Business Impacts of California’s New Plastic Bag Ban

Chris Toman

UPDATE (1/8): California’s statewide ban on plastic bags will be delayed pending a ballot initiative in 2016. Plastic bag manufacturers and other opponents of the statewide ban have collected enough signatures before the January 1st, 2015 deadline to force a referendum.

california-bans-retail-plastic-bagsIn late September, California Governor Jerry Brown signed into law two solid waste bills with far reaching effects for state businesses. Although the new regulations are similar to laws passed by local governments across the country, this marks the first time that such regulations have passed at the state level and signals the continued momentum for policies that reduce waste and increase diversion rates.

It’s worth taking a closer look at these two laws, which could be used as a model for other states and municipalities.1 Today’s post will focus on the plastic bag ban and the reasons why other cities and states are moving to enact similar laws. My second post will discuss the composting mandate for businesses of a certain size.


The plastic bag ban will primarily impact businesses in the food and retail markets. Similar to laws passed in many cities nationwide―including Seattle, WA, San Francisco, CA, Santa Fe, NM, Westport, CT, to name just a few―California’s law will ban retailers, grocers, and pharmacies from providing customers with single-use plastic bags.

Single-use recycled paper bags will not be banned, but the law requires stores to charge customers a ten cent fee for each single-use bag. The ten cent charge is a common feature of many plastic bag laws. The revenue collected goes back to the store, not to the government. The reasons for the fee are twofold:

  1. To discourage consumers from using single-use bags, thus incentivizing the use of reusable cloth bags; and
  2. To offset the added expense of paper bags to businesses, which generally cost more than the alternative plastic bags.

Though companies may be at the frontline for consumer complaints, past experience demonstrates that the public is able to adapt to the new ban quickly. Successful bans have been implemented in numerous cities since as early as 2008.


There are many reasons for the growing number of plastic bag bans around the country, from lowering costs to local governments to making recycling less expensive for processors and improving the environment.


For local governments, plastic bags are expensive. In many solid waste markets, shipping a ton of material to a landfill is more expensive than recycling a ton of material. Plastic bags have a particularly low recycling rate nationwide, meaning a lot are ending up in landfills. The EPA estimates that only 12% of plastic bags, sacks, and wraps gets recycled every year (compare that number to the 55% recycling rate for aluminum cans). In addition, the recycling market for plastic bags is very poor and processors often lose money when they attempt to sell the plastic bags they do collect. As a result, it all adds up to a lot of plastic bags being shipped to landfills at a high cost to local governments.

Governments pay for plastic bags in other ways as well, particularly in areas with a lot of beachfront property, like California. Plastic bags are one of the most common sources of litter, polluting parks, oceans, and other waterways. California’s efforts to clean up litter and prevent it from ending up in oceans and on beaches have been estimated to cost over $100 million per year alone. Reducing the number of plastic bags from entering the waste stream will improve local government’s bottom line.


Though the recycling rates are poor, the plastic bags that are sent to recycling processors cause a lot of problems that raise the cost of recycling all materials. At recycling facilities, known as Material Recovery Facilities (MRFs), plastic bags get jammed in sorting machinery and have to be manually removed by workers with box cutters. In large MRFs that process over 130,000 tons of material annually, that can mean stopping the machines over six times a day at a cost of over a million dollars per year.


Governments spend money to keep plastic bags out of the ocean and other sources of water because they are harmful to marine ecosystems. Plastic bags contribute to the large plastic “vortex,” or gyre, that’s collected in the Pacific Ocean. The EPA now estimates that the vortex is twice the size of Texas. After entering a marine environment, plastic bags can also break down into small fragments that are consumed by fish and other aquatic life.

In addition to those effects, the energy to produce a plastic bag results in more greenhouse gas emissions than a reusable bag. According to the EPA, using ten plastic bags per week results in more than three times the amount of greenhouse gas emissions over two years than using a reusable bag. Manufacturing plastic bags also consumes about 4.5 times more energy than manufacturing a reusable bag.

The culmination of all these issues drove California to enact a ban on plastic bags. Though new regulations are often viewed as burdensome, businesses may be relieved that action is being taken at the state level. Rather than having to keep track of hundreds of different bag policies in California, businesses need only adhere to a single statewide regulation, and the regulation itself should have minimal, if any, impact on business operating budgets.

Check back soon for my next blog post, which will explore California’s commercial composting requirement and why more and more governments are trying to collect food waste. Learn more about Ecova’s Waste Management Solution.

Full text copies of the bills can be accessed here: SB 270 (plastic bag ban) and AB 1826 (composting)

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