THE IMPACT OF PUBLIC POLICY ON THE CIRCULAR ECONOMY AND ENVIRONMENTAL SECURITY

Abstract

To target a negative trend of people polluting the environment, governments around the globe are actively introducing legislations to discourage usage of damaging products and encourage citizens towards more environmentally friendly behavior. However, it is still not clear how and if such policies affect citizens’ behavior in other domains – whether there exists any positive/negative spillover effect from governmental sustainable policies on consumers’ purchasing patterns. In this article, we explored this issue using the example of Western European countries, where a ban on the use of free plastic bags has been introduced since 2016. We implemented difference-in-difference analysis between two groups of citizens: those who live in provinces where local government takes an active environmental role and those – where local government does not. In addition, we differentiated on the citizens’ environmental motivation: whether they are concerned about environmental issue and claim to actively take actions in reducing harm towards the planet or not. By comparing the monthly shares of products in plastic packaging sales before and after the ban, we found that spillover happened only among low environmentally oriented consumers. The spillover showed to be negative, indicating that, on contrary to the intended goal, introduction of governmental ban increased the purchases of plastic products. In addition, we found a clear spillover evidence only for flavored drinks category, confirming that the spillover does not take place beyond products/actions which are closely associated with the ban.