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The Latte Levy - An Amarach Research and Carr Communications Report 2018

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What impact will the so called 'latte levy' have on plastic waste in Ireland?

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The Latte Levy - An Amarach Research and Carr Communications Report 2018

  1. 1. Discussion Paper: The impact of the framing effect on the 15c ‘Latte Levy’
  2. 2. 15c As part of the ongoing collaboration between Amárach Research and Carr Communications, we have embarked on a series of short behavioural economics studies examining issues prominent in public debate. In this case we conducted a nationally representative study of 1,000 Irish adults exploring public opinion about the 15c levy on single use plastic cups (dubbed the ‘latte levy’) currently being proposed by the government and aimed at reducing the 2 million disposable cups a day sent to landfill. We examined the effects of framing the levy in positive and negative ways on the reactions of the respondents. This research found that Irish adults purchase on average of 4.17 hot beverages per week. Nearly 6 in 10 consider that plastic cups contribute to environmental pollution, and just under half felt that the cost of the levy was appropriate. A significant majority (over 7 in 10) would be in favour of a suite of measures to reduce our overreliance on them: o a discount when using a reusable container or a free reusable container, o refund schemes for the return of reusable cups, o options for alternative packaging, o rewards scheme for repeat use of reusable cups, and o reduced availability of single use plastics. Those aged between 16 and 24 consumed more disposable coffees yet were most environmentally conscious and open to the introduction of these measures. Further, our research found that people are more sensitive to losses than gains, are influenced by how a decision is framed, and are responsive to clear environmental messaging. This suggests that the introduction of the levy, as a single measure, may increase the prevalence of reusable cups by up to 3.4% (that is 68,000 of the 2 million cups used diverted from landfill each day). If we were to apply the multiple behavioural nudges / interventions suggested above in addition to the levy this may divert up to 12.5% of single use cups (or 250,000) a day from landfill. Therefore, when communicating key policy decisions, such as the ‘latte levy’, these framing effects are important to consider. Our findings also propose that the introduction of these measures by producers and retailers would be additions to their current service offering welcomed by the public. Single use plastics have been supporting world economic growth over the past 100 years. They are being used in packaging, cosmetics, and to support our ‘on the go lifestyles’ in the form of disposable and non-recyclable containers, cutlery, straws, and bags. While we have benefited from this versatilematerial,thescientific evidence suggests that human beings have become over reliant on plastic to the detriment of the environment, and human health and wellbeing. February 2018 Discussion Paper: The impact of the framing effect on the 15c ‘Latte Levy’ By Robert Mooney (Amárach Research), Amy Hume (Carr Communications), Colm Murphy and Séin Healy (Amárach Research). Executive Summary 2Discussion Paper: The impact of the framing effect on the 15c ‘Latte Levy’
  3. 3. Introduction According to the World Economic Forum (WEF)i plastics have become a ubiquitous material driving the modern economy “combining unrivalled functional properties with low cost [yet] hundreds of millions of tonnes of plastics with biodegradation lifecycles of hundreds of years are currently polluting the oceans and seas of the planet.” According to the United Nations Environmental Programme only 22% to 43% are recycled.ii Reports by the Intergovernmental Panel on Climate Changeiii , the Environmental Protection Agency, and the World Health Organisationiv clearly establish a causal link between environmental quality and human health. A recent report published by the National University of Ireland Galway (NUIG)v indicates an occurrence of microfibre plastics in the guts of 73% of fish species in the North Atlantic. The report suggests that the high rate of microfibre plastics found in the gut are of primary concern to the health of fish species and the entire ecosystem. This indicates that significant risks from the overreliance on single use