Energy & Environment Lab Chicago Bag Tax Study

One hundred billion plastic bags are used annually in America, where the majority end up in landfills, taking up to an estimated 1,000 years to decompose. In addition, paper bags also have significant environmental impacts—in 2015, paper production contributed to 20% of all toxic air releases in the US.

In early 2017, in an effort to curb disposable bag use, the City of Chicago implemented a seven-cent tax on all paper and plastic checkout bags. In partnership with ideas42 and New York University, the Energy & Environment Lab set to work to understand the effect of the tax.

The team discovered that Chicago’s bag tax significantly reduced disposable bag use and increased reusable bag use – a change that occurred within the first month of the tax. Importantly, these effects persisted a year after the tax implementation.

Some top-line findings: 

  • The likelihood of consumers using disposable bags significantly decreased; of consumers switching away from disposable bags, half switched to using reusable bags and the other half to using no bags at all.
  • Before the tax went into effect, 82% of consumers in Chicago used at least one disposable bag per trip. Over the next year, the bag tax led to a 28 percentage point decrease in the use of any disposable bags.
  • In addition to fewer consumers using disposable bags, more consumers were using reusable bags. Before the tax, only 13% of consumers in Chicago used a reusable bag. Over the next year, the bag tax more than doubled the likelihood of reusable bag use – a 16 percentage point increase.
  • Due to the tax, more consumers opted to forgo bags altogether. Before the tax, just 8% of consumers in Chicago did not use any bags when grocery shopping. Over the next year, the likelihood of not using bags increased by 13 percentage points.  
Preliminary Results Memo Skipping The Bag: Assessing the impact of Chicago’s tax on disposable bags