ETF Trends
ETF Trends

In late September, California Governor Jerry Brown signed into law two solid waste bills with far reaching effects for state businesses. Although the new regulations are similar to laws passed by local governments across the country, this marks the first time that such regulations have passed at the state level and signals the continued momentum for policies that reduce waste and increase diversion rates.

It’s worth taking a closer look at these two laws, which could be used as a model for other states and municipalities.1 Today’s post will focus on the plastic bag ban and the reasons why other cities and states are moving to enact similar laws. My second post will discuss the composting mandate for businesses of a certain size.

PLASTIC BAG BAN

The plastic bag ban will primarily impact businesses in the food and retail markets. Similar to laws passed in many cities nationwide―including Seattle, WA, San Francisco, CA, Santa Fe, NM, Westport, CT, to name just a few―California’s law will ban retailers, grocers, and pharmacies from providing customers with single-use plastic bags.

Single-use recycled paper bags will not be banned, but the law requires stores to charge customers a ten cent fee for each single-use bag. The ten cent charge is a common feature of many plastic bag laws. The revenue collected goes back to the store, not to the government. The reasons for the fee are twofold:

  1. To discourage consumers from using single-use bags, thus incentivizing the use of reusable cloth bags; and
  2. To offset the added expense of paper bags to businesses, which generally cost more than the alternative plastic bags.

Though companies may be at the frontline for consumer complaints, past experience demonstrates that the public is able to adapt to the new ban quickly. Successful bans have been implemented in numerous cities since as early as 2008.

WHAT’S THE PROBLEM WITH PLASTIC BAGS, ANYWAY?

There are many reasons for the growing number of plastic bag bans around the country, from lowering costs to local governments to making recycling less expensive for processors and improving the environment.

COST TO LOCAL GOVERNMENTS

For local governments, plastic bags are expensive. In many solid waste markets, shipping a ton of material to a landfill is more expensive than recycling a ton of material. Plastic bags have a particularly low recycling rate nationwide, meaning a lot are ending up in landfills. The EPA estimates that only 12% of plastic bags, sacks, and wraps gets recycled every year (compare that number to the 55% recycling rate for aluminum cans). In addition, the recycling market for plastic bags is very poor and processors often lose money when they attempt to sell the plastic bags they do collect. As a result, it all adds up to a lot of plastic bags being shipped to landfills at a high cost to local governments.

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