plastics to the environment and to human health and wellbeing exist and are interlinked. Further, the the rapid rise in single use plastics, which is fuelled by our faster ‘on the go’ lifestyle, is unsustainable. The risks these unsustainable practices represent require that we, as human beings, must transform our way of living by anchoring the impacts of these risks to our everyday behaviour. This includes reducing the production, use, and disposal of single use plastics. The good news is that these changes are not only socially and environmentally sustainable, but make more economic sense than the current trajectory we are on. The European Environment Agency (EEA) Country Profile report on Ireland, states that: “Recent research estimates that if Ireland achieved a target of a 2% reduction in domestic material consumption per annum, this would yield savings of about €928 million in the first year and increased annual savings thereafter. By 2020 this could lead to a 25% improvement in resource efficiency, yielding a total saving of approximately €7 billion over that period.” vi This will allow us to “reduce our dependency on finite raw materials without compromising future development”vii . In 2017 a Waste Reduction Bill was proposed which proposes the introduction of a deposit and return scheme for milk, soft drinks, or water beverage containers including plastic, glass, tin or other materials and a ban on single use non-compostable cups and tableware. In a recent speech in the Dáil, the Minister for the Environment Denis Naughten stated that the 2 million single use plastic coffee cup/hot beverage containersviii which are not recyclable due to the plastic lining on their inside, are sent to landfill every day in Ireland and described the discarding of plastic waste as “environmental sabotage”ix . In response to this challenge, Minister Naughten proposes the introduction of a 15c levy on all single use coffee cups. This has been dubbed ‘the latte levy’. A recent pilot study carried out at Cardiff University explores series of interventions to promote the use of renewable cups. The study found the following: • a charge/levy on disposable cups increased the use of re-usable coffee cups by 3.4%, • environmental messaging in cafes increased the use of re-usable coffee cups by 2.3%, • the availability of re-usable cups led to an increase of 2.5%, • the distribution of free re-usable cups led to a further increase of 4.3 %, • the provision of free re-usable alternatives combined with clear environmental messaging and a charge on disposable cups increased the use of reusable cups from 5.1% to 17.4%x . The study implies that the use of reusable coffee cups could be increased by 12.5% following the simultaneous introduction of several of the measures suggested above. In Ireland, of the 210,000 tonnes of plastics produced each year, only 40% are recycled and 52% go straight to landfill.xi 3Discussion Paper: The impact of the framing effect on the 15c ‘Latte Levy’
  4. 4. The study To provide insight into the current debate around the proposed ‘latte levy’ we conducted a national survey representative across age, gender, region, and social class of 1,000 Irish adults in late 2017. We examined the public perceptions of the risks posed to health and wellbeing by single use plastics, public concerns about the environment, their purchasing habits, and the different preferences of different consumers. We also carried out a behavioural study examining the effectiveness of the framing of different options to reduce the use of single use coffee cups. In this way we explored how effective one specific intervention, the framing effect, might be in reducing our societal wide overreliance on disposable coffee cups. Finally, we examine our findings in the context of the findings of the Cardiff study. The Irish public believe that plastic bottles contribute the most to pollution, followed by plastic bags. This may be despite the success of the plastic bag levy or possibly because there is a plastic bag levy; i.e. a prominent anti-waste measure in Irish society that is resonant with the public. Plastic cups still rate highly at 58%xii . Survey Results When asked what the biggest risks that climate change poses to health and wellbeing, extreme weather events were considered to be the largest while an increase in waste to landfill was the least. This may point to a lack of connection between waste, climate change and health among the Irish population. Further, it indicates that the links between climate change and health reflect the more prominent societal discourses around climate change; e.g. the impact of extreme weather events which have been widely covered across multiple media channels. 