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Proposed Plastic Bag Levy - Extended Impact Assessment: Volume 1: Main Report


Executive Summary

Mike Pringle MSP has tabled a Members Bill in the Scottish Parliament to impose an environmental levy on lightweight plastic carrier bags as provided by shops and other retail outlets. It is understood that this would cover all bags made partially or completely of plastic, with the exception of those used for directly packing of fresh meat, fish, fruit and other foods.

This brief study, commissioned by the Scottish Executive and undertaken by AEA Technology Environment and associates, has addressed the likely impacts of such a levy and variants of it on:

  • The environment.
  • Consumers.
  • Business.
  • Waste.
  • Local authorities.

Advocates of a levy on plastic bags cite the main benefits as being reduced littering (including marine litter), reduced use of resources and energy, lower pollutant emissions and increased public awareness of environmental issues.

Opponents argue that lightweight plastic carrier bags are hygienic, convenient and durable, that they are often reused for other purposes, that they form only a small part of the litter stream and that they have a lower overall environmental impact than paper bags. They also claim that a levy would impact unfairly on poorer households and would lead to job losses in Scotland (from reduced plastic bag manufacturing and importing).

The study has considered these and other arguments for and against a levy, quantifying the probable effects wherever possible. It considered a range of different scenarios:

  • Scenario 0: No levy, i.e. business as usual.
  • Scenario 1A: A levy of 10p on plastic but not paper bags, covering all businesses (as proposed in the Bill).
  • Scenario 1B: A levy of 10p on plastic but not paper bags, covering all businesses except small and medium sized enterprises ( SMEs) and charities.
  • Scenario 2A: A levy of 10p on plastic and paper bags, covering all businesses.
  • Scenario 2B: A levy of 10p on plastic and paper bags, covering all businesses except SMEs and charities.

A wide range of evidence has been used to inform the study. This includes experience from the PlasTax in Ireland and voluntary schemes in the UK along with results from life cycle analysis ( LCA) studies from France and Australia.

The study does not make a judgement on whether, on balance, such a levy should be introduced, but provides evidence on the main effects expected under each of the four levy scenarios.

Overall Effects

A levy would cause a set of interacting effects. The study is predicated on evidence that a levy would stimulate a switch away from use of plastic bags (by typically 90%). If only plastic bags were to be levied (scenarios 1A and 1B), then studies and experience elsewhere suggest that there would be some shift in bag usage to paper bags (which have worse environmental impacts). This study is based on this experience of behaviour change.

In each of the areas considered - environment, consumers, business, waste and local authorities - there would therefore be a complicated set of effects, but in general:


The environmental impact of each of the four levy scenarios was assessed using 8 indicators. These include energy, water, waste and litter. Under the levy as proposed (scenario 1A) 5 out of the 8 indicators show an improvement.

There are different impacts under each levy scenario. In particular, including paper bags increases the potential environmental benefits of a levy ( e.g. scenario 2A or 2B) where all 8 indicators improve.

In all cases the changes in environmental indicators due to a levy are modest ( i.e. 1% or less) in comparison to overall environmental impacts from other activities in Scotland (as shown in Table A3.7).


Consumers act to reduce the financial impact by switching away from use of carrier bags. This limits the detrimental financial impact for consumers to a maximum of £10 per person per year.


The impacts would be positive for food retailers, and detrimental for non-food retailers and other businesses such as plastic bag manufacturers.


Under scenarios 1A and 1B waste increases due to a switch from plastic to paper bags. When paper bags are included in the levy ( e.g. scenario 2A or 2B) waste arisings fall. The greatest increase, 5,409 tonnes, is for scenario 1A, while the greatest decrease, 4,993 tonnes, is for scenario 2A. These should be compared against total household waste arisings of 2,094,872 tonnes pa [ SEPA], a 0.26% increase and a 0.24% decrease respectively.

In all scenarios litter reduces, but plastic bags are only a small percentage of reported litter.

Local authorities

There will be set-up costs and on-going costs to administer the levy. In general the revenue from the levy is expected to cover the on-going administration costs. However there are important differences between the on-going costs and revenues between local authorities. For example smaller authorities could receive lower revenues without a proportional reduction in administration costs.

Impacts on the Environment (Section 4 in the main report)

The study used an LCA approach to evaluate the changes in a range of different environmental indicators ( e.g. energy use, water use, waste etc). The analysis shows that there would be an environmental benefit for some of the indicators depending on what consumers choose to use were a levy to be introduced.

In all scenarios where the levy is applied, consumption of non-renewable energy, atmospheric acidification and formation of ground level ozone and the risk of litter would be considerably less than the current situation.

In scenarios 2A and 2B, where the levy is applied to paper bags as well as plastic bags, these environmental benefits increase. In addition there are reduced impacts in terms of consumption of water, emissions of greenhouse gases and eutrophication of water bodies (rivers, lakes, etc.). This is because paper bags have a higher environmental impact in these categories relative to plastic bags.

As these results depend on key assumptions we undertook a sensitivity analysis to assess how this changes the results. This shows that scenarios 1A and 1B, which increase use of paper bags, are more sensitive to key assumptions than scenarios 2A and 2B. Excluding SMEs in the levy (scenarios 1B and 2B) accentuates the impacts.

