Toronto Mayor clueless on basic economics
David Miller - the seemingly basket-case mayor of Toronto - has decided to change the way they’re trying to discourage plastic bag use by Toronto citizens.
It seems that the original idea was to force supermarkets to pay their customers a dime for bringing in a reusable bag. The change was to instead have the stores charge customers a nickle for every bag they got from the store.
Now anyone who’s done any analysis on incentives can easily see the problem with the initial plan - primarily that it doesn’t have a clear incentive for either party. Ten cents is not remotely enough to incent the average shopper to bring their own bag(s). On top of that the store actually has to do reverse transactions to get the ten cents to the client, and has to have their staff count non-standard bags, things that are likely to raise costs, even if only slightly, affecting their narrow bottom-line. Hence one side in the transaction doesn’t care and the other will resist it because it will cost more.
The structure of the new charge is a clear improvement - the customer is charged a nominal but not negligible amount, which will incent them to reuse their bags or bring in others. The store they merely adds another product to their list and hence don’t lose money, unless paying the five cent levey to the city is prohibitively expensive.
Why didn’t Miller or his advisors think of this beforehand? Is he really as inept as some people think?
Of course I think the whole thing is at best sophist environmental window-dressing. Given the environmental issues that seem to be cause panic, the anti-plastic-bag fetish that’s mainstreamed in the last couple of years doesn’t seem to be that important.
Anything here rankle you? Feeling overly perturbed or elated? Leave a comment below. or subscribe to the Sauce Captain feed.
Comments
No comments yet.
Sorry, the comment form is closed at this time.