What are you talking about? Do you wish to live in a human society? Litter of plastic bags is an externality - all this law does is to impose the costs on those who incur it.
I think this is pure free markets are the only moral structure, coercion is immoral, etc. ideology. I do not find it compelling because adherents' apply the "coercion is wrong" absolutely when it comes to governments enforcing it through fines, but deny economic coercion applies when e.g
a bank charges overdraft or late fees no matter how ludicrous.
There is a suggestion that ultimately a bank doesn't put you in jail, where governments can do that if you continue to not pay fines. But increasingly governments take unpaid fines from income tax refunds or other mechanisms for collection rather than consider outstanding fines a criminal offense rather than civil.
Also most free market adherents opposed to government coercion forget that contractual obligations are only enforceable through government coercion (unless they would like to go back to the time of private armies).
As far as I can see, that is orthogonal to the issue at hand.
> all this law does is to impose the costs on those who incur it.
We might consider littering to be immoral, and might therefore feel that we have a right to prohibit others from doing it, but it does not follow that we have a right to prohibit people from using, selling, owning or manufacturing bags (or fine or tax them for doing those things).