Exercises: Economic, Social and Environmental Sustainability

Define sustainable development. Explain the three pillars (economic, social and environmental) and give one Irish example for each.

Match each indicator to the pillar of sustainability it mainly measures (economic, social or environmental):

1. a) Growth rate of real GDP.

1. b) Consumer price inflation.

1. c) Level of greenhouse gas emissions.

1. d) Gini coefficient of income inequality.

1. e) Share of people at risk of poverty.

Ireland's greenhouse gas emissions were 60 million tonnes in one year and 54 million tonnes five years later.

1. a) Calculate the absolute fall in emissions.

1. b) Calculate the percentage fall.

1. c) State whether this is an improvement in environmental sustainability and why.

Real GDP in a region grows by 4% a year while its carbon emissions grow by 3% a year. Population grows by 1% a year.

1. a) Calculate approximately the growth rate of real GDP per head.

1. b) Calculate approximately the change in emissions per unit of GDP.

1. c) Explain what this shows about the link between growth and environmental sustainability.

The table shows the share of national income received by each fifth of households in a country:

1. a) Calculate the ratio of the income share of the top 20% to that of the bottom 20%.

1. b) Explain what this ratio indicates about inequality.

1. c) Describe two government policies in Ireland that could reduce this inequality and their possible effect on growth.

A farmer in County Tipperary can raise income by increasing dairy herd size by 20%. This would raise income by €15,000 a year but increase nitrate run-off into local rivers.

1. a) Identify the private benefit and the external cost.

1. b) Explain why the farmer may ignore the external cost.

1. c) Suggest two ways in which policy could encourage a more sustainable outcome.

Ireland has a legally binding target to reduce greenhouse gas emissions. A proposal would raise the carbon tax by €20 per tonne of CO₂ each year.

1. a) Explain how a carbon tax internalises an externality.

1. b) Discuss the effects on low-income households and rural households and explain how revenue could be used to address them.

1. c) Discuss the likely effect on economic growth and competitiveness.

1. d) Evaluate whether the policy supports all three pillars of sustainability.

The following data refer to a country over ten years:

1. a) Calculate the percentage change in GDP, emissions, and the poverty rate.

1. b) Calculate the change in emissions per €1 billion of GDP.

1. c) Assess whether growth was sustainable over this period, using all three pillars.

1. d) Explain why GDP alone is an incomplete measure of well-being.

A rural Irish county plans a large data centre that would create 300 jobs and raise local tax revenue, but would use considerable electricity and strain the local grid.

1. a) Identify economic, social and environmental costs and benefits.

1. b) Explain the concept of opportunity cost in this decision.

1. c) Discuss the role of a cost-benefit analysis and its limitations, especially in valuing environmental effects.

1. d) Reach a reasoned conclusion on whether the project should proceed.