, particularly in the worlds warmer regions By 2050 it is anticipated that air conditioning alone may result in - Answer GHG emissions equivalent to that of India, the world's 3rd-largest emitter today, which would create a vicious circle of more global overheating