The Problem
You are a policy analyst working for the Mayor of Toronto. An environmental coalition, working on problems of solid and hazardous waste, has convinced a key group of Councilors that a tax should be imposed on bottled water, specifically those held in plastic bottles. One of their proposals is a 50-cent tax on these beverages.
They assert that the public currently subsidizes these drinks through both the container (through solid waste system required for their proper disposal) and the water itself (most bottled water is lightly filtered tap water, bottled in the city it is sold in, with very low bulk water fees paid to the local water utility).
Environmentalists argue that over two billion plastic water bottles are used annually in Canada alone. These bottles are associated with extensive litter problems both on land and in waterways. While the bottles are technically recyclable, there is little market for this recycled plastic and as such, separating and disposing of it represents a cost to the municipality. At the same time, a great deal of these bottles do not find their way into recycling bins – according to a Toronto Sun report, as few as 50 per cent of the water bottles Torontonians consume everyday are actually being recycled. That means as many as 65 million empty plastic water bottles per year end up as garbage in a landfill waste site. In some communities the percentage of water bottles that end up in landfills can be as high as 80 per cent.
Some municipalities have pursued bans on bottled water sales. Concord, Mass. banned the sales anywhere in the City. Several other cities, including Toronto, have banned sale of bottled water in many civic facilities.
Other jurisdictions have chosen to pursue taxes rather than bans. These cities include New York and Chicago as well as others. While these taxes and bans are relatively new, they appear to have some effect on consumer choice. For example, a University of California, Berkeley study showed that consumers decreased bottled water purchases by 3% due to a tax of 6-cents per bottle and that the decreased buying rates were maintained even when the tax was removed. Environmentalists argue that bottled water bans and taxes can push people to use available tap water and bring refillable water bottles when they are on the go. Advocates for the poor are concerned that this higher cost for bottled water might hit low-income earners unfairly as many may be living and working in areas where public water dispensers are not available.
In your analysis, proposals should be focused on a tax rather than a ban. Local environmentalists argue that a tax on bottled water will reduce its use and generate significant revenue for the City. With these proposals in mind, your assignment is to explore the efficacy of the proposed 50-cent tax per botted on all bottled water sold in the City.
First, you should gather some basic data, which are publicly available, and develop some back-of-the-envelope calculations, checking the environmentalist’s claims for orders of magnitude (in terms of reduction in the sale of bottled water and the revenue potentially generated by the tax).
Second, analyze the impact of the tax on individuals or households? To what extent are alternatives available? Are the alternatives more environmentally sound? Are they more or less affordable to households? Third, explore the problem from a societal perspective – assess the policy’s impact on local governments (waste collection costs, revenue generation, tax collection methods) and the related industries (grocery stores, pharmacies, take-out restaurants, etc.).
The Assignment
Be sure to begin it with a short executive summary, and give a recommended course of action: Adopt the tax, kill it, or delay and study it some more. If you are going to urge a delay, be sure to spell out exactly how you will use staff time to learn more about the problem and the possible policies that could be adopted.
The memorandum should be a maximum of five (5) single-spaced, written pages or 25 PowerPoint slides. Concision is encouraged, but take care in how you approach and communicate your analysis and recommendations, Short shouldnt mean simplistic or poorly throught-out.
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