Solved: Case Study: A State Tax on Plastic Shopping Bags

Introduction  

You are a policy analyst working for a state senator.

An environmental coalition, working on problems of solid and hazardous waste, has convinced a key group of state legislators that a tax should be imposed on plastic bags like the ones provided to customers at grocery and convenience store checkouts. One of their proposals is a 5-cent tax on plastic bags. They assert that the public subsidizes both the plastics industry (through oil for the initial production of the bags and the solid waste landfills required for their proper disposal) and the consumers of plastic bags (through underpriced solid waste disposal and litter collection). 

Environmental argue that over 500 billion plastic bags are used annually. These bags are associated with extensive litter problems both on land and in waterways. In fact, the problem of plastic bag disposal (and the subsequent environmental impacts on wildlife) has already motivated several countries to ban bags altogether. Uganda, Rwanda, Kenya, and South Africa have all approved national-scale plastic bag bans (although implementation has been uneven). Several countries have chosen to pursue taxes rather than bans. These countries include Ireland, Denmark, and Taiwan. States, counties, and cities have also pursued both bans and taxes including San Francisco, CA; Malibu, CA; Mexico City, American Samoa, and Washington, DC.  While these taxes and bans are relatively new, they appear to have significant effects on consumer choice. For example, an Australian study showed that 70 percent of consumers at groceries and 73 percent at other retail stores used a reusable bag or no bag at all when a fee was charged as compared to 33 and 28 percent, respectively, when no fee was charged. In some cases, retailers themselves have started to charge bag fees to discourage the use of single-use plastic bags. For example, IKEA’s implementation of a 15 U.S. cent bag fee in the United Kingdom resulted in a reported 95 percent decrease in consumption. Studies of the Irish case (21 U.S. cents point-of-sale tax) on plastic shopping bags demonstrated a 90 percent decrease in retailer purchases on bags for customers as well as a decline in the proportion of “national litter composition” composed of plastics bags (5 percent before the tax and 0.22 percent two years later). However, some studies have shown that a 0.007 U.S. cents fee placed on plastic bags in Italy had little effect on consumer behavior.  Estimates indicate that grocery checkout type plastic******** cost ********** $********U.S. cen******** $********.S. cents whereas paper******** cost ********** $********** $********.S. cents. Advocates for the poor are concerned that this h******** cost ******** substitute might hit low-income earners especially hard. Environmental advocates, however, argue that reusable bags *******U.S. cents per use and that the reusable bags, not paper bags, should be considered as the substitute for plastic bags.  In your state, proposals are focused on a tax rather than a ban. The model that is being proposed by environmental groups is based on the Washington, DC ordinance. Essentially, advocates of the tax want to eliminate the subsidy on litter collection and solid waste disposal at the state level, as well as cut down on the volume of waste being brought to the state’s landfills overall. It has been five years since a major landfill was built in this state, and citizen groups have become well mobilized in their efforts to stop their location anywhere near any of the state’s urbanized areas. The disposal of solid waste has become a crisis of major proportions. Advocates of the plastic bag tax also argue that the policy will generate much needed revenue for state environmental conservation priorities (particularly watershed restoration and preservation).  The state senator for whom you work is a key member of the Budget and Finance Committee. The senator is fiscally conservative, but open to arguments about incentive user

Prompt: Review the provided case study and construct a policy proposal to address the issue. Thus, your assignment is to check (“without prejudice”) “the legitimacy of claims,” as well as explore “the efficacy of the policy of a 5-cent tax on plastic bags.”

Be sure to begin it with the usual one-page executive summary, and give a recommended course of action:

Adopt the tax, it, or delay and study it some more.  If you are going to urge a delay, be sure to spell out exactly how you will use staff time to learn more about the problem and the possible policies that could be adopted. 

First, you should gather some basic data, which are easily available, and develop some back-of-the-envelope calculations, checking the environmental’s claims for orders of magnitude (in terms of reduction in the use of plastic bags and the revenue potentially generated by the tax). 

Second, analyze the family as the decision-making unit. If plastic bags are no longer free at the point of sale, what will be the impacts on individual households? To what extent are alternatives available? Are the alternatives more environmentally sound? Are they more or less affordable to households? 

Third, explore the problem from a societal perspective. Use the city and/or county as the decision-making unit and explore the alternatives and their associated cost and benefits. 

Fourth, speculate on the responses to any proposed policy that families, governments, and the related industries might have (grocery stores, pharmacies, take-out restaurants, the petroleum and/or chemical industry).  Elements of the problem-solving policy proposal include:  

1. Statement of the problem and its context  

2. Background, overview, and significance of the problem  

3. Policy Landscape including key stakeholders and key factors that influence the issue from a policy perspective.  

4. Policy options and criteria for options analysis  

5. Proposed policy solution/recommendation for the problem that addresses the feasibility, realism, and defensibility of the solution  

Document Requirements  

1. APA format: https://www.libs.uga.edu/ref/apastyle.pdfhttps://owl.purdue.edu/owl/research_and_citation/apa_style/apa_formatting_and_style_guide/general_format.html  

2. The policy brief should be 12-point font, Times New Roman and double-spaced (per APA style)  

3. The document – The memorandum should be a maximum of 5,000 words, excluding technical appendices.  

4. Properly cited figures are acceptable and encouraged if needed to highlight particular points of information.

Be sure to follow APA guidelines if figures are included.

Figures should be referenced from the topic and placed in a separate section at the end of the document.

Figures are not considered in the total page count.