Plastic Bags - COAG Standing Council on Environment and Water

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• Option M: elimination of plastic bags by government regulation prior to 1 January 2009
(ACG scenario 6)
• Option N: a voluntary commitment by retailers to carry on education and other activities
from the 2003–05 ARA code of practice, with a target of reducing plastic bag use by 50
percent by the end of 2006, with further reductions depending on the availability of
environmentally sustainable alternative carry bags (the ANRA proposal) (ACG
supplementary scenarios 1a and 1b)
• Option O: as for Option N but with additional targets of a 10 percent year-on-year
reduction in plastic bag use after 2006 (ACG supplementary scenarios 2a and 2b).
7.2. Impact analysis: methodology
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7.2.1 ACG report to EPHC, Phasing out light-weight plastic bags: costs and benefits of
alternative approaches
A cost-benefit analysis was undertaken of the eight hypothetical approaches proposed by EPHC
and the baseline scenario listed above to address the problems associated with plastic bags. ACG
examined the economic implications at a national and industry level using the MMRF-Green
computable general equilibrium model of the Australian economy. The MMRF-Green model is
built on data supplied by the Australian Bureau of Statistics, and complemented by data from
other sources that provide further detail on the industry and production relationships within the
Australian economy. ACG also considered supplementary information on plastic bag costs,
consumption patterns and likely preferences for alternatives. In addition, ACG estimated the
environmental impacts of each option.
Economic models are one tool used to keep track of price, production and tax relationships within
an economy to ensure there is no double counting. Economic models are well suited to estimating
the likely net impacts of policy changes at an economy-wide and industry level. The outcomes of
the model are not an exact prediction of future outcomes of the implementation of a certain option
– they are approximations best suited to indicating the signs (positive or negative), magnitude, and
relativities of changes that are likely to be induced by a policy or economic ‘shock’.
Many of the potential costs and benefits arising from action on plastic bags are not quantifiable.
For this reason the analysis uses community willingness to participate in clean-up in order to
develop approximate ‘value’ for environmental impacts rather than attempting to evaluate social
impacts (e.g. cultural, community or educational benefits) arising from each option. In addition,
ACG specifies the ‘unquantifiable’ benefits that would be required for each option if the
environmental, social and economic costs were to be outweighed by the benefits. More
information about the ACG methodology and findings can be found in the ACG report
accompanying this RIS – Phasing out light-weight plastic bags: costs and benefits of alternative
approaches.
Each costed option has also been modeled according to likely impacts on a range of key factors
including:
• administration costs – for government and industry, and differentiated according to costs
of overseeing a ban, point-of-sale suasive approach or levy
• training and staff costs – for retail staff involved in delivering new point-of-sale baghandling
arrangements
• theft – from retailers, associated with increased theft of shopping baskets or trolleys (based
on the Irish experience with ‘PlasTax’)
Consultation Regulatory Impact Statement: Investigation of options to reduce the environmental impact of plastic bags January 2007 45