If carbon emissions rise sharply along with GDP, what is the main concern for long-term welfare?
Answer and explanation
Correct answer: Climate and environmental damage
GDP records the value of current production, but it does not automatically subtract all environmental damage caused by that production. A sharp rise in carbon emissions can increase climate risks, pollution, health costs and future adaptation burdens. These effects may reduce long-term welfare even during economic growth. Hence option D is correct; the other options do not describe the central external cost.
Frequently asked questions
What is the correct answer to this question?
Climate and environmental damage
Why is this the correct answer?
GDP records the value of current production, but it does not automatically subtract all environmental damage caused by that production. A sharp rise in carbon emissions can increase climate risks, pollution, health costs and future adaptation burdens. These effects may reduce long-term welfare even during economic growth. Hence option D is correct; the other options do not describe the central external cost.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
