Correct Option (b)
Assumption 2 is valid. The passage explicitly states that "an unbalanced emphasis on growth is often associated with negative environmental consequences." This directly supports the premise that environmental degradation can be a consequence of economic growth.
Incorrect Options:
Assumption 1 is not a valid assumption based on the passage. The passage highlights that "focusing exclusively on economic growth is problematic" and mentions "adverse distributional effects" associated with an unbalanced emphasis on growth. This indicates that economic growth does not inherently ensure a reduction in economic disparity; rather, it can potentially worsen it. Therefore, the assumption that higher economic growth is essential to ensure a reduction in economic disparity contradicts the nuanced view presented in the passage regarding the limitations and potential negative outcomes of an exclusive focus on growth.