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June 06, 2022 02:35 PM

OECD examines economic impact of plastics pollution policies

Steve Toloken
Assistant Managing Editor
Plastics News Staff
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    A new report from the OECD has some eye-catching analysis around a topic that doesn't usually get much attention in the plastic debates: What will be the economic impact of cleaning up plastic waste and pushing the industry in a more sustainable direction?

    The new Organization for Economic Co-Operation and Development report says that if governments take a tough policy approach, it will mean the expected growth in plastics use worldwide will fall sharply over the next few decades.

    Here's the numbers: The tough policy scenario that the report outlines would see global plastic use grow from 460 million metric tons a year now to about 827 million tonnes by 2060.

    By comparison, plastics use would grow much more, to 1,230 million tonnes a year in 2060, under a business-as-usual scenario.

    Basically, the June 3 OECD report says under a scenario of stricter plastics policies — think taxes on packaging, recycled content mandates and producer responsibility laws — the world will add 367 million tonnes of plastics use annually in 40 years. That's roughly equal to — or a little less than — what we're using now each year.

    But global economies will add twice that in annual plastics use, or 771 million tonnes, if no real changes are made in policy. Basically, the world will be boosting its annual plastics use by 2.7 times compared to today.

    The report, the second in a series that OECD is doing on plastics policies worldwide, is full of numbers that put the environmental and economic impact in a broad context. It does say the world will use more plastic, under any scenario, driven by economic growth worldwide.

    It estimates world GDP will more than triple by 2060. Plastic use will either keep up with that — more or less — or it'll fall to growth levels well below GDP, based on policy scenarios.

    OECD, a group of 38 developed nations and democracies around the world, also has estimates on how circular the industry would become under those different scenarios. Business-as-usual would see recycled plastics rise to about 12 percent of total demand by 2060, double what it is now.

    But under the most aggressive policy scenario, what it calls "global ambition," recycled plastic would rise to 41 percent of total use, mainly from "demand pull" policies like recycled content targets. Those aggressive policies could mean a big shift away from virgin plastics.

    OECD also looked at the impact on broader world GDP from the various policy scenarios and concluded it would be modest.

    The "global ambition" scenario would cut a total of 0.8 percent from global GDP growth by 2060, while a more middle-ground approach taken mostly by governments in the developed world would cut GDP growth by 0.3 percent, in total, over four decades. OECD said it shows the "rather modest economic cost of even highly ambitious policy action."

    The impact won't be felt equally around the world, though. Developing countries, in general, will see a bigger drag on their overall economic growth over the next four decades, of between 1-3 percent, OECD said.

    Of course, there's an economic impact of doing nothing, including more environmental pollution and greenhouse gas emissions from continued dominance of fossil fuel feedstocks.

    And there are environmental impacts of all materials, a point that OECD analysts made in their first plastics report, released in February.

    OECD scheduled a public webinar June 21 to present the results of this latest report.

    Like I said, there's a ton of data. It's impossible in this column to cover all of it, but here's a few final thoughts.

    OECD says policies could have a big impact on reducing environmental leakage of things like the bottles, packaging and materials we can all see. But for microplastics, it's less optimistic. Those could be much tricker to limit, OECD believes.

    The top line of the report, the item that got a lot of media attention, is a familiar story: Plastics in the environment will triple by 2060 if we keep following current trends.

    But there's a lot underneath for an audience immersed in plastics.

    The American Chemistry Council put out a statement about the report, saying that it welcomed the document for its emphasis on policy and that there is "significant alignment" between the OECD analysis and some of ACC's policies.

    It noted ACC supports a global plastics pollution treaty and other global policies referenced in the OECD report, like "enhancing plastics' design for circularity, improving recycling and litter collection rates [and] setting country-specific recycling targets."

    But it also pushed back on the report's recommendation to tax plastics. OECD said taxes could target single-use plastics, reduce pollution and help make recycled plastics more affordable compared with virgin materials.

    There's a lot to digest, and it's dense reading. But if you're looking for ideas on what the plastics industry could look like in coming decades, the report has something to say.

    Steve Toloken is Plastics News' Washington-based assistant managing editor, and author of the Pellets and Politics blog. Follow him on Twitter @Steve_Toloken.

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