Lessons from Toronto’s Ill-Fated Plastic Bag Tax

Part II: The Problems We’re Not Solving by Banning Bottled Water

An Ecofiscal blog series by Jessie Sitnick and Dale Beugin

The Problems We’re Not Solving by Banning Bottled Water, seeks to unravel the web of issues that underlie “Ban the Bottle” movements and policies. One of the most tangible is the goal to reduce plastic waste. Here we dig into that issue and recycle a fascinating ecofiscal case-study, which sadly ended up in the municipal garbage bin.

Plastic Waste is Costly

Let’s be clear: the goal of reducing plastic waste is absolutely sensible. According to the United Nations, the plastics we throw away cause up to $13 billion (US) of damage to marine ecosystems each year, and the overall costs of plastic waste (including from air pollution caused by plastic waste incineration) are closer to $75 billion (US) annually. As Achim Steiner, UN Under-Secretary-General and UNEP Executive Director, explains: “reducing, recycling and redesigning products that use plastics can bring multiple green economy benefits — from reducing economic damage to marine ecosystems and the tourism and fisheries industries, vital for many developing countries, to bringing savings and opportunities for innovation to companies while reducing reputational risks.”

Gigantic plastic rings attack sculptures in downtown Vancouver — an awareness raising stunt organized by the PlasticPollutionCoaltion

As noted in part 1 of our series, a focused effort to reduce plastic bottle waste through use of a ban would likely need to apply to all bottled beverages, not just water. Recall, at UVM, the bottled water ban simply resulted in more students buying bottled pop, leading in fact to MORE plastic bottle waste. However, very few examples of all-out plastic bottle bans seem to exist. (One exception is Carnival Cruise’s move to ban all plastic beverage containers from coming aboard, not to cut waste but rather to reduce illegal booze smuggling. Yarr, matey!).

So having examined the failure of at least one bottled water ban to reduce waste, let’s take a look at an ecofiscal policy approach aimed at achieving a similar goal: Toronto’s now repealed plastic bag fee. Internalizing the economic costs of environmental damage caused by plastic (whether in bottle or bag form) is certainly an ecofiscal opportunity. And studies have shown that plastic bag fees work (and not just sort-of work, but really work!). Toronto’s experience, ripe with lessons, proves that point and illuminates a few others.

TDot’s Stranger-Than-Fiction Plastic Bag Policy Story

In 2009, the city instituted a 5-cent tax on throw-away plastic shopping bags, the kind normally given out by grocery stores and retail shops. Interesting side-note: the city simultaneously approved a ban on the sale of bottled water on all city-owned properties. The bag fee was negotiated rather successfully with industry (some Loblaw stores were already piloting plastic bag charges in partnership with the city). The bottle ban, on the other hand, met with pretty serious corporate backlash. But we’ll get back to this later.

What happened next with the bag fee will make those familiar with Toronto’s unique political history chuckle, cringe, or both.

In 2012, Mayor Rob Ford required council to vote on a motion to repeal the fee. Instead, they voted to enact a surprise plastic bag ban — which was then quickly overturned under legal threats from the plastics industry. The result: there is now no mandatory fee on plastic bags in Toronto, but some retailers continue to charge the 5-cent fee (many donate a portion of that money to charities focused on environmental protection and conservation).

Learnings We Can Apply to Plastic Bottles?

Despite the odd fate of Toronto’s plastic bag policy, there are some important lessons here that could inform a similar approach to plastic beverage bottles.

1It worked. All evidence suggests that the fee was very effective in achieving exactly the goal it was designed to address: less plastic bags in landfills. A city report, used as evidence in Council, noted that plastic bag use had dropped by 53% between 2008 and 2012. By its own calculations, Loblaw claims that the fee applied in its stores diverted over 5 billion plastic bags. Councillor Janet Davis mourned the end of the fee, saying the city was abandoning “probably one of the most effective waste diversion strategies we’ve had.”

