1. In the article Bucks for Ducks or Money for Nothin? The Political Economy of the Federal

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1 Eco 333 Name Test 3 6 August points. Please write answers in ink. You may use pencil to draw graphs. 1. In the article Bucks for Ducks or Money for Nothin? The Political Economy of the Federal has been the reasons for the lack of habitat protection? Explain. 2. Bruce Babbit (Secretary of Interior for the Clinton Administration) calls the Endangered Species Act the most visionary environmental law that has ever been passed. One might conclude from this statement that the ESA has been a great success in protecting both species and their habitat. Does Dean Lueck reach this conclusion in his article The Law and Politics of Wildlife Preservation? Explain 3. According to Bruce Yandle, Public Choice and the Environment: From the Frying Pan to the Fire, The lessons of public choice do not tell us that all political solutions are to be avoided. Indeed, politics cannot be avoided [p. 56]. Is fair to say that Yandle is critical of government management of environmental resources? Explain. If Yandle is a critic, then why does he admit a necessary role for government? Explain. 1. In his article Clean Politics, Dirty Profits: Rent Seeking Behind the Green Curtain, Jonathan Adler observes that the details of environmental policies have major economic consequences. What is Adler s main point in this article, and what does it have to do with economic consequences? What evidence does Adler use to support his thesis about rent seeking behind the green curtain? Explain. 2. According to Bruce Yandle, Public Choice and the Environment: From the Frying Pan to the Fire, The lessons of public choice do not tell us that all political solutions are to be avoided. Indeed, politics cannot be avoided [p. 56]. Is fair to say that Yandle is critical of government management of environmental resources? Explain. If Yandle is a critic, then why does he admit a necessary role for government? Explain. 3. According to Dean Lueck, The Law and Politics of Federal Wildlife Preservation, the ESA [Endangered Species Act] has been a double-edged sword for environmental groups [p. 114]. Explain why. 1. Jonathan Adler contends that, by its very nature, environmental regulation may be more prone to rent-seeking, for in the environmental context, both regulated firms and public interest representatives stand to gain from reductions in output or the creation of barriers to entry. [p. 5] Provide some examples of environmental regulations that provide rents to regulated firms. Who are the public interest representatives, and in what way do they gain from these regulations? 2. In the article Bucks for Ducks or Money for Nothin? The Political Economy of the Federal

2 have been the reasons for the lack of habitat protection? Explain. The duck population has rebounded after several decades of steady decline. Is there a bootlegger-and-baptist story in this recovery? 3. a. Does Dean Lueck believe that the private market system will provide the optimal level of b. The passage of the Endangered Species Act (ESA) in 1973 marked a dramatic change in federal government policy concerning wildlife preservation. Explain how the ESA has changed the government s role in wildlife preservation. Also, explain how environmental organizations have responded to the opportunities provided through the ESA. c. According to Lueck, bureaucrats can direct landowners to set aside more than the optimal d. This model would seem to indicate that we devote too much habitat for wildlife preservation. 4. Elizabeth Brubaker contends that Canadian politicians and bureaucrats destroyed Canada s Atlantic groundfisheries. How did they do this? Explain the specific roles played by both Atlantic. Although many of the world s fisheries suffer from too much fishing effort, does Brubaker indicate that fisheries can be managed on a sustainable basis? Explain 1. How does David Gerard explain the origins of the federal wilderness system? Explain. 2. In his article Clean Politics, Dirty Profits: Rent Seeking Behind the Green Curtain, Jonathan Adler observes that there is green pork in the corn barrel, and that brown bootleggers fund green Baptists. How does Adler use these examples to advance his thesis? Does Adler conclude that environmental regulations are more about helping special interest than improving the environment? 3. Read the article Protecting the Plover is Pitting the Poor Bird Against Beach Lovers, Wall Street Journal (7 June 2001). a. Assume that a beach can be used for either recreation or as piping plover (PP) habitat. Using Dean Lueck s model of optimal land allocation, illustrate the efficient allocation of beach property between the competing uses. b. Had the Endangered Species Act (ESA)not been enacted, the Fish and Wildlife Service would be required to pay landowners for habitat. Indicate the cost of purchasing PP habitat and the amount of habitat the FWS would buy.

