TJC H2 ECONS P1

© TJC 2018 9757/01 TEMASEK JUNIOR COLLEGE Preliminary Examinations 2018 General Certificate of Education Advanced Level Higher 2 ECONOMICS Paper 1 Case Study 9757/01 Friday 24 August 2018 2 hours 15 minutes Additional Materials: Answer Paper, Cover Page READ THESE INSTRUCTIONS FIRST Do not turn over until you are told to do so. Write your name and CG number on all the work you hand in. Write in dark blue or black pen. You may use an HB pencil for any diagrams or graphs. Do not use staples, paper clips, highlighters, glue or correction fluid. Answer all questions. Begin each question on a separate sheet of answer paper. At the end of the examination, fasten your work for each question separately. Attach the cover page to your work for Question 1. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 8 printed pages. Temasek Junior College Economics [Turn Over

2 © TJC 2018 9757/01 Answer all questions. Question 1: Tiny Plastic, Big Problem? Figure 1: Global plastic production from 2006 to 2015 (in million metric tons) Source: Statistica and Power Plant CCS Figure 2: Share of global plastic production Source: PlasticsEurope Market Research Group (PEMRG) Extract 1: Global plastic production The growth of the plastics industry goes hand-in-hand with economic development. The more an economy grows, the more plastic is used in construction, infrastructural development, electrical and electronic industries, and transport. Single-use plastic packaging – the nemesis of environmental activists – is also in strong demand in developing countries. Even in Europe, where anti-plastics campaigning has been especially vigorous, packaging accounts for 40 per cent of consumption. But the world's leading producer of plastic is China. Today it holds a whopping 29 per cent of the market share, up from 15 per cent just a decade ago. European, US and Japanese plastic manufacturers have meanwhile seen their market share shrink. Source: Business Times, 9 July 2018 245 245 250 270 279 288 299 311 322 0 100 200 300 400 2006 2008 2009 2010 2011 2012 2013 2014 2015 Global plastic production from 2006 to 2015 (in million metric tons) Middle East, Africa 6% NAFTA 24% Europe 22% CIS 2% China 21% Japan 6% Rest of Asia 14% Latin Americ a 5% 2006 Middle East, Africa 7% NAFTA 19% Europe 18% CIS 3% China 28% Japan 4% Rest of Asia 17% Latin Americ a 4% 2015

3 [Turn Over © TJC 2018 9757/01 Extract 2: Global plastic crisis The impacts of global plastic use have reached an alarming level. Based on the latest data, 9 billion metric tons of plastics have been produced since the 1950s, creating 7 billion tons of waste. Plastic waste not only damages the environment and threatens animal life but also harms human populations. One of the most dangerous elements of plastic waste is tiny pieces of debris known as microplastics, which are damaging the environment. These tiny particles can end up in people’s stomachs via drinking water or eating seafood, which could present health risks. Various attempts to minimise plastic use have been introduced. One involves developing plastic materials, known as biodegradable plastics or bioplastics, that decompose naturally in the environment. The materials commonly used to produce bioplastics are corn, sugarcane, vegetable oil and starch. However, using these ingredients for plastics has raised some concerns. First, the production of bioplastics requires a huge investment in the land, fertilisers and chemicals. Second, the use of these plants for plastics will trigger a competition between plants for food versus plants for plastics, which will likely lead to food price hikes and a food crisis. Source: The Jakarta Post, 6 May 2018 Extract 3: The Future of Food The urban population is exploding around the globe, and furthermore, issues like wasted food, poor working conditions, polluted ecosystems, mistreated animals, and greenhouse gases are just some of the concerns that people have about our current supply chains. Fortunately, food systems are evolving – and the future of food depends on technologies that enable us to get more food out of fewer resources. One such example is the development of automated vertical farms. By stacking farms on top of another and using automation, vertical farms can produce 100x more effectively per acre than conventional agricultural techniques. However, the problem for vertical farms is still cost – and it is not clear when they will be viable on a commercial basis. Source: Visual Capitalist, 6 September 2017 Extract 4: Firms’ response to the plastic crisis Coca-Cola Co. Chief Executive Officer James Quincey is kicking off a recycling spree, as part of its efforts to woo customers by improving it s image as a socially responsible organisation. The soft-drink company, which operates in more than 200 countries, is setting the goal of recycling one bottle or can for each one it sell s by 2030. If successful, the plan could lead to cost savings because Coke could provide a growing amount of its own packaging material. Source: The Straits Times, 20 January 2018

4 © TJC 2018 9757/01 Extract 5: Plastic Industry in India The Indian plastics industry made a promising beginning in 1957 with the production of polystyrene. Thereafter, significant progress has been made, and the industry has grown and diversified rapidly. The industry is dominated by conventional plastics production and hosts more than 2,000 exporters. It employs about 4 million people and comprises more than 30,000 processing units, 85-90 percent of which are small and medium-sized enterprises. The Indian plastics industry is supported by a large number of polymer producers, and plastic process machinery and mould manufacturers in the c ountry. Among the industry’s major strengths is the availability of raw materials in the country . These raw materials, including polypropylene, high-density polyethylene, and PVC, are manufactured domestically. Source: India Brand Equity Foundation, July 2018 Extract 6: Bio-plastic industry in UK Presently in the UK, supportive regulation and legislation has encouraged more environmentally sustainable business practice s and consumer behaviour. For example, the government’s drive towards achieving a ‘zero waste’ economy, through reducing waste and increasing recycling, has fostered an increa sed consciousness of resource efficiency. This awareness has indirectly promoted the use of bio-plastic products. Due to their biodegradability in the right applications, bio-plastics can help divert organic waste from disposal so avoiding the additional costs of Landfill Tax. This can act as an incentive to businesses and municipalities to use bio-plastics, instead of conventional plastics. In addition, initiatives to reduce food and packaging waste have fostered research and innovation into more carbon neutral forms of plastics. Already, advances in the technical properties and functionality of bio-plastics have increased their attractiveness and the extent to which they can substitute for conventional plastics. Based on the current annual domestic demand for bi o-plastic products of 4,000 tonnes, it is estimated that in 2014 the gross output impact of the bio-plastics sector amounted to £103.4 million. This supports roughly 1,000 jobs and contributed £43.4 million of direct output to the UK economy. Source: Bio-based and Biodegradable Industries Association (BBIA), October 2015

5 [Turn Over © TJC 2018 9757/01 Questions (a) (i) Explain whether the change in Europe’s share of global plastic produ