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Published on January 8th, 2008 | by jasonphillip

35

Groundbreaking Bottled Water Tax Raises Dustup in Chicago

Water bottlesIn 2007, the image of bottled water in the public consciousness underwent a huge shift.  What had been largely seen as a healthy lifestyle choice had, in just a matter of months, become recognized by many consumers as an eco-sin. (Click here for a Green Options post detailing the ways bottled water is costly, wasteful, and bad for public health.)  Now, a controversial new eco-sin tax, the first of its kind, has shined an even bigger spotlight on the ubiquitous bottled water.

As the New Year begins, Chicagoans are getting some direct encouragement to forgo buying disposable bottled water and switch to reusable bottles filled with fresh, clean water from the tap. In November, Chicago became the first city in the U.S. to pass a tax on bottled water sold within the city limits. The 5 cents per bottle tax went into effect on Jan. 1, and is expected to raise $10.5 million for the city this year.

In addition to producing revenue that can be used to maintain the city’s water infrastructure, the tax is designed to encourage citizens to shift their hydration habits from bottled to tap water, which is essentially the same thing you get when you buy most bottled water brands. (Filtration with a charcoal filter such as Brita or Pur is a common step taken to remove any chlorine aftertaste, though it I think it tastes fine straight from the faucet.) The tax will also help reduce the number of the plastic containers that wind up in landfills (less than 20% of plastic water bottles in this country are ever recycled) and reduce the greenhouse gas and other pollution created by trucking all that water to retail sites.

Of course, the new tax is meeting some resistance from businesses with an interest in the wasteful status quo. In addition to news reports of grumbling from some consumers who are used to buying their water bottles by the case, the tax now faces a legal challenge from some industry trade groups.  Yep, it turns out that a lot of the folks who profit from selling tap water are willing to sue to protect their share of this huge-margin business. Real shocker, right?  Actually, the lawsuit isn’t really surprising when you consider the racket that bottled water has become. The fact is, consumers regularly pay more per ounce for bottled water than they do for gasoline—and it’s much easier to manufacture.

The city has responded to the suit by saying it is prepared to defend the tax in court. One argument that the suit makes is that the new tax is unfair because it doesn’t apply to other non-carbonated bottled beverages, such as milk, teas, coffees, and sports drinks. Chicago Law Department spokesman Jenny Hoyle responded by pointing out that, “unlike these other beverages, tap water is a generally available, safe alternative in the city of Chicago.” That’s a crucial difference, and one that makes intuitive sense. In other words, the taxing rules don’t need to be the same for Gatorade and water because the city isn’t already in the business of providing an alternative to Gatorade through its infrastructure.  Essentially, the city is taxing consumers for the convenience of the bottle, because the same thing is available in every working faucet in town.

Time will tell if Chicago’s bottled water tax survives this legal challenge, but I sure hope it does.  This kind of eco-sin tax seems like a smart way to spread the true economic costs to those who benefit from them.  Sure, it’s convenient to buy a chilled bottle of water sometimes, and I’ll gladly pay a nickel extra for those times when I forget to bring my refillable bottle or it’s not immediately convenient to find tap water or I just really want an ice-cold bottle of Evian with my lunch.  What’s good about this tax is that it creates a concrete financial incentive to switch your everyday, habitual water consumption to the sustainable model of refillable bottles rather than throwaway plastics. It gets people to take another look at that plastic bottle and assess the relative merits of its convenience versus the real economic price of its disposability. 

My guess is that the bottled water tax will be upheld and that after a few months of trying to get around the tax by driving outside the city limits to buy in bulk, many consumers here in Chicago will just make the switch to refillable bottles. In a year, the tax will go unnoticed by most people, just like the most people have no idea how much taxes increase the price of cigarettes. If other communities follow suit with their own bottled water taxes (and it seems this may be a trend), they’ll probably be smart to charge 10 cents a bottle and really send a strong signal that provides the most revenue buck for the taxation bang.

A related side effect of Chicago’s tax on bottled water that I like is that it makes you take a second look at those often-neglected public water fountains (or “bubblers” as we used to call them growing up in Wisconsin). In the light of a law that says essentially, “Hey, you can get this item for free if you just walk over to the faucet,” water fountains don’t appear to be quite such outdated relics of another era. In fact, these underappreciated appliances that tend to remind many of us of elementary school start to take on a more noble appearance as a valued civic service, dispensing life-giving nourishment, free for the asking. In a world in which water resources are becoming more valuable every year, maybe the once-ubiquitous bubbler will make a comback rather than going the way of the all-but-extinct public telephone booth.