35% 41% 42% 47% 51% 71% Waste to landfill Decreasing air quality Decreasing water quality Other Pollution Risk to animal and plant life Extreme weather 22% 46% 58% 77% 82% Plastic straws Microbeads Plastic cups Plastic bags Plastic bottles Figure 2: What single use plastic products do you believe contribute most significantly to environmental pollution. Figure 1: What are the biggest risks climate change poses to our health and wellbeing? 4Discussion Paper: The impact of the framing effect on the 15c ‘Latte Levy’
  5. 5. When asked how often they buy takeaway hot beverages, 44% of respondents claimed to purchase one at least once a week. While there is little difference in purchasing habits between genders, there is a clear decrease in consumption with age: with almost 6 in 10 of those aged 16-24 reporting purchasing a beverage at least once a week, while fewer than 3 in 10 of those over the age of 55 do so. On average, those who buy a takeaway coffee do so 4.17 times each week. The data suggests that some differences exist across the demographics: males consume more than females (consuming 4.91 compared to 3.5); those aged 16-24 consumed the largest amount of any subgroup (at 5.63 each week); and those in Dublin also consumed more than other regions (5.12 per week, compared to the Rest of Leinster at 3.55). 57% 56% 58% 42% 46% 51% 61% 72% 52% 60% 59% 56% 51% 62% TOTAL M ALE FEM ALE 16-24 25-34 35-44 45-54 55+ DUBLIN ROL M UNSTER CONN / ULST ABC1F50+ C2DEF50- At least once a week Less often than once a week 4.17 4.91 3.5 5.63 4.44 3.64 4.15 3.59 5.12 3.55 3.76 4.19 3.74 4.57 TOTAL M ALE FEM ALE 16-24 25-34 35-44 45-54 55+ DUBLIN ROL M UNSTER CONN / ULST ABC1F50+ C2DEF50- Mean Score Figure 4: Average number of takeaway hot drinks consumed each week. Figure 3: Propensity to purchase takeaway hot beverages each week. 5Discussion Paper: The impact of the framing effect on the 15c ‘Latte Levy’
  6. 6. When asked how they felt about a 15c levy for single use coffee cups, 45% of respondents felt that it was just right, however 42% felt that it was too much, and 13% felt that it was too little. Again, we see a clear distinction between younger and older age groups. Those aged between 16-24 and 25-34 are more likely to consider the 15c levy to be too little or just right, compared to the total, while older age groups are more likely to consider the 15c levy to be too much compared to the total. Finally, we asked a series of questions examining interventions which might encourage behavioural change; specifically, how likely they are to encourage an individual to purchase fewer single use plastics goods. Ages 16-24 25-34 35-44 45-54 55+ Too little 14% s 17% s 13% = 11% t 12% t Just right 51% s 48% s 50% s 39% t 40% t Too much 35% t 35% t 37% t 50% s 47% s Figure 5: Feelings towards a 15c levy for a single use coffee cup Figure 6: Preference for reducing the reliance on single use coffee cups 80%A percentage discount for using a refillable container 80%Free usable container 76%A refund for the return of each single use plastic item 74%Alternative packaging - no additional cost 73%A free product with a number of purchases using refillable 73%Reduced availability of single use plastic products 69%Local community initiatives 64%Information defining the risks to human health 64%Asked for reusable container before every purchase 63%Pictures illustrating where the waste will end up on 63%Information defining the risks to animal and sea life 62%Information regarding local retail and service poroviders 62%A national information campaign 60%A levy on single use plastic goods Just right 45% Too little 13% Too much 42% 6Discussion Paper: The impact of the framing effect on the 15c ‘Latte Levy’
