The government aims to reduce nitrogen oxide (NOxNO_xNOx) and particulate matter (PM10PM_{10}PM10) emissions arising from diesel-powered commercial delivery vans in urban areas.
Which one of the following combinations of policies would be most likely to achieve this objective?
Introduce a scrappage subsidy for old diesel vans and lower the fuel duty on commercial diesel fuel to reduce operating costs for small businesses.
Levy a tax on the acquisition of new diesel delivery vehicles and use the tax receipts to subsidise electric cargo bikes and zero-emission electric delivery vans.
Mandate a minimum proportion of electric vehicles in delivery fleets while subsidising the road tax on high-emission diesel commercial vehicles to support logistics firms.
Expand low-emission zones that charge diesel vehicles to enter city centres, and reduce the VAT on spare parts for diesel engines to keep existing fleets running efficiently.
378 exam-style questions on AQA A Level Economics 1.8 The market mechanism, market failure and government intervention in markets, covering 1.8.1 How markets and prices allocate resources, 1.8.2 The meaning of market failure, 1.8.3 Public goods, private goods and quasi-public goods, 1.8.4 Positive and negative externalities in consumption and production, 1.8.5 Merit and demerit goods, 1.8.6 Market imperfections, 1.8.7 Competition policy (A-level only), 1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only), 1.8.9 Government intervention in markets, and 1.8.10 Government failure. Each one has a worked solution and a mark scheme showing where the marks go.