Yeah, there are positive and negative externalities. And both are examples of specific market failures.<p>And no. Plastic Bags cost $0 from the grocery store under normal circumstances. If it weren&#x27;t for the bag tax of $0.05, I wouldn&#x27;t be paying (or being discouraged) to use recyclable bags. Why would I buy a $1.00 reusable bag if all the plastic bags are free?<p>On the other hand, if plastic bags cost $0.05, then the reusable bag becomes useful within 20 trips to the grocery store (moreso, because in my experience, the reusable bags can hold two or three times as much. So maybe only in about 7 trips or so it makes up for it).<p>This reduced pollution and overall created a better situation for my municipality. Most importantly, the bag tax works as far as getting rid of plastic-bag pollution.<p>If you were actually familiar with the argument, you&#x27;d have made a sane counterargument by now. But instead, you&#x27;ve only claimed that this bag pollution example is &quot;not a market failure&quot; or &quot;not an externality&quot;.<p>I do get that you want to play with definitions all day long, but I&#x27;m going to hammer this point until you come up with a cohesive argument.<p>---------------<p>If you disagree, please tell me the free-market approach. And explain why the free-market approach failed to occur for 40+ years straight (ie: until the creation of the bag tax).<p>Hint: there&#x27;s no free-market enterprise who is going to be able to make money while cleaning up polluted rivers. In particular, no one can &quot;profit&quot; from the cleanup of the The Great Pacific Garbage Patch.<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Great_Pacific_garbage_patch" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Great_Pacific_garbage_patch</a><p>Very few people are even discouraging the use of plastic bags and plastic water bottles that contribute to the pollution.<p>Come on man, the environment is the CLASSIC market failure. The easiest way to deal with it is to incur a minor tax on plastic goods that end up in the patch, to discourage its growth.