  7. 7. Each of the options as a means of reducing the overreliance on single use coffee cups provided to the respondents scored 60%. They can be roughly divided into two groups; those scoring above 70% and those between 60 and 70%. Firstly, these results illustrate the propensity to be convinced by convenience and immediate financial rewards (discounts, free container, refunds, no additional costs, free products) yet seeking to retain the same access to the same products and services. Secondly, the respondents opted for action orientated initiatives (reduced availability, and local initiatives) and the provision of information (risks to health, the provision of information) or a levy. One of the most interesting findings in this research, from a behavioural perspective, is the 20% difference in preference for a discount for using a refillable container, compared with paying a levy on a single use plastic. While a discount will reduce the cost for consumers, and the levy increase the cost to them, retailers will have a degree of discretion as to how they pass on the cost to consumers, and so ultimately will reward those who use a refillable cup, and penalise those who use a single use cup. It will be interesting to see how retailers frame this. So, what does this research say about Ireland, our overreliance on single use cups, and what the impact of the ‘latte levy’ might be? Overall, this indicates a significant support for the reduction of the use of single use plastics, yet consumers have clear preferences for interventions which have the minimum impacts on their lifestyle. It also suggests that it is those who purchase the most disposable coffees (the 16 to 24- year olds) who may be most responsive to measures to reduce their prevalence. Further, it appears that how information is framed has an effect on decision making and behaviour. The purpose of the behavioural aspect of this research is to test this assumption. Behavioural Insights The basis of a behavioural approach is that human beings make decisions based on shortcuts, or cognitive heuristics, which allow us to carry out everyday activities without having to reflect on every aspect of every choice we make. Therefore, we make decisions in socio-cultural contexts and rarely with all the relevant facts available, or the adequate time available to us to make the most logical and rational decision. There are a wide range of biases prominent in decision making, and many relevant to product choice; in this study we explore the framing effect. This is a behavioural bias first explored by Tversky and Kahneman in 1981xiii , and since has been applied to the exploration of many policy areas. It allows us to explore what responses we might elicit simply by framing, or wording, a question or statement differently. That is, individuals may react to a choice in different ways depending on how it is presented to themxiv . In this study we examine the relevance of the framing effect on the impact of a 15c levy on consumer choice when purchasing a single use plastic cup. Our hypothesis is that framing the question in a positive or negative manner will not affect respondent’s answers, as rational human beings. To examine this, respondents were asked two questions to allow us to explore two things: the impact of positive and negative framing on responses to individual choice and also on the choices others might make. The first question, examining individual choice, was framed in a positive and negative way: • Positive: “I think that the introduction of a 15c levy on all single-use disposable cups will result in me taking my own refillable container to where I purchase a hot beverage (coffee, tea or hot chocolate).” • Negative: “I think that the introduction of a 15c levy on all single-use disposable cups will not result in me taking my own refillable container to a where I purchase a hot beverage (coffee, tea or hot chocolate).” The second question, examining ‘others’ choices, was also framed in a positive and negative way: • Positive: “The 15c levy on all single-use disposable cup will change other people’s use of disposable cup.” • Negative: “The 15c levy on all single-use disposable cup will not change other people’s use of disposable cup.” We split the 1,000 respondents, asking roughly half of them a positively and half a negatively framed question. The base for the positive frame was n=512 and for the negative frame n=503. The results from both questions showed a significant difference in survey responses, proving the framing effects. In theory, the way the questions were asked should not have influenced the responses people gave. 7Discussion Paper: The impact of the framing effect on the 15c ‘Latte Levy’
  8. 8. Distribution of Social Scores (Negative) 250 200 150 100 50 0 0 1 2 3 4 5 6 Frequency Distribution of Individual Scores (Positive) 180 160 140 120 100 80 60 40 20 0 0 1 2 3 4 5 6 Frequency Figure 7: Distribution of individual question scores. Figure 8: Distribution of social scores. These framing effects can be clearly seen for both ‘individual’ and ‘societal’ frames as demonstrated in Figure 7 and 8, where scores given are skewed towards the higher end of the scale for the positively framed question and the lower end for the negatively framed questions. Distribution of Social Scores (Positive) 250 200 150 100 50 0 0 1 2 3 4 5 6 Frequency 8Discussion Paper: The impact of the framing effect on the 15c ‘Latte Levy’ Distribution of Individual Scores (Negative) 180 160 140 120 100 80 60 40 20 0 0 1 2 3 4 5 6 Frequency