More information:

Chicago Tribune – New Year Brings Bottled Water Tax

Chicago Sun-Times – City Sued over Bottled Water Tax

The Daily Green – An Eco-Sin Tax on Bottled Water

Green Options – Daily Tip: Bottle Your Own Water

Green Options – Lighter Footstep: 5 Reasons Not to Drink Bottled Water

Photo credit: Keetsa



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35 Responses to Groundbreaking Bottled Water Tax Raises Dustup in Chicago

  1. Johnny D says:

    In finland there’s been a deposit on bottles since the 50′s and the recycling rate of them is close to 100% because of that.

  2. JKF says:

    Do you want to know why no one cares about your opinions? You blatant bullshit, that is why… Bottled water from the major bramnds is NOT “essentially the same” as tap water. I know you were ignorant referring to the fact that Dasani and Aquafina are bottled with municipal tap water. But that water is filtered through a MUCH better system than a piece of crap Brita filter. As for the taste…well, go ahead and make sweeping judgements about it tasting fine from the tap…as if you have tasted tap water from EVERY city. Just realize that when you do that, fewer andfewer people will ever listen to you becuase yuo prove yourself to be unwilling or unable to have an intelligent debate

    • Aaron says:

      The solution is a refundable deposit on the container: this makes a positive incentive for people to keep the bottle’s out of the trash stream so they can recover the $10 or whatever from the refundable bottle deposit.

      Your right, not all water from a pipe tastes the same. Some regions have horrible tap water (palm springs for example.) The issue is not the water, but the improper disposal and waste of the plastic (made from foreign oil) bottle. Being wasteful is stupid in a world where the cost of natural resources is on the rise because of increased global competition and demand for those resources. Most developed countries in which bottled water is sold, are net oil importers. Throwing millions of plastic bottles in the trash is similar to mindlessly wasting hundreds of thousands of barrels of oil: further more since plastic can be repeatedly recycled, throwing it is the trash is similar to throwing small amount of gold in the trash or any other limited resource. Oil in the crust of the earth is a finite resource.

  3. Donovan says:

    I don’t think that the five cents per bottle tax will be enough to discourage the average John Smith to switch to a reusable bottle.

    In South Africa, for example, a similar tax was placed on plastic shopping bags about three years ago. The amount of people since then to have actually changed their shopping routine to include their own “sustainable” shopping bags when at the till, is virtually unnoticeable. People don’t mind paying the extra 5c equivalent for convenience.

    Although bottled water is not necessarily a convenience issue so much as it might be a perceived health issue, I think that the tax will have the same effect as with plastic shopping bags – that is to say almost non at all.

    My guess is that for such taxes to have a meaningful impact on societies behaviour towards the environment, their impact will have to become far bigger in monetary terms – i.e. five cents is just too little.

  4. Although I do agree that there are much better alternatives to drinking bottled water I would have to caution people as to the “safety” of our own tap water. Having been in the water filtration business for over 20 years, yes, our water is some of the safest in the country, but that is with regards to bacterial contamination. Most people do not realize that due to the chlorine content of the water and the carcinogenic byproducts it creates in the water to sanitize, over time it can be very harmful. But alas, a simple carbon filter will do the trick. Understand that most of the “bottled water” that is really tap water still goes through a reverse osmosis system and in some cases even through a hyper oxygenation process which takes care of bacteria and the byproducts found in tap water.

  5. Jim Anderson says:

    I don’t know about Chicago water supply but I do know about Minneapolis and their water supply. I lived there for 25 years and got sick twice from drinking the water. The worst sickness was giadiasis. I was very uncomfortable and sick and lost two weeks of work. At the time 25,000 people were affected out of a population of about 250,000. I lived three blocks from one end of the bridge that fell down and killed some people. we were told the bridge was safe and it wasn’t. We are told the public water system is safe.

  6. Chris says:

    Publically available water fountains are not required by law in all states.

    In Louisiana, it’s almost impossible to find water fountains in any public areas. This is because water fountains impede the sale of … bottled water at exorbitant prices.

    I agree that the bottled water industry is an enormous scam, but an incredibly large money making one. The soft drink companies who perpetuated this scam in the first place have significant legal wherewithal to pursue this for as long as it takes to maintain unfettered access to this market.

    chris

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  9. mike says:

    Hawaii has a 6 cents bottle redemption program in which you are taxed 6 cents and given a nickel for each recycled good you bring to the redemption center.

  10. “… has shined… “?

