To Nudge, Shove or Prod – when is a bag tax not a bag tax?

From this Saturday (1st October) all retailers in Wales will be required to charge 5 pence for every single use carrier bag it hands out [Note: the levy in Wales is not restricted to plastic bags]. Any business caught handing out bags without charging the levy face a £5,000 fine.

This will make Wales the first country in the UK to introduce such a charge. The Northern Ireland Executive is consulting on similar proposals now. Scotland and England may head in the same direction.  At a UK level plastic bag use fell quite substantially between 2006 and 2009 following a concerted effort by the Labour government, business and environmental campaigners to drive down the 11bn bags we used in 2006 to just under 6.5 bn in 2009. However that trend bottomed out and bag use rose again last year. As a result the Coalition Government is “looking carefully” at what happens in Wales with the introduction of a mandatory charge.

Although pejoratively referred to as the “Welsh bag tax” no money from the charge goes directly to the Welsh Government (VAT is collected for HM Treasury). Rather than a means of direct revenue generation instead the charge has been introduced with an explicitly behaviour change objective – to reduce the number of single use bags given out in Wales, (in 2009-10 this was estimated at 350 million bags from supermarkets alone). The Welsh Government anticipates the charge will see a 90% reduction in the number of bags distributed in Wales.

Not everyone, least of all the Carrier Bag Consortium or the pressure group the Tax Payers Alliance, is happy about this new “stealth tax”. Bag tax is also criticised as rather marginal in environmental terms. They form a relatively small component of the waste stream yet have been easy for politicians, environmentalists and even big business to characterise as a major menace that everyone can tackle providing a superficial quick win and self-congratulatory slaps on the backs all round.

Easy solutions - Not always are the best ones

By pushing onto the public yet another ‘easy step’ on the path to sustainability and encouraging the consumption of ‘eco-bling‘ (as George Monbiot describes it), the fetishisation of the plastic bag menace is charged with doing little to change underlying mindsets of consumption and disposability or more damaging behaviours. But one outcome will be an additional pot of cash for environmental projects in Wales.

Revenue raised is supposed to then go to “good causes”, causes of the retailers own choosing (estimated at £3 million in the first year). The extent to which this will happen is unclear as in another ‘nudge’ the Welsh Government will not prescribe where retailers spend the additional money. It has an expectation that the proceeds of the tax will “be passed on to charities or good causes in Wales, and in particular to environmental projects”. A little wooly and light touch perhaps but this carrot is backed up with the usual governmental stick of the promise of further regulations to determine where the money is spent if Welsh business does not play ball.

Of course none of this is particularly new. Many companies such as Marks & Spencer and Ikea voluntarily introduced charges on such bags a few years ago. Other countries have either imposed an outright ban or introduced a levy upon plastic bags (e.g. China, Italy, Rwanda, South Africa, Mexico City, Washington DC, Hong Kong, Ireland).

Citizens Pledge

The citizens pledge - Uttarakhand is a state in northern India

And a number of British towns and cities have tried to emulate the success of Modbury in Devon (Britain’s first “plastic bag free town”) launching voluntarist campaigns trying to persuade local retailers and consumers to switch from plastic carrier bags. With support from all 33 borough councils in London Borishas unsuccessfully spent two years promoting the idea of making “London a plastic bag free city” in time for the Olympic Games.

(2008 Survey)

 

You would think this issue would have been dealt with years ago, given explicit cross party political and public support (although nudgers would note the discrepancy between what people say and do, but see the Daily Mail/ICM Poll, 2008). Yet the lack the legal powers to impose and enforce a ban/levy coupled with the inertia and entropy inherent in much grassroots campaigning has seen many local campaigns flounder. So Wales has become the first place in the UK where the bag menace can be tackled through a combination of the nudge and the shove to try and achieve a shift in the behaviour of a population. Quite where the nudge comes in is perhaps less clear than might appear.

If this is indeed a nudge then it is really more about the state mandating the placement of a question and a consequent choice in front of the consumer where previously one did not exist. So the introduction of a charge, however small, for something that was previously a ‘free gift with any purchase’ (the cost was already factored in to retailers overheads) reframes the relative value of the bag.

A softer nudge would be training the cashier to ask you an innocuous sounding question like “Good morning, do you have your bags with you?” Underpinned by a legislative shove the Welsh Government nudge seems more of a prod that aims to inculcate a new social norm (bag for life, avoid the strife). No one has to pay the charge, they could make do without a bag or bring their own. In other words they could change their behaviour and from the Irish example it seems likely the majority will do so.

Arrggh! It's the Slovenian plastic bag monster!