3 c. Under the ESA, the FWS need not pay for PP habitat. Indicate the level of habitat that the FWS will demand under the current rules of the game. Indicate the deadweight loss under this allocation. d. In the case of the piping plover, how does use of the ESA alter property rights? Explain. e. Because property owners are subject to severe land-use restrictions, Lueck contends that the ESA creates perverse incentives. How might people who live along the beach respond upon hearing that the piping plover is to be protected under the ESA? Explain. 4. In the article Bucks for Ducks or Money for Nothin? The Political Economy of the Federal has been the reason for the lack of habitat protection? Explain. 1. a. Does Dean Lueck believe that the private market system will provide the optimal level of b. The passage of the Endangered Species Act (ESA) in 1973 marked a dramatic change in federal government policy concerning wildlife preservation. Explain how the ESA has changed the government s role in wildlife preservation. c. According to Lueck, bureaucrats can direct landowners to set aside more than the optimal d. This model would seem to indicate that we devote too much habitat for wildlife preservation. 2. After examining federal environmental regulations, Bruce Yandle concludes that federal government environmental regulations give us too little environmental improvement for the expenditure of resources. Indeed, some federal environmental regulations have arguably increased the levels of pollution (jumping from the frying pan into the fire). Does Yandle offer an explanation for this lack of effectiveness and waste of resources? Explain. 3. Jonathan Adler concludes that federal government environmental regulations have as much to do with promoting narrow economic interests as with protecting environmental concerns. Provide at least two examples where environmental causes have also become public interest shields for private gain.

4 4. Elizabeth Brubaker contends that Canadian politicians and bureaucrats destroyed Canada s Atlantic Groundfisheries. How did they do this? Explain the specific roles played by both Atlantic. Although many of the world s fisheries suffer from too much fishing effort, is Brubaker confident that fisheries can be managed on a sustainable basis? Explain. 1. In the article Bucks for Ducks or Money for Nothin? The Political Economy of the Federal has been the reason for the lack of habitat protection? Explain. 2. Bruce Babbit (Secretary of Interior for the Clinton Administration) calls the Endangered Species Act the most visionary environmental law that has ever been passed. One might conclude from this statement that the ESA has been a great success in protecting both species and their habitat. Does Dean Lueck reach this conclusion in his article The Law and Politics of Wildlife Preservation? Explain 3. Elizabeth Brubaker contends that Canadian politicians and bureaucrats destroyed Canada s Atlantic Groundfisheries. How did they do this? Explain the specific roles played by both Atlantic. Although many of the world s fisheries suffer from too much fishing effort, does Brubaker indicate that fisheries can be managed on a sustainable basis? Explain. Extra Credit (5 additional points). Read the attached article, Green Groups, Native Tribes Want U.S. to Levy Duties on Canadian Lumber, Wall Street Journal, 10 May 2001, p. A6. Use the economic concepts covered in this course to evaluate the environmental and economic merits of the proposed tariff on Canadian softwood lumber imports. 4. How does David Gerard explain the origins of the federal wilderness system? Was it public demand or bureaucratic supply? Explain. 4. Jonathan Adler contends that, by its very nature, environmental regulation may be more prone to rent-seeking, for in the environmental context, both regulated firms and public interest representatives stand to gain from reductions in output or the creation of barriers to entry. Please provide some examples of environmental regulations that provide rents to regulated firms. Who are the public interest representatives, and in what way do they gain from these regulations? 5. In the article Bucks for Ducks or Money for Nothin? The Political Economy of the Federal have been the reasons for the lack of habitat protection? Explain. The duck population has rebounded after several decades of steady decline. Is there a bootlegger-and-baptist story in this recovery? 3a. Does Dean Lueck believe that the private market system will provide the optimal level of e. The passage of the Endangered Species Act (ESA) in 1973 marked a dramatic change in

5 federal government policy concerning wildlife preservation. Explain how the ESA has changed the government s role in wildlife preservation. Also, explain how environmental organizations have responded to the opportunities provided through the ESA. f. According to Lueck, bureaucrats can direct landowners to set aside more than the optimal g. This model would seem to indicate that we devote too much habitat for wildlife preservation. 4. Anderson and Huggins claim, You Have to Admit it s Getting Better. What is getting better? How do we know? 5. Anderson and Huggins report that, No One Washes a Rental Car. What are they actually reporting about publicly managed environmental assets? Do free market environmentalists suggest ways to improve the value of these assets? Explain.