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A blog about economics in the South Caucasus.

Is Georgia on the Right Path to Reduce Massive Plastic Bag Usage?

 

In October 2018, a new law came into force which prohibits producing, importing, and selling single-use bags thinner than 15 microns.1 The second wave of this reform was introduced in April 2019, and expanded to all forms of plastic bags. It is important to ask, why was it necessary to impose a restriction on plastic bags? What are the implications and the expected consequences of the ban?

Plastic shopping bags are produced at a rate of one trillion a year and distributed at store checkout counters across the globe. More than two thirds created are single-use plastic bags. We now often find plastic bags everywhere: on the streets, in pastures and agricultural lands, in the sea, in rivers, etc. While we can all see such waste material plastering our surroundings, most of us are not fully aware of the real threats behind these extremely convenient and apparently “innocuous” products.

We commonly hear that plastic bags are not biodegradable, which means they can virtually last forever (compared to the human lifespan) and remain blocking the environment. However, a lesser known fact is that over time they spread micro plastic fragments that leak toxins into soil and drinking water. Even when properly disposed of, because of their light weight single-use plastic bags are easily blown out of landfills, potentially damaging agricultural land and providing ideal breeding grounds for mosquitos. Furthermore, in developing countries like Georgia, where the waste management sector is not properly controlled, plastic bags can also cause blockages in local drainage systems, potentially leading to disastrous consequences.2 Finally, they pose a threat to the natural habitat around us. Animals, birds, marine life, and cattle often mistakenly eat plastic or use it for nest-building, which leads to entanglement, choking, and poisoning. Single-use disposable plastic bags have a potentially larger adverse impact, as they are incredibly hard to recycle, and consequently block the sorting equipment in recycling facilities.

Seeing the consequences of such enormous use of these products, the European Union has set a target capping the use of plastic bags to 90 bags per person by the end of 2019, to a total of 46 billion - based on the current population – compared to the 116 billion bags used in 2016. Georgia took the responsibility and brought its legislation in line with the EU after signing the Association Agreement in 2014. Data from the Centre for Education and Protection of the Environment shows that, over the course of a single year, one Georgian resident uses some 525 plastic bags, which clearly exceeds the target set by the EU. Most of the plastic bags used in Georgia are imported and 40% are single-use plastic bags. This thus explains the choice to initially ban single-use plastic bags and all other plastic bags at a later date.

So, one must ask… is banning a promising strategy? What are the alternatives? And, why was banning chosen?

Banning is a command-and-control strategy which works in association with fines sanctioning illegal actions. A ban might be preferred by those who think plastic bags should not be used at all. An alternative instrument, for example, could be taxation, which does not eliminate the possibility of selling plastic bags, but makes them more costly to consumers, who then internalize the real cost of using plastic bags.

Both bans and taxation generate revenue. With a ban, financial flows depend on the number of violators and on the quality of enforcement. Whereas, in the case of taxation, tax revenues depend on the number of plastic bags sold. While monitoring and enforcement could be assigned to tax revenue commissioners; utilizing the preexisting tax collection and monitoring infrastructure. Therefore, the incremental cost of introducing a plastic bag tax would not be excessively high. However, banning might require the establishment of new responsible bodies, or at least the hiring and training of additional personnel to monitor the process of enforcement.


WHICH POLICY ISMORE EFFECTIVE?

International evidence shows that, in different contexts, the results vary. For example, taxation was implemented in Denmark and by certain American states with great success. Denmark was a pioneer, introducing a tax on plastic bags in 1994. After the introduction of the tax, their plastic bags use halved (from 800 mln to 400 mln per year). In Washington D.C. (USA) a tax on plastic bags was only introduced in 2009, and the effect was immediate, with consumption reduced by 85% from 22.5 to 3.3 mln bags per month, following the introduction of the tax. Bear in mind, though, that the taxation system is well-structured and controlled in both Denmark and Washington D.C.

Bangladesh and China, on the other hand, resorted to a strategy of banning. Bangladesh was a pioneer in implementing a ban on thin plastic bags, introduced in 2002. However, their ban strategy was not as successful as expected, due to weak enforcement mechanisms. Whereas, China was much more successful. China introduced a ban on single-use plastic bags in 2008. Following this ban, there has been a 66% decline in plastic bag usage. It is worth noting that Chinese companies faced significant fines, of 10,000 yuan (approximately 1,593 USD), for the illegal production and distribution of plastic bags. Moreover, China established a strict enforcement mechanism, sending regulators across the country in order to make sure that grocery stores complied.

Thus, it appears that both plastic banning and taxation policies have been quite successful in the countries where the systems and enforcement/monitoring mechanism were successfully applied.

Ultimately, we cannot discern the rationale behind Georgia choosing banning over an environmental tax on plastic bags, nor whether this choice will deliver the expected benefits. Surely, given that with bans only violators pay a fine, while an environmental tax impacts every producer and consumer, and individuals can therefore feel the tax burden, a ban appears to be the most politically feasible measure. However, taxation can have additional benefits in terms of preparing the ground for more restrictive measures. A taxation system can help society smoothly transition from decreased plastic bag usage to its total elimination.

In light of international experiences, it seems reasonable to expect that the success of the Georgian government’s initiative will depend on whether monitoring and enforcement function effectively. Unfortunately, so far it has been impossible to receive any information on the details of the process, or any official statistics reporting the scale of violations, financial flows from fines, or other outcomes associated with the introduction of the policy.

What we do know is that the responsibility for monitoring and enforcement is split between different agencies, depending, for example, on whether the bags are produced domestically or imported from abroad and, in some cases, there seem to still be gaps on the inspection side. For example, a laboratory required to determine the quality and composition of imported products does not yet exist; it is to be built soon, thanks to a grant from the Italian government.

We also know that local producers have been lobbying for an amendment to the legislation, or for a delay in its implementation, claiming that they did not have sufficient time to switch to more environmentally friendly alternatives and have lost competitiveness against foreign providers, with most retail stores using imported products.

Consequently, the full enforcement of the new law might be delayed for a while and, according to representatives of the responsible entities, the regulation might ultimately be revised. Therefore, the short-term success of the reform is far from guaranteed. In the longer term, the results of the reform will depend crucially on gauging the competitiveness of local producers, without their sacrificing environmental quality: a tough task for Georgian regulators.


1 Violators of the law will be fined up to 500 lari (about 200 USD). Further violations will double the fine to 1000 lari (400 USD).
2 For example, a 1998 flood in Bangladesh was caused by a plastic litter blockage.


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Guest - Recyclingge on Friday, 03 May 2019 13:38

Plastic bags should be banned - necessarily :(

Plastic bags should be banned - necessarily :(
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