The bad economics that are plastic bag taxes

In January, the British government announced its intention to extend their plastic bag tax to all shops. As of now, only establishments which have more than 250 employees need to impose the charge on single-use plastic bags. In the United States, certain states or cities even go beyond a tax and put an outright ban on them. But the UK government’s own research suggests that this is actually bad for the environment.

Environmental Impact and Re-Use

In 2011, the UK’s Environment Agency published an earlier-drafted life cycle assessment of supermarket carrier bags. The aim: establishing both the environmental impact of different carrier bags which are in use and their re-use practice. The intention was to inform public policymakers about the impact that a crackdown on plastic bags could possibly have. Needless to say, politicians had little concern for the actual assessment the report presented.

In a section the report calls “global warming potential” (GWP), the agency assessed the environmental impact according to abiotic depletion (the disposal of products produced by crude oil), acidification (impact on soil, freshwater bodies, and the oceans), eutrophication (nutrients contained in water), human toxicity, freshwater aquatic ecotoxicity, marine aquatic ecotoxicity, terrestrial ecotoxicity, and photochemical oxidation (air pollution). These impact categories were also aligned with the GWP assessment of the 2007 IPCC report on climate change.

The researchers then looked at the number of times that a bag would need to be reused in order to have the same environmental impact as the conventional HDPE (High-density polyethylene) bag that people are used to. They reach the following conclusion:

“In round numbers these are: paper bag – 4 times, LDPE bag – 5 times, non-woven PP bag – 14 times and the cotton bag – 173 times.”

The attentive reader will now ask the correct deductive question: so what are the re-use levels that we experience in practice? Or: do people’s behavior reflect the environmental impact of shopping bags accordingly?

The report used two Australian studies that state the following life expectancy for the carrier bags mentioned earlier: paper bags (kraft paper) were found to be single use, LDPE (low-density polyethylene) between 10 and 12 times, while non-woven PP (polypropylene) bags weren’t included (only woven HDPE bags had their life expectancy included), and cotton bags had 52 trips on average.

These findings may be an approximation, but even if we informed the public and doubled the re-use of alternative carrier bags, then paper and cotton bags wouldn’t even break even. In fact, many countries with a lower inclination to reuse bags would have an immense backlog on this issue. LDPE bags over-performed in re-use to GWP-ratio, however, most plastic bag taxes and bans include LDPE bags as well, which makes the policy all the more ineffective. The same could happen to woven HDPE swag bags, which also perform well in this ratio, yet swiftly fall under the ban because they are made from the same composition as the classic single-use plastic bag.

It’s really just Frédéric Bastiat’s “that which is seen, and that which is not seen” all over again.

It could be that non-woven PP bags are indeed the better alternative, but even if they are we are looking at a heavy bag which needs an intense behavioral shift and large usage to be effective. Until that is achieved, years could go by in which consumers use bags which have a worse environmental impact then if they just reused a single-use plastic bag each time.

Only Intentions Seem to Matter

The most worrying thing about this research is that, despite its intention to inform public policymakers, it found no attention whatsoever. Quite the contrary, Her Majesty’s Government is actually doing the complete opposite by extending the plastic bag tax to all stores.

The problem with the debate around this issue is even larger. Let’s pretend for a minute that we’d comprehensively informed a politician sitting in the according parliamentary environment committee what the studies find. His plausible response would be that we will have to educate the population and ban other bags on the long-term, as well. There is really no way you can win. The intentions are really all that matter for public policymakers: if voters think that this measure improves their environmental impact, despite findings suggesting that it does the opposite, then the policy will be introduced.

One important message to people is that measures that intuitively sound sensible might turn out to produce unintended consequences. It’s really just Frédéric Bastiat’s “that which is seen, and that which is not seen” all over again.

This article was first published by the Foundation for Economic Education.

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About Bill Wirtz

My name is Bill, I'm from Luxembourg and I write about the virtues of a free society. I favour individual and economic freedom and I believe in the capabilities people can develop when they have to take their own responsibilities.

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