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Market Based Examples

Ireland Ireland is perhaps the best known example of a plastic bag tax success story. Ireland was consuming approximately 1.28 billion plastic bags, or about 325 bags per Irish person per year. These bags were costing retailers about 50 million dollars and were costing the country as a whole even more from lost tourist revenue due to littering caused by them. In 2001 the Waste Management Regulations were enacted and they put a 15 Euro cent tax on each bag sold. The Irish chose this level of tax high enough to send as clear message that people need to use reusable bags. The tax applied to all plastic bags except for those used to house raw meat or fresh produce. The tax was intended to nearly ban plastic bags without eliminating them as an option. There were administrative concerns as well. How will the government collect the tax and how will it determine the difference in bag use. The government required a record of bags received and a record of bags given out, for what purpose, and how much tax collected. In the first year the tax cut plastic bag usage by about 90% from 1.2 billion to 235 million. The tax has also raised 10 million euros for environmental projects. The sale of reusable bags has skyrocketed.There was some concern over setbacks from increased consumption of large plastic garbage bags. Some stores reported an increase in usage of up to 77% but this pales in comparison to the  amount of plastic saved by nearly baning the use of plastic bags (Environment Australia). There is also large consumer acceptance of the tax. It has dramatically reduced litter around the country and saved approximately 18,000,000 liters of oil (reusablebags.com). Denmark Denmark also instituted a tax on bags; however, Denmark did it differently than Ireland. In 1994 Denmark put a tax of 22 DKK per kilo of plastic bags. This tax is included in the price charged to retailers and has cut plastic bag usage by 66%. Since, unlike Ireland, the tax was not levied on consumers it did not change consumer behavior by as much as the Irish tax. The Danish market has collected around 170 million DKK so far and has used that money to fund many environmental projects.

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