Council might vote tomorrow on whether to ban the bags. It's not clear whether they'll ban just plastic bags or both plastic and paper. The Statesman counts enough votes for a ban of both.
I think one can make a case that a nickle tax or so on plastic bags is superior to doing nothing. Both a tax and doing nothing are superior to a ban, in my opinion, and certainly superior to a ban of both paper and plastic.
Let's start with why we should do anything at all about plastic bags.
Plastic bags are useful. Ban proponents like to tout the ease of switching to more durable bags and making behavioral changes, but the fact is that these things still have a cost. The cost depends largely on individual characteristics like conscientiousness (are you the kind of person who will remember to bring the reusable bag?), shopping patterns (are you the kind of person who makes a lot of spontaneous purchases?), and self-identification as an environmentalist (are you Lisa Simpson or Mr. Burns?). The cost of a ban is highly idiosyncratic, and likely the lowest for the people who already use reusable bags and are most vocal about a ban.
The financial cost to the City of disposing of the bags (including the imputed cost of landfill space) provides no compelling justification for a ban. If you believe these numbers, the 263 million plastic bags Austinites use each year cost the City $850,000 per year to put in landfills and clean up as litter. That works out to around 3 cents per bag. (Not that that's the right accounting -- we pay the City to haul our trash to the landfill, including our plastic bags, so that $850,000 exaggerates the economic cost of the externality.) A 3-cents-per-bag externality does not justify a ban; at most, it justifies a 3-cents-per-bag tax.
I do agree, though, that plastic bags present a special problem. Because they are so light, they're carried off by the slightest breeze. They are prone to getting away from even the most conscientious users. They are thus unusually likely to become litter. Then they do not stay in one spot long enough for anyone to have an incentive to pick them up, and of course do not decompose, so they are unusually likely to remain litter.
Plastic bags are a real litter problem.
For me, the pertinent question me is, Are we better off with a nickle-per-bag tax or an outright ban?
I think we're better off with the tax. A tax by itself will dramatically reduce the use of plastic bags, judging from the experience of other cities. A tax will also generate money we can use to clean up other litter -- plastic bags aren't the only things littering our creek beds and parks. The city could divert the $4 million it intends to spend on educating consumers about the ban to cleaning up litter. The City could put a lot of people to work and clean up a lot of litter with $4 million and the tax income stream. If you're really interested in a cleaner city, a tax will get you that.
Note that the litter issue is an issue for plastic bags, not paper bags. Paper bags (particularly the ones at the grocery store) are a lot heavier and don't blow around as much. Plus, they are biodegradable. And recyclable, for those who are worried about landfills. And what do you have against trees, anway? I don't see any justification for taxing paper bags, much less banning them.
A flat ban of both paper and plastic would cause a large deadweight loss by forcing people (even if just occasionally) to over-invest in fancy bags. Even the most environmentally saintly among us will occasionally find herself at the checkout counter without her reusable bag. She will have to purchase a new, heavy-duty reusable bag that she will no longer need once she gets home. Someone who forgets her reusable bag just once a month will, by the end of the year, have twelve extra, expensive "resuable" bags. (Calling a bag "reusable" doesn't mean it will be re-used. Conversely, calling a plastic bag a "single use" bag doesn't mean it will only be used once.) Buying too many heavy-duty bags is a form of waste, just like using too many flimsy single-use bags.
The only justification for banning paper bags, really, is that they're more expensive and (probably) more energy-intensive than plastic bags, so if we ban plastic bags then we've just got to ban paper bags as well, because otherwise we're just encouraging people to waste energy. The proper way to address that concern is not to ban the less-energy-intensive alternative in the first place, but to tax paper and plastic at the same rate. Taxing paper bags doesn't solve any externality I see, but it will make a tax on plastic bags easier on the grocers.
Update: Wells Dunbar has the preview at KUT.