Billions of plastic bags are used and discarded each year around the world and these cause considerable environmental damage – a form of market failure. In this podcast we consider the extent of the problem and policies that countries around the world are adopting to try to minimise this market failure. Many countries, including China, have banned single-use plastic bags completely, while others, such as Ireland, have chosen to tax them to try to limit their use.
Category: Economics for Business: Ch 22
Britain’s recycling strategy is under risk following a collapse in waste paper prices. Three quarters of UK waste paper is exported to Far Eastern buyers, but demand from this region has collapsed in recent months. The price collapse has led to a surplus of recyclable paper and some local authorities have proposed using Ministry of Defence (MoD) sites to store the waste while there is no market or use for it.
Paper price collapse blows hole in Britain’s recycling strategy Guardian (11/11/08)
Recycled waste could be stored on MoD bases Guardian (16/11/08)
Questions
- Define the terms (i) private cost and (ii) external cost.
- What are the external costs resulting from disposing of waste paper and other recyclable products in landfill sites?
- Using diagrams as appropriate, illustrate the changes that have taken place in the market for waste paper.
- Evaluate two strategies that the government could adopt to increase the price of waste paper.
- Discuss the likely success of a policy of storing waste on MoD sites to await an upturn in the recycling market..
“The economic crisis is petty by comparison to the nature crunch. But they have the same cause.” This is how George Monbiot starts his article below. The comparison between the financial crisis may seem an unlikely one, but global warming and the resultant economic costs could also have a significant effect on the world economy.
This is what denial does Monbiot.com (14/10/08)
Green shoots of recovery Guardian (8/10/08)
Independence from the street up Guardian (23/9/08)
Questions
| 1. | Define the terms (i) external cost (ii) private cost (iii) social costs. |
| 2. | Using diagrams as appropriate show the reasons why the market economy may fail to allocate scarce resources appropriately. |
| 3. | “If the global economy keeps growing at 3% a year (or 1700% a century) it too will hit the wall.”. Discuss possible policies that may help prevent this situation arising. |
Nationalisation has been seen by most people as something very much of the past. However, the financial crisis has changed all that and the recent nationalisation of banks in Iceland and part-nationalisation of UK banks has brought the concept under the economic microscope once again.
Iceland struggles for control as it nationalises Kaupthing Times Online (10/10/08)
Brown and Darling have bitten the bullet – and set the world an example Guardian (9/10/08)
G7 ministers forced to think the unthinkable Guardian (11/10/08)
Questions
| 1. | Define the term ‘nationalsation’. |
| 2. | Assess why the Icelandic government felt that the nationalisation of Kaupthing was the best solution to their financial situation. |
| 3. | Discuss the extent to which other countries may be obliged to nationalise their banks. |
| 4. | Discuss whether the current tranche of nationalisation is likely to be extended beyond the finance industry. |
The article linked below looks at the extent to which economic downturn and rising inequality are likely to affect crime levels in the UK. Traditionally the view has been that an economic downturn will raise crime, but is it necessarily the downturn that is causing the increased crime?
Consumed by crime Guardian (24/9/08)
Questions
| 1. | Explain why an economic downturn may lead to increased levels of crime. |
| 2. | Discuss the extent to which deregulation of markets may have exaggerated the relationship between crime and the level of economic growth. |
| 3. | Assess the view espoused in the article that “a culture obsessed with material goods” and “competitive individualism” have led to stronger link between crime and economic growth. |