Context: UN Environment Assembly, meeting Feb. 28 to March 2 in Kenya's capital Nairobi, is expected to propose an international framework to address the growing problem of plastic waste in the world's oceans, rivers and landscape.

• Last year United Nations Environment Programme (UNEP) report stated that emissions of plastic waste into the aquatic ecosystems may triple by 2040 in the absence of actions.

Key causes behind increasing plastic waste

• Increasing global consumption and low participation in recycling programmes.
• Consumption externality: It is more challenging to address challenging to address compared to production externality. Because imposing cost of the harm by plastics on all consumers may not yield efficient solutions due to their large number.
• Banning plastic bags can result in a sustainable environment, intergenerational equity, saving marine and wildlife ecosystems, and restoring soil quality. However, it also causes inconvenience for consumers, increases substitution costs, and creates unemployment shocks as it affects the production of plastics.
• Taxation: It is difficult to bring global consensus on a uniform tax to be imposed. Because, it may depend on country-specific circumstances.

Negative impacts of Plastic waste

• Plastic products like bags, bottles, etc. take a long time to decompose.
• The increase in the consumption worldwide and low interests in recycling programmes have led to more prevalence of plastic wastes.
• Plastic wastes result in a huge loss of marine life, especially Marine fisheries and wildlife.
• This also impacts the livelihoods and income of people in the coastal regions, who are dependent on marine ecosystems.

Consumption externality

• Plastics is an example of a consumption externality (which involves many people) rather than a production externality (which involves one or multiple firms). Consumption externality is a complex issue, as it is challenging to differentiate the behaviour of consumers.
• Since the number of consumers is more, the cost of controlling them will also be high.

Key challenges
Several regions across the world have banned plastic items, although this approach promotes a sustainable environment, and helps save marine and wildlife ecosystems, It causes:

• Inconvenience for consumers
• Increases substitution cost
• Creates unemployment as it affects the production of plastics
• Leads to less economic activity
• Leads to less income generation

The replacement of plastics that are low cost, have substitutes that result in a deadweight loss for the economy.

• If plastics are banned, the efficiency of imposing tax and the associated problems have to be considered.
• It is complex to identify and impose an exact tax regime as it depends on specific factors that vary across countries.

Key Suggestion

• The environment regulation for plastics should include a ‘command and control’ approach.
• “Command-and-control” approach demands the polluters to meet emission-reduction targets and facilitates the installation and use of specific types of equipment to reduce emissions.
• The effectiveness of regulations depends on its framework, foundation, design and execution.
• Regulations should be credible, transparent and predictable.
• A tax rate should be carefully determined and in general, the rate of tax on plastics should be higher than the cost of compliance.
• Eco-taxes may be imposed in the various stages of production, consumption or disposal of plastics.
• The pollution-controlling authority should install meters for recording the emission or the effluent discharged in the process of production or consumption of plastics.

Evaluating the social cost

• The social costs should be estimated differently in the local/regional and global contexts. Health and hygiene are the factors in the local context. Climate change is the predominant factor in the global context.
• Eco-tax rates on plastics should be equal to the marginal social cost arising from the negative externality associated with production, consumption or disposal of goods and services. This requires evaluation of damage to the environment based on scientific assessment of the adverse impacts on health, environment, etc.

Key policy measures can be adopted against plastics

The comprehensive policy measures against plastics should involve,

• Removal of existing taxes and subsidies that have a negative environmental impact, taking into account the different types or grades of plastics, and restructuring existing taxes in an environmentally friendly manner.
• Inclusion of creative and effective policy solutions to reduce plastic consumption.
• Promoting multiple uses of plastics through better waste management, educating the public, incentivising R & D activities for substitute development, appropriate disposal mechanisms and waste management.

Road Ahead

• There have been concerns growing over ecotoxicological implications due to the growing prevalence of plastics in the environment particularly in marine ecosystems which has visible effects on a trans-national scale. In this regard, the latest UN Environment Assembly meeting has gained significance and is expected to propose a framework for tackling the issue.

By: Shubham Tiwari