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1.1 Nature of economics

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Question 1
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Extract A

The UK's Green Transition and Energy Policy

In October 2023, the government increased the Boiler Upgrade Scheme grant for air-source heat pumps from £5,000 to £7,500 in England and Wales. Applications for the grant rose by 60% in the immediate week following the policy change. Despite this, the average cost of installing an air-source heat pump remains high at approximately £12,500, meaning many low-income families are still priced out.

This subsidy enhancement was a highly unfair use of public funds at a time when frontline public services like the NHS are facing severe real-terms budget shortfalls. Some environmental economists argue that the government should ban all new gas boiler installations by 2030 to accelerate the transition to net-zero carbon emissions.

Additionally, the carbon tax on heavy industrial emitters was frozen at £82 per tonne. Treasury sources defended this freeze, stating it prevented energy bills from rising further for domestic consumers. However, other analysts noted that the freeze would lead to a 3% shortfall in planned emissions reductions by 2025. It is clear that the government must do more to penalise fossil fuel corporations rather than protecting their record windfalls.


Question

Explain the difference between a positive and a normative statement, using an example of each from Extract A.

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1.1 Nature of economics Questions

  1. A Level
  2. /Economics
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