Ottawa, Ontario — A fee of $60 to $90 per metric ton on plastic resin could help implement the plastics treaty and close financing gaps in developing countries, according to a new report from the Minderoo Foundation.
The report, discussed during an official panel on April 24 at the United Nations plastics treaty talks, for the first time puts substantial details behind a fee proposal that some countries have been pushing in the negotiations.
A Minderoo representative said the fee, which it estimates at 5-7 percent of the cost of polymers, would partly answer a problem common to global environmental agreements: how to pay for them. The report used U.S. dollars in its calculations.
"The problem is funding treaty implementation," said Nicholas Lockhart, a fellow at the World Trade Institute at the University of Bern, speaking for Minderoo. "Those of us who have been part of international environmental law understand that in other [multilateral environmental agreements], implementation has foundered on the rocks of finance."
While it's far from clear if such a fee would be part of any agreement, it generated considerable interest among the roughly 100 observers and delegates at the panel discussion.
All the audience questions to the four-person panel focused on the fee, even after the moderator asked for queries for the other speakers.
The report said the fee would generate $25 billion to $35 billion a year globally, or a total of $350 billion and $500 billion between 2026 and 2040 to help close funding gaps to eliminate plastic pollution in the environment.
It said the money from the resin fee would be in addition to revenue expected from other sources, including extended producer responsibility schemes, new and existing global and regional development funds and the private sector.
Minderoo sees a plastics fee as a way to get financial contributions from the resin sector to match that coming from other business sectors.
"It involves burden sharing across the supply chain … because along with EPR — which applies to the brands and downstream — the fee would apply upstream to plastic polymer producers," Lockhart said.
"The way it would contribute to treaty implementation is through, in part, a retained share by the country of production but more importantly, a distributed share which would go through multilateral entities, or it could be producer responsibility organizations," he said.
The report argued that such a fee would be "relatively easy" to administer because about 60 companies produce 90 percent of the world's plastic resin.
The report also estimated the resin fee would increase the cost of finished goods by less than 1 percent, and a GDP impact of between 0.05 percent and 0.09 percent.
"In lower income countries, this fee would amount to $1 to $2 on cost of living per year, so a tiny impact socially and economically," he said.
"The details of this are a moveable feast and subject to negotiations," Lockhart said. "What's important here is the basic concept of a solution to a big financing gap."
