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    Rio Grande Guardian > Green Guardian > Story
checkDavila: Plastic Bag is a Market Failure
Last Updated: 1 May 2013
By Mauricio Davila
Mauricio Davila is a freshman at UT-Pan American and is double majoring in finance and economics.
EDINBURG, May 1 - When the plastic bag ban was proposed in McAllen, Texas last year, it was shot down without a second glance.

The City’s cursory cost-benefit analysis left the commission with the false impression that the ban was not necessary in McAllen. This is what I deduced from talking to Scott Crane, a city commissioner who supported the ban.

The decision was based on an incomplete analysis. Identifying the benefits was easy because they don’t go beyond being able to bring your groceries home without having to remember reusable bags. Identifying the costs was more complicated because there are so many unquantifiable external costs associated with plastic bag. External costs are when a person or group’s actions impose a cost on others.

In economics, the plastic bag is what we call a market failure—a situation in which the market does not provide the amount of a product that takes into account all external costs of the production and consumption. In this case, the external costs of the plastic bags used by individual citizens are being imposed on the environment and the community of McAllen as a whole.

Today, it is not uncommon to see market failures that are caused by external costs in the headlines. Global warming, the collapse of the North Atlantic Fisheries, and the depletion of forests are all market failures caused by the person or group responsible for them not incorporating these costs into their own private cost-benefit calculations. If they had, these problems would never have existed. And if you look closely at single-use plastic bags, the same problem arises.

The Costco off of Jackson Ave in Pharr, Texas does not offer free plastic bags. According to the manager, “the main reason Costco doesn’t use bags is because they are trying to save the consumer money. If they supplied bags, the costs of membership and the costs of items would increase.”

Thus, we are indirectly paying for the plastic bags. Beyond the cost of higher prices in our groceries, a recent study written for the Environmental Law and Policy Center, a Midwest environmental advocacy organization, has calculated the environmental external costs associated with plastic bag production and disposal.

The costs were broken down into three categories: (1) production, (2) transportation and (3) disposal. The production process was calculated to have a cost of 0.20 cents per bag due to CO2 emissions. The transportation costs were incalculable so the costs were left as unknown. The process of disposing was the most substantial causation of cost; litter accounts for 5.20 cents per bag, landfill for 2.92 cents, and improper recycling for 2.20 cents. This comes to a low estimate totaled at 10.52 cents per bag.

These costs become a problem because as we individually benefit from plastic bags by being able to carry our purchased goods without the “burden” of having to carry with us a reusable bag, the community as a whole bears the collective costs of the production and disposal of them.

Unfortunately, these are only the quantifiable costs related to plastic bags. A myriad of other problems have been connected to the production and disposal of plastic bags by scientists and economists.

The contamination of our seafood supply is one of them. Plastic makes up approximately 90 percent of all trash floating on the ocean surface, with an estimated 46,000 pieces of plastic per square mile. Plastic does not biodegrade; instead, it photo-degrades with sunlight, breaking down into smaller pieces until they reach the size of plankton. These plastic bits are then eaten by marine life, which are then eaten by fish higher up in the food chain until they ultimately end up dead or on our dinner tables.

Plastics carry chemicals that disrupt and inhibit hormones the moment they enter our bodies; scientists have connected them to autism, ADHD, breast cancer, and miscarriage among other negative health effects. Moreover, research has shown that plastic absorbs many other pollutants in the ocean, making the consumption of contaminated seafood more dangerous.

Another problem is higher gasoline prices. Sixty-six percent of what dictates the price of gasoline is the cost of crude oil used to produce it, according to the U.S Energy Information Administration. The main component used to produce plastic bags is also crude oil. With the increase in demand for crude oil by the production of plastic bags, the price of it rises, thus, also affecting gasoline prices.

I hope it is clear now which way the balance scale tips. We need to choose between the benefit of not carrying reusable bags versus a cleaner city, lower grocery prices, taxpayer dollars put to better use, less contaminated seafood, and better gas prices.

In the United States we are prone to looking at our actions as singular and individualistic, affecting us only. In reality, what may seem good and rational to you as an individual is not necessarily what is good and rational for the community as a whole.

Here in the Rio Grande Valley the citizens of some cities have already made up their minds. Brownsville imposed a plastic bag fee, while South Padre Island and Laguna Vista passed a total bag ban.

What side will the citizens of McAllen take?

Mauricio Davila is a freshman at the University of Texas-Pan American, and he is double majoring in Finance & Economics.

The above guest column is part of a series on environmental issues the Rio Grande Guardian is running in association with UTPA.

Write Mauricio Davila



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