Plastic Bags - COAG Standing Council on Environment and Water

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3.2. Nature of the plastic bag transaction
The value that some consumers place on the plastic bag varies with context. Some consumers may
value plastic bags in a retail context when they are purchasing goods that need to be carried.
However, after the bag has served its original purpose, they view the bags as an undesirable item
that impinges on their expectation of having a clean and healthy environment, unaffected by
plastic bag litter.
There is a relationship between consumption of plastic bags and the incidence of litter. As noted,
above, about one to two percent of plastic bags enter the litter stream. The price the consumer faces
for plastic bags will impact on their use and re-use, the use of alternatives, and the value people
attribute to the bag after its initial use. Each of these factors can influence the number of plastic
bags in the litter stream. For example in Ireland, a tax on plastic bags resulted in a reduction in
plastic bag litter (see section 3.4).
<strong>Plastic</strong> bags are not an integral packaging item and are generally provided to consumers without a
transparent charge. <strong>Plastic</strong> bags are a type of packaging that is not necessarily essential to the
integrity of the product purchased. By way of comparison, packaging of most consumer goods is
embodied in the cost of the item, where the type of packaging is important for the consumer to be
able to buy and preserve the integrity of the item. The consumer, for example, does not
distinguish between the milk and the carton, considering them to be one item and with the carton
included as part of the overall cost. Product packaging, such as a milk carton, often fulfils the
practical need of protecting the integrity of the product through the distribution process and the
safety of consumers through preventing contamination and tampering.
<strong>Plastic</strong> bags, on the other hand generally appear to the consumer to be provided free of charge.
The consumer may not usually be aware that the price of plastic bags is spread across the price of
all goods on sale. 22 The ACG notes that these pricing arrangements provide no monetary incentive
for consumers to reduce their use. 23 It has been reported that supplying plastic bags costs the retail
industry over $173 million per year. 24 More importantly, customers who do not take a plastic bag
and choose to use a reusable bag as an alternative, still share the cost of plastic bags used by
others. A consumer who can opt out of paying for plastic bags by bringing their own bag to a
retailer that charges explicitly for plastic bags (say 2 cents per bag) would save around $10-$15 a
year. 25
However as the cost of plastic bags is usually included across the price of all products, the
consumer usually cannot take advantage of this saving. As ACG observes, ‘customers who refuse
plastic bags are not able to recoup this value’ and at present only a small number of specialist
retailers charge consumers a transparent charge for plastic bags – for example, Aldi Supermarkets
(15 cents); Bunnings Warehouse (10 cents); and IKEA, (25 cents). Therefore this provides little
monetary incentive to reduce bag use. 26
If no explicit monetary value is placed on plastic bags, there may be a disconnect between the
consumer’s decision to use plastic bags and the external impacts and costs that result from this use.
ACG notes that consumers that are most sensitive to a price on plastic bags include those that put
22 ACG report May 2006 indicated that a plastic bag costs $0.03 p15
23 ACG report May 2006 p xi
24 Planet Ark, http://www.planetark.com/campaignspage.cfm/newsid/56/newsDate/7/story.htm
25 Nolan ITU 2002, <strong>Plastic</strong> Shopping <strong>Bags</strong> – Analysis of Levies and Environmental Impacts, Melbourne, p. 4
26 ACG report, p13 – chapter 1
Consultation Regulatory Impact Statement: Investigation of options to reduce the environmental impact of plastic bags January 2007 20