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A-LevelEconomicsMarket FailureMay/June 2020Paper 2 Q120 Marks

The growing problem of plastic waste It has been estimated that, globally, consumers buy a staggering one million plastic bottles every minute and that 91% of these are not recycled. There is now real and growing concern about the serious threat to marine life caused by the dumping of plastic waste in the sea. There are an estimated 150 million tonnes of plastic waste in the world's oceans. Every year, millions of birds, mammals and fish die from eating or getting tangled in plastic waste. There is also growing evidence that humans could become ill when consuming fish that has eaten plastic waste. A recent study found that people who often consume seafood eat up to 11000 tiny pieces of plastic each year. Those living in parts of South East Asia and around the Mediterranean sea are most at risk. The scale of these problems is worst in Asia's developing economies. For example, a recent report from Pakistan stated that 'Continued dumping of plastic products has become a serious threat to animals and plants inhabiting coastal and offshore waters. People do not seem to understand how damaging plastic waste is for the oceans.' This is a typical concern; significantly, no solutions to these problems have been proposed by Pakistan's government. One possible way to tackle the problem is to introduce a 'bottle tax' on drinks that are sold in plastic bottles. The amount of tax would ideally depend on the size of the bottle, for example being $0.10 for a one litre bottle and $0.20 for a two litre bottle. The UK government is considering imposing a 'deposit return' scheme similar to those that are successfully operating in Denmark, Germany and Sweden. Customers would pay a deposit when buying drinks in plastic bottles and are refunded the deposit if they return the empty plastic bottles to a retailer. In most developed countries the legal disposal of plastic waste is heavily regulated. The most common method of disposal is for plastic waste to be buried in landfill sites. Interestingly, in China and India, landfill sites often have very few plastic bottles because people collect bottles and sell them to gain a source of income. Another solution to the problem of plastic waste is to create a new product by recycling the plastic; more research needs to be carried out to evaluate this option, but this research is expensive and beyond the reach of many developing economies. The demand for plastic products is forecast to increase due to its widespread use in agriculture, manufacturing and retailing. Unless something is done about the problems of disposal, even more plastic rubbish will find its way into our oceans. The key issue for many of Asia's developing economies is that their options appear to be limited. Sources: Dawn, 24 June 2017 and Punjab Daily Times, 1 November 2017

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About This A-Level Economics Question

This structured question appeared in the Cambridge A-Level Economics (9708) May/June 2020 examination, Paper 2 Variant 3. It tests the topic of Market Failure and is worth 20 marks.

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