This chapter reviews the current landscape of international agreements and initiatives, as well as the status of efforts to improve it. It then zooms in on the financial resources that would be needed to stop plastic leakage linked to poor waste management practices in developing countries, which has been recognised as an important priority for international co-operation. Finally, the chapter assesses the current contribution of ODA towards this goal
Global Plastics Outlook
Economic Drivers, Environmental Impacts and Policy Options
7. International co-operation to make plastics value chains more circular
Abstract
KEY MESSAGES
The environmental damages generated by the current use and disposal of plastics, are global problems that require international co-operation to resolve. The international community has voiced strong ambitions to limit the pollution of the environment by plastics and momentum is building for a binding global agreement on plastic pollution.
Improving waste management to reduce land-based sources of marine plastic is one of the main priorities for action, alongside upstream preventative measures. Since the bulk of macroplastic waste mismanagement occurs in low and middle-income countries, the investments needed in these countries are particularly large.
Building the basic waste management infrastructure is estimated to cost more than EUR 25 billion per year in low and middle-income countries.
Analysis of official development assistance (ODA) highlights that although the financial support to address plastic leakage in developing countries is increasing, it is only a fraction of what’s needed.
Additional sources of funding will need to be tapped into and enabling policy frameworks established to ensure that the resources are used effectively. Without international support and local political leadership, the required investment and governance for high-quality infrastructure will not materialise.
7.1. Addressing the environmental consequences of global plastics value chains requires international co-operation
National efforts to address the challenges linked to the use of plastics, described in the previous chapter, need to be supplemented with international co-operation for several reasons:
Plastics are shipped across the world as materials, products and waste streams, and supply chains are spread across the globe – policy responses would be more effective if co-ordinated internationally.
The environmental consequences of plastics polluting water bodies are often transboundary and threaten the ocean – a global commons.
Tackling both the upstream and downstream environmental challenges posed by plastics requires innovation and investment on a significant scale, as well as a steep policy learning curve all of which can be accelerated through international co-operation.
7.2. A more comprehensive global approach to plastic pollution is needed
Even before the rise of plastics up the political agenda, a series of international agreements had put forward binding requirements and non-binding recommendations for managing plastics and preventing pollution (Figure 7.1). However, this patchwork of agreements has gaps and there is no international governance instrument that comprehensively addresses the challenges at the different stages of the plastics lifecycle. For example, there are few policy instruments dedicated to marine plastic litter,1 national legislation on ocean affairs is fragmented, requirements are incompletely implemented and multilateral monitoring systems are not functional (UN Report of the Secretary-General, 2018[1]).
Table 7.1. The fragmented nature of global agreements on plastics is hindering environmental protection
Key international agreements that cover pollution and impacts of plastics
Note: 1. The draft CBD framework is currently being negotiated and is expected to be adopted during the second phase of the UN Biodiversity Conference in May 2022, in Kunming, People’s Republic of China (Convention on Biological Diversity, 2021[6]).
Source: Adapted from UNEP (2017[7]), Combating Marine Plastic Litter and Microplastics: An assessment of the effectiveness of relevant international, regional and subregional governance strategies and approaches, https://www.gpmarinelitter.org/resources/information-documents/combating-marine-plastic-litter-and-microplastics-assessment.
The Sustainable Development Goals (SDGs), adopted by the United Nations in 2015, also contain targets that are relevant for plastic waste management and leakage (see Table 7.2 for a selection of relevant targets). Importantly, the SDGs are aspirational and non-binding.
Table 7.2. The SDGs highlight international ambitions to reduce the environment and health impacts of waste
|
Most relevant Sustainable Development Goals |
|
|
|
|
Targets directly related to plastic waste and leakage |
11.6: by 2030 reduce the adverse per capita environmental impact of cities, through municipal and other waste management |
12.4: environmentally sound management of waste throughout the lifecycle, reduce release to air, water, and soil 12.5: by 2030 substantially reduce waste generation |
14.1: by 2025 prevent and reduce marine pollution, in particular from land-based activities |
Source: Adapted from (United Nations, 2021[8]).
Recent years have seen a ramping up of international attention on plastic pollution, and specifically marine litter. As a result, a number of high-profile initiatives on plastic leakage (see Glossary) have been launched by the G7 and subsequently by the G20 (Figure 7.1). Communiqués and commitments have primarily focused on land-based sources of marine plastic litter. One of the flagship initiatives at the G20 level is the Osaka Blue Ocean Vision, which was announced in 2019 and sets the strategic target of reducing plastic leakage to the ocean to net zero by 2050. The Convention on Biological Diversity2 and the European Union have also set additional targets;3 but, they remain voluntary.
