Bottle Water Bans and Substitution Effects

As an economist who also supports environmental issues, I often get asked if it's hard to reconcile the two. I usually answer "not at all - many policies are both good economics and good for the environment". But I understand where people get the idea that the two must conflict, ..








particularly when I read articles such as this one from my home-town London Free Press:

--- If you just can’t get by without your bottled water, you might soon be sweating it out at London city arenas. Ditto at the city’s four golf courses, parks — and even at city hall itself. That’s because a city council committee is being told it should lower the boom on sales of single-use bottled water on city property, under a ban that would be phased in starting this fall and be fully in place a year from now. Saying the ubiquitous plastic water bottles litter streets, leach chemicals into landfills and don’t send out the right environmental message, a city council committee meeting tomorrow is being urged in a staff report embrace the ban. It may not take much convincing to persuade the environment and transportation committee, some of whose members are already solidly behind the idea. ---

This policy may have little impact on the environment, but it is likely to have some fairly nasty effects on city finances. There are four basic points to the policy:

1. Sales of bottled water would not be permitted.
2. Sales of other bottled products, such as juice and soda would still be permitted.
3. Consumers would still be allowed to bring their own bottled water.
4. More fountains will be put into place. (Though how many and in what proportion to existing fountains is still an open issue).

Even if we accept the idea that reducing the number of plastic bottles used is beneficial (and I do accept this),