Ireland married its bag tax with a large scale education programme and receipts went directly into an Environmental Fund so the link between tax and spend was clear. It is a shame Wales has been unable to do likewise. Unfortunately the awareness raising campaign in Wales has been limited so far, one consequence of which may be to compound resistance and irritation over the Welsh levy which may diminish its effectiveness. Setting the charge at the relatively low level of 5 pence may counter this, though conversely it may also make it easier for the consumer citizen to carry on as before (Ireland is increasing its charge to 22 cents as bag usage has recently begun creeping up again).

But it is an interesting experiment all the same. Watch this space to see whether this combination of nudge and shove does indeed produce a profound change in environmental behaviour of the Welsh population the government hopes for, or whether further prodding may be required …

Marc

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5 responses to “To Nudge, Shove or Prod – when is a bag tax not a bag tax?

  1. Great article Marc. I was just at the pharmacy and the lady asked me if I would like a bag. I happened to have one with me, having anticipated needing one, and so I was able to demurely yet smugly put my shopping into it (I think the smugness is a major motivator for people to bring their own bags). She then said rather ruefully, ‘yes we’re going to have to start paying for them soon’ and I said ‘well I think it’s quite a good thing, we’ll just have to always remember to take our own bags with us’ and she said ‘oof, with my memory!’ I said we’d probably get used to it after a while. Which you do. Because Coop in Cardiff used to charge 10p per bag and that was sufficient motivation to make me sometimes walk back home to get my bag if I’d forgotten it! 10p might not seem like a lot but you feel like an idiot if you could have easily avoided it, and it quickly adds up. Plus there’s the smugness factor again. If you bring your own bags and other people are having to pay 10p or more for theirs, you get to be smug about it. It’s definitely a nudge rather than a shove because you still have the option, and 5p won’t make much difference on your £30 shop, but there’s a psychological reward for adopting the behavior. And yes it’s only a small victory for the environment, but rather than the ‘find x’ situation where nothing was achieved, I think this represents a baby step in the right direction. I agree that it would be far better if the proceeds were clearly being directed into environmental causes, but hey, it’s a start.

  2. Yes the idea that people prefer avoiding losses more than they like like acquiring gains is a central insight (called loss aversion) from the world of behavioural economics, going back to the work of the psychologists Tversky & Kahneman and their development of ‘prospect theory’ in the late 1970’s. Indeed the rough ratio of loss pain to gain joy is apparently 2:1. Chuck in the ‘power of smug’ and you never know – a change may come …

  3. And now Cameron chips in reminding “retailers […] need to know that the Government has options at its disposal – including regulating as other countries have done”. Great story on this at the Daily Mail (http://www.dailymail.co.uk/news/article-2043014/David-Cameron-warns-supermarkets-Cut-plastic-bags-forced-charge.html?ITO=1490) . Yesterday’s Mail headline read – “PM’s ultimatum on plastic bags”.

    Even better are the 981 (and growing!!) mainly hostile comments that follow it though! Some have got to be taking the proverbial surely?!

    “I know many who will boycott shops who do not supply bags. It’s a basic mark of civilisation to be given a bag. The Prime Minister will be punished electorally if he pursues this particular hobby horse.
    – Dave, England, 30/9/2011 00:39”

    For shame Cameron. Welcome to socialism! Enforcing oppressive costs and taxes upon the masses for false causes!
    – Bradley Willis, Bath, 29/9/2011 1:40

    … I’m 100% for cutting down on environmentally damaging bags … starting with Mrs. Balls, Annie Eagle, Her Ladyship Ashton, Maggie Beckett and all such rabid pro-mass-immigration female MPs …
    – Peter Gun, Little Paxton, 29/9/2011 22:17

    Folks, get used to it. All the major decisions facing this country are now decided by the EU. The UK government is merely a local government branch of the EUSSR and only has the power to concern itself with matters such as plastic bags. Surely there is no longer any doubt that the three main parties are in the pockets of the EU.
    – Steve, UK, 29/9/2011 16:26

    A basic mark of civilisation to be given a bag …

  4. As much as believe that protecting the environment (and by extension protecting others) should be one of main priorities, I think forcing companies to collect a tax is not the right way to go about it. Much better to allow retailers to impose an additional charge on bags in keeping with the own business context and needs. Of course, they have to specify the charge on the receipt and have a notice by the till. Or the state can work with retailers to promote the consequences of plastic bag use and how consumers can make a difference. Or do what Tescos did and, if possible, offer clubcard points for bringing your own bag.

  5. Pingback: The Gambler | Transforming Behaviours

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