Question 21N.1.HL.TZ0.1b
| Date | November 2021 | Marks available | [Maximum mark: 15] | Reference code | 21N.1.HL.TZ0.1b |
| Level | HL | Paper | 1 | Time zone | TZ0 |
| Command term | Evaluate | Question number | b | Adapted from | N/A |
Evaluate the use of carbon taxes to reduce threats to sustainability.
[15]
Marks should be allocated according to the paper 1 markbands for May 2013 forward, part B.
Answers may include:
- definitions of carbon taxes, sustainability
- diagram to show the application of a carbon tax
- an explanation of the impact of a carbon tax on the amount of fossil fuels produced and/or on different stakeholders
- examples of cases where carbon taxes have been applied
- synthesis or evaluation (evaluate).
Evaluation may include: consideration of the extent to which carbon taxes affect different stakeholders, the advantages and disadvantages of carbon taxes in comparison with alternative policies, the difficulties of measuring externalities / estimating the socially-optimal level of output.
Examiners should be aware that candidates may take a different approach which, if appropriate, should be rewarded.
The candidates demonstrated good general understanding of indirect taxes, but some lower-achieving answers took this aspect of the question too far and focused on explaining and evaluating taxes on demerit goods, virtually ignoring the aspects of the question that referenced carbon and sustainability. Another weakness in some answers, which could possibly be avoided by more careful labelling of the diagram, was the explanation of carbon taxes as taxes on carbon as if the carbon is the main product of the firms being taxed with carbon taxes, not a side effect from the production of other goods (such as electricity).
