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7 Conclusions
Mike Pringle
MSP has stated that the levy
"aims to alter people's behaviour to help protect the
environment".
Environmental Impact
Our analysis suggests that environmental benefits will
be achieved if consumers switch from lightweight plastic
bags to reusable bags. In all scenarios where the levy is
applied, consumption of non-renewable energy, atmospheric
acidification, the formation of ground level ozone and the
risk of litter fall considerably compared with the current
situation.
However, our analysis also suggests that, in all
circumstances, paper bags have a greater negative
environmental impact than conventional plastic carrier
bags. If paper bags are excluded from the levy, as
currently proposed, we estimate that paper bag usage will
increase by 174 million bags per year to 213 million per
year. This will have associated environmental implications
in terms of increased energy use, transport costs, storage
space and waste disposal.
The scenario analysis suggests that including both paper
bags and
SMEs in the levy (scenario 2A) would
lead to greater environmental benefits. It would offer more
overall savings in bag use and generate more revenue than
the levy proposal to include all retailers but exclude
paper bags (scenario 1A).
The levy as proposed is estimated to reduce annual
lightweight plastic carrier bag use by 697 million bags.
However, there would be an increase in annual demand of 15
million 'bags for life', 90 million bin liners and 174
million paper bags. This would result in an estimated
decrease of 3,484 tonnes of polyethene used in Scotland per
year
but an increase of 8,893 tonnes of paper
per year
60.
Greater environmental benefits will be achieved if paper
bags are also subject to the levy. There would be an annual
reduction in lightweight plastic carrier bag use of 697
million bags and an increase in 'bags for life' by 21
million and bin liners by 90 million, but a decrease in
paper bag use of 35 million per year. These savings would
result in an estimated decrease of 3,214 tonnes of
polyethene used in Scotland per year
and a decrease of 1,779 tonnes of paper
per year.
Although under all levy scenarios there would be a
resulting decrease in litter, the fact that plastic bags
account for less than 1% of land litter suggests that this
would have a minor impact on the overall litter problem in
Scotland. The same argument also holds for any reduction in
the amount of plastic carrier bag waste going to
landfill.
We undertook a sensitivity analysis to examine how the
environmental indicators for the levy scenarios change in
response to changes in the assumptions used. This shows
that environmental indicators for the levy scenarios that
include paper bags (scenarios 2A and 2B) are much more
robust to changes in the assumptions.
An education and awareness campaign, as used in Republic
of Ireland, is seen as beneficial to the introduction of a
levy to reinforce to consumers the waste hierarchy's
principles:
- To reduce waste.
- Reuse where possible.
- Recycle when reuse is not possible.
- Recover energy.
- And only then to dispose of the item.
Costs to Consumers
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.
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.
To put this into context the average Scottish household
spends some £365 per week [
ONS].
Impacts on Industry
An estimated 300 to 700 jobs could be lost in Scotland
alone as a direct result of a levy being imposed on plastic
carrier bags [
CBC]. Knock-on effects would also be
felt elsewhere in an industry that employs around 2,500
people in carrier bags manufacture, import and
distribution, and around 12,000 in the wider plastic films
sector in the
UK.
Impacts on Local Authorities
CoSLA has a number of operational
concerns, particularly regarding the magnitude of the
proposed levy and any proposal for a joint collection body.
If the levy were successful in its aim of reducing plastic
bag usage, expenditure on collecting and enforcing the levy
might exceed income. Local authorities could then be
expected to look to the Scottish Executive to cover a
funding shortfall.
CoSLA also believes that additional
funding would be required for set up the administrative
systems and that detailed analysis of the potential costs
is required.
Impacts on Charities
In a submission by the Association of Charity Shops to
Mike Pringle
MSP, the Association voiced its belief
that the ability of some shops to operate successfully
would be jeopardised by the levy. The Association is
concerned that donations by the public would become
difficult, as donated stock is usually delivered to shops
in plastic carrier bags. These bags are then reused for
customer purchases.
Impacts on Larger Retailers
After taking set-up and administrative costs into
account, the food retail industry would benefit from net
cost savings from a bag levy. Savings would come from
having to buy far fewer plastic carrier bags that are given
away for free, while sales of 'bags for life' and bin
liners would increase [
ERM,
UCD].
However, this would not be the case for non-food
retailers. Evidence from the Republic of Ireland from those
retailers that switched to paper bags (mainly 'high street'
non-food retailers) suggests that greater storage space and
more frequent deliveries are now required. This has
increased overhead costs for material purchase and
transport by over four-fold [
BRC].
There are also different consumption patterns between
food and non-food. For the former, people often shop
regularly and can thus plan to take reusable bags with
them. For the latter however, it is often an impulse
purchase [
WRAP 2005]. Overall, retailers feel it
would be fairer if all bag materials (not just plastic) and
all businesses (small or large) were levied
UK-wide.
In terms of system needs for compliance, it is envisaged
that larger retailers will find this easier, having
computerised systems and greater resource available. There
will be a cost associated with administration of the levy,
but experience in the Republic of Ireland suggests that the
effects were generally positive or neutral [
UCD]. In general, costs are considered
modest and, in some cases, are less than the savings the
retailers enjoy from buying fewer lightweight plastic
carrier bags. Although there have been some reports of
problems with increased theft, it is understood that, after
an initial rise in theft, retailers state that levels
returned to those before the introduction of the levy.
Impacts on
SMEs
The levy would represent a greater burden to smaller
retailers (
e.g. newsagents, butchers,
etc.) because they are less likely to have
computerised systems. As a minimum, it is anticipated that
retailers will need to have an auditable system recording
carrier bags sales, account for bags in stock, reconcile
sold versus stock remaining, submit records (quarterly in
Republic of Ireland) and submit payment.
Revenue Generated
In an average year, the levy is expected to generate an
estimated:
- £7.75 million under scenario 1A (proposed
levy).
- £5.43 million under scenario 1B (proposed levy
excepting
SMEs, charities and
promotions).
- £8.14 million under scenario 2A (proposed levy plus
levy on paper bags).
- £5.70 million under scenario 2B (proposed levy plus
levy on paper bags and excluding
SMEs, charities and
promotions).
Costs to Introduce
To determine the costs of set up and administration for
local authorities would require a detailed specification of
the systems and wider discussions. In the absence of any
assessments on costing, we generated some estimates based
on simplistic assumptions. We did this largely to prompt
discussion on this matter. Our calculations suggest
indicative set-up costs of around £3 - 4 million, and
enforcement and ongoing management costs of around £3.5
million per year.
Alternatives to the Levy
Lightweight plastic carrier bags have undergone
considerable design engineering to produce a lightweight,
strong and reliable means of transporting goods from the
place of purchase to the home.
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 has been proposed and
submitted by the
CBC to the Voluntary Code of Conduct
Working Group set up by the
BRC and the
SRC. The voluntary approach has been
adopted in Australia, where a reduction in use of 20.4% has
been achieved.
In addition,
WRAP is working with
BRC on increasing the uptake of 'bags
for life', with the aim of reducing the use of lightweight
plastic carrier bags and improving recycling rates.
These two projects present an alternative to the levy
and a means of altering consumer behaviour - a fundamental
aim of the levy proposed by Mike Pringle
MSP.
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