By Michael Reddell 13/08/2018

There is a reason why we do not let primary school children make policy or vote.  They are children, precious and growing but prone to all the enthusiasms of children, easily influenced, and not responsible (as taxpayers or anything else) for their expressed preferences.  

And yet, as the Prime Minister was reported, it seemed that the fact that lots of school children had written to her about plastic shopping bags was almost enough in itself to justify a decision to ban them.  And how many of those letters in turn were subtly –  or not so subtly –  prompted by teachers, themselves disproportionately likely (at least based on the sample I’ve seen over 10 years and four schools) to be Labour and Greens supporting? Has a child in central Wellington ever came home enthused by a teacher regaling them with the creative wonders of the market, of innovation, or prosperity? (Let alone any other traditional virtues.)

Having now read the government’s consultative document on the planned ban on plastic shopping bag, I was pretty staggered by how bad it was. Since the document is actually released under the name of the Ministry for the Environment, has the New Zealand public service now sank to such a low level of “analysis” and evaluation? Or were they simply overruled by ministers with an agenda, and no analysis?  Either way, there is little positive that can be said for it.

Just for clarity –  since this didn’t really come through in the media reporting I saw – this is what it is proposed to ban:

A new plastic bag (including one made of degradable plastic) which has handles and is below a maximum level of thickness. The terms ‘plastic’ and ‘degradable’ (including ‘biodegradable’, ‘compostable’ and ‘oxo-degradable’) would be defined in regulations with reference to international standards.

Thus, oddly, of the 31 bags I brought home from the supermarket the other day, only 15 will be outlawed.  But there is no hint in the document as to why one sort of bag –  that one might put beans or apples in, or in which bread rolls might come wrapped –  is less problematic environmentally than the bags (with handles) that I might then carry the groceries home with.

Since one tends to notice these things once attention is drawn to them, I’m also relieved to find that the two newspapers a day that arrive at our house will still be able to be wrapped in plastic (definitely never re-used after it is ripped open), and that the various magazines that arrive each week wrapped in plastic will also still be okay.  But why?  What is the difference?    Will the bag my newspapers were in be more likely to blow round than the bags the groceries were in?  No evidence or argument is offered?

It is a simply incoherent approach, apparently grounded on no analysis whatever (at least none they have sufficiently confidence in to expose to scrutiny –  perhaps it will biodegrade in sunlight?).

The document highlights just how small a problem – if a “problem” – plastic bags are. Here is total use:

Industry estimates of current consumption in New Zealand of standard supermarket single-use shopping bags are 154 bags per person per year. This is about 750 million bags per year, or about 0.01 per cent by weight of total waste in levied landfills.

0.01 per cent of landfill waste.

There is more:

Published urban litter count data does not differentiate plastic shopping bags from ‘unclassified packaging’, which makes up 10.8 per cent by count in ‘visible litter’. Takeaway food and drink packaging makes up an estimated 40.2 per cent, and non-packaging litter makes up 42.4 per cent.

And recall that the proposed ban isn’t going to ban all plastic shopping bags, only the ones with handles, which must make up quite a small proportion of even that 10.8 per cent of total “unclassified packaging”.

Or take these (unverified) estimates from various “coastal clean-up events”:

Figure 1: Coastal clean-up data, New Zealand, top litter categories by … weight

(the orange bars are items wholly/largely made of plastic).

So, even if you were wanting to focus policy on the potential impact of plastic litter on marine life, etc, it is far from clear why you would make a start on plastic bags (again, recall that the class of plastic bags the government proposes to ban is only a fraction – no estimates from them as to what fraction – of total plastic bags). Rope and buoys/floats do rather stand out, as do plastic drink bottles. As I read the consultative document, it is all plastic, and will also break down over time into stuff that might do bad stuff to marine life or even humans. But the Government is just coming for our shopping bags.

I used the word “might” a couple of sentences back.  I don’t claim any expertise in the science: here instead I’m quoting the Associate Minister for the Environment, Eugenie Sage in her message at the front of the consultative document.

There is early evidence of the toxicity of these plastic particles to marine species, and potentially the human food chain.

