UGC NET Questions (Paper – 1)

The polluter pays principle is grounded in the idea that environmental costs should be internalised into production and consumption decisions. When those who generate pollution bear the financial burden of control and remediation, they have stronger incentives to reduce emissions and adopt cleaner technologies. This principle also promotes fairness by avoiding the transfer of private pollution costs onto the public at large.

Option A:
Option A is incorrect because making governments pay regardless of responsibility would effectively socialise the costs of private pollution and weaken incentives for prevention.

Option B:
Option B is correct as it states that those who cause pollution should pay for its control and damages, aligning with many environmental laws and economic instruments.

Option C:
Option C is incorrect since exempting polluters from responsibility goes against both economic efficiency and environmental justice; it would encourage careless practices.

Option D:
Option D is incorrect because both producers and consumers can be polluters, and the principle applies to whoever causes the environmental harm, not to a single group.

The polluter pays principle states that the cost of pollution control and remediation should be borne by the polluter. It internalises environmental costs that would otherwise be external to the market. This principle provides an economic incentive for firms and individuals to reduce pollution. Therefore the description in the question clearly refers to the polluter pays principle.

Option A:
The precautionary principle advocates taking preventive action in the face of uncertainty to avoid serious or irreversible damage. It does not specifically assign costs to the polluter. Thus it does not match the definition given.

Option B:
Equity relates to fairness in the distribution of benefits and burdens among different groups. While polluter pays may promote a kind of equity,it is a more general value and not the specific policy rule defined in the question. Therefore it is not the most precise answer.

Option C:
The polluter pays principle directly links responsibility for pollution with financial liability. By making polluters responsible for the full environmental costs,it encourages cleaner technologies and processes. This is exactly the logic captured by the stem.

Option D:
Subsidiarity is a governance principle that decisions should be taken at the lowest appropriate level. It concerns allocation of authority rather than allocation of environmental costs. Hence it is not relevant to the concept described in the question.

The polluter pays principle requires that the costs of pollution control and remediation be borne by those responsible for creating pollution. It aims to internalise environmental externalities into production and consumption decisions. The stem clearly describes the idea that polluters should pay for prevention,control and clean up,so polluter pays is the correct term. This principle underpins many modern environmental policies.

Option A:
The precautionary principle emphasises taking preventive action in the face of scientific uncertainty,but it does not specify who should bear the cost. Therefore it does not directly address the cost allocation issue highlighted in the question.

Option B:
Polluter pays encourages firms to adopt cleaner technologies and avoid wasteful practices,because they face financial responsibility for damage. This aligns well with the demand in the stem that generators of pollution cover associated costs.

Option C:
Subsidiarity is a governance principle stating that decisions should be taken at the lowest effective level,close to affected citizens. It deals with institutional arrangements rather than cost allocation for pollution,so it is not the right answer.

Option D:
Proximity refers to managing waste as close as possible to its source to reduce transport and associated impacts. While related to logistics,it does not capture the core idea that polluters should bear costs,so Option D is not suitable.

In a cap and trade system, the government sets an overall “cap” on allowable emissions and allocates or auctions permits that add up to this cap. Firms that can reduce emissions cheaply may sell surplus permits to others,creating a market price for pollution. The stem describes this type of system with a limit and tradable permits,so the missing word is cap. Hence Option C is correct.

Option A:
Tax and trade is not a standard phrase. Pollution taxes operate differently by charging a fee per unit of emissions rather than fixing a quantity cap and allowing trading within that cap.

Option B:
An offset typically refers to a project or activity that compensates for emissions made elsewhere,for example through tree planting. While offsets can sometimes be linked to trading schemes,they are not the defining word in the cap and trade expression.

Option C:
Cap emphasises that the total quantity of emissions is limited to a specified level,ensuring an environmental outcome. Trading then allows flexibility in how reductions are distributed. This two part mechanism is exactly what the question refers to.

Option D:
Ratio and trade is not a recognised policy term in environmental economics. It would not convey the core idea of a fixed overall limit on emissions,so it is not an appropriate answer.

Statement B is the only wrong statement because the EKC does not claim that growth automatically solves all environmental problems without deliberate policies and technological changes. Statements A, C and D are correct: A summarises the inverted-U hypothesis, C acknowledges that the pattern is not universal and D notes that the EKC is debated and contested. Therefore, the combination that identifies B only as wrong is the correct answer.

Option A:
Option A is incorrect because it labels both A and B as wrong, whereas A accurately describes the basic EKC hypothesis of rising then falling pollution with income for some pollutants. Treating a correct descriptive statement as wrong contradicts the theoretical literature.

Option B:
Option B is correct as it isolates the simplistic and erroneous interpretation that growth alone will fix environmental problems. It recognises that policies, regulations and structural changes are necessary even if an EKC-type pattern is observed.

Option C:
Option C is incorrect since it marks both B and C as wrong. While B is indeed wrong, C is correct in warning that EKC patterns vary across pollutants and countries, and cannot be generalised mechanically.

Option D:
Option D is incorrect because it regards all four statements as wrong, including A, C and D, which are correct. Denying the existence of debate or the basic description of the EKC misrepresents environmental economics.

Eco taxes and subsidy reforms work by altering financial incentives so that environmentally harmful activities become more expensive and cleaner alternatives more attractive. These tools are classic examples of economic instruments. The stem explicitly refers to changing prices through taxes and subsidies,so “economic” instruments is the correct description. Option B is therefore right.

Option A:
Command and control instruments rely on regulations that set standards or limits and enforce compliance through penalties. They do not primarily operate by changing prices,so Option A is not suitable here.

Option B:
Economic instruments internalise environmental costs into market decisions by adjusting taxes,subsidies or tradable permits. This aligns exactly with the function described in the question.

Option C:
Informational instruments focus on providing data,labels or awareness to influence behaviour. While useful,they do not directly change price structures in the way eco taxes and subsidy removal do.

Option D:
Voluntary instruments involve self regulation or agreements without legal compulsion. They may accompany economic measures but are not defined by price changes,so Option D does not fit.