The objective of this report is to illustrate the effect of the implementation of a plastic bag tax in Australia. By providing a brief overview of issues, correlated with plastic bag consumption in conjunction with current and proposed changes to policies in Australia. Through the application of economic theory, it can determined whether a tax would decrease consumption and through supporting evidence indicating its efficiency when applied in practice.
Australians approximately use 6.9 billion plastic bags per year (Errata Nolan ITU, 2002). The high consumption of plastic bags highlights one outstanding issue. The adverse impact, consumption and disposal of plastic bags have towards the environment. This involves the resources used to make
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Resulting, as shown in figure 3, in reduced consumption and creating a better socially efficient outcome. Comparing figures 2 and 3, it is evident that without the tax, overconsumption can occur as external costs are not always implied meaning decreased awareness of the issue.
As seen from both Figure 2 and Figure 3, the application of negative externality of consumption is appropriate, as it clearly indicates the before and after results of the implementation of the tax. As clearly shown, overconsumption leads to social inefficiency, but by applying a tax, a decrease in the consumption of plastic bags can allow for a shift of the market. The increase in social efficiency also allows for social cost and benefit to be equal. By applying taxes on the plastic bag negative externality it allows for a reduction in the supply of plastic bags. Due to this tax, the supply curve S1 will shift upwards to S2. This will inherently also reduce the gap between Qefficient and
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Both countries implemented similar taxes, whilst Ireland had the largest decrease in consumption, the tax was successful to a lesser extent in South Africa (Dikgang, Leiman, & Visser, 2012). The differences between Ireland and South Africa, was the larger public awareness of the tax in Ireland (Killian,2005). A problem that both countries faced was that most of the retailers were burdened with implementing the tax decreasing its proposed effectiveness (Killian,2005) (Dikgang, Leiman, & Visser, 2012). The basic issue that arose was, there needed to greater public awareness and that better monitoring and effective implementation measures were necessary in the early stages. In South Africa, for example, a short term effect was a decrease in consumption. Long term, there was a steady increase in the demand for plastic bags as consumers became accustomed to the higher prices demonstrating the diminishing effectiveness of the South African levy (Killian,2005). Whilst in contrast, the Irish levy had a sustainable decrease of consumption (Convery et al., 2007),. Later on, South Africa adjusted the tax to allow for a partnership between the government and retailers. This clearly indicates potential limitations of the introduction of a tax in
Imagine this. You are walking down the street and you come across a chain link fence, and you can't even see through it because of the grocery bags covering it. This is actually a very common occurrence which could be prevented with a simple twenty-five cent bag tax. Governments should implement these grocery bag taxes because grocery bags pollute the Earth, there are better alternatives, and they are difficult to clean up. Supporters believe that the bag tax will be beneficial to everyone.
The purpose of this proposition is to give shoppers the option of which carryout bag they choose while remaining environmentally conscious about the use of plastic bags. Proposition 65 will stop retail stores from keeping the money collected from carryout bag taxes as profit and instead give the funds to environmental conservation efforts. Opposers of Prop 65 argue that this initiative is a distraction devised by the plastics industry to deceive voters into believing that allocating revenue from carryout bags to conservation efforts is enough to help the environment, when in actuality the use of plastic bags should be eradicated entirely. Additionally, opposers contend that Prop 65 will undermine retailers by requiring them to bear the cost
I vaguely remember the bag tax that was short-lived in Dallas. While the ban and 5 cent tax on plastic bags was created with an environmentally friendly goal, the execution of the plan would not work, just as what happened in Dallas. Plastic bags are a portion of pollutants that are present. The tax and ban would also have to apply to other types of trash that people use and throw away on a daily basis. Some consumers will just pay the tax, especially if they are using few bags or forgot that the tax was established. If someone wants to use plastic bags without paying the tax, they will go out of their way to visit neighboring areas that do not have the policy. Stores that are obligated to abide by the policy will lose customers and, in turn,
It is now clear that a bag tax may be a neccessity for the reasons of our diminishing environment, our government needs more funds to do what is needed, and it will assist the poor. There is many ongoing studies of our environment, all of which have concluded that we are destroying it. In order to fix this menacing problem our government will need an ample amount of funds to do so. With this new tax, it will essenctially force the poor into the middle class, thus improving our overall quality of life. Obviously, this tax, or something similar, is needed in order to fix our society and
Plastic bag waste has become a huge issue in our state and must be put to an end. I believe that enforcing a bag tax is the best way to do this. Along almost every street or highway, you will find plastic bags strewn about carelessly. This is very unsettling and unattractive for the people coming in and out of our state. If we were to place a bag tax, people would be more likely to save their bags, or use less, limiting
