Question 6

7pts

Background: High temperatures are an important cause of death in India where only 5% of households have air conditioning (A/C). 70% of the electricity powering A/C in India comes from fossil fuels.

Indicate for each statement if it is true or false.

1. Increased use of A/C in India is an example of a negative feedback loop.

2 Since hot temperatures inside homes are a negative externality, the decision to install an A/C is an example that fits the textbook definition of abatement.

3 Installing A/Csin India would generate positive externalities on the manufacturers of A/Cs in the form of increased sales.

4The cycle of installing A/Cs followed by greater warming followed by more A/C demand, etc. is analogous (similar in key respects) to the cycle of permafrost melting and releasing methane followed by more warming, etc.

5The cycle of installing A/Cs followed by greater warming followed by more A/C demand, etc. is analogous (similar in key respects) to the cycle of higher demand for avocado toast leading to rising marginal costs on avocado farms and substitution towards mangos.

6 The marginal social benefit of abatement is simply the price consumers pay for a new A/C.

7Replacing an A/C with a fan powered by a rooftop solar cell panel is an example that fits the textbook definition of abatement.