Impact statement

Numerous policies and technological solutions are being developed and implemented to reduce plastic pollution. However, the majority of these do not address the fundamental drivers and societal foundations that govern the current plastic economy, and therefore fail to provide the disruptive changes needed for a sufficient transition of the plastic economy. In this letter, we address the importance of two of these fundamental drivers: the influx of monetary support for the linear plastic value chain through subsidies and the lack of inclusion of the cost of negative externalities. We argue that the UN plastics treaty should address these fundamental drivers, since a transition to a circular economy, which facilitates a regenerative and restorative plastic production and consumption, is not possible as long as these fundamental drivers provide such a strong foundation for the current socio-technical system. Since these conditions have not been sufficiently addressed in the treaty negotiations, we believe that it is vital to highlight them at this point in time.

The current linear plastic economy

One of the most important aspects of UNEA Resolution 5/14 is the acknowledgement that plastic pollution cannot be eliminated if the treaty does not account for the full life cycle of plastic (UNEP, 2022). Plastic waste pollution is mainly a function of the vast consumption of SUP and short-lived plastic products and packaging materials, as, for example, reflected in the EU SUPs Directive (Directive [EU] 2019/904). SUPs account for 60%–95% of global marine plastic pollution (Schnurr et al., Reference Schnurr, Alboiu, Chaudhary, Corbett, Quanz, Sankar, Srain, Thavarajah, Xanthos and Walker2018). Reducing consumption levels of SUPs and improving waste management will be a vital component of a transition away from the linear plastic economy. A common reasoning for the use of plastics is that plastics are cheap, lightweight and versatile (e.g., Almohano et al., Reference Almohana, Abdulwahid, Galobardes, Mushtaq and Almojil2022). Whereas the latter two aspects relate to the inherent material properties, the cheap pricing of plastics is maintained by policy frameworks that include large-scale subsidies (IMF et al., 2022) and exclude externalities in the pricing of plastic products and packaging (Erkins and Zenghelis, Reference Ekins and Zenghelis2021). This is central to the discussion on how a transition to a circular economy can be facilitated since the artificially low price of plastics is central to the growing production of SUPs such as packaging.

Artificially low plastic prices also stifle economic innovation that could beneficially replace SUPs. A variety of business models exist that can deliver goods and services without relying on SUPs. These include reuse/refill businesses, zero waste shops, reusable packaging for direct-to-consumer shipping and rental and cleaning of durable goods (e.g., tableware) to replace SUPs. These businesses are examples of a nascent, new socio-technical regime; however, they often struggle to scale up as the transition is hindered by plastic-based competitors’ incumbent advantage and artificially low prices.

Several legislations across the different UN regions currently aim to regulate the production of SUPs and/or provide room for reused products to take up market shares. These include bans on plastic bags (Nielsen et al., Reference Nielsen, Holmberg and Stripple2019), bans on most polluting SUP products and requirements for categories of products to have a certain amount of reuse products (Xanthos and Walker, Reference Xanthos and Walker2017; Schnurr et al., Reference Schnurr, Alboiu, Chaudhary, Corbett, Quanz, Sankar, Srain, Thavarajah, Xanthos and Walker2018). While all these regulations can shift the production somewhat, they do not change the fundamental drivers behind the vast consumption of single-use and short-lived products – the artificially low price of primary plastic (e.g., Sicotte, Reference Sicotte2020). For the UN plastics treaty to fundamentally transition the dominating socio-technical regime, a change in the market mechanisms that provide a steady supply of low-price primary plastics is required. Two policy areas stand out as fundamental for this transition. First, subsidies for both fossil fuel extraction and plastic production keep the price of primary plastic artificially low (QUNO & Eunomia, 2024). Second, the price of negative externalities, such as impact on human health, global warming and environmental degradation, is excluded from the price of plastics and instead paid for by society.

The importance of subsidies

More than 99% of the 460 Mt plastic produced in 2022 was made from fossil-based sources such as oil and gas (Holmberg et al., Reference Holmberg, Tilsted, Bauer and Stripple2024). This implies that subsidies for fossil fuel extraction indirectly support plastic production by lowering the price of the feedstock and energy used for primary plastic production. According to the International Energy Agency (IEA) fossil fuel subsidies amounted to more than USD 1 trillion in 2022 (IEA, 2023). While this cannot be seen as a 1:1 direct support for plastic production, the link between the extraction of fossil fuel and the production of plastics is well established (Tilsted et al., Reference Tilsted, Bauer, Birkbeck, Skovgaard and Rootzén2023). In a recent report, plastic production subsidies were grouped into feedstock subsidies, energy subsidies and a broader ‘other subsidies’ group (QUNO & Eunomia, 2024). The report estimates plastic production subsidies in the 15 largest producing countries to amount to USD 43 billion in 2024, with Saudi Arabia’s USD 38 billion by far contributing with the largest subsidies.