Figure 7.1. The G7 and G20 have hosted several initiatives to tackle plastic pollution
Note: The G7 Oceans Plastic Charter was endorsed by Canada, France, Germany, Italy, the United Kingdom and the European Union.
In the absence of a global agreement, some regional organisations have co‑ordinated their members’ policies to address particular plastic-related issues, such as marine plastic pollution (Table 7.3). However, gaps remain in the coverage of regions and issues (UN Report of the Secretary-General, 2018[1]).
Table 7.3. Regional organisations help to co-ordinate members’ policies and actions
A number of governments and civil society actors have been calling for an international treaty to improve this fragmented and incomplete policy landscape (Simon et al., 2021[15]; Duncan et al., 2020[16]; EIA, 2020[17]). Discussions on a global agreement are being held under the auspices of the UN Environment Assembly (UNEA).4,5 An Ad Hoc Open Ended Expert Group was established in 2017 and has held four high-level events to consider the international governance needs, completing its mandate in 2020 (AHEG, 2020[18]; IUCN, n.d.[19]). The fifth session of the UNEA will resume in Nairobi in 2022 and aims to make further progress on resolutions on marine litter and microplastics (UNEA, 2021[20]). So far, 81 countries have endorsed the Oceans Plastic Pollution Declaration, which calls for the development of a binding global agreement on plastic pollution (AOISIS, 2022[21]). This support signals the likely willingness of dozens of countries to adopt a global measure.
In this context, many countries and organisations are stressing the need to focus international co‑operation efforts on both upstream actions (Box 6.3) – such as restraining excessive use of plastics, designing for circularity and promoting reuse – as well as downstream actions, such as enhancing recycling, minimising leakage and cleaning up.6 On the former, the international trade community has been gearing up efforts to address issues that occur across the global plastics value chain (see Box 7.1 for details). On the latter, co‑operation efforts focus on strengthening waste management in places where land-based sources of marine plastic litter are particularly large. The following sections discuss the costs of reducing plastic leakage in low- and middle-income countries and the role of official development assistance (ODA).
Box 7.1. Addressing issues that occur across global plastics value chains requires international co-operation
The plastics value chain is becoming increasingly interconnected and globalised, requiring co-ordinated action between countries to effectively address plastic pollution and to promote the circular use of plastics. Acknowledging the global acceleration of plastics production and consumption and their associated environmental impacts due to fossil fuel inputs and leakage into the environment, the international trade community has begun to take action to seek co-operation on trade-related aspects.
One conventional aspect in trade related dimensions of the global plastic pollution issue is the prevalence of trade in plastic waste and the related environmental risks (Chapter 4). Another important aspect is plastic embodied in traded products, including primary, intermediate, and final forms of plastics. There are not only apparent trade flows such as virgin plastics, plastic based commodities, and plastic waste and scrap, but also hidden trade flows, such as plastic casings for electronic components, plastic composites used in bumpers and dashboards in vehicles, and fruit juice sold in plastic containers. While these fractions are not captured in official trade statistics (as they are recorded by customs as electronics, vehicles or fruit juice), the magnitude of these fractions can be huge. Recent estimates from the United Nations Conference on Trade and Development (UNCTAD) suggest that exports of primary, intermediate and final forms of plastics can reach over USD 1 trillion, representing 5% of global trade in value in 2018 (Barrowclough, Deere Birkbeck and Christen, 2020[22]). This finding implies that international co-operation efforts to combat plastic pollution should not only focus on end-of-pipe solutions for recycling and waste management, but also need to look upstream in the plastics value chain. In particular, product policies that aim to foster the uptake of innovative and more circular solutions, and deter the use of hazardous additives are important (Box 6.3).
In this context, product policies, such as eco-design, eco-labelling, and green public procurement, can play an important role (OECD, 2020[23]). For example, eco-labelling programmes are increasingly used to stimulate demand for circular products (Laubinger and Börkey, 2021[24]). Hazardous content and recycled content of products can be used as a basis for calculating modulated fees in extended producer responsibility schemes (Laubinger et al., 2021[25]) (Chapter 6). Product-based standards are also emerging in various jurisdictions setting forth material content standards (recycled content, hazardous content), recyclability standards, reparability standards, standards on sustainable production, material quality standards (e.g. waste and scrap, secondary materials), product quality standards (e.g. second-hand goods, remanufactured goods) (Yamaguchi, 2021[26]).
