Saturday, June 14, 2008

Where tax may actually be welcome

If there's only one thing good that could be said about tax, it's that it can change consumer behaviour. Drowning in a sea of 1.2 billion plastic shopping bags every year, Ireland passed a different kind of consumption tax in March 2002. It mandated shoppers to pay $0.15 for every plastic bag consumed at the register.
As a result, bag habits took a dramatic turn. Shoppers shifted to reusable cloth bags. Eventually, plastic bag consumption fell 90 per cent to only 230 million per year. So, roughly one billion plastic bags have been dislodged from the litter annually.

And since the production of bags has been reduced, about 18 million litres of oil have been saved. That's worthwhile in itself, but the good news doesn't end there. The government raised $9.6 million from the plastic tax during the first year of implementation alone, according to
Likewise, Irish retailers are reaping the benefits. They're not only earning from the sale of reusable bags, they're saving money as well. Before the tax was imposed, retailers spent $50 million a year on providing plastic shopping bags.
So, in the case of one small European country, the numbers already stack up. How do they look worldwide? What's the global commotion actually worth?
Consumers around the world use approximately 500 billion to one trillion plastic bags each year. That translates into a fairly vigorous rate of consumption, of more than one million every minute. And since a lot of them are not reused, and can take up to 1,000 years to decompose, billions of them end up in landfills, or litter the parks and beaches, or block the drains and spoil the oceans - eventually harming marine life.
Considering the danger plastics pose to the environment, a lot of countries have adopted a flurry of laws to discourage their use. Here in the UAE, groceries and supermarkets have introduced reusable bags.
Amid the hullabaloo about plastics, however, a lot of people are still using plastic bags. If banning and introducing alternative bags won't work, should taxing plastic bags be a better solution then?
Supplying plastic bags is a business expense to shops. If they start charging for them, people will think about alternatives. Eventually, shops will save money. When consumption drops, production does too. If there is less production, less oil and energy will be consumed. The fewer people use plastics, the lesser the ugly litter will be, the better for the environment. And, don't forget, tax also spells revenue.
Old habits die hard. And since plastic bags make shopping convenient and retailers are giving them away for free, consumers have more reason not to change. Maybe it takes a little push, like Ireland's plastic tax, to eventually kick that habit of mindless consumption.

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