There has been much buzz since news broke that local supermarkets are in talks to charge for plastic bags in The Straits Times (Sept 24, 2; Oct 5, 6). Civic discourse on this issue is not new - the Singapore Environment Council produced a 2013 position paper with recommendations to reduce wastage and inefficient usage of plastic bags. Charging for plastic bags was one of them. While it has been informative reading the recent public opinions on this issue, we felt a few talking points could have been better elucidated on with less emotion and more impartiality.
Plastic bags are given out freely with purchases at supermarkets. Consumers also see benefits through the reuse of these plastic bags in their daily life. The real costs of plastic bags are ignored, and overconsumption ensues. First, there is the cost of producing the plastic bags and operational cost of bringing them to consumers. Second, there are many negative externalities, including many environmental costs, associated with plastic bags. In the economic context, such a situation has led to a market failure for plastic bags.
We agree that the right pricing will correct this market failure and reduce the consumption of plastic bags. Plastic bags usage in England dropped more than 85 per cent a year after a 10 Singapore cents surcharge per plastic bag was introduced. This shows that plastic bag consumption can be price-sensitive - a small increase in prices can lead to a huge drop in demand.
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