Economic Development

Small Bag Tax, Big Impact

The tax on disposable bags in the nation's capital has had a noteworthy impact.
by | May 1, 2010

When a cashier asks Washington, D.C., residents whether they want paper or plastic, they have a new answer: neither.

On Jan. 1, the city started imposing a 5-cent tax on all disposable shopping bags, hoping that consumers might switch to reusable bags or do without them entirely. Already the results are turning into a case study about the power of small fees to produce big changes in consumer behavior.

The district's fee applies to bags provided by grocery stores, drug stores and liquor stores. In late March, the city produced its first report on the tax's effects: It estimates that stores were providing 22.5 million bags per month before the fee went into effect. In January, estimates indicate retailers only handed out 3 million bags.

City officials aren't sure whether the decline really has been quite that dramatic. They note that retailers aren't used to reporting the number of bags they provide, which could be leading to some early inaccuracies. Still, Charles Allen, chief of staff to D.C. Council member Tommy Wells, who sponsored the fee, says that anecdotally major grocery stores report they're handing out at least 50 percent fewer bags. Some smaller retailers report even bigger drops.

What's striking about the results in D.C. is that this big shift in behavior has been spurred by a more modest approach than what other places have considered. San Francisco and other California cities have placed outright bans on plastic bags. Other places have mulled larger fees. For example, Seattle's City Council voted in 2008 to impose a 20-cent fee on disposable bags. In pursuing these efforts, cities thought they'd found an easy target for reducing litter and cutting greenhouse gas emissions-but they were wrong.

The problem has been political support. Before D.C., no major city had actually succeeded in implementing a bag fee. In Seattle, opponents-aided by the American Chemistry Council, the plastic industry trade group-overturned the measure at the polls before it ever went into effect. "They recognized that there is a better approach," says Keith Christman, managing director for plastic markets at the American Chemistry Council, "and that's reducing, reusing and recycling." He argues that bag bans and fees may prompt stores to end plastic recycling programs, and that reusable bags are potentially unsanitary.

For their part, D.C. officials say they tried aggressive recycling, but that the Anacostia River was still clogged with plastic bags. The fee's modest size was helpful in winning the City Council's unanimous backing. The district also decided to treat plastic and paper bags the same, an acknowledgement that paper bags cost more for retailers and that some research indicates they come with more adverse environmental effects. "The goal from the very beginning was to get into your head, not your wallet," says Allen. "And a nickel did just that."

Josh Goodman
Josh Goodman  |  Former Staff Writer
mailbox@governing.com

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