UPSC Prelims 2019 CSAT Paper II · Q26 of 79 Comprehension medium

Passage

Passage - 4 A changing climate, and the eventual efforts of governments (however reluctant) to deal with it, could have a big impact on investors' returns. Companies that produce or use large amounts of fossil fuels will face higher taxes and regulatory burdens. Some energy producers may find it impossible to exploit their known reserves, and be left with "stranded assets" — deposits of oil and coal that have to be left in the ground. Other industries could be affected by the economic damage caused by more extreme weather — storms, floods, heat waves and droughts.

On the basis of the above passage, the following assumptions have been made : 1. Governments and companies need to be adequately prepared to face the climate change. 2. Extreme weather events will reduce the economic growth of governments and companies in future. 3. Ignoring climate change is a huge risk for investors. Which of the above assumptions is/are valid ?

  1. (a) 1 and 2 only
  2. (b) 3 only
  3. (c) 1 and 3 only ✓ UPSC's answer
  4. (d) 1, 2 and 3

Why the answer is (c)

• Assumption 1 is valid because the passage states that governments will make efforts to deal with climate change and companies will face higher taxes and regulatory burdens, implying a need for preparation.

• Assumption 3 is valid because the passage explicitly links a changing climate to a 'big impact on investors' returns' and mentions 'stranded assets,' indicating that ignoring climate change poses a significant financial risk.

• Assumption 2 is invalid because the passage states that other industries could be affected by economic damage from extreme weather, but it does not assert that extreme weather events will universally reduce the economic growth of all governments and companies.

• Therefore, only assumptions 1 and 3 are directly supported by the text, making option (c) the correct answer.

Why the other options are wrong

(a) 1 and 2 only
Option (a) is incorrect because it includes Assumption 2, which is not supported by the passage as it overgeneralizes the impact of extreme weather on economic growth.
(b) 3 only
Option (b) is incorrect because it excludes Assumption 1, which is valid as the passage implies governments and companies must adapt to regulatory and economic changes.
(d) 1, 2 and 3
Option (d) is incorrect because it includes Assumption 2, which is not a valid inference from the passage regarding the universal reduction of economic growth.

Asked in the CSAT Paper II of the UPSC Civil Services Preliminary Examination 2019, held on 2 June 2019. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.

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