  9. 9. Figure 9: Mean scores for both individual and social frames. Figure 10: Mean scores for both Individual and Social based on exposure to Negative or Positive Frame. Comparing the means of each framing question further highlights the discrepancies between the positively and negatively framed survey responses, as seen in Figure 9. From these results we can see that the means were found to be significantly different for both questionsxv . We can, therefore, reject the null hypothesis that framing the question in a positive or negative light does not affect respondent answers. This suggests that framing the question in a positive light increases the average response rating, as shown in Figure 10. This holds true across both the individual question and the societal question, demonstrating that the framing effect is not limited to how people view their own actions but is applicable to how they view the actions of others. This suggests that the respondents in our survey can be heavily influenced by simply reframing the question in a positive manner for both individual and social measures. Negative Positive 3.33 2.90 0.00 1.00 2.00 3.00 4.00 Means Score Individual based on exposure to Negative or Positive Frame Negative Positive 3.53 2.94 0.00 1.00 2.00 3.00 4.00 Means Score Social based on exposure to Negative or Positive Frame Means Score Social by Experimental Frame Experimental Frame MeanScoreQ5 Negative Positive 3.6 3.5 3.4 3.3 3.2 3.1 3 2.9 2.8 2.7 2.6 9Discussion Paper: The impact of the framing effect on the 15c ‘Latte Levy’ Means Score Individual by Experimental Frame Experimental Frame MeanScoreQ4 Negative Positive 3.6 3.5 3.4 3.3 3.2 3.1 3 2.9 2.8 2.7 2.6
  10. 10. As has been demonstrated above, the scores for Individual behaviour are lower than those for Social behaviour i.e. the behaviour of others. We compared the means of the collective responses to the two questions, and found that controlling for framing effects, people expected the levy to be a more effective mechanism for behaviour change on others than themselves, as shown in Figure 11. Statistical analysis showed there to be a significant difference between the two responses. This is not the effect we would have expected to find, based on theories of overconfidence bias, in particular overplacement. People tend to rate themselves as better compared to others than they actually arexvi . Therefore, we would have expected to see it manifest itself here, as people anticipate that they will respond far more positively to the levy than other people. 4.0 Individual Other 3.8 3.6 3.4 3.2 3.0 2.8 2.6 2.4 2.2 2.0 3.135 3.256 Levy impact on behaviour of individuals v others Figure 11: Mean scores for expected levy impact on individuals v others. 10Discussion Paper: The impact of the framing effect on the 15c ‘Latte Levy’
  11. 11. Conclusive remarks As our survey suggests, most people would support a ban on single use coffee cups and the ‘latte levy’ will be somewhat effective in reducing the prevalence of single use coffee cups in Ireland. We also surmise that the effective implementation of framing and other behavioural nudges could reduce the use of single use coffee cups further. This supports the argument for a reduction in the overreliance on single use plastics and suggests that while there may be short term challenges for producers and retailers, closing the loop on the circular economy will have significant and positive long term ecological, social and economic benefits. Finally, these measures could also support Ireland in meeting our targets as defined in the Europe 2020xvii which emphasises smart, sustainable and inclusive growth and help us to achieve our United Nations Sustainable Development Goalsxviii . Broader Societal Discourse and Context of this Study If the findings of the Cardiff study are to apply to the Irish case, this implies that the introduction of the levy, as a single measure, may reduce the prevalence of single use coffee cups by 3.4% or 68,000 of the 2 million used per day in Ireland. If we were to apply all the interventions explored in the Cardiff study to the Irish case, the figures suggest that we could divert 12.5% or 250,000 of the 2 