Pertaining to the diagram above, previous to government intervention, the energy drinks market was allocated purely by the forces of demand and supply1 with market equilibrium at PE (original price) and QE (original quantity). After a tax of €1 per liter was imposed, the equilibrium quantity of energy drinks produced and consumed decreased to Qtax, as the supply curve shifted upwards to Stax . Furthermore, the price paid by consumers increased to Pc from PE and price received by the energy drinks companies decreased to Pp from PE. In addition, consumer expenditure on energy drinks decreased as well. Due to indirect tax, this changed from (d+e+f+g+h) to (b+d+f+g) since consumers are purchasing less of the good as the price increased. The company’s revenue also decreased significantly from (d+e+f+g+h) to (f+g), as the quantity of output decreased. However, the government received tax revenue of (b+d), increasing its budget. Indirect tax on energy drinks ultimately results in underallocation of resources. Too little of
However, the tax has been a concerned of many people. Some, especially those in the health field, welcome the tax. Yet, this tax is criticized by other people who are in the business of selling food and drinks with high sugar. It has enormous potential effects on retailers and soft drink producers, because tax on sugar will increase prices of foods and drinks with a high level of sugar, and it also will lead to increase the costs of production for business. According to the law of demand, as price rises, consumers willing and able to buy less, the quantity demands falls. Also, the law of supply shows that a rise in the costs of production will lead to a decrease in supply. Hence, business of sugary foods and drinks will decrease the supply, and business will reduce sales. In addition, Price elasticity of demand indicates that the demands of a good is affected by change in the price of the good. (Anderton, A., 2008) A report found that the price elasticity of the demand for drinks with high sugar is -1.6 (Colchero, M., 2015). Thus, the report shows that the price elasticity of demand for drinks with high sugar is elastic, which means the change in price of sugar will lead to high change in demand of sugar. Consequently, through the tax to increase price can effectively influence the consumption of sugar, which lead to reduced consumption. Nevertheless, it is unlikely that a single way of a tax would be effective in reducing sugar intakes. Government involves restrictions on price, promotions and advertisement, product reforestation and portion size reduction, implemented in parallel is likely more
Around the world, plastic bags are used by everyone everywhere. Some places you even will have to pay 5 to 15 cents for them, some places where you have to pay is Boulder, Colorado, Brownsville, Texas, and even in Washington D.C. We can all avoid this problem simply by just switching to reusable bags. Most stores can offer you to pay for the reusable bags and you get to keep them, and be able to use them as often as you would like, but if you would like to you could even DIY (do it yourself), but then you have to provide materials for yourself.
I strongly disagree about paying 25cents per bag just to put some groceries in a plastic bag. I understand that recycling is important and you don't want people to throw away the bags ,but no matter what it's still going to happen . Paying money for bags is just crazy the money that we are wasting for bags could go to something more important like homeless people, orphanage homes ,charitys ,animal shelters ,natural disasters etc. other then going to the government which I think it is very selfish. I think paying for bags should be banned because, paying for them are putting people out of good jobs. Californias , Washingtons, New Yorkers, etc. 50% of people have lost their jobs due to the government making us having to pay for bags and
Plastic bags have been used on a daily basis since 1977 (Williamson, 2003) as a means of carrying items such as groceries as they are not only convenient but also cheap. However, the over-use of plastic bags has posed significant threats to the environment in recent times as they are non-biodegradable and also a threat to wildlife. The primary reason for this concern is that plastics bags are not re-used, but simply disposed of in landfills.
Plastic bags can be recycled and reused, it is only a matter of updating machinery to do so. Plastic bag fees will hurt people who are struggling financially, as well as cost retailers more money to buy alternatives. The final reason presented is that plastic bag alternatives are even worse than the effect plastic bags have on the environment. To really improve the environment, we, as a society, should work harder to reduce our waste and to recycle more. Although this topic is widely debated, plastic bags should not have a fee or
Many individuals underestimate the amount of plastic we use each day. According to the article “Plastic Bags Wars”, “the world consumes 1 million plastic shopping bags every minute”. Plastic bags, along with many other types of plastics, have become a leading source of pollution worldwide (Doucette). Captain Charles Moore, founder of the Algalita foundation states that we use two million plastic bottles in the United States every five minutes. Discovered by Charles Moore in 1997, the “Great Pacific Garbage Patch” is a prime example of the amount of plastic pollution that enters the
As the negative externalities appear, tax can apply. As the graph shown, people maximize their welfare where PMB = PMC. By applying the tax of P0 -P2, the supply curve shifts to SMC and price rises from P1 to P2, People will now consume less, as the quantity decreases from Q* to Q**, the negative surplus (shaded area) will decrease, thus, the social well-being increases.
The reason the marginal private benefits of smoking are greater than the social ones is because smoking has external costs affecting others; they not only affect their own health and get lung cancer, but can also cause lung cancer to others.This is
Five hundred billion used globally and one hundred billion of them end up in U.S. landfills, taking about one thousand years to decompose, but only 5.2 percent were recycled (Borrud, 2007, p.75).-These are the figures plastic bags have produced every year. Human beings invented plastic bags for the convenience of carriers and packers. However, just as other great inventions, say, nuclear energy and biotechnology, plastic bags are causing serious issues like global warming, environment pollution and energy consumption. They are gradually becoming sword towards ourselves. In responding to this problem, the city of San Francisco has become the trail blazer to prohibit non-biodegradable plastic bags in its large supermarkets and pharmacies.