Oct/Nov 2023 MEMORANDUM
ECS2606
Environmental Economics
100 Marks
Duration: 2.5 Hours
“This rising demand for motorised boating activities at many South African
estuaries is causing problems for the visitor as well as for the environment.
These issues have led to calls for action by certain interested parties to regulate
access (Lee et al., 2015)”
1. Mention three different types of impact analysis and briefly describe the type of
impact analysis that applies to the passage above.
Three different types of impact analysis include:
a. Environmental Impact Assessment (EIA): EIA assesses the environmental
consequences of a proposed project or activity. It aims to identify potential negative
impacts and recommend mitigation measures.
b. Social Impact Assessment (SIA): SIA focuses on the social effects of a project or
activity, considering aspects like community well-being, cultural heritage, and social
cohesion.
c. Economic Impact Analysis: This type of analysis evaluates the economic effects of
a project or activity, including factors like job creation, cost-benefit analysis, and
financial viability.
In the passage, the type of impact analysis that applies is **Environmental Impact
Assessment (EIA)**. The passage discusses problems related to motorized boating
activities in South African estuaries and the calls for regulation due to concerns about
their impact on the environment.
, 2. Describe the concept of an externality and distinguish between a positive and a
negative Externality. Are rising motorised boating activities in South African
estuaries a negative or a Positive externality? Explain briefly.
Externality refers to the impact of an economic activity on third parties who are not
directly involved in that activity. It can be positive or negative:
- **Negative Externality**: This occurs when the external effects of an economic
activity impose costs or harm on unrelated third parties. For example, pollution from a
factory negatively affects the health of nearby residents, creating a negative externality.
- **Positive Externality**: In contrast, a positive externality happens when the
external effects benefit third parties. An example is the education of individuals, which
leads to a more informed and skilled workforce, benefiting society as a whole.
In the context of the passage, rising motorized boating activities in South African
estuaries are likely associated with **negative externalities**. These activities may
cause problems for the environment, affecting not only the boaters and operators but
also visitors to the estuaries and the ecological systems within the estuaries. The harm
inflicted on the environment, visitors, and ecosystem qualifies as a negative externality,
leading to calls for regulation to address these detrimental effects.
In 1950, the world produced more than 2 million tons of plastic per year. By 2015,
this annual production swelled to 419 million tons and exacerbating plastic waste
in the environment. Shockingly, National Geographic found that 91% of all plastic
that has ever been made is not recycled, representing not only one of the biggest
environmental problems of our lifetime, but another massive market failure.
Considering that plastic takes 400 years to decompose, it will be many
generations until it ceases to exist. There’s no telling what the irreversible effects
of plastic pollution will have on the environment in the long run.
https://earth.org/the-biggest-environmental-problems-of-our-lifetime/
3. Distinguish between cumulative and non-cumulative pollutants and give an
example of each. Is plastic a cumulative or non-cumulative pollutant? Explain.
Cumulative pollutants: are those that accumulate in the environment over time without
breaking down or being removed. They persist in the environment, potentially causing
harm in the long run. An example is heavy metals like mercury, which can accumulate
in water bodies and marine life, posing long-term risks to ecosystems and human
health.
ECS2606
Environmental Economics
100 Marks
Duration: 2.5 Hours
“This rising demand for motorised boating activities at many South African
estuaries is causing problems for the visitor as well as for the environment.
These issues have led to calls for action by certain interested parties to regulate
access (Lee et al., 2015)”
1. Mention three different types of impact analysis and briefly describe the type of
impact analysis that applies to the passage above.
Three different types of impact analysis include:
a. Environmental Impact Assessment (EIA): EIA assesses the environmental
consequences of a proposed project or activity. It aims to identify potential negative
impacts and recommend mitigation measures.
b. Social Impact Assessment (SIA): SIA focuses on the social effects of a project or
activity, considering aspects like community well-being, cultural heritage, and social
cohesion.
c. Economic Impact Analysis: This type of analysis evaluates the economic effects of
a project or activity, including factors like job creation, cost-benefit analysis, and
financial viability.
In the passage, the type of impact analysis that applies is **Environmental Impact
Assessment (EIA)**. The passage discusses problems related to motorized boating
activities in South African estuaries and the calls for regulation due to concerns about
their impact on the environment.
, 2. Describe the concept of an externality and distinguish between a positive and a
negative Externality. Are rising motorised boating activities in South African
estuaries a negative or a Positive externality? Explain briefly.
Externality refers to the impact of an economic activity on third parties who are not
directly involved in that activity. It can be positive or negative:
- **Negative Externality**: This occurs when the external effects of an economic
activity impose costs or harm on unrelated third parties. For example, pollution from a
factory negatively affects the health of nearby residents, creating a negative externality.
- **Positive Externality**: In contrast, a positive externality happens when the
external effects benefit third parties. An example is the education of individuals, which
leads to a more informed and skilled workforce, benefiting society as a whole.
In the context of the passage, rising motorized boating activities in South African
estuaries are likely associated with **negative externalities**. These activities may
cause problems for the environment, affecting not only the boaters and operators but
also visitors to the estuaries and the ecological systems within the estuaries. The harm
inflicted on the environment, visitors, and ecosystem qualifies as a negative externality,
leading to calls for regulation to address these detrimental effects.
In 1950, the world produced more than 2 million tons of plastic per year. By 2015,
this annual production swelled to 419 million tons and exacerbating plastic waste
in the environment. Shockingly, National Geographic found that 91% of all plastic
that has ever been made is not recycled, representing not only one of the biggest
environmental problems of our lifetime, but another massive market failure.
Considering that plastic takes 400 years to decompose, it will be many
generations until it ceases to exist. There’s no telling what the irreversible effects
of plastic pollution will have on the environment in the long run.
https://earth.org/the-biggest-environmental-problems-of-our-lifetime/
3. Distinguish between cumulative and non-cumulative pollutants and give an
example of each. Is plastic a cumulative or non-cumulative pollutant? Explain.
Cumulative pollutants: are those that accumulate in the environment over time without
breaking down or being removed. They persist in the environment, potentially causing
harm in the long run. An example is heavy metals like mercury, which can accumulate
in water bodies and marine life, posing long-term risks to ecosystems and human
health.
