Shifting Plastics to a Circular Economy Could Generate Billions

Plastic packaging is a part of our lives. Just think of everything you buy that is packaged in plastic. But too much of it is just chucked into the garbage. Consider that 32 percent of plastic packaging never makes it into collection systems, according to a new report released by the World Economic Forum and the Ellen MacArthur Foundation.

That waste creates “significant economic costs by reducing the productivity of vital natural systems such as the ocean and clogging urban infrastructure," the report's authors wrote. The cost of thrown-away plastic packaging that isn’t recycled is “conservatively estimated” at $40 billion a year, which exceeds “the plastic packaging industry’s profit pool.”

That can change. The report offers a new vision for plastic packaging and plastics in general. Shifting to a circular economy could generate $706 billion worth of economic opportunity, and a “significant proportion” would come from packaging. What is a circular economy? The Ellen MacArthur Foundation defines it as “restorative and regenerative by design" with an aim "to keep products, components, and materials at their highest utility and value at all times.”

Plastics production has increased from 15 million tons in 1964 to 311 million tons in 2014. It is predicted to double over the next 20 years, and plastic packaging, the focus of the report, is expected to remain the largest application. Packaging represents 26 percent of the total volume of plastics used. And it does carry some benefits, such as reducing food waste by extending shelf life.

But it also has its drawbacks. Or, as the report puts it, it has “significant negative externalities” -- and they are $40 billion in annual costs due to lost resources. Those costs will increase with a business-as-usual approach. Every year, at least 8 million tons of plastics end up in the ocean -- the equivalent of dumping the contents of a garbage truck into the ocean every minute. If nothing is done to stop it, that could increase to two trucks per minute by 2030 and four per minute by 2050.

Packaging is the primary packaging material that ends up in the world’s oceans. There are an estimated 150 million tons of plastics in the world’s oceans today. If nothing is done, by 2025 the oceans are expected to contain one ton of plastic for every three tons of fish, and by 2050 there could be more plastics than fish (by weight).

Plastic requires oil to be produced so that gives it a “significant carbon impact,” as the report states. And over 90 percent of plastics are derived from virgin fossil feedstocks, which represents about 6 percent of global oil use, equivalent to the oil use of the global aviation sector. If plastic use continues to grow as predicted, the plastics sector will account for 20 percent of total oil consumption and 15 percent of the annual carbon budget by 2050. The annual carbon budget is what is required to achieve the goal of remaining below 2 degrees Celsius in global temperature rise. So, reducing the greenhouse gas impact of plastics product is important.

So, what can be done to create a circular economy for plastics production? For one thing, plastics should “never become waste,” the report states. That is the “overarching vision of the new plastics economy.” Instead of becoming waste they should “re-enter the economy as valuable technical or biological nutrients.” The report points out that it is already partially being accomplished. In Europe, for example, presently 53 percent of plastic packaging can be recycled “economically and environmentally effectively.”

The report lays out ways that eliminating plastics packaging waste can be accomplished. One key way is by increasing the “economics, quality and uptake of recycling.” And to do that includes doing two things: establishing a cross-value chain dialogue mechanism and developing a Global Plastics Protocol to set the direction on creating a new plastics economy.

One thing is clear after reading the report. If we are to effectively tackle climate change plastics production will have to improve.

Image credit: Jane McKnight