UGC NET Questions (Paper – 1)

Statements A, B, C, E and F are correct and together explain the purpose, methods and limitations of CBA. It compares monetised costs and benefits, uses valuation techniques, assesses net benefits and can be complemented by distributional analysis, while decision-makers often consider additional criteria such as ethics or ecological thresholds. Statement D is false because CBA cannot fully capture all ethical, distributional and ecological aspects by itself. The correct combination is therefore A, B, C, E and F only.

Option A:
Option A is correct as it acknowledges both the usefulness and limitations of CBA and recognises the need for complementary analyses and criteria in environmental decision-making.

Option B:
Option B is incorrect because it omits F and thus ignores how CBA results are actually used alongside other considerations in practice.

Option C:
Option C is incorrect since it excludes A and therefore does not explicitly state that CBA monetises costs and benefits.

Option D:
Option D is incorrect as it leaves out B, ignoring environmental valuation methods important for non-market goods.

Statements A, B, C, D and F are correct on taxes, subsidies, permits, policy mixes and valuation. Statement E is wrong because economic instruments are intended to reduce pollution when designed well. Therefore A, B, C, D and F only is correct.

Option A:
Option A is incomplete because it omits F.

Option B:
Option B is correct because it includes A, B, C, D and F and excludes E.

Option C:
Option C is incorrect because it includes E (false).

Option D:
Option D is incorrect because it includes E (false) and omits C.

Green accounting attempts to integrate environmental factors into national income accounts. It recognises that GDP can rise while natural capital is depleted or environmental quality declines, giving a misleading picture of true wealth. By subtracting costs of pollution and resource depletion and adding the value of environmental services, green GDP provides a more realistic measure of sustainable economic performance. Thus, the main idea is to adjust income measures for environmental losses, as described in Option C.

Option A:
Option A is incorrect because simply calculating physical output volumes does not address environmental externalities. Green accounting is specifically concerned with valuing environmental gains and losses.

Option B:
Option B is incorrect as it suggests excluding environmental assets, which is the opposite of what green accounting advocates. Ignoring these assets perpetuates the shortcomings of conventional GDP.

Option C:
Option C is correct since it points to the need for incorporating the depreciation of natural capital alongside produced capital. This adjustment helps policymakers see whether growth is being achieved at the cost of long-term environmental health.

Option D:
Option D is incorrect because green accounting does not demand the abolition of all traditional measures. Instead, it complements and refines them by adding an environmental dimension.