Sustainable Development · Paper 2 — Free Economics SL Practice Questions

Country Alpha, a low-income nation in Sub-Saharan Africa, has experienced rapid economic growth averaging $7\%$ per year over the last decade, driven largely by the extraction and export of crude oil. Its GDP per capita has doubled from USD 1,200 to USD 2,400. However, the World Bank reports that Alpha's adjusted net savings — a measure of genuine savings accounting for resource depletion and pollution damage — have turned negative. UNICEF data shows that primary school enrolment rates have fallen from $78\%$ to $65\%$ over the same period, and the Gini coefficient has risen from $0.38$ to $0.52$. The government of Alpha has announced a policy to double oil production over the next five years to fund infrastructure projects.

Country Beta, a middle-income nation in Southeast Asia, has seen its Human Development Index (HDI) rise from $0.620$ to $0.745$ over the past fifteen years. However, its Ecological Footprint per capita has grown from $2.1$ global hectares to $3.8$ global hectares, while its biocapacity per capita is only $1.2$ global hectares. The government is considering two policy options: - Policy X: Subsidise the adoption of solar panels and electric vehicles to reduce carbon emissions. - Policy Y: Continue current growth strategies focused on manufacturing exports, which have raised incomes but increased pollution.

Country X is a lower-middle-income country in sub-Saharan Africa with a Human Development Index (HDI) of $0.520$. In 2023, Country X discovered significant deposits of rare earth minerals used in smartphones, electric vehicle batteries, and wind turbines. A multinational corporation (MNC) has offered to develop the mines, promising: - $15{,}000$ direct jobs - Construction of $200\,\text{km}$ of paved roads - Annual royalty payments of $2.5\%$ of revenue to the government, estimated at USD $120$ million per year Environmental impact assessments predict: - Deforestation of $8{,}000$ hectares of tropical forest - Acid mine drainage affecting two major rivers used for drinking water and irrigation - A $40\%$ increase in local air particulate matter ($\text{PM}_{10}$) during the 20-year mining phase The Minister of Economic Development argues the project is essential for poverty reduction. The Minister of Environment argues it violates the principles of sustainable development.