Mike Pringle MSP has stated that the levy "aims to alter people's behaviour to help protect the environment".
Our analysis suggests that environmental benefits will be achieved if consumers switch from lightweight plastic bags to reusable bags. In all scenarios where the levy is applied, consumption of non-renewable energy, atmospheric acidification, the formation of ground level ozone and the risk of litter fall considerably compared with the current situation.
However, our analysis also suggests that, in all circumstances, paper bags have a greater negative environmental impact than conventional plastic carrier bags. If paper bags are excluded from the levy, as currently proposed, we estimate that paper bag usage will increase by 174 million bags per year to 213 million per year. This will have associated environmental implications in terms of increased energy use, transport costs, storage space and waste disposal.
The scenario analysis suggests that including both paper bags and SMEs in the levy (scenario 2A) would lead to greater environmental benefits. It would offer more overall savings in bag use and generate more revenue than the levy proposal to include all retailers but exclude paper bags (scenario 1A).
The levy as proposed is estimated to reduce annual lightweight plastic carrier bag use by 697 million bags. However, there would be an increase in annual demand of 15 million 'bags for life', 90 million bin liners and 174 million paper bags. This would result in an estimated decrease of 3,484 tonnes of polyethene used in Scotland per year but an increase of 8,893 tonnes of paper per year 60.
Greater environmental benefits will be achieved if paper bags are also subject to the levy. There would be an annual reduction in lightweight plastic carrier bag use of 697 million bags and an increase in 'bags for life' by 21 million and bin liners by 90 million, but a decrease in paper bag use of 35 million per year. These savings would result in an estimated decrease of 3,214 tonnes of polyethene used in Scotland per year and a decrease of 1,779 tonnes of paper per year.
Although under all levy scenarios there would be a resulting decrease in litter, the fact that plastic bags account for less than 1% of land litter suggests that this would have a minor impact on the overall litter problem in Scotland. The same argument also holds for any reduction in the amount of plastic carrier bag waste going to landfill.
We undertook a sensitivity analysis to examine how the environmental indicators for the levy scenarios change in response to changes in the assumptions used. This shows that environmental indicators for the levy scenarios that include paper bags (scenarios 2A and 2B) are much more robust to changes in the assumptions.
An education and awareness campaign, as used in Republic of Ireland, is seen as beneficial to the introduction of a levy to reinforce to consumers the waste hierarchy's principles:
- To reduce waste.
- Reuse where possible.
- Recycle when reuse is not possible.
- Recover energy.
- And only then to dispose of the item.
Costs to Consumers
Consumers would obviously have to pay the levy itself overtly, on levied bags they continue to use, but the true additional financial burden of a levy on consumers in Scotland depends on a number of other factors as well.
The cost to the consumer also depends on whether or not certain costs (in particular the 'hidden costs/savings') are passed on to the consumer by the retailer.
This leads to a wide range of estimated costs to the consumers, depending on assumptions. In Scenarios 1A and 1B (no levy on paper bags) the estimates ranges from £7.41 to £10.58 per year. In Scenarios 2A and 2B (levy on paper bags as well) the range is from about £2.50 to £6.11 per year. To put this into context the average Scottish household spends some £365 per week [ ONS].
Impacts on Industry
An estimated 300 to 700 jobs could be lost in Scotland alone as a direct result of a levy being imposed on plastic carrier bags [ CBC]. Knock-on effects would also be felt elsewhere in an industry that employs around 2,500 people in carrier bags manufacture, import and distribution, and around 12,000 in the wider plastic films sector in the UK.
Impacts on Local Authorities
CoSLA has a number of operational concerns, particularly regarding the magnitude of the proposed levy and any proposal for a joint collection body. If the levy were successful in its aim of reducing plastic bag usage, expenditure on collecting and enforcing the levy might exceed income. Local authorities could then be expected to look to the Scottish Executive to cover a funding shortfall. CoSLA also believes that additional funding would be required for set up the administrative systems and that detailed analysis of the potential costs is required.
Impacts on Charities
In a submission by the Association of Charity Shops to Mike Pringle MSP, the Association voiced its belief that the ability of some shops to operate successfully would be jeopardised by the levy. The Association is concerned that donations by the public would become difficult, as donated stock is usually delivered to shops in plastic carrier bags. These bags are then reused for customer purchases.
Impacts on Larger Retailers
After taking set-up and administrative costs into account, the food retail industry would benefit from net cost savings from a bag levy. Savings would come from having to buy far fewer plastic carrier bags that are given away for free, while sales of 'bags for life' and bin liners would increase [ ERM, UCD].
However, this would not be the case for non-food retailers. Evidence from the Republic of Ireland from those retailers that switched to paper bags (mainly 'high street' non-food retailers) suggests that greater storage space and more frequent deliveries are now required. This has increased overhead costs for material purchase and transport by over four-fold [ BRC].
There are also different consumption patterns between food and non-food. For the former, people often shop regularly and can thus plan to take reusable bags with them. For the latter however, it is often an impulse purchase [ WRAP 2005]. Overall, retailers feel it would be fairer if all bag materials (not just plastic) and all businesses (small or large) were levied UK-wide.
In terms of system needs for compliance, it is envisaged that larger retailers will find this easier, having computerised systems and greater resource available. There will be a cost associated with administration of the levy, but experience in the Republic of Ireland suggests that the effects were generally positive or neutral [ UCD]. In general, costs are considered modest and, in some cases, are less than the savings the retailers enjoy from buying fewer lightweight plastic carrier bags. Although there have been some reports of problems with increased theft, it is understood that, after an initial rise in theft, retailers state that levels returned to those before the introduction of the levy.
Impacts on SMEs
The levy would represent a greater burden to smaller retailers ( e.g. newsagents, butchers, etc.) because they are less likely to have computerised systems. As a minimum, it is anticipated that retailers will need to have an auditable system recording carrier bags sales, account for bags in stock, reconcile sold versus stock remaining, submit records (quarterly in Republic of Ireland) and submit payment.
In an average year, the levy is expected to generate an estimated:
- £7.75 million under scenario 1A (proposed levy).
- £5.43 million under scenario 1B (proposed levy excepting SMEs, charities and promotions).
- £8.14 million under scenario 2A (proposed levy plus levy on paper bags).
- £5.70 million under scenario 2B (proposed levy plus levy on paper bags and excluding SMEs, charities and promotions).
Costs to Introduce
To determine the costs of set up and administration for local authorities would require a detailed specification of the systems and wider discussions. In the absence of any assessments on costing, we generated some estimates based on simplistic assumptions. We did this largely to prompt discussion on this matter. Our calculations suggest indicative set-up costs of around £3 - 4 million, and enforcement and ongoing management costs of around £3.5 million per year.
Alternatives to the Levy
Lightweight plastic carrier bags have undergone considerable design engineering to produce a lightweight, strong and reliable means of transporting goods from the place of purchase to the home.
A draft voluntary code to develop waste reduction and reuse initiatives and to continue product engineering to make further savings in the production, transportation and storage of plastic carrier bags has been proposed and submitted by the CBC to the Voluntary Code of Conduct Working Group set up by the BRC and the SRC. The voluntary approach has been adopted in Australia, where a reduction in use of 20.4% has been achieved.
In addition, WRAP is working with BRC on increasing the uptake of 'bags for life', with the aim of reducing the use of lightweight plastic carrier bags and improving recycling rates.
These two projects present an alternative to the levy and a means of altering consumer behaviour - a fundamental aim of the levy proposed by Mike Pringle MSP.