Government

Plastic Bag Tax: Small Incentive, Big Result

Legislation To Propose State Wide Ban On Plastic Bags
Justin Sullivan/Getty Images

Washington D.C.'s five-cent tax on plastic shopping bags has cut their use by more than half, the WSJ reports this morning.

Last year, D.C. shoppers used about 270 million disposable bags. Since the tax went into effect this year, stores are giving out about 60 percent fewer bags, surveys suggest.

Whether you're pro- or anti- bag tax, this is a pretty striking example of how a small incentive (a nickel, in this case) can have a big influence on behavior.

Environmentalists argue that disposable plastic shopping bags are a global scourge, though there's some debate on the issue. They've been banned in a few countries; a few U.S. cities, including San Francisco and Oakland, have banned their use in certain stores.

Backers of bag bans and taxes argue in part, that the bags create what economists call a negative externality — a cost (in this case, an environmental cost) that isn't borne by people who sell the bags or use the bags.

But broader bans haven't taken off in the U.S.

California lawmakers recently voted down a proposal to ban the bags statewide. The American Chemistry Council, which represents some big plastic-bag manufacturers, fought the bill, arguing in part that it would create bureaucratic expenses and hurt jobs.

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