At the same time, the fragmentation of product policies related to the circular use of plastics can potentially act as trade impediments for businesses to pursue circular economy business models (Yamaguchi, 2021[26]). In particular, the costs to comply with different regulations and standards, can act as barriers for market access for businesses (Yada et al., 2017[27]). While many product policies related to the circular use of plastics are still under consideration, international co-operation across the plastics value chain can be essential to address these potential trade-related challenges.
In this context, a number of international co-operation initiatives are already underway. In December 2021, 68 members to the World Trade Organization (WTO) issued a joint ministerial statement on the Informal Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade (IDP) (WTO, 2021[28]). The initiative explores how improved trade co-operation can contribute to domestic, regional, and global efforts to reduce plastic pollution.
International harmonisation of product policies related to circular economy and plastics is also taking place. In 2020, the International Organization of Standardization (ISO) developed standards on eco-design and circularity of materials (ISO, 2020[29]). Between 2019 and 2020, the EU’s standardisation body CEN-CENELEC developed nine standards related to “material efficiency aspects for products in scope of eco-design legislation” (CEN-CENELEC, 2021[30]). Both initiatives may contribute to aligning plastics policies and trade policies towards mutually supportive and coherent outcomes.
Continued dialogues appear to be critical to make the plastics value chains more circular by tackling illegal trade in plastics, harmonising efforts on product policies, removing subsidies to fossil fuel inputs, and harnessing trade policies including tariffs and non-tariff measures towards more sustainable outcomes. Exploring further synergies between on-going global initiatives such as those of the WTO and ISO, as well as forthcoming global initiatives under the UNEA process, may provide promising avenues for addressing the trade dimensions of global plastic pollution.
7.3. Eliminating plastic pollution will be costly for low and middle-income countries
As shown in Chapter 2, mismanaged waste is by far the largest source of plastic leakage. Macroplastics account for almost 90% of total leakage, with land-based leakage from improper waste management practices accounting for 95% of all macroplastics. Since the bulk of mismanaged macroplastic waste occurs in low and middle-income countries, the investments needed in these countries are particularly large.
An OECD report developed in conjunction with this Global Plastics Outlook (OECD, 2022 forthcoming[31]) estimates the per-capita capital (i.e. initial investment in facilities, equipment and installation) and annualised costs (i.e. ten-year annualised capital investment costs, operating and maintenance costs). Countries were grouped based on the stringency of their current policies (high, moderate, and low) and the capacity of their current waste management infrastructure (high and moderate). The report makes estimates for a moderate ambition and a high ambition investment scenario. Both scenarios target full waste collection, recovery and disposal, but the high ambition scenario includes circular economy solutions such as prevention measures and recycling targets, while the moderate ambition scenario included mixed waste collection, landfilling and energy recovery.7
For countries with a moderate to low policy stringency and a low level of existing infrastructure, the estimated initial investment required to implement the moderately ambitious investment profile is EUR 20.2 per capita, with annualised current costs of EUR 6.5 per capita (Figure 7.2). When applied to the population of low and lower middle-income countries (using World Bank data for 2019 (World Bank, 2021[32])), this represents an initial investment of EUR 80 billion and an annualised cost of more than EUR 25 billion.
Figure 7.2. The cost of preventing plastic pollution varies by ambition, policy stringency and needs
Source: (OECD, 2022 forthcoming[31]), The Cost of Preventing Ocean Plastic Pollution.
The annual cost represents 0.3% of total GDP of the concerned low and lower middle-income countries and would be an important financial burden, especially for the group of least developed countries. International support will be instrumental in accelerating the investments required in infrastructure and changes to waste management practices, policies and governance.
7.4. Official Development Assistance (ODA) dedicated to plastic waste management is increasing, but insufficient
There are numerous international initiatives in place to help countries address marine plastic litter and other plastics-related issues. For example, UNEP has identified 138 relevant initiatives for technical support and 74 for financial support to countries (UNEP, 2020[33]). These initiatives differ substantially in scope, focus, size and operations. Comparing and analysing them in a consistent way is challenging. In contrast, international co-operation in the form of ODA is one type of support to developing countries that can be tracked across years and regions. Therefore, this section will analyse trends in ODA and compare the available budgets with the required investments.
