&gt;The plastic bag ban caused much gnashing of teeth, but it was a basic instance of market failure (nobody pays for the externalities of bag pollution)<p>In no way does this demonstrate a &quot;market failure&quot;. Municipalities own and&#x2F;or strongly control the entire waste removal pipeline. Had the process been in control of a private entity they could have been free to make their own rules saying they will not permit plastic bags, or charge an appropriate fee for their disposal.