Discuss possible methods of government intervention to reduce electronic waste

Edexcel A-Level Economics Paper 1 June 2024 Extract

With reference to Extract D, discuss possible methods of government intervention to reduce electronic waste. (15 marks)

Paragraph 1

1. one method to reduce electronic waste is to impose an indirect tax on new electronic equipment
2. an indirect tax is an extra cost of production.
3. this causes supply to shift to the left.
4. this leads to an increase in the price of new electronic devices.
5. this leads to a lower equilibrium quantity of electronic devices being bought and sold.
6. extract D mentions that 'in 2018, 1.2 million tonnes of electronic devices were sold in the UK'. This number would go down if these devices were taxed.
7. if less new electronic devices are being bought, this reduces the burden to dispose of old devices as people will keep hold of them.

Evaluation

1. however, an indirect tax shifts the burden of the problem onto both the consumers and producers.
2. even worse, when goods and services are inelastic in demand, the burden gets shifted even more heavily onto the consumers.
3. this is because they have to pay higher prices.
4. there is also a loss of consumer surplus and producer surplus due to the lower equilibrium quantity caused by the tax, which is called deadweight loss.
5. this is a potential example of government failure in the form of distorted markets.

Paragraph 2

1. another method the government could reduce to reduce electronic waste is provision of information.
2. extract d, line 12 mentions 'education' as an option for policymakers.
3. in 2018, only '500,000 tonnes (of electronic devices) made it to recycling centres' despite far more being bought and sold.
4. if the government introduces advertising campaigns, this could allow consumers to understand the negative externalities in consuming new electronic devices.
5. negative externalities are the cost to a third party due to the consumption of a good or service.
6. these externalities include environmental damage or bad health for future generations which ends up burdening the government, the NHS, or the taxpayer.
7. if the people are better informed, they are less likely to ignore these exernalities.
8. consumers are likely to internalise the issues of electronic waste into their own decision making and they will reduce demand for new devices or remember to recycle old ones.

Evaluation

1. however, information provision is expensive.
2. the government would have to invest a portion of the budget into booking advertisement slots on the radio or on tv, or take up resources from schools to educate kids about the issue of electronic waste.
3. these decisions always have an opportunity cost, as the government must give up some spending from another area such as education or healthcare.
4. this could lead to unintended consequences which is a form of government failure.

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