The problem with the plastic debate

Plastic taxes are good intentions but bad economics...

The European Union's new plastic tax has come into effect on January 1. You'll see this new tax often described as an EU-tax that you pay directly as a consumer into a treasury in Brussels. While that indirectly true, it's important to understand how it works. The plastic tax charges a tax of 80 Euro Cents per kilo of plastic packaging -- so that doesn't mean everything made out of plastic, just plastic packaging, and only applies to non-recyclable plastic packaging.

So who exactly pays this tax? The EU does not give clear directions on that, because the EU cannot implement taxes in member states. It seems reasonable that member states tax the manufacturers, but theoretically, they only need to send the required annual amount to the EU, which calculates the amount based on the amount of non-recyclable plastic packaging that was consumed in each country. 

The tax was decided at the European Council Summit back in July when EU leaders were struggling to find new revenue streams to fund the biggest budget in EU history. This tax will raise between 6 and 8 billion Euros per year, but that is hardly enough to make up for the needed money to fund EU programmes.

It is questionable whether the tax will have the desired effect. Those EU countries with industries producing non-recyclable plastic packaging will find a way to subsidise these companies, possibly even with EU funds. The people who will actually pay this tax are the consumers who will once again pay more for food, drinks, or hygiene products. 

What we should do is be tougher on plastic pollution. The pollution, that is the actual problem that people are trying to address, and which should have tougher fines for those who do the actual polluting. If you're dumping plastic packaging into a river or the sea, you need to be held accountable for those actions.

This entire conversation is oddly similar to the discussion of plastic bag taxes, or all-out plastic bag bans. In 2011, the UK’s Environment Agency published an earlier-drafted life cycle assessment of supermarket carrier bags. The aim: establishing both the environmental impact of different carrier bags which are in use and their re-use practice. The intention was to inform public policymakers about the impact that a crackdown on plastic bags could possibly have. Needless to say, politicians had little concern for the actual assessment the report presented.

When analysing the global warming impact of each bag, the agency assessed the environmental impact according to abiotic depletion (the disposal of products produced by crude oil), acidification (impact on soil, freshwater bodies, and the oceans), eutrophication (nutrients contained in water), human toxicity, freshwater aquatic ecotoxicity, marine aquatic ecotoxicity, terrestrial ecotoxicity, and photochemical oxidation (air pollution).

The researchers then looked at the number of times that a bag would need to be reused in order to have the same environmental impact as the conventional HDPE (High-density polyethylene) bag that people are used to. They reach the following conclusion:

“In round numbers these are: paper bag – 4 times, LDPE bag – 5 times, non-woven PP bag – 14 times and the cotton bag – 173 times.”

The attentive reader will now ask the correct deductive question: so what are the re-use levels that we experience in practice? Or: do people’s behaviour reflect the environmental impact of shopping bags accordingly?

The report used two Australian studies that state the following life expectancy for the carrier bags mentioned earlier: paper bags (kraft paper) were found to be single-use, LDPE (low-density polyethylene) between 10 and 12 times, while non-woven PP (polypropylene) bags weren’t included (only woven HDPE bags had their life expectancy included), and cotton bags had 52 trips on average.

These findings may be an approximation, but even if we informed the public and doubled the re-use of alternative carrier bags, then paper and cotton bags wouldn’t even break even.

The bottom-line is: the EU's new plastic packaging tax is motivated by the ambition to raise revenue, and is not necessarily informed by the best science. Not all that appears sensible on the surface will end up being the best policy to implement.