Unit 1 Micro: Welsh Plastic Bag Charge Reduces Demand

A tax on plastic bags in Wales has seen the number given away drop by sizeable amounts according to this news report Since 1 October 2011, there has been a minimum charge of 5p on all single use carrier bags.

The Welsh government acted in a bid to encourage re-use of bags and therefore lower demand for single-use free bags. The justification was on economic and environmental grounds:

According to the website set up to explain the carrier bag charge:

Every single use carrier bag, no matter what it is made of, is a waste of resources as they all need:

* raw materials to create them;
* energy to be produced – which creates emissions;
* to be transported; and
* to be disposed of

The plastic bag charge / tax is collected by the retailer and the revenue is ear marked for distribution to charitable causes.

Pricing plastic pangs creates an incentive to cut usage and this certainly seems to have happened. But the effect of the charge appears to have been amplified by behavioural changes driven by network effects. Public support for the charge has risen and herd behaviour seems to be working to cut plastic bag consumption.

The early figures reveal differences in plastic bag reductions - why might food service retailers have seen a smaller reduction?

Food retail - between 96% and 70% reductions
Fashion - between 75% and 68% reductions
Home improvement - 95% reduction
Food service - up to 45% reduction
Telecommunications - 85% reduction.

More reading:

Guardian: Plastic bag use in Wales plummets due to 5p charge, figures show

Welsh government: Single carrier bag charge

There are plans for 5p plastic bag charge in Scotland but the Coalition government seems reluctant to act in England.