The government is considering a tax on plastic bags. The rationale is clear: they cause waste with costs that neither supermarkets nor shoppers currently internalise. Apparently, there is some skepticism that this will actually result in a desired change in behaviour; the argument being that it could just become a straight out tax.
Fortunately, the Irish did the world a favour and introduced a similar tax back in 2002 (a 15 cent Euro charge). And the results have been studied. For instance, a paper published in Environmental and Resource Economics found that:
The effect of the tax on the use of plastic bags in retail outlets has been dramatic—a reduction in use in the order of 90%, and an associated gain in the form of reduced littering and negative landscape effects. Costs of administration have been very low, amounting to about 3% of revenues, because it was possible to integrate reporting and collection into existing Value Added Tax reporting systems. Response from the main stakeholders: the public and the retail industry, has been overwhelmingly positive. Central to this acceptance has been a policy of extensive consultation with these stakeholders. The fact that a product tax can influence consumer behaviour significantly will be of interest to many policymakers in this area. This paper analyses the plastic bag levy success story and provides insights and general guidelines for other jurisdictions planning similar proposals.
This is as strong as an endorsement as you are ever likely to get. Basically, in Australia, retailers argue that the reduction will only be about 30 percent. The Irish experience suggests that that is a dramatic under-estimate. The only potential bad news is that there won’t be much revenue for possible uses on environmental clean-up. But let’s face it, that is the best bad news one could hope for.
[Update: Peter Garrett has ruled out a bag levy. Terrific. ;( ]