MI_H1_ECON_P1

Class Adm No Candidate Name: This question paper consists of 8 printed pages. [Turn over 2011 Promotional Examination II Pre-university 2 ECONOMICS 8819/01 Paper 1 13 September 2011 3 hours Additional Materials: Answer Paper READ THESE INSTRUCTIONS FIRST Write your name and class on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use a soft pencil for any diagrams or graphs. Do not use paper clips, highlighters, glue or correction fluid. Section A Answer all questions. Section B Answer one question. Start each question on a fresh sheet of paper. You are reminded of the need for clear presentation in your answers. The number of marks is given in brackets [ ] at the end of each question or part question. At the end of the examination, hand in your answers to the three questions separately.

2 Section A Answer all questions in this section. Case Study Question 1: The Fight against Carbon Figure 1: Total Carbon Emissions Carbon Emissions 0 100 200 300 400 500 600 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year ,000 Kilotons Canada Australia S o u r c e : tradingeconomics.com Table 1: Carbon Emissions from Electricity Generation Source: CARMA Database, Aug 2011 * 1mwh = 1000 kilowatt hours * 1kt = 1000 tons Extract 1: Australia introduces carbon emission tax Australia unveiled its most sweeping economic reform in decades on Sunday with a plan to tax carbon emissions from the nation's worst polluters , reviving hopes of stronger global climate action with the largest emissions trade scheme outside Europe. Prime Minister Julia Gillard said 500 companies including steel and aluminium manufacturers would pay a A$23 per ton carbon tax from next year, rising by 2.5 percent a year. Australia is the developed world's worst per-capita greenhouse gas emitter because of its heavy reliance on cheap coal for power generation. Emissions are set to rise in the booming economy with more people travelling, the government says. As carbon emission is a prevalent source of global warming, the scheme is aiming to cut national emissions by 5 percent of 2000 levels by 2020, which would mean a cut of about 160 million tons. The danger is that a vigorous campaign by the conservative opposition and business groups opposed to the tax could erode public support. Major concerns were raised as the tax may impose Country Present CO2 Emission (KT) Electrical Energy (MWH) % Fossil % Hydro % Nuclear % Renewable Australia 224,000 228,000,000 90.04 6.82 0 1.53 United Kingdom 227,000 4,190,000,128 71.35 1.33 20.34 5.28 Japan 414,000 1,030,000,000 33.23 7.57 27.74 2.75 Germany 429,000 636,000,000 62.11 3.05 24.36 7.46 China 3,120,000 3,260,000,000 82.51 14.51 2.02 0.12 Canada 172,000 732,000,000 26.29 49.91 11.95 4.28

3 the highest carbon price in the world, compromising the competitiveness of Austral