The cost of environmental restructuring in Sondeland
The government of Sondeland has implemented aggressive decarbonisation targets, rapidly phasing out fossil fuel subsidies and taxing carbon-intensive industries. While this has positioned the nation as a global leader in green technology, the immediate transition has caused energy prices to surge, leading to structural unemployment in traditional manufacturing hubs. Consequently, real GDP per capita has contracted by 4.2% over the last two years, and middle-income families have seen their real household incomes shrink as wages fail to keep pace with the rising cost of green energy and eco-taxes.
Despite the contraction in material living standards, the government points to rising scores in national environmental quality indices and a significant drop in urban air pollution. However, social research institutes report that public anxiety is mounting. Financial insecurity, particularly among low-income households struggling to heat their homes, has led to a measurable decline in life satisfaction surveys. Economists debate whether the long-term ecological benefits will eventually translate into higher national welfare, or if the current economic contraction will leave a lasting scar on the nation's collective well-being.
With reference to Extract C, assess the impact of a decline in real GDP per capita on subjective happiness.
