Many grab-and-go foods that consumers purchase come in plastic packaging. These forms of packaging are bad for the

Question

Many grab-and-go foods that consumers purchase come in plastic packaging. These forms of packaging are bad for the environment. Suppose the government wants to implement a regulation to solve this consumer problem. The government cares most about finding an efficient solution that will also be relatively effective in reducing plastic waste. Which solution should to government choose? 1. A ban on plastic packaging for fast food products. 2. An information disclosure law requiring that all plastic containers be labeled as highly polluting. 3. A pigouvian tax on plastic containers. 4. A ban on grab-and-go foods such that consumers can only eat-in on reusable dishes.

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3. Pigouvian tax on plastic containers Reason: Since the usage of plastics for the grab and go foods are being used in quantities which are much more than socially desirable levels, this creates a negative externality, where the societal cost of using plastic is much more than the private cost. In order to internalise this externality, the cost of the plastic containers must increase. In order to increase the cost of the containers so that the quantity of plastic containers in the market comes at the socially desirable level, the government can consider imposing Pigouvian tax. Imposition of Pigouvian taxe on plastic will make the plastic containers costly, thus increasing the cost component of fast food sellers, who in turn will either find alternatives to plastic containers or will increase the charge of the overall food that they are offering. This will discourage the usage of plastic containers and using this the government can also earn some revenues, which can be used to promote biodegradable alternatives to plastic.

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Many grab-and-go foods that consumers purchase come in plastic packaging

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