The Real Cost of Plastic

Credit: Original article can be found here

A new study shows the actual cost to society,
environment, and the economy.

For just the
year 2019, the actual cost of plastic produced is US$3.7
trillion – more than the GDP of
India.
 

A new report,
“Plastics: The cost to society, environment, and the
economy” shows the true cost of plastic pollution. This
report separates the cost of the production of plastic to
the impact, or lifetime cost, to society, environment and
economy while laying out in stark terms the devastating
impact plastic will have on all of us unless we take urgent
action now.

In 2019, according to the new report by
Dalberg and commissioned by WWF, the lifetime cost of the
plastic produced in that year alone has been revealed at
US$3.7 trillion,¹ more than the GDP of India.

Unless
action is taken, these costs are set to double for the
plastics produced in 2040 at US$7.1 trillion², equivalent
to 85% of global spending on health in 2018 and greater than
the GDP of Germany, Canada, and Australia in 2019 combined.
The report demonstrates that governments and citizens are
unknowingly subsiding a plastic system that is imposing
countless negative impacts on people and the
environment.

“Plastic is everywhere. From the
deepest parts of our ocean to the tallest mountain peaks,
from the beaches of Aotearoa to the remote Arctic. It is in
the water we drink, the air we breathe, and the food we eat.
A staggering 11 million tonnes of plastic enters the ocean
each year, while humans are consuming up to a credit card a
week worth of plastic. We are paying the price -literally-
for our reliance on plastic many times over. From retail to
waste management to leakage into the environment to
greenhouse gas emissions. It is costing us the Earth. A
global problem requires a global solution and Aotearoa must
play its part,” says Livia Esterhazy, WWF-New Zealand
CEO.

To address this crisis on a systemic level and
reduce the cost that plastic imposes on society, WWF is
calling on governments to start the negotiation of a legally
binding global treaty on marine plastic pollution at the
fifth session of the UN Environment Assembly in February
2022.

The new figures released as discussions take
place at the IUCN
World Conservation Congress
, highlight the importance of
a global solution to tackle the plastic pollution crisis in
response to escalating concern about a lack of global
coordination in plastic action. So far, over two million
people have signed a petition,
including more that 4,100 New Zealanders, and more than 75
businesses have endorsed the call for
a global treaty
on marine plastic pollution. The
majority of the UN Member States (119 countries) have
explicitly supported the establishment of a new global
agreement to address plastic pollution.

Marco
Lambertini, Director General of WWF International says,
“This is the first time we have seen such a clear
assessment of some of the unaccounted costs being imposed by
plastic pollution on society and they are a burden that is
too high to bear – both for people and the environment.
Tragically, the plastic pollution crisis is showing no signs
of slowing down, but the commitment to tackle it has reached
an unprecedented level. We need a UN treaty on plastic
pollution that unites governments, companies and consumers
around clear targets for reduction, collection, recycling
and sustainable alternatives to stop plastic leakage into
the environment by 2030.”

Failure to understand and
remediate the real costs of plastic will cost even more in
the future, as under a business as usual scenario it is
estimated that by 2040 there will be a doubling of plastic
production and a tripling of plastic pollution entering the
ocean to 29 million tonnes, increasing the total stock of
plastic in the ocean to 600 million tonnes. Greenhouse gas
(GHG) emissions from the plastic lifecycle will account for
up to 20% of the entire global carbon budget, accelerating
the climate crisis.

The analysis shows that the cost
of plastic to society, the environment and the economy is at
least 10 times higher than the market price of virgin
plastic, and the current approach to addressing the plastic
crisis is failing. Marginalised communities are
disproportionately bearing the cost of the plastic
lifecycle, and climate change, which the plastics lifecycle
is contributing to, disproportionately affects disadvantaged
groups.

The currently quantifiable societal cost of
plastic is significant, but this could be just the tip of
the iceberg. In particular, the costs of known and potential
impacts on human health as well as impacts on the
terrestrial ecosystems have not been quantified or are still
difficult to quantify at this point.

The majority of
countries came out in strong support of moving forward with
treaty negotiations at the first ever Global Ministerial
Meeting on Marine Litter and Plastic Pollution which took
place last week (1-2 Sept). 15 new countries endorsed a new
UN Treaty on Plastic pollution, bringing the total number of
supportive governments to 119. WWF is urging all UN member
states to start negotiating for a global treaty that must
tackle all stages of the plastic lifecycle, stopping the
leakage of plastic pollution into the oceans by
2030.

Notes to editors:

¹ This is based on the
authors of this report’s estimate of the median minimum
lifetime cost of the plastic produced in 2019 being US$3.7
trillion – upper bound being US$4.8 trillion and lower bound
being US$2.7 trillion – and countries’ GDP data from
Investopedia Silver, Caleb., 2020. The Top 25 Economies in
the World. Investopedia. See Annex 3: Methodology for an
overview of how this figure was calculated. All values
provided in 2019 US $.

² Note that the estimated
lifetime costs of plastic produced in 2040 excludes the
market cost of plastic.

The costs of plastic imposed
on governments and society include:

1. Market cost of
plastic: The market cost of the plastic produced in 2019 was
~US$370 billion;

2. Waste management costs: The
management of plastic waste costs more than US $32 billion,
to collect, sort, dispose and recycle the huge quantities of
plastic waste generated every year.

3. Ecosystem
services costs: The plastic produced in 2019 that becomes
marine plastic pollution will incur a minimum cost of
~US$3.1 trillion (+/- 1 trillion) over its lifetime in the
ocean, equivalent to ~60% of global spending on education in
2019.

The authors calculate the lifetime cost of
plastic by using the perpetuity formula with a discount rate
of 2% as per Drupp, M.A. et al. (2018) “Discounting
Disentangled”, American Economic Journal: Economic Policy,
10(4), pp 109-34. Consequently, 85% of the lifetime value of
plastic is borne in the first 100 years and 95% of the
lifetime value is borne in the first 150 years. This gives
the authors confidence in their efforts to provide a
conservative estimate of plastic’s lifespan since key
plastic waste types have life expectancies beyond 150 years.
The formula used was the annual cost of plastic produced in
2019 that entered the ocean (LB: 41,897,689,714 ,
UB:83,795,379,428) divided by the discount rate of
2%.

WWF
and the Ellen
MacArthur Foundation
released new policy white papers on
31st August 2021 outlining the key success criteria and
general elements that such a treaty should
contain.

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