Most of the problems associated with plastic bags are consumption externalities. These externalities occur so readily because nearly all of the over a billion bags consumed per day are given out for free.  People overuse plastic bags because although the price of the bags is included in the cost of the item, people don't realize that they are paying for them.  Although we don't realize it,  plastic bags cost consumers in US approximately 4 billion dollars in increased good costs per year.



A large plastic bag externality is how to dispose of them once they are used. Plastic bags can be recycled into other plastic bags; however, this is rarely the case. According to the EPA only 1% of plastic bags were recyled in US in 2004.  Most plastic bags are not recycled instead they wind up in landfills, in the ocean, or even as litter.

The plastic bags that end up in landfills take up valuable landfill space. It is estimated that 8 billion plastic bags per year enter the waste stream in the US alone. A typical landfill costs more than twenty million dollars to build and millions more per year in order to maintain.  Nearly all of this money comes from taxpayers. California alone estimates that landfilling plastic costs taxpayer more than $750 million per year (BEC). California landfilled more than 17 million cubic yards of plastic or about  a quarter of everything landfilled (BEC). California costs are less than many other places because only 80% of California's plastic bags were littered or ended up in a landfill (BEC). This is compared to some places such as Ireland where only a small percentage of plastic bags is recycled. There are additional costs as well. Eventually the landfills will leak and can cause immense environmental damage.  There will be large costs associated with cleaning up these messes in the future.  Plastics in general makes up between 14 and 28% by volume of waste in general. Around the world over 200,000 plastic bags are dumped in landfills every hour (PlanetArk.com).



Plastic bags in general take anywhere from 20 to 1,000 years to breakdown in the environment. This is a very long period of time; however, eventually they would breakdown and disappear. Once in a landfill though, they never breakdown. Modern landfills are designed so that nothing in them breakdowns.  This means that as space becomes more of a premium something eventually will need to be done with the bags. There is a huge cost to this. Some may justify the cost by discounting the costs to the future but on this timescale it makes any future cost irrelevant. All of these factors cost taxpayers billions of dollars over the years.

The plastic bags that are not put in the waste basket end up as litter.  Litter is a huge burden on society. Litter is so pervasive in some parts of the world that in South Africa plastic bags are called its national flower.  In China plastic bags cover the streets and are known as white pollution. Plastic bags cover the streets, clog drains and gutters, and are even linked to disease.



Litter costs alot of money to clean up. The City of  San Francisco estimates that it alone spends about 8.5 million dollars on cleanup and disposal of littered plastic bags.  CalTrans, the agency responsible for California's roadways, spent 16 million dollars on cleaning up litter on freeways. This number excludes the work done by volunteers or businesses participating in the adopt-a-highway program. 

This number also excludes the cost of a living in a dirty city. Residents of a city gain value from it being clean. This value can't be computed easily; however, with a proper survey you could determine people's willingness to pay for a clean city.  Another cost of living in a dirty city is decreased tourism. I doubt people would visit a city merely to see the dirtiest city on the planet. It is more likely it would be the other way around. More tourist will come to a clean city than a dirty one.



Possibly the largest and most problematic externality caused by plastic bag consumption is environmental damage. Click next to explore this issue.