million cups away from landfill in Ireland every day. That is 182,000 more cups a day not going to landfill than if the levy were introduced on its own. Consequently, we can deduce that while the ‘latte levy’ may have an impact, it would be greatly enhanced by the inclusion of a combination of other behavioural nudges including the increased availability of containers, loyalty schemes/incentives for repeat purchase, and clear environmental messaging/framing. Our research also highlights that people are more sensitive to losses than gains and are influenced by how a decision is framed. This suggests that when communicating key policy decisions, such as the ‘latte levy’, these framing effects are important to consider. This is also directly relevant to the sustainability discourses. These are often focused on risks to the economy, health and/or the environment. They do not focus on the benefits of implementing more sustainable practices such as improvements in health and wellbeing, supporting jobs and indigenous economic growth, and promoting the socio-cultural benefits of a healthy environment. 11Discussion Paper: The impact of the framing effect on the 15c ‘Latte Levy’
  12. 12. End Notes i The New Plastics Economy Rethinking the future of plastics: http://www3.weforum.org/docs/WEF_The_New_Plastics_Economy.pdf ii Valuing Plastics: https://wedocs.unep.org/rest/bitstreams/16290/retrieve iii Intergovernmental Panel on Climate Change: http://www.ipcc.ch/ iv World Health Organisation: http://www.who.int/en/ v Frontiers in Marine Science: https://www.frontiersin.org/articles/10.3389/fmars.2018.00039/full vi EPA Towards a Resource Efficient Ireland: A National Strategy to 2020: http://www.epa.ie/pubs/reports/waste/prevention/TowardsAResourceEfficientIreland.pdf vii https://www.epa.ie/pubs/reports/waste/prevention/TowardsAResourceEfficientIreland.pdf viii Further referred to as ‘coffee cups’. ix Minister Denis Naughten speech re Waste Reduction Bill 2017: https://www.dccae.gov.ie/en-ie/news-and-media/speeches/Pages/Minister-Denis-Naughten-speech-re-.aspx x Results of a field experiment to reduce coffee cup waste: https://orca.cf.ac.uk/99366/1/Coffee%20cup%20summary%20report%20-%20Poortinga%20%28FINAL%29.pdf xi EPA Waste Plastics Packaging Statistics for Ireland 2013: https://epa.ie/pubs/reports/waste/stats/wastepackagingdata2013/EPA_Packaging_2013_data_release_web.pdf xii It is worth noting that this research was carried out in September 2017; a recent national poll conducted by Amárach for the Claire Byrne Show suggested that this figure has now risen to 70%: most likely in response to ongoing public discourse about the ‘latte levy’. xiii Tversky, Amos and Kahneman, Daniel (1981) The Framing of Decisions and the Psychology of Choice, https://www.uzh.ch/cmsssl/suz/dam/jcr:ffffffff-fad3-547b-ffff-ffffe54d58af/10.18_kahneman_tversky_81.pdf xiv To paraphrase, and re-contextualise, Kahenman’s (2011) description of the result of a sporting contest, in this case Ireland versus Wales in Rugby- ‘Ireland Won’ can have a very different meaning than ‘Wales Lost’ and evoke markedly different associations and reactions, even though they are logically equivalent (Kahenman’s; 2011: 363). Another example from a study Tversky conducted with medical students in Harvard Medical School where they were given the outcomes of two treatments for lung cancer. • the one-month survival rate is 90%, or • there is a 10% mortality in the first month. In this instance, survival is a positive framing and mortality is a negative one. Unsurprisingly, the former frame was more popular (ibid: 365). xv With a p value of 0.0001 for both questions and rejection of the null hypothesis of 99.99%. xvi Moore, D. and Schatz, D. (2017). The three faces of overconfidence. Social and Personality Psychology Compass, 11(8), p.e12331. xvii Europe 2020 Strategy: https://ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/eu- economic-governance-monitoring-prevention-correction/european-semester/framework/europe-2020-strategy_en xviii United Nations Sustainable Development Goals: http://www.un.org/sustainabledevelopment/sustainable-development-goals/ If you would like to discuss the findings of this research or discuss social, behavioural and market research consultancy, solutions, and insights please contact Dr Robert Mooney at robert.mooney@amarach.com or +353 (1) 4105200 or Amy Hume at amy@carrcommunications.ie 12Discussion Paper: The impact of the framing effect on the 15c ‘Latte Levy’

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