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  13. Rudy Cabrera says:

    You can keep you fluoridated and chlorinated poison tap water. Ever here of fluorosis of the teeth and how the Nazis used fluoride, it is slow poisoning of the masses plain and simple.

  14. moulin1 says:

    My municipal water system had so many “don’t drink” warnings I have lost count. All from E. Coli contamination. Because I have ulcers my immunosystem is compromised to contaminated food and drink, What gives anyone else minor indigestion can incapacitate me for a week. I never drink tap water and never will. Due to pollution, overcrowding, flood plain destruction and a deteriorating infrastructure America’s above ground water system has become a vector for disease and poisoning. Suggesting that wisely health conscious Americans who choose safer below ground water supplies (spring water) should instead put their trust in big brother to safeguard both our health and the environment is a very bad idea.

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  16. Some readers have made some points worth responding to, so in no particular order my responses:

    1. Health Risks of Tap Water
    Not every community boasts municipal tap water that meets the same standards of taste and safety of Chicago’s, but carbon filters can do a pretty good job of removing chlorine aftertaste. A bigger problem is waterborne bacteria that can sometimes make it into the water supply. Without getting into conspiracy theories about flouride (great urban legend, but it doesn’t hold up) in the U.S. there are many safeguards against bugs in the tap water. As Green Options reported in June (see last link in article above) bottled water doesn’t have a clear-cut health benefit over tap water:

    “In theory, bottled water in the United States falls under the regulatory authority of the Food and Drug Administration. In practice, about 70 percent of bottled water never crosses state lines for sale, making it exempt from FDA oversight.

    “On the other hand, water systems in the developed world are well-regulated. In the U.S., for instance, municipal water falls under the purview of the Environmental Protection Agency, and is regularly inspected for bacteria and toxic chemicals. Want to know how your community scores? Check out the Environmental Working Group’s National Tap Water Database.

    “While public safety groups correctly point out that many municipal water systems are aging and there remain hundreds of chemical contaminants for which no standards have been established, there’s very little empirical evidence which suggests bottled water is any cleaner or better for you than its tap equivalent.”

    2. Effective Curb on Consumption or Revenue Boondoggle?
    Some readers make the case that dinging people 5 cents per bottle won’t be enough to change any consumer behavior. The reasoning is that because bottled water is a luxury good with inelastic demand, the laws of economics dictate that a small price increase will not produce a decrease in demand.

    This reading of the situation may turn out to be true, but I don’t think that’s a reason not to try assigning a real cost to a real environmental problem. It’s my understanding that Mayor Daley originally wanted a 10 cent per bottle tax, which may have been a more realistic target for changing consumer behavior. It’s likely the level of the tax was negotiated down by the City Council.

    I’m not convinced that this tax isn’t just a revenue making scheme cleverly disguised as environmental policy. It all depends on how the new revenue is spent (uh, Mayor, how about using that $10 mil to improve the city’s infamous recycling program?). But as I said, this is sin tax, and like taxes on cigarettes and booze, it’s a way for the government to make money on consumer choices that have ill effects on all of us, and that we all wind up paying in the end. I’ve got no problem with that.

  17. mitzy guara says:

    There are lots of good water filter systems you can buy and install on your on own faucets and refill a bottle over and over to your hearts content. When everyone does that and we STOP buying plastic throw-aways, things will change. If no one buys a certain product they GO OUT OF BUSINESS.If we’re too stupid to do the right thing, then we should be taxed to reduce our own waste. At least someone is doing something, are you?

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  19. Greeny says:

    This is asinine, and just another reason to NOT buy anything in Chicago. I used to work in the City, and never, ever bought anything there. No food, no soda, nothing. Taxes are completely ridiculous, and when they taxed soda and take out containers in the City, I’d had enough…

    I have bottled water – keep it around “in case” for emergency situations or water main breaks (which seem to happen every winter around here in the northern Chicago ‘burbs). And I have a Pur filter on the faucet… While Chicago (and the surrounding burbs) have good tasting water – I do not like the taste of chlorine, and since I’ve begun filtering that crap out – I’ve felt much better and drink much more water… I recycle *everything* – the foodstuffs that can’t be recycled go into the garbage disposal – as a result, I don’t have to pay for garbage pickup (recyclables are picked up free) and I don’t have a raccoon attacking my garbage cans for dinner either…

    I have some refillable containers that I fill w/the Pur too…

    What this boils down to is that Chicago’s just pissed that they have less people buying their water than the bottled water… This means that their sales volume has dropped, and their costs have stayed the same or increased because of the age of the infrastructure… Their back is up against a wall because some people in the City can’t afford bottled water, and solely rely on the City infrastructure – those fucks will whine to high holy hell if there’s a problem and it’s not fixed immediately (as well they should) and the City knows it… So they’re freeking out and trying to blame their lack of preventative maintenance over all these years on the evil bottled water demon… *sigh*…

