Where is my reusable bag? Retailers' bag use before and after the plastic bag ban in Dharan Municipality of Nepal.

Banning single-use plastic bags is a popular policy intervention among cities in developing countries such as Nepal. While the policy marks some success in curbing plastic bag usage, it confronts two major challenges. First, the effect of the ban often dilutes and becomes ineffective over time. Second, bag leakage could occur as customers switch to unregulated plastic bags and create more pollutants. Using three rounds of retailer-level panel data from the Dharan Municipality of Nepal, this study finds evidence to support both contentions. The usage of plastic bags slows down initially but rises subsequently as the subjective probability of being caught for using banned plastic bags reduces with time. One year after the ban, an increase in the expected fine does not increase the use of reusable bags but significantly reduces that of banned plastic bags. These results show that the ban does help reduce the total bag use in the short term but requires continued monitoring and enforcement to be effective in the long term.