A transition away from using fossil energy and feedstock in industrial facilities will not occur without targeted measures (Vogl, Reference Vogl2023). Despite growing calls to mitigate climate change, the fossil fuel-dependent plastics and petrochemical industry has only recently begun to develop decarbonization or net-zero roadmaps. These roadmaps reveal a fragmented approach that emphasizes technological supply-side measures, such as switching energy sources or increasing the use of biomass, recycled or carbon dioxide-based feedstock. However, they largely ignore scope 3 emissions and demand-side measures, such as reduced use or production (Kloo et al., Reference Kloo, Nilsson and Palm2024). Addressing the fossil fuel subsidies that maintain and exacerbate the current plastics crisis is thus an important action to transition away from an overproduction of SUPs.

Societal cost of externalities

Trasande et al. (Reference Trasande, Krithivasan, Park, Obsekov and Belliveau2024) estimated that endocrine-disrupting chemicals used in plastics cost the United States an estimated USD 250 billion in increased health care costs in 2018 alone. In another study, Cropper et al. (Reference Cropper, Dunlop, Hinshaw, Landrigan, Park and Symeonides2024) assessed the economic consequences of insufficient regulation of hazardous chemicals in plastics in 38 countries, containing one-third of the global population. They concluded that the societal cost of premature deaths and loss of IQ points of USD 1.5 trillion could have been saved if legislation in 2003 had the same protection level as later imposed in 2015.

The environmental toll is similarly profound. A conservative global estimate of the economic impacts of marine plastics by Beaumont et al. (Reference Beaumont, Aanesen, Austen, Börger, Clark, Cole, Hooper, Lindeque, Pascoe and Wyles2019) was a staggering USD 2.5 trillion per year, which excludes economic impacts on land or in communities. Cleanup and mitigation impose immense public costs, often borne by municipal and national budgets, and can have unintended negative environmental impacts, offering only limited and short-term band-aid solutions (Falk-Andersson et al., Reference Falk-Andersson, Rognerud, Frond, Leone, Karasik, Diana, Dijkstra, Ammendolia, Eriksen, Utz, Walker and Fürst2023).

If these externalities were priced into plastic products, current consumption patterns would be economically unsustainable. Incorporating full-cost accounting into policy frameworks – via taxes, sufficient extended producer responsibility and elimination of subsidies – would realign market incentives, correct the price signal, and support the transition to a circular and regenerative plastic economy.

Placing a price on the human health and environmental costs of plastic pollution is very complex, particularly regarding the long-term, often invisible health effects, non-market environmental damages and global-scale intergenerational impacts due to the persistence of plastics in nature (Beaumont et al., Reference Beaumont, Aanesen, Austen, Börger, Clark, Cole, Hooper, Lindeque, Pascoe and Wyles2019). Quantifying the full economic cost of plastic pollution is further complicated by uncertainty driven by data gaps, inconsistent methods and ethical concerns around discounting future harms and ensuring the human rights of vulnerable communities (Beaumont et al., Reference Beaumont, Aanesen, Austen, Börger, Clark, Cole, Hooper, Lindeque, Pascoe and Wyles2019).

Importance of the UN plastics treaty

As demonstrated in this letter, subsidies and inadequate pricing of externalities have a major role in sustaining the current linear plastic economy, thereby preventing a needed transition toward a more circular economy, which focuses on reducing consumption of plastics, phasing out SUPs and providing a pathway toward a more regenerative and restorative plastic economy. While such changes seem essential, they are also extremely complex, both due to the global and complex industrial ecosystem that constitutes the plastic economy, and because it is in reality impossible to explicitly quantify all impacts and their associated costs.

As mentioned in the Introduction section, policies can ‘destabilize’ socio-technical regimes and thus provide a foundation for the needed transition. The UN plastics treaty can provide such a political foundation for transition by addressing this pricing failure through three distinct avenues. First, it should include, as part of the mandatory obligations to all Parties, a requirement to phase out all production subsidies for plastics and their feedstocks. Second, it should impose a polymer production fee that is calibrated to the externality costs of plastic production, as determined by an independent scientific body. Finally, the UN plastics treaty should enable a phase-out of SUPs to minimize plastic pollution and associated externalities. Reporting requirements and regular review of these obligations will be required to ensure compliance and progress toward the goal of facilitating a transition to a new plastic economy, where societal costs are sufficiently accounted for.