Environmental economics: real-world examples
Named cases you can use in an answer, each under the syllabus point it illustrates and linked to the lesson it comes from.
HL.b Environmental economics
HL.b.4When the market fails to prevent negative impacts, the polluter-pays principle may be applied.HL
PolicyCigarette butt clean-up law, Spain
Spain passed a law requiring tobacco companies to pay for cleaning up cigarette butts from streets and beaches, as part of an extended producer responsibility approach.
Shows the polluter-pays principle applied to producers, so that the cost of clean-up shifts from taxpayers to the companies whose products create the waste.
PolicyEU Emissions Trading System
The EU Emissions Trading System (since 2005) caps total emissions from power stations and heavy industry. Polluters must buy or trade permits for each tonne of CO₂ they emit, which puts a market price on carbon.
Demonstrates the polluter-pays principle working through a market mechanism, where the cost of the externality is internalised by the people who cause it.
since 2005 Environmental economics #2
HL.b.5"Greenwashing" or "green sheen" is where companies use marketing to give themselves a more environmentally friendly image.HL
StudyEU survey of green product claims
A 2020 European Commission survey found that 53% of the green claims made about products in the EU were vague, misleading or unfounded.
Quantifies how widespread greenwashing is across markets, which shows it is a systemic problem rather than the work of a few bad companies.
Volkswagen 'clean diesel' scandal
Volkswagen marketed its diesel cars as 'clean diesel', but in 2015 US regulators found it had fitted defeat-device software to about 11 million vehicles so they passed emissions tests while emitting far more NOx on the road.
Shows greenwashing at its most extreme: green marketing was used in place of real environmental performance, and the deception led to legal and financial penalties.
HL.b.6The tragedy of the commons highlights the problem where property rights are not clearly delineated and no market price is attached to a common good, resulting in overexploitation.HL
Ogallala Aquifer depletion, USA
Under the US Great Plains, farmers pump groundwater from the shared Ogallala Aquifer for irrigation much faster than it is naturally recharged, so water tables are falling.
Shows that open access to a shared resource with no price leads each user to overexploit it, until the resource runs down for everyone.
Ogallala Aquifer, USA Environmental economics #2Overfishing and the High Seas Treaty
International waters beyond national jurisdiction have no owner and no price on their fish, which has led to overfishing. The 2023 UN High Seas Treaty set up a framework for marine protected areas in these waters.
Demonstrates the tragedy of the commons caused by property rights that are not defined, and shows international governance as one response to it.