How does one eliminate plastic shopping bags without inconveniencing consumers?
Peter Garrett, Midnight Oil frontman and current Minister for the Environment, Heritage and the Arts has the idea that shopping-bags are evil – entirely correct – but that, while they need to be removed, taxation and regulation are bad ideas:
Mr Garrett is working with state governments to formulate a strategy for weaning the country off plastic bags. It uses 4 billion a year, and Mr Garrett said they were having a serious impact on coastal and marine environments.
Banning the bags outright or imposing a levy on them were among proposals being considered, but Mr Garrett said he was conscious of passing costs on.
“We certainly don’t want to disadvantage the consumer, and I don’t believe in any way that any measure that will be brought forward will do that,” he said.
Mr Garrett said biodegradable plastic bags were not the answer, with some taking as long as 1000 years to completely break down.
Should be very interesting indeed. A levy would seem to be the optimal solution: plastic bags cause damage to the environment, damage that costs (a) money, to repair, and (b) not-money, as our environment disappears under the weight of our own waste. The solution? Add that cost to the price of a shopping bag (meaning charge money for them). Consumers cause the damage, consumers get to pay the compensation for that damage.
Thus, the Pigovian tax: add the social cost to the private cost of plastic bags. The market receives price signals based upon the negative externality and fewer bags being consumed. Yes, this causes inconvenience to consumers – why should they pay for the damage their behaviour causes?
The usual alternative is the likes of a ban: simple, efficient, either popular or not. Pass a law that forbids the things being in supermarkets. I actually rather favour this one. Like taking a band-aid ™ off, one may as well just rip it off. Have shopping bags one month and then nothing the next. People who forget to bring bags can purchase cloth ones – they really aren’t that expensive (and usually hold quite a bit).
But I’m hippie scum, utterly without sympathy for non-hippie scum like me (and, believe me, I use my share of plastic bags. Then end up garbage bags, and they end up in land-fill. I also use my fair share of cloth shopping bags – I just don’t always remember, or I shop while I’m out.
Anyway, this too would inconvenience consumers. In fact, given that consumers are getting these basically for free, anything that isn’t this way of doing things is likely to be inconvenient. This is what makes Garrett’s statement so interesting.
My guess is that they will come up with something geared towards voluntary conversion by stores, hopefully big-box retailers first. I would like to see them push the system that I saw Sainsbury’s use, when I was there. Several different types of bags for use/sale, and a rebate if you brought your own.
Unless the government intends to use the levy-money to repair environmental damage (making the levy a Coasian solution), the tax is not a good idea: it’d be unpopular, and the effect on the number of plastic bags used is more likely than not to be both small and short-lived. Customers will end up adding the cost in to their expected cost of a shopping trip.
Stores, however, should be encouraged to levy their own goods, on a weighted basis, and use that money to fund re-usable cloth bags. Those can be free for customers, and you receive a discount equal to the estimated cost-increase when you bring your own bag (either theirs or someone else’s). Yes, goods would be more expensive – but probably not by much. Think about how much a single, $1, $1.50 cloth bag will hold: add $1 to the cost of all the groceries inside, and it’s a fairly small change. At that level of the customer’s budget, their consumption will not be very responsive at all to the increase, meaning inefficiency (deadweight loss, excess burden) will also be acceptably low.
Does this inconvenience shoppers? A bit, sure – bear in mind, though, that, by bringing bags with them, they can erase that cost completely (on average). Given that we’re all, currently, choking off the environment with our toxic plastic bags, that hardly seems too inconvenient for mature economies to handle. The alternative is for the government to underwrite the cost of cloth bags – but that means taxing all of us. Moreover, it means the market can’t clear properly (e.g. by taking your own bags to the supermarket) because the price signals are all out of whack, moreso even than before.
In any event, if the government intends non-intervention to be their solution, they have few enough options thereafter. The market for plastic bags got to this point without intervention, so it stands to reason that non-intervention will leave it at this point, over the long-term.