Whilst ODA to address plastic pollution has increased significantly in recent years, it started from a low base and volumes remain small relative to overall ODA finance (Figure 7.3). ODA targeting plastics specifically increased from around USD 27 million in 2014 to USD 149 million in 2019. ODA targeting solid waste management more generally increased from USD 224 million to USD 327 million over the same period.
While absolute ODA finance has increased, the share of plastic-related ODA (i.e. ODA targeting plastics specifically and ODA targeting solid waste management) compared to total ODA spending remains marginal. In the period 2017-19, it accounted for only 0.2% of ODA gross commitments, compared to 18.6% for climate mitigation and adaptation and 4.6% for biodiversity. Currently annual ODA accounts for less than 2% of the financial needs to set up basic waste management in developing countries (Section 7.3).
Figure 7.3. Plastic-related gross commitments for ODA have increased steadily but remain small
Source: Own calculations based on (OECD, 2021[34]), OECD Data Platform on Development Finance for the Sustainable Ocean Economy and the OECD’s Creditor Reporting System, https://stats.oecd.org/Index.aspx?DataSetCode=crs1.
Prior to 2017, development co-operation largely focused on improving general solid waste disposal and management systems, which received an annual average of USD 206 million between 2008 and 2016. While ODA to enhance solid waste management has continued to increase, and reached USD 327 million in 2019, a growing number of emerging projects also specifically focus on plastic pollution. These projects, for instance, support public awareness raising and the development of national strategies for plastics management in developing countries, finance recycling and clean-up, or research into the sources and impacts of plastic pollution. ODA targeting plastics specifically has increased significantly in recent years, from an average of USD 34 million annually in the 2008-16 period (0.02% of global ODA) to USD 147 million in 2019 (0.07% of global ODA in the same year).
Asian countries are the largest beneficiaries of plastic-related ODA, attracting one-third of these funds over 2017-19 (Figure 7.4). This reflects the fact that Asia is one of the worst-affected regions in the world, with coastal populations, environments and economic sectors such as fisheries, tourism and shipping being increasingly harmed by plastic waste leakage (Schmidt, Krauth and Wagner, 2017[35]). Countries in the south-east of Europe that are not members of the EU were the second-largest recipients, receiving one-quarter of plastic-related ODA in 2017-19, mostly from EU institutions and other EU countries. One-third of plastic-related ODA is provided through regional or cross-regional allocations that target transboundary issues and multi-country solutions for marine pollution and ocean plastics.
Figure 7.4. Asian countries attract the most plastic-related ODA
Note: Plastic-related ODA flows include those for solid waste management generally and those for management of plastics specifically.
Source: Own calculations based on (OECD, 2021[34]), OECD Data Platform on Development Finance for the Sustainable Ocean Economy and the OECD’s Creditor Reporting System, https://stats.oecd.org/Index.aspx?DataSetCode=crs1.
The bulk of plastic-related ODA is extended through bilateral development co-operation, which accounted for 79% of the 2017-19 total. The top five bilateral providers were the European Union, Germany, Norway, Sweden and Canada, collectively accounting for 64% of ODA to tackle plastic pollution. Plastic-related ODA from multilateral providers accounts for a smaller share of the total, but has increased significantly, from an annual average of USD 45 million over 2008-15 period to an annual average of USD 79 million over 2016-19 (+76%). The second largest provider overall was the Asian Development Bank, which provided 17% of ODA during the 2017-2019 period.
Recent initiatives by development banks signal increasing involvement by multilateral providers in this area in the years to come. For example, the Asian Development Bank has issued an Action Plan for Healthy Oceans and Sustainable Blue Economies for the Asia and Pacific region; the World Bank has established the ProBlue trust fund; and the European Investment Bank has launched the Clean Ocean Initiative together with France and Germany. Multilateral co-operation and international organisations can help donors to align goals and prevent duplicative or competing bilateral aid.
In summary, while ODA targeting solid waste management and plastics has increased substantially in recent years, it represents a very small share of the total finance needed to effectively address plastic pollution in low and middle-income countries (as discussed in Section 7.3). Additional sources of funding need to be tapped to provide adequate and sustainable levels of funding. These sources include revenue from the households and firms benefiting from public waste management services, as well as domestic government subsidies and private sector investment. For instance, one of the world’s largest consumer goods companies, Unilever, has announced that it will help collect and process more plastic packaging than it sells by 2025 by investing in waste management infrastructure and partnering with relevant stakeholders (Global Plastic Action Partnership, 2021[36]; Unilever, 2021[37]).8 ODA can be instrumental for leveraging such initiatives.