For each of the environmental indicators used in this study we have assessed the total impact from all activities in Scotland. This analysis shows that the environmental benefits in all indicators from a levy are modest ( i.e. 1% or less) when compared to overall environmental impacts from other activities in Scotland.

Impacts on consumers (Section 5 in the main report)

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. This draws upon experience from Ireland of the change in behaviour and therefore bag use. The total cost was calculated from the amount of levy paid for carrier bags, the relative hidden costs of plastic and paper bags 1, the costs of buying additional heavyweight plastic carrier bags (so-called 'bags for life'), the costs of buying additional bin liners, and additional VAT.

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.

Including paper bags in the levy would therefore reduce the financial burden. Indeed this has a bigger effect on the range than whether or not SMEs are included.

The estimates of financial impact on consumers should be compared with average household expenditure in Scotland, this is £365 per week.

Impacts on business (Section 5 in the main report)

a) Retailers

After taking set-up and administrative costs into account, the food retail industry would benefit from net cost savings from the proposed bag levy. Savings would result from having to buy far fewer plastic carrier bags (now usually given away for free 2), while sales of 'bags for life' and bin liners would increase.

However, this would not be the case for non-food retailers ( e.g. clothing), as experiences in the Republic of Ireland following the introduction of the so-called PlasTax has seen a more pronounced shift to paper bags in these stores.

In terms of systems needed to comply with the proposed levy, larger retailers are expected to find this easier, having computerised systems and greater resource available. Smaller retailers may well not have computerised systems and the levy would thus represent a greater burden

b) Other business

There are an estimated 15-20 manufacturers, importers and distributors of plastic carrier bags in Scotland, most of which are SMEs. All will be affected by the proposed levy. It is believed that the imposition of a plastic bag levy in Scotland would lead to job losses, as it is considered unlikely that plants that currently manufacture plastic carrier bags would switch to alternative products ( e.g. production of bin liners). Losses have been estimated at between 300 to 700 direct jobs, with further indirect jobs being affected ( e.g. in support and distribution services).

Impacts on Waste (Sections 4 and 5 in the main report)

In all four levy scenarios, the total number of carrier bags (lightweight and heavyweight plastic and paper) used in Scotland per year would decline as a result of the levy. However, if paper carrier bags are not subject to the levy (as in scenarios 1A and 1B), the total tonnage of all carrier bags used and requiring disposal actually increases by 5,409 tonnes for scenario 1A (the proposed levy). Scenario 2A (including paper in the levy) would yield the greatest reduction in the tonnage of waste relative to current levels (a reduction of 4,993 tonnes per year). For comparison, in 2002/03 household waste in Scotland was 2,094,872 tonnes [ SEPA] and 5,409 tonnes extra represents a 0.26% increase, whilst 4,993 tonnes less equates to a 0.24% decrease.

This analysis suggests some potential for an increase in solid waste generation for scenarios that favour a switch to paper bags. This is due to different assumptions about the relative weight of plastic and paper bags, and the fact that the LCA looks at solid waste impacts throughout the bag life cycle rather than just the end-of-life disposal phase.

Impacts on local authorities (Section 6 in the main report)

To determine the costs of set up and administration for local authorities would require a detailed specification of the systems and wider discussions. Our preliminary estimates suggest that the application of the levy to all businesses could cost Scottish local authorities, collectively, about £3-4 million to set up and £3.5 million per year to manage. This would reduce to £1.5-2.5 million to set up and £1.75 million per year to manage if the levy was applied selectively, i.e. based on retailer size or function.

These costs could be more than offset by revenues from the levy estimated at £7.75 million per year for all businesses and £5.5 million per year if applied selectively. However, smaller local authorities could receive lower revenues without a proportional reduction in administrative costs.

The Convention of Scottish Local Authorities ( CoSLA) has reservations about the duty of collection falling to the local authorities and its concerns regarding the magnitude and potential administrative costs of the Levy, which they believe needs a full investigation.

Alternatives to the levy (Section 3 in the main report)

In addition to the assessment of the impacts of the levy scenarios, the study examined the details of alternatives to the levy.

The Carrier Bag Consortium ( CBC) has developed 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. This has been submitted to the Voluntary Code of Conduct working group set up by the British Retail Consortium ( BRC) and the Scottish Retail Consortium ( SRC).

A voluntary approach has already been adopted in Australia, where use of carrier bags fell by 20.4% between 2002 and 2004.

Report Structure

This summary provides a brief introduction to the analysis methodology and results of the study. The main sections of the report are:

Volume 1

Section 1 reviews the context for the study.

Section 2 sets out background information on the various types of carrier bags and why they would be subject to a potential levy and reviews experience in Ireland.

Section 3 presents an assessment of the views for and against a levy based on experiences from around the world and from a variety of stakeholders.

Section 4 presents the life cycle assessment ( LCA) analysis undertaken for different plastic bag levy scenarios.

Section 5 analyses the impacts a levy would have on consumers and businesses.

Section 6 gives a brief review and commentary on levy collection and its potential impact on local authorities.

Section 7 presents our conclusions.

Volume 2

Appendix 1 reviews international experience.

Appendix 2 provides details of the retail context.

Appendix 3 provides detail information on the LCA approach including the sensitivity analysis.

Appendix 4 provides graphs on the distribution of revenue to local authorities.

Both volumes include a glossary and a full set of references.