Toronto’s results are not unique. In 2013, Tatiana Alexandra Homonoff published what we might call the “seminal study” in plastic bag fees (yes, such a thing exists). Having gathered data from 16,251 shoppers at 16 different grocery stores in the Metro D.C area, Homonoff found that putting a fee on plastic bag use was much more effective at getting people to BYOB (bring your own bag) than offering them a discount for each reusable bag they brought. She found that the the introduction of a bag fee resulted in a 40% decrease in disposable bag use.

2 The importance of practical, accessible, and reasonably priced alternatives. A study out of Berkley found that while plastic bag fees work, they work even better when paired with a cheap alternative (indeed, the magic combination was a slightly higher fee and a super-cheap reusable option). In Toronto, you couldn’t take two steps into a grocery store without tripping over a display of reusable shopping bags and bins, priced at $1 or $2 respectively. Reusable bags also quickly became the best new “freebie” at community festivals, events, and at higher end stores. Even now, with the fee gone, it is as common, if not more, to see people carting their purchases around in reusable bags as opposed to plastic ones. Is this a fashion statement, a value statement, or purely practical? Probably all of the above, but it appears behaviour around bag use has indeed shifted.

3What happens to the money matters. It’s worth mentioning a little known fact about Toronto’s plastic bag fee — the city didn’t get a single cent of it. Retailers were allowed to keep the fee and use the revenue as they wished. Many chose to invest that into charitable programs or into free reusable bags for loyal customers. This didn’t keep critics from dubbing it a tax grab, however. And the lack of transparency around how revenue from the fees was used certainly didn’t lend any durability to the policy, which was easily framed as just another way for big business to line its pockets.

Photo by: nadi0

So is there an ecofiscal case to be made for the more effective pricing of plastic waste? Yes. Could it work? Probably, if the policy is designed well. But does it solve the bottled water dilemma? Unlikely. That’s because the bottle itself is only half the “problem” in this story (maybe less than half?).

If It’s Not About the Bottle, What is It About?

Recall that on the day that former Toronto Mayor David Miller announced the plastic bag fee, he also introduced a bottled water ban — with a very different explanation of its logic and goals: “I don’t believe as Canada’s largest purveyor of tap water we [the City of Toronto] should be selling water in our facilities,” he said.

Unlike the bag tax, the bottled water ban stuck. And Toronto is not alone. Last year San Francisco enacted one of the strictest bottled water bans of any city in the US. The Board of Supervisors President, David Chiu, sounded much like Miller in his reasoning: “Given our access to incredibly healthy clean and tasty Hetch Hetchy [local] water, which is some of the highest quality municipal tap water in the country, it just doesn’t make sense for us to have this addiction to plastic water bottles,”

What’s going on here? If this was just about waste, then — again — why focus so exclusively on bottled water bottles, which, as Bloomberg blogger and recycling expert Adam Minster points out, are among the easiest things to recycle (much easier, than say, a Starbuck’s coffee cup).

Photo by: Quinn Dombrowski

Explicit in both Miller’s and Chiu’s statements is the idea that local water — ample and clean — is a better choice for all than water purchased in a bottle. Implicit in their statements is another idea, one we’d be wise not to take for granted. When we purchase bottled water, their quotes seem to suggest, we are paying for something that — by all rights — we should be able to have for free.

Indeed, the explanation behind the University of Vermont’s bottled water ban is quite clear on this. Simultaneous with discontinuing its bottled water sales, “the University…invested in providing safe, clean drinking water across campus for free.” Now, in the aftermath of the report showing that students simply replaced their bottled water purchases with (even more) pop purchases, the university is doubling-down on its free water promotion, seeking to make that free water even more convenient.

Photo by: Niels Heidenreich

This notion: that water is free or should be free and that selling water is therefore a violation, is a trickier, certainly more philosophical strand in the bottled water debate. But it’s there. And it may shed light on a deeply held, and problematic, misconception that free water has no cost. That the human right to water, and our cheap consumption of it, are the same thing.

They are not.

And that brings us to Part 3 in our series: There’s No Such Thing as Free Water.


Jessie Sitnick (Communications Director) and Dale Beugin (Research Director) are both staff of Canada’s Ecofiscal Commission.

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