Chicago’s 7-cents-a-bag tax driving down bag use, study shows

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Chicago’s 7-cents-a-bag tax on paper and plastic bags is driving consumer behavior in the right direction to reduce landfill costs: Both the number of disposable bags used and the number of shoppers willing to pay for them is way down.

Before Feb. 1, Chicago shoppers used an average of 2.3 disposable bags every time they went to a major grocery store.

In the first month after shoppers started paying 7-cents-a-bag for the privilege, the number of disposable bags used declined by roughly one bag-per-shopping trip, a 42 percent decrease.

Even more encouraging to environmentalists, only 49 percent of the 14,168 Chicago customers surveyed used any disposable bags. That’s down from the 82 percent who used at least one disposable bag every time they went to the grocery story before being forced to pay a bag tax.

Before the tax, only 13 percent of customers brought along re-usable bags to carry their groceries. After the tax, it was 33 percent. Three percent of customers surveyed used both a disposable paper or plastic bag and a re-usable bag.

The survey was conducted for the city by ideas42, a behavior design lab, and by researchers from New York University and the University of Chicago Energy & Environment Lab.

It tracked bag use at large grocery store chains in Chicago—on the North, South and West sides–in the run-up to the Chicago tax and in the one month after the tax was imposed.

Chief Sustainability Officer Chris Wheat called the 42 percent reduction “pretty clear proof that the bag tax is working” to change consumer behavior.

“We see roughly equivalent reductions in bag use no matter where you were in Chicago,” he said.

Wheat denied that an even higher tax may be needed to speed the process along.

“Seven cents has seemed to be a pretty significant incentive for people to reduce bag use. That’s what the research is telling us. And we think that, over time, that bag use will continue to go down,” Wheat said.

“Making a decision to either bring a reusable bag or not take a bag at all is a learned behavior. You remember to bring your re-usable bag with you in your back-pack or your purse. You get used to taking that item from the pharmacy or grocery store in your back-pack or your purse, instead of taking a bag.”

Cashiers also need time to learn how to talk to consumers about bags, Wheat said. Already, the city is hearing “anecdotally” that grocery store cashiers are asking customers at check-out “whether or not they want a bag” or, preferably, “whether they want to buy a bag,” Wheat said.

That kind of dialogue will help encourage consumers to pay attention instead of just absorbing the additional cost.

Although the one-month results are encouraging, Tanya Triche Dawood, vice-president and general counsel for the Illinois Retail Merchants Association, believes it’s “way too early to tell” what the impact of the bag tax will be.

“We’ll have a better understanding of how people have changed their habits a year from now. We need to get out of this time of volatility when they first get hit with the tax to see what the change in behavior really is,” she said.

“The point of the tax is not to raise revenue. The point of the tax is to get people to think twice about using bags, be it plastic or paper. I don’t know that the tax needs to be higher. The highest that exists out there today is ten cents. But there’s also five cents in Washington D.C. We’ve seen good results from both.”

The bag tax was a cornerstone of Mayor Rahm Emanuel’s 2017 budget.

It stemmed from the fact that the city’s partial ban on plastic bags turned into a farce when retailers started using thicker plastic bags to get around the ban.

That’s why, in conjunction with the tax, the city lifted the ban on plastic bags, allowing retailers to go back to the cheaper, thinner ones.

A nickel of the tax goes the city. The remaining 2 cents-a-bag “commission” goes to retailers, but only when disposable bags are either sold or given to consumers at check-out and the store “separately states the tax on the receipt.”

The Chicagoland Chamber of Commerce favored an “incentive” to reward consumers who bring their own re-usable bags over a penalty for all consumers who fail to bring their own recyclable bags.

Doug Palmer, a senior associate for ideas42, strongly disagreed, citing, what he called “loss aversion.”

“People react to a loss about twice as much as they react to an equivalent gain. I’m much more likely to notice that a tax is applied or that I’m losing something vs. gaining five-cents or seven-cents from a bonus,” he said.

Ald. John Arena (45th) has argued that if the goal really is to stop a ploy by major retailers to get around the city’s partial ban on plastic bags, then the city should ban plastic bags altogether and impose a ten-cent tax on paper bags.

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