The plastic challenge needs circular solutions

The global economy misses out on an estimated $80 billion to $120 billion a year because of plastic waste

The plastic challenge needs circular solutions


he world produces nearly 300 million tonnes of plastic every year. This miracle material has made modern life possible. But more than 40 percent of it is packaging, which is used once and then discarded through landfill or burning. Much of the plastic is designed without fully considering what happens after it is used.

About 8 million tonnes of plastic ends up in the oceans every year. Much of it arrives via the world’s rivers, choking the waterways. It is estimated that there could be more plastic than fish in the oceans by 2050. Evidence shows that people worldwide are ingesting microplastics through food and drinking water. The environmental damage and the financial losses are also vast. The global economy misses out on an estimated $80 billion to $120 billion a year because of plastic waste.

At the United Nations Environment Assembly in Nairobi in 2017, more than 200 nations passed a resolution to eliminate plastic pollution in our seas. The adoption in March 2022 of a resolution to establish an inter-governmental negotiating committee to develop a legally binding global instrument to end plastic pollution in the world’s oceans, rivers and landscape demonstrates a willingness to act. Pakistan is also committed to reducing plastic waste leak in the Indus River basin by at least 50 percent by 2030.

However, policies to curb plastic pollution have had limited success in many developing countries, including Pakistan, because of the market and policy failures. These failures create a vicious cycle of distorted production patterns and consumer preferences, resulting in the entrenched linear, throwaway plastic value chain model. The challenges range from misaligned incentives and financing to capacity constraints in implementing (existing and new) policies. Policy and market failures create bottlenecks in the plastic value chain and prevent market-based investment and consumption decisions toward plastic circularity.

For example, the existing policies to address plastic pollution usually focus on waste management and implementing bans on plastic bag use. However, they are not enough to prevent plastic pollution. There is a lack of incentives to influence the decisions of producers and consumers of plastic materials and products before they become waste.

Without incentives for the upstream reduction of consumption of single-use plastics, the exponential volumes of waste overstretch downstream waste management systems. This risk is even more acute in Pakistan due to weak capacity and governance in the solid waste management sector.

Government interventions related to the plastic bag ban and waste management are fragmented and incoherent. This results in limited success for policy instruments, the excess burden on public budgets and the risk of shifting the problem from one place to another rather than solving it comprehensively. An example is upstream state encouragement towards using virgin materials to plastic producers coexisting with downstream subsidies to waste management — they are socially costly and a waste of public funds.

This occurs because the government did not consider plastics’ environmental and societal costs and their alternatives when formulating policies. Unlike other pollution problems, the external costs of plastics are generated at different stages during the production and consumption and in multiple places in the post-consumption phase, after the plastic product has become waste. This complexity, exacerbated by multiple interest groups operating along the plastic lifecycle, often clouds the decision-making process.

Government interventions related to the plastic bag ban and waste management are fragmented and incoherent. This results in limited success for policy instruments, the excess burden on public budgets, and the risk of shifting the problem from one place to another.

A broader economic policy incorporating a mix of coherent policy instruments is needed to prevent plastic pollution. In other words, policies should jointly align incentives for multiple actors operating in the plastic life cycle to contribute to sustainable solutions through voluntary market transactions. For example, taxes, product standards and behavioural nudges should encourage consumers to request that upstream producers and brands deliver packaging and products that contain no plastic or are made of plastics that can be reused or easily recycled.

This is a precondition for unlocking the commercial value in the plastic value chain. A comprehensive mix of coherent policies can turn the value chain from linear to circular and reduce the volume of plastic waste.

Upstream fiscal and financial circular policy interventions can be helpful in sustainably reducing plastic waste. For instance, a tax on plastic products that are not easily recyclable can encourage consumers to choose an alternative, more eco-friendly products. This incentivises the manufacturers to produce more sustainable products.

Similarly, subsidies can be a powerful tool to encourage producers and consumers to recycle more by creating financial incentives that make recycling more attractive. Subsidies for recycling can help create market demand for recycled materials by making them more competitive with virgin materials. This can help incentivise producers to use more recycled materials in their products, which can help reduce waste and conserve resources.

Another circular policy intervention is extended producer responsibility (EPR). EPR is a widely used policy to support the transition to a circular economy. EPR is a policy approach in which the responsibility of producers is extended to the post-consumer stage of a product’s lifecycle. It employs a diverse policy instrument mix that aims to make producers responsible for collecting, sorting and treating end-of-life products.

The most common EPR instruments are take-back requirements, advance disposal and recycling fees and deposit-refund systems. Take-back requirements oblige producers to collect their products at the end of their life and to organise their appropriate treatment. This is usually pursued through specific quantitative collection or recycling targets.

Advance disposal or recycling fees are upfront payments required by consumers to cover the end-of-life collection and treatment costs of a product. In deposit-refund systems, consumers pay a deposit when purchasing a product and receive a refund (usually of the same value) upon its return to a drop-off point. This provides consumers a price incentive to sort and dispose of end-of-life products properly and thus reduce littering.

The interventions mentioned above can encourage less waste generation and raise additional revenues that can be used to offset adverse impacts on poor and vulnerable households and the environment. Such policies reduce profits in the linear business models of upstream plastic producers, converters, and consumer goods companies while increasing profits of green business models. This attracts private investors and service providers, which reduces the need for public finance to mitigate plastic pollution. Circular solutions can also have positive effects on the climate and jobs. A mix of coherent and integrated policies can achieve the best results to solve the plastic waste problem.

The writer is an associate professor at the Department of Economics, COMSATS University Islamabad, Lahore Campus

The plastic challenge needs circular solutions