Environmental and Resource Economics

, Volume 38, Issue 1, pp 1–11

The most popular tax in Europe? Lessons from the Irish plastic bags levy

Original paper

Abstract

There have been occasional ad hoc efforts to influence consumer behaviour by the imposition of product taxes that reflect external costs imposed by such products that are not initially included in their price. In the spirit of this idea, in 2002 Ireland introduced a 15 Euro cent tax on plastic shopping bags, previously provided free of charge to customers at points of sale. The effect of the tax on the use of plastic bags in retail outlets has been dramatic—a reduction in use in the order of 90%, and an associated gain in the form of reduced littering and negative landscape effects. Costs of administration have been very low, amounting to about 3% of revenues, because it was possible to integrate reporting and collection into existing Value Added Tax reporting systems. Response from the main stakeholders: the public and the retail industry, has been overwhelmingly positive. Central to this acceptance has been a policy of extensive consultation with these stakeholders. The fact that a product tax can influence consumer behaviour significantly will be of interest to many policymakers in this area. This paper analyses the plastic bag levy success story and provides insights and general guidelines for other jurisdictions planning similar proposals.

Keywords

Environmental taxes Product taxes Plastic bag tax Litter Ireland 

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Copyright information

© Springer Science+Business Media, Inc. 2006

Authors and Affiliations

  • Frank Convery
    • 1
  • Simon McDonnell
    • 1
  • Susana Ferreira
    • 1
  1. 1.School of Geography, Planning and Environmental PolicyUniversity College DublinDublinIreland

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