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  21. An excellent opinion piece that appeared in the New York Times way back in 2005 puts the pernicious nature of the bottled water industry in a global context…

    “Bottled water is undeniably more fashionable and portable than tap water. The practice of carrying a small bottle, pioneered by supermodels, has become commonplace. But despite its association with purity and cleanliness, bottled water is bad for the environment. It is shipped at vast expense from one part of the world to another, is then kept refrigerated before sale, and causes huge numbers of plastic bottles to go into landfills.

    “Of course, tap water is not so abundant in the developing world. And that is ultimately why I find the illogical enthusiasm for bottled water not simply peculiar, but distasteful. For those of us in the developed world, safe water is now so abundant that we can afford to shun the tap water under our noses, and drink bottled water instead: our choice of water has become a lifestyle option. For many people in the developing world, however, access to water remains a matter of life or death.”

    The entire article can be found here: http://www.nytimes.com/2005/08/01/opinion/01standage.html?_r=1&pagewanted=all&oref=slogin

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  23. pimp says:

    …yeah, this guy’s an idiot. “I think it tastes just fine from the tap.” You just lost all credibility. You have earned my contempt, good sir.

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  26. Van Hung Le says:

    I think if I can try this, it is very good

  27. Lynette says:

    Next: Air Tax

  28. Tiffany says:

    I think switching to reusable bottles has a lot of benefits. I just had a hard time finding bottles with a design that I like, that also offered the same functionality of bottled water. I found some that were perfect at http://www.reduceeveryday.com Their bottles fit everywhere an Evian would but now I’m not paying for a new bottle every time I need a refill.

  29. Pete says:

    I live in Chicago and buy my cases of bottled water whenever I am traveling outside the city. Problem solved from my end, and I don’t have to make any additional contribution to the Daley friends and family employment fund.

  30. Jack says:

    So drinking water is a healthy thing to do and you support penalizing people because of the delivery mechanism used? People drink too much soda and what-are-really-bad-for-you “fruit juice drinks” and bottled water makes being HEALTHIER more convenient… How ridiculous, the same plastic that makes bottles for water serves as the container for soda and fruit juice. Taxes are not the answer for everything! I’d like to eradicate stupidity, perhaps I should lobby for a tax?

  31. Alex says:

    The tax is a bit absurd – businesses will respond to this, mark my word. There’s a way around this law, and the city’s 10 mil revenue will soon disappear, prompting another “sin tax” to pop up in its void.

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  33. Devin Harry says:

    This is asinine, and just another reason to NOT buy anything in Chicago. I used to work in the City, and never, ever bought anything there. No food, no soda, nothing. Taxes are completely ridiculous, and when they taxed soda and take out containers in the City, I’d had enough…

    I have bottled water – keep it around “in case” for emergency situations or water main breaks (which seem to happen every winter around here in the northern Chicago ‘burbs). And I have a Pur filter on the faucet… While Chicago (and the surrounding burbs) have good tasting water – I do not like the taste of chlorine, and since I’ve begun filtering that crap out – I’ve felt much better and drink much more water… I recycle *everything* – the foodstuffs that can’t be recycled go into the garbage disposal – as a result, I don’t have to pay for garbage pickup (recyclables are picked up free) and I don’t have a raccoon attacking my garbage cans for dinner either…

    I have some refillable containers that I fill w/the Pur too…

    What this boils down to is that Chicago’s just pissed that they have less people buying their water than the bottled water… This means that their sales volume has dropped, and their costs have stayed the same or increased because of the age of the infrastructure… Their back is up against a wall because some people in the City can’t afford bottled water, and solely rely on the City infrastructure – those fucks will whine to high holy hell if there’s a problem and it’s not fixed immediately (as well they should) and the City knows it… So they’re freeking out and trying to blame their lack of preventative maintenance over all these years on the evil bottled water demon… *sigh*…

  34. Em Dunc says:

    Using reusable water bottles is definitely better for the environment and for humans too! Think about it: out of all of the plastic bottles that we use, only 20% of them actually make it to recycling. The other 80% ends up in a landfill. Also, plastic bottles can leach harmful chemicals like BPA. With a reusable water bottle, you don’t have to deal with any of that! I use a Klean Kanteen and I fill it with filtered tap water. Way better for the environment and waaay better for me! Buying a reusable bottle will also save you money in the long run.

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