Registered Environmental Manager (REM) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Registered Environmental Manager Test using flashcards and multiple choice questions. Gain insights with hints and explanations for each question. Ace your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is meant by a perverse subsidy?

A subsidy that supports innovative business practices
A financial aid that negatively affects public welfare
Investment incentives for environmentally friendly practices
A subsidy that is beneficial for all stakeholders

The correct answer is: A financial aid that negatively affects public welfare

A perverse subsidy refers to a financial aid or incentive that has unintended negative consequences for public welfare or the environment. Such subsidies can encourage behaviors or practices that are detrimental, leading to environmental degradation, social inequalities, or economic inefficiencies. For example, subsidies that support fossil fuel production may lower energy costs in the short term but also contribute to increased greenhouse gas emissions and climate change. The other options focus on subsidies that are either beneficial or supportive of positive outcomes. Innovative business practices and environmentally friendly investments generally lead to improvements or advancements in these areas, while a subsidy beneficial for all stakeholders implies a universally positive aspect, which contradicts the definition of a perverse subsidy. In essence, a perverse subsidy counteracts the intended goals of supporting sustainable practices and improving public welfare.