This paper investigates the use of charges and standards in dealing with a common externality, plastic litter from shopping bags in Botswana. The country passed a plastic bag tax (effective 2007) to curb the plastic bag demand. Interestingly, the legislation did not force retailers to charge for plastic bags, which they did voluntarily at different prices.
Authors assessed the environmental effectiveness and efficiency of the plastic bag legislation by analyzing consumers’ sensitivity to the improvement of the plastic bag and related price charges. The introduction of the plastic bag levy led to a significant decline in the consumption of plastic bags per 1,000 Botswana pulas of shopping. The partial success of the Botswana levy was due to the constantly high prices of the bags.
This paper has been peer-reviewed on the South African Journal of Economics.
