Analyzing the Environmental Impact of Plastic Bag Regulations: A Panel Data Study on PM2.5 Levels

Abstract

This study provides a comprehensive analysis of the impact of the ban and tax on the use of plastic bags on the air quality measured by PM2.5. Utilizing a panel dataset of 208 countries spanning 1960 to 2021, we employed Fixed Effects, Driscoll and Kraay, and GMM models to estimate the effects. In all models, our findings suggest that the ban considerably decreases the proportion of the population exposed to PM2.5 levels exceeding WHO guidelines. Meanwhile, the ban increased the proportion of the population exposed to PM2.5 levels exceeding the Interim Target-1 value, while reducing those exceeding the Interim Target-3 in the Driscoll and Kraay and GMM models. Counterintuitively, the introduction of a tax on plastic bags was shown to significantly raise both the mean annual exposure to PM2.5 in a given area and the proportion of the population exposed to PM2.5 levels exceeding all WHO targets and guideline values, as per the GMM model. Similar trends were observed in the fixed effects and Driscoll and Kraay models, albeit for a fewer number of WHO target values. In terms of combined effect, the ban was found to decrease the proportion of the population exposed to PM2.5 levels exceeding the WHO guidelines, Interim Target-1, and Target-2 values, but increased those exceeding the Interim Target-3 value. However, the tax policy resulted in increased exposure across all measures. These results underscore the intricate relationships between plastic bag policies and air pollution levels, offering important implications for policy design. Considering the significant reduction in the population's exposure to PM2.5 following the implementation of a plastic bag ban, such policies should be promoted. However, the ban's effect of increasing exposure to PM2.5 exceeding the Interim Target-1 value calls for supplementary measures to counter this unexpected consequence. The finding that taxation leads to an increase in PM2.5 exposure is surprising and may hint at complex underlying dynamics, such as an increase in the use of alternative materials with higher PM2.5 emissions. Policymakers may need to reassess the efficacy of taxation as a tool to improve air quality and explore mechanisms ix to ensure that the use of alternative materials does not lead to higher pollution levels.