I was quite surprised by her rather modest claims (“early evidence”, “potentially”). Surely that uncertainty would then be reflected in the cost-benefit analysis for any regulatory intervention? Oh, silly me. That assumes there is a cost-benefit analysis, but in this document there is nothing even remotely resembling such a standard part of the policy analysis toolkit. And that is even though they explicitly acknowledge what evaluation they did do:

This assessment was based on information from overseas experience, which has many gaps in relation to these goals.

So what is the rush? Why not do your evaluation rigorously and robustly, clearly identifying your assumptions when there is (as there always is) inevitable uncertainty? And how about pricing the option of waiting, or incentivising the development of genuinely biodegradable bags?

But actually the clue to what is going here is actually repeated several times in the document, this from the Executive Summary:

plastics 3

In other words, we want to be in your face about it, and we can inconvenience almost everyone.

It isn’t about marine pollution or the potential toxicity of plastics, but a stake in the ground for a strategy which, if pursued, would up-end the way we do things across the spectrum of economic life, all based on the new dogma known as “the circular economy”.

I’d noticed a reference to this concept a few months ago in a speech by a senior Labour minister (this stuff isn’t just Greens flakiness) but hadn’t paid it much attention. But here is what the Government says in the latest consultative document:

plastics 4

With not a single reference, at all, to the role of the price system in signalling the best uses for resources, best productive processes etc, etc, it looks a lot like economic illiteracy hallowed by a major government ministry.  There is, for example, no hint in any of this – presented as some easy alternative – about the labour costs in each of these approaches. No one doubts that the earth has finite resources – heck, even the Sun will burn itself out one day – but on this standard of analysis, government would never have let the Industrial Revolution (or all the huge improvements in material living standards that flowed from it) occur.

If there are unpriced externalities, identify them, estimate the significance of them, and look at the options for pricing them. That would be pretty standard economic analysis. You might even focus first on the most significant sources of marine pollution, not the feel-good ones, deliberately designed to inconvenience almost everyone.

Because this isn’t just some new analytical framework for academics to play with. It seems to be a policy agenda:

Actions to phase out aspects of a linear ‘throwaway culture’ are part of a transition to a circular economy.

If the Prime Minister, James Shaw, Eugenie Sage and the rest of them haven’t come for your water bottle, your disposable coffee cup, your newspaper wrapper, your fresh produce bag at the supermarket, the tray supermarket meat comes on, or the carton your Chinese takeaways come in, this document suggests it is only a matter of time. Standard economic analysis would suggest that provided the true economic cost of landfill provision is charged for (e.g) these are cheap and efficient technologies improving the living standards of New Zealanders.

As I’ve already noted, there is no cost-benefit analysis in the document. Specifically, there is no overall summary estimate. But there is also no attempt to put a dollar value on any one of the various potential costs and benefits (some identified, others ignored completely). How do we value the potential reduction in the poisoning etc from marine life? I have no idea of the appropriate number, and the documents suggests (by silence) that MfE and the Government have no idea either. Since that is, purportedly, the main benefit of the policy, it seems like quite a gap.

And if there is no cost-benefit analysis, there is also no decent distributional analysis. But there is this stark statement:

Some consumers on low incomes may nonetheless find the up-front cost of multiple-use bags unaffordable. One possibility is to provide support, such as offering discounted bags to holders of Community Services Cards and Gold Cards.

So yet another policy proposal –  from the party the campaigned that it was on the side of the poor and the marginalised – that will hit the poorest hardest (as the net-zero climate proposal will). And that on the Government’s own reckoning. But it does rather highlight the point about why supermarket shopping bags with handles exist: because they are cheap and efficient.

Strangely, there is also no real analysis of where the savings to retailers (from not providing bags) are likely to go. Again, from a left-wing government, the first option listed in a “windfall profit” to retailers – transferring value from poor people to supermarket shareholders? My starting point would be that, over time, any savings to retailers would be competed away, but I know that serious people have concerns about the degree of competition in the New Zealand supermarket sector. On which note, it would be interesting to know – and tempting to OIA – whether the supermarket chains have lobbied for this ban, including in its very particular form. Quoting again from the Associate Minister:

Government working alongside industry can be very powerful

No doubt, but there should be no presumption – perhaps especially from left-wing parties, if they seriously care about consumers and the poor – that such working together will generally be in the public interest.

I have noted already that some costs are not even identified at all. At present, if I go to the supermarket I give no thought to what I will bring my purchases home in. Supermarkets provide plastic bags (as do many other retailers). If every trip to the supermarket were in future to involve 30 seconds to collect reusable bags before heading out, then across tens of millions of trips to the supermarket each year, the value of that time alone will be non-trivial.

