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The Disposable Carrier Bag Charge: An Effective Curb On Packaging Waste?


Image: Credit to TODAY (TODAY File Photo)

Introduction

On 3 July 2023, the National Environment Agency (NEA) announced that supermarket operators with an annual turnover of more than $100 million will be required to charge at least five cents per disposable carrier bag. This charge applies to nine retail brands across the nation and covers disposable carrier bags of all material types, not just plastic bags.


Why was it implemented?

The Disposable Carrier Bag Charge aims to reduce packaging waste as part of Singapore’s journey towards becoming a Zero Waste Nation.¹ Ultimately, its goal is to contribute towards reducing the waste sent to Semakau Landfill each day by 30% by 2030.²


By implementing a charge for disposable carrier bags, customers have a financial incentive to bring their own bags. The demand for disposable carrier bags is price elastic,³ meaning that despite the small increase in price of only five cents, there will be a disproportionately large fall in demand.⁴


One contributing factor to the large price elasticity is the psychological effect elicited by such incentive-based policies. As Toby Park of the Behavioural Insights Team notes, such incentives change the way we perceive options.⁵ In implementing the Disposable Carrier Bag Charge, the Singapore government is effectively reshaping social norms by shifting the default circumstances from that of using disposable carrier bags to always bringing your own reusable carriers. Eventually, this may result in an overall societal change wherein the act of asking for a disposable carrier bag will become a far more salient social taboo, hence reducing disposable carrier bag usage significantly in the long term.


How is the Disposable Carrier Bag Charge enforced?⁶

Supermarket operators have enforced the disposable carrier bag in different ways. Sheng Siong uses plastic bag dispensers at self-checkout counters which require customers to pay, whilst most other supermarket chains have adopted an “honour system” where customers are trusted to scan barcodes located on self-checkout counters. Don Don Donki has opted to implement a system wherein customers can input the total number of bags required at the self-checkout counters, which will then be dispensed by staff.


Various media collaterals have been displayed in supermarkets to remind customers of the Disposable Carrier Bag Charge and to remind customers to bring their own bag. For example, Fairprice has displayed posters to encourage customers to bring their own bags when purchasing their groceries (see Figure 1).


Figure 1: Fairprice “Bring Your Own Bag” Poster⁷

Contextualising the Disposable Carrier Bag Charge⁸

Singapore is not alone in her vision of a plastic-light future. As of 2018, At least 127 countries have adopted some form of legislation to regulate plastic bags, and this number is set to grow in the coming years.⁹


Surprisingly, the movement to drastically limit single-use plastic has gained significant traction in the Global South.¹⁰ In fact, Africa is the continent leading the way in terms of outright bans on single-use plastic, with 64% of countries having already passed legislation banning plastic use.¹¹ Such countries are acutely affected by plastic waste mismanagement due to a lack of infrastructure. Combined with the lack of industry actors that pour millions into fighting plastic bag regulations,¹² jurisdictions in the African continent have had the most incentive and least barriers when it comes to legislating single-use plastic bag bans.


Singapore’s surcharge is a price-based mechanism rather than an outright ban. Such a form of regulation has the benefits of lower enforcement costs. The additional revenue generated can also be funnelled into other green initiatives. Doing so also allows for a more gradual transition away from plastic usage and prevents a black market from forming. As such, plastic bag surcharges have become the more politically palatable choice, with more than 40 jurisdictions already implementing some form of plastic tax.¹³


Will the charge be effective at curbing plastic use?

There has been rigorous discourse on whether the policy would be effective. Before the surcharge was implemented, a forum was set up for the public to express their opinions on the proposed scheme. A majority of respondents supported the proposal, believing that a surcharge would be effective.¹⁴


This view was echoed by local academics. Professor of Social Science (Environmental Studies) Michael Maniates at Yale-NUS College, having analysed international trends of similar plastic taxes, concluded that a fall in Singapore’s consumption of plastic bags is to be expected. In particular, he highlights that charging for a good that was once free results in an exceptionally high price-sensitivity,¹⁵ ultimately contributing to the high price elasticity of carrier bags, and hence resulting in a greater fall in demand.¹⁶


The success of Singapore’s surcharge at reducing plastic waste can also be inferred from similar surcharges implemented elsewhere.


