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What If Fashion Were Taxed Like Cigarettes?

The fast-fashion industry produces a lot of waste but has largely avoided any consequences for its impact on the environment. That is starting to change.

The lower house of France’s Parliament passed a bill in February that would impose a “sin tax” of up to 10 euros or 50% of the selling price on fast-fashion clothing, a severe penalty given that many of these products cost less than €10. The bill would also ban advertising and demands that companies in the industry disclose the environmental impact of their businesses. The bill was approved unanimously and moved to the upper house of Parliament. If it becomes law, it will make France one of the first countries to impose this type of penalty on fast-fashion companies.

Fast fashion has become a roughly US$120 billion industry and is projected to grow to US$185 billion by 2027. Shein, H&M, Temu, Zara, and others have built worldwide businesses by creating cheap clothing in bulk as quickly as possible to respond to changing fashion trends, especially for a growing global middle class with more disposable income. The crux of the problem is that fast fashion tends to encourage what many consider an excessive amount of consumption. Traditional clothing companies might release new lines four times a year; fast-fashion companies do so weekly or even daily. The clothes are designed to be relatively cheap and worn for a short period of time before being discarded, sometimes after only seven or eight wears. Consumers are then expected to buy the next hot thing. The result? People are buying more clothes, an estimated 60% more, but keeping them only half as long as they would a more durable, higher-quality piece of clothing.

Those dynamics exacerbate the environmental impacts of an industry that is inherently polluting to begin with. Conventional textile mills generate about one-fifth of the world’s industrial water pollution. About 20-35% of all the microplastics in the world’s oceans come from microfibers shed by clothes as they are washed. The industry also produces veritable mountains of unsold clothing, which get burned or thrown into landfills strewn around the Global South. (Shein, for one, has argued that its business model better matches supply with demand and produces less unsold clothing).

The photograph above was taken by Maria Lernerman, who came across the Shein-labeled piece of plastic while on vacation.

Businesses with a high-volume, low-price model, such as Shein and Temu, would be the most vulnerable to a tax like the one France is contemplating, given higher prices would test consumer demand. The effects would also depend on how the French regulation ends up defining “fast fashion.” It may cover only the “fastest” companies, such as Shein and Temu, or it could include older, more established players like Zara and H&M. An advertising ban would severely limit companies’ ability to grow, and the tax would cut into both growth and profits. While it would be a competitive benefit for “slower” fashion companies, placing severe costs and restrictions on even part of the industry could cement the image of fashion as “sinful,” making it easier for other governments to levy taxes or fees on all players over time. Lastly, a bill such as this could be politically divisive, opposed by consumers who are already facing economic strains.

On one level, France’s bill is aimed directly at the environmental impact of fast-fashion companies, but there is another motive behind the bill. This bill would give a competitive advantage to France’s domestic fashion and retail industry and protect it from upstarts. But lawmakers in other jurisdictions are also looking at the industry. The EU’s European Commission has been working for four years on regulations for the industry that should enter into force by 2030. In the US, state lawmakers in New York and California have introduced bills that address the fast-fashion industry’s environmental effects. And in 2022, Massachusetts banned textiles being thrown out in the garbage, mandating they be recycled.

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