The authors of the consultative document also seem conveniently oblivious to how people actually live.  This is from a post by Eric Crampton earlier this week:

We have a few reusable bags at home. The ones we have get reused a lot, because we use them on planned trips to the store. But most of our trips aren’t like that. Most of them are grabbing a few things on the way home after getting off the bus. Maybe other people are happy to carry around reusable grocery bags every day on the off chance that they might need to grab milk, bread, eggs and butter on the way home. I’m not. On those trips, we use the disposable plastic bags. Because what else are you going to do? Walk home, get a bag, walk back to the shop? It’s absurd.

Or my own experience as a semi-retired suburban homemaker. I go for an hour-long walk most days. About three-quarters of the way round, I pass the local supermarket, and perhaps most days I pop in and get one or two things. A light supermarket shopping bag, with handles, equips me for the walk back up the hill home again.  Zealots will no doubt argue that I should carry a reusable bag with me all the way round my walk. By why would I want that inconvenience? Or this morning, when I went out I planned to pick up just one small thing, that I might have carried home without a bag at all. But passing the supermarket I noticed a generous discount on something I stock up on whenever it is on sale. I bought five of that item. With a supermarket shopping bag, with handles, it was not a problem. Without that option, I am more likely to use the car and drop back down to the supermarket later in the day, extra carbon emissions and all. All these sorts of forced changes of behaviour should be identified, and efforts made to price them, weighed up against serious estimates of any possible benefits.

The consultative document does, at least, include a table showing estimate of how many times different types of alternative bags have to be used to have less environmental impact (over 14 different measures) than a standard supermarket shopping bag. At the absurdist end of the spectrum – and yet these the sorts of options Greens like to talk up in other contexts – an organic cotton bag would, we were told, need to be reused 20,000 times: roughly once a day for each of 60 years. In a sense that difference is one of the marks of how much progress society has made in identifying products as cheap and useful as the supermarket shopping bag. Organic cotton, after all, was all the cotton there was a few hundred years ago.

Lest you be unable to believe that there is no evaluation framework at all, MfE do offer one up in the document.  It is captured in this subset of their table:

plastics 5

This framework is not designed to assess whether there is a policy problem that can be cost-effectively addressed. Rather, it assumes there is a major policy problem (note that triple-weighting on the first criterion, and how broadly and loosely defined it is) and then it set up to demonstrate the superiority of the option the government plans to ram through. There is no obvious reason (from a public perspective) why the ability to impose a ban without new legislation should be favoured over an option that requires new legislation (in fact, rather the contrary given the pervasive – deliberately so – effect on this proposed ban). And on the other hand, the evaluation framework gives no weight at all to issues around personal freedom and choice. Thus, some of the other options – tax or mandatory-charge based – would be likely to generate substantial reductions in plastic bag use, while allowing those for whom use of such bags was particularly convenient or valuable to do so. It is, for example, the approach adopted in the UK. The consultative document offers no good economic reason not to take that path here.

Finally, it is perhaps worth noting that some media outlets have reported there being 104 countries to have adopted such a ban. In fact, the consultative document is quite clear that there are 104 jurisdictions – anything from local councils to national governments. Recall that there are 70 odd territorial local authorities in New Zealand alone. And that local councils – here and (no doubt) abroad – do all sorts of daft and damaging things without adequate scrutiny and evaluation (see, for example, our housing markets). Going by the table in the document, the number of countries that have actually and enforced imposed bans (especially as far-reaching as our government plans) seems able to be counted on the fingers of one hand. We deserve much better analysis; it is not a case of New Zealand simply copying what every other advanced economy is already doing.

It is a shockingly poor document, perhaps summed up best in this question for submitters:

plastics 6

Perhaps it is mostly a fair enough question, but given all the analytical resource and money (from taxpayers) the Government and MfE have at their disposal, surely they could have at least made a stab at estimating the costs and benefits themselves, setting down their workings as a basis for submitters to agree or not.

But that perhaps assumes that this is a real consultation. I suspect the school children can be counted on to write in assuring the Prime Minister and her colleagues that it is a wonderful plan and everyone will feel better for it. Such a sound way to make policy.