Ireland’s 2002 levy, the first of its kind, is often used as the benchmark for comparison. Multiple studies have agreed that the surcharge did achieve its intended outcome of reducing plastic bag usage as following the implementation of a single-use plastic bag levy of €0.15 (≈ $0.35 SGD (current prices)) per bag, consumption fell by more than 90%.¹⁷ Similarly, in England, where all retailers were forced to charge a minimum of £0.05 (≈ $0.12 SGD (current prices)) per single-use bag in 2015, there was an 85% decrease in its consumption.¹⁸


However, these reported effects are often the result of short-term studies. If we extend the period of analysis, the initial shock of the surcharge could wear off and consumers may then find the surcharge to be a reasonable price for the convenience a plastic bag brings. In such a scenario, this rebound effect will significantly limit the effectiveness of such regulation. South Africa provides an excellent case study,¹⁹ as compared to pre-implementation levels, the initial reduction of 80% in plastic bag consumption later fell by almost half after a 4-year period.²⁰ Similar tendencies have been observed in Sweden.²¹


Concerns of unintended consequences

Another oft-cited concern is that the limited scope of current legislation may result in severe unintended consequences. Specifically, the decrease in plastic bag consumption in large supermarkets may be offset by significant increases in plastic usage elsewhere.²²


There are three potential reasons for this. First, the public noted that in response to the surcharge, many may choose to request for more plastic bags at hawker centres and convenience stores as these locations are not required to implement a surcharge. Second, the fact that many supermarkets introduced house-branded plastic bag bundles in stores right after implementing the surcharge suggests that firms were quick to capitalise on the surcharge as a profit-making strategy rather than one to reduce plastic use.²³ Finally, consumers who used to reuse disposable carrier bags as bin liners may now have no choice but to purchase single-use bin liners.²⁴ Together, these three effects may significantly hinder progress in achieving the aim of an overall reduction in packaging waste.


The last concern is not unique to Singapore, as individuals in many other countries also had the habit of reusing plastic bags as bin liners. For example, in Portugal, the consumption of rubbish bags increased by 12% after levies on plastic carrier bags were introduced.²⁵ Similarly, whilst California saw an elimination of 40 million pounds of plastic carryout bags, trash bag purchases increased by 12 million pounds.²⁶


While the absolute amount of plastic waste still decreased in these countries after the surcharges were implemented, it must be noted that the alternatives used were usually made out of a thicker material and required more resources to manufacture. This leaves the overall environmental effect of the surcharge unknown.


Indeed, calculating the overall impact of such policies on the environment is challenging as there is no widely-agreed upon metric; a truly “green” solution requires not only considering the problem of permanence and toxicity, but also carbon emissions. This is further complicated by the fact that environmental friendliness is heavily context dependent. For example, while biodegradable bags were once touted as a potential solution to plastic pollution problems in Singapore, where most waste is incinerated,²⁷ such items are not necessarily the greener alternative.²⁸ Additionally, while reusable bags have a longer lifespan, the manufacturing process is significantly more resource intensive than plastic carrier bags, with the carbon footprint being about 131 times higher.²⁹ Unfortunately, evaluating the environmental impact of the Disposable Carrier Bag Charge is a complex task and its efficacy depends heavily on the metric used.


The bigger picture

A separate point of contention is that the effective incidence of the surcharge is imposed on consumers rather than businesses. This, coupled with the fact that businesses, not individuals, contribute the lion’s share of plastic pollution, can lead to backlash.³⁰ For example, given how fresh produce is still largely being individually wrapped in plastic packaging, many Singaporeans believe that supermarket brands still have a long way to go in terms of sustainable practices.³¹


Moreover, the lack of financial transparency over how the increase in revenue from the surcharges will be spent adds to further controversy.³² Understandably, Singaporeans would like assurance that the money collected is not misused in any way which would compromise the environmental agenda it was meant for.

That said, it is imperative to note that this surcharge is only a small part of the overall push towards a more sustainable future. Indeed, Singaporeans should expect an overall decline in disposable plastic use not just because of this particular surcharge, but also because of the other initiatives and collaborations the government has plans of rolling out as outlined in the SG Green Plan 2030.


Instead, one objective success of the surcharge is the increase in environmental awareness amongst the population. Indeed, the government is cognisant that a sustainable future requires a whole-of-nation approach, and ensuring every citizen knows they have a role to play is fundamental in achieving any form of long-term success. The large variety of discussions that spawned after the implementation of the surcharge is testament to how effective the policy has been in reigniting conversations about sustainability. Indeed, this surcharge has signalled the Government’s absolute priority in treating plastic waste seriously, forcing Singaporeans at large to also reflect on the state of our environment and perhaps nudge them towards a more sustainable lifestyle.