In addition to investments in waste-management hardware, improvements to the software – i.e. the regulatory framework, governance mechanisms and the capacity of key actors – will also be needed. The OECD provides some recent guidance through its Implementation Handbook for Quality Infrastructure Investment (Box 7.2). Moreover, the social implications of waste management reforms will need to be considered carefully, as many low and middle-income countries have a large number of informal waste pickers and waste handlers involved in these activities and reforms may affect their livelihoods (see Box 4.1 in Chapter 4). Finally, structural conditions at the macro-economic level, such as ensuring that the rule of law is respected and that corruption does not channel investments to other destinations, are critical for improving waste management and preventing plastic leakage.
Box 7.2. Successful waste management investment requires strong regulatory frameworks and governance mechanisms
Cost-effective techniques and relatively low-tech infrastructure, such as collecting mixed waste and sanitary landfilling, will likely play a primordial role in reducing the amount of plastic leakage in low and middle-income countries. The OECD’s Implementation Handbook for Quality Infrastructure Investment puts forward the following four requirements for successful infrastructure investments for waste management:
Adopt the necessary policy and regulatory frameworks: set up a clear institutional framework with well-specified responsibilities for each public actor, issue legal waste management obligations as well as standards, and develop monitoring schemes to verify compliance.
Set up strong governance mechanisms: take into account stakeholder opinions and develop a long-term vision that determines the waste management infrastructure needed, procure infrastructure in a competitive way that leverages the expertise inside and outside of the country, organise infrastructure management in line with the OECD Recommendation of the Council on the Governance of Infrastructure1 and foresee a mechanism to incorporate informal waste pickers in the system.
Ensure adequate and stable financing: do not only focus on investments, but also ensure the financing of recurring costs for operations and maintenance; provide sufficient investor protection and warrant payments by the national treasury to support procurement at sub-national level; and consider using economic instruments such as taxes that generate revenues and incentives for waste prevention or sorting.
Enhance the capacity of sub-national governments: local authorities are typically responsible for organising the collection and disposal of waste from households and small companies. They need sufficient technical expertise to oversee the operations, legal tools to enforce local rules, adequate financing, the authority to impose local taxes, and communication skills to inform as well as motivate the population.
1. Available at https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0460.
Source: OECD Implementation Handbook for Quality Infrastructure Investment, https://www.oecd.org/finance/oecd-implementation-handbook-for-quality-infrastructure-investment.htm
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Notes
← 1. With the exception of some regional action plans on marine litter.
← 2. The New Global Framework for Managing Nature through 2030 includes a target to reduce pollution from all sources to levels that are not harmful to biodiversity and ecosystem functions and human health, including by eliminating the discharge of plastic waste.
← 3. The EU action plan Towards a Zero Pollution for Air, Water and Soil includes a target for EU Member States to reduce plastic litter at sea (by 50%) and microplastics released into the environment (by 30%) (EU Commission, 2021[38]).
← 4. The UNEA has previously adopted resolutions on marine plastic pollution that acknowledged the emerging threat (UNEA Resolution 1/6), requested an assessment of current governance gaps (UNEA Resolution 2/11), set a vision for ending plastic pollution entering oceans (UNEA Resolution 3/7), and, most recently, acknowledged a need for greater co-ordination and knowledge sharing (UNEA Resolution 4/6).
← 5. The first draft of the Post-2020 Global Biodiversity Framework, produced by UNEP for the Convention on Biological Diversity, includes target 7, which aims to eliminate the discharge of plastic waste. The draft text of the Post-2020 Biodiversity Framework is currently being negotiated and is expected to be adopted during the second phase of the UN Biodiversity Conference in May 2022, in Kunming, People’s Republic of China (Convention on Biological Diversity, 2021[6]).
← 6. See for example the interventions at the Ministerial Conference on Marine Litter and Plastic Pollution under the auspices of the UN Environment Programme, held in Geneva and online on 1‑2 September 2021, available at https://enb.iisd.org/ocean/conference-marine-litter-and-plastic-pollution/summary
← 7. The report estimates investment costs and annualised costs. It is not a cost-benefit analysis because the model does not include the benefits, such as the revenues generated from recycling in the high-ambition scenario. The estimates in the study were for end-of-life plastic pollution and did not include marine-based sources, primary microplastics or leakage from production (abrasion) or consumption (littering).
← 8. For other private sector initiatives, see the Ellen MacArthur Foundation’s reports at https://archive.ellenmacarthurfoundation.org/resources/apply/global-commitment-progress-report/organisation-reports