Conclusion

To conclude, the implementation of the Disposable Carrier Bag Charge has resulted in Singapore being more aligned with global trends surrounding the regulation of plastic use. No doubt, the existential threat of climate change and plastic pollution forces local policymakers to rethink our sustainability strategy. However, significantly more time and resources are needed to evaluate the efficacy of such policy in its intended aim of reducing plastic waste. With other green initiatives being pushed out as part of the SG Green Plan 2030, Singapore has afforded significant resources and attention towards becoming a regional leader in building a more sustainable future.


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¹ “Disposable Carrier Bag Charge,” National Environment Agency, July 24, 2023, https://www.nea.gov.sg/our-services/waste-management/disposable-carrier-bag-charge.
² “Zero Waste Master Plan | Introduction,” Towards Zero Waste, April 13, 2023, https://www.towardszerowaste.gov.sg/zero-waste-masterplan/.
³ Johane Dikgang, Anthony Leiman and Martin Visser, “Elasticity of demand, price and time: lessons from South Africa’s plastic-bag levy,” Applied Economics, 44(26) (2012): 3339–3342, https://doi.org/10.1080/00036846.2011.572859.
⁴ Cabrera José Maria, Caffera Marcelo and Cid Alejandro, “Small Incentives May Have Large Effects: The Impact of Prices on the Demand for Plastic Bags,” Munich Personal RePEc Archive, May 5, 2020, https://mpra.ub.uni-muenchen.de/100178/.
⁵ Toby Park, “A fine or a nudge? Charging for plastic bags works and is an interesting behavioural case study,” The Behavioural Insights Team, August 2, 2022, https://www.bi.team/blogs/a-fine-or-a-nudge-charging-for-plastic-bags-works-and-is-an-interesting-behavioural-case-study/.
⁶ Koh Wan Ting, “Barcodes and dispensers: How supermarkets in Singapore are gearing up for the plastic bag charge,” CNA, June 23, 2023, https://www.channelnewsasia.com/singapore/plastic-bag-charges-singapore-supermarkets-dispensers-barcodes-3573671.
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⁸ Koh Wan Ting, “Barcodes and dispensers: How supermarkets in Singapore are gearing up for the plastic bag charge,” CNA, June 23, 2023, https://www.channelnewsasia.com/singapore/plastic-bag-charges-singapore-supermarkets-dispensers-barcodes-3573671.
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¹⁰ Charlotte Elton, “'Really encouraging': Plastic bag bans work, say campaigners. Where is Europe lagging behind?” Euronews, April 5, 2023, https://www.euronews.com/green/2023/04/05/really-encouraging-plastic-bag-bans-work-say-campaigners-where-is-europe-lagging-behind.
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¹⁴ REACH, “Public Consultation on Disposable Carrier Bag Charge at Supermarket,” REACH, 17, 2022, https://www.reach.gov.sg/Participate/Public-Consultation/National-Environment-Agency/Environmental-Protection/Public-Consultation-on-Disposable-Carrier-Bag-Charge-at-Supermarkets.
¹⁵ Johane Dikgang, Anthony Leiman and Martin Visser, “Elasticity of demand, price and time: lessons from South Africa’s plastic-bag levy,” Applied Economics, no. 44(26) (2012): 3339–3342, https://doi.org/10.1080/00036846.2011.572859.
¹⁶ Megan Sim, “S’poreans weigh in: Is charging 5 cents for plastic bags going to save the environment?” The New Paper, July 4, 2023, https://tnp.straitstimes.com/news/singapore/sporeans-weigh-charging-5-cents-plastic-bags-going-save-environment.
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³¹ Ashley Tan, “Shopper Laments about Veggies & Fruits Individually Wrapped in Plastic at FairPrice & Cold Storage Outlets,” Mothership, August 1, 2023, https://mothership.sg/2023/08/supermarket-plastic-wrapped-veggie-fruit/.
³² REACH, “Public Consultation on Disposable Carrier Bag Charge at Supermarket,” REACH, 17, 2022, https://www.reach.gov.sg/Participate/Public-Consultation/National-Environment-Agency/Environmental-Protection/Public-Consultation-on-Disposable-Carrier-Bag-Charge-at-Supermarkets.

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