By Hannah Yang
Ocean plastic pollution is a large-scale problem that stems from multiple points of the plastics life cycle, ranging from design, production, use, disposal, and environmental leakage. Voluntary extended producer responsibility (EPR) is an important tool to address the plastics problem. EPR focuses resources directly on the disposal and pollution aspects of plastic waste, while still implicating the upstream production decisions. It provides a more immediate solution to addressing pollution, allows flexibility for innovation and efficiency, and allocates responsibility on those best equipped to address the problem. I propose that New Plastics Economy (NPE) is a non-profit organization that provides a workable platform for building out a voluntary EPR scheme, however, its success would depend on careful control mechanisms to ensure accountability of the participants and the organization itself. This proposed voluntary EPR scheme for NPE is just a starting point and a single piece of a much larger puzzle. It leaves open the door for international and local regulators to implement longer-term solutions.
The Plastics Problem
Plastics have many benefits; they are lightweight, provide sterile packaging, and help extend the shelf-life of products, among others.1See Plastics: Consumer Benefits, Am. Chemistry Council, https://plastics.americanchemistry.com/Consumer-Benefits/ (last visited Nov. 5, 2020). Because they are cheap to manufacture, plastics are treated as disposable after just one short use.2See World Wildlife Fund, Plastics: Convenience Numbs Common Sense, Medium (Apr. 21, 2018), https://medium.com/wwftogetherpossible/plastics-convenience-numbs-common-sense-9dfc4a7b7991. However, society’s management of plastic waste is a growing problem and many are realizing that this momentary convenience comes at a cost.3 See Özgül Calicioglu, Drowning in Plastics: A Problem of Too Much Convenience?, World Bank: World Bank Blogs (Nov. 28, 2019) https://blogs.worldbank.org/eastasiapacific/drowning-plastics-problem-too-much-convenience.
One major negative consequence is plastic pollution in oceans. It is estimated that between 4.8 million and 12.7 million metric tons entered the ocean in just 2010 alone.4 See Jenna R. Jambeck et al., Plastic Waste Inputs from Land into the Ocean, Science, Feb. 13, 2015 at 768, DOI: 10.1126/science.1260352; see also World Economic Forum, The New Plastics Economy: Rethinking the Future of Plastics, ¶14 (Jan. 2016) http://www3.weforum.org/docs/WEF_The_New_Plastics_Economy.pdf (estimating in 2016 about 8M8 million tons each year, and expecting a doubling by 2030 if no action is taken). Once in the ocean, the plastics do not biodegrade easily and continue to persist in the environment.5 See W.C. Li et al., Plastic Waste in the Marine Environment: A Review of Sources, Occurrence and Effects, Sci. of the Total Env’t, May 24, 2016 at 333, https://doi.org/10.1016/j.scitotenv.2016.05.084. When these plastics do slowly break down, carbon is released into the water and atmosphere, which contributes to global warming.6 See Monica Isola, Plastic Contributes to Global Warming as It Breaks Down, Researchers Find, Yale Climate Connections (Nov. 7, 2018), https://www.yaleclimateconnections.org/2018/11/common-plastics-emit-global-warming-pollution/. Ocean plastics also pose serious harm to marine life, choking or starving marine wildlife.7 See What Is the Great Pacific Garbage Patch?, Nat’l Ocean Serv. (Nov. 5, 2020), https://oceanservice.noaa.gov/facts/garbagepatch.html. Harms extend beyond the individual organisms that consume the plastics and bioaccumulate through the food chain.8 See W.C. Li et al, supra note 5.
Sources of Ocean Plastics
Ocean plastics can originate from both land and ocean sources. It is estimated that about 20 percent of plastic waste enters the marine environment from ocean-based sources, such as fishing, cargo ships, and offshore platforms.9 See id.; Marine Debris Program: Sources, Nat’l Ocean Serv. (Nov. 5, 2020), https://marinedebris.noaa.gov/types-and-sources/sources. Land-based sources make up the remaining 80 percent, through spillage of pellets, littering, dumping, stormwater discharges, and general poor waste management.10 See Marine Debris Program: Sources, supra note 9. As the two sources of plastics pose somewhat different issues, they also warrant somewhat different solutions. This discussion will largely focus on the land-based sources.
Within the category of land-based sources, there are a variety of factors that contribute to increased plastic waste in the oceans. For instance, producers of raw materials can reduce direct inputs of plastic by taking additional steps to prevent spillage of plastic pellets into the ocean.11 See Julissa Treviño and Undark, The Lost Nurdles Polluting Texas Beaches, The Atlantic (Jul. 5, 2019), https://www.theatlantic.com/science/archive/2019/07/plastic-pellets-nurdles-pollute-oceans/593317/. These producers can also reduce the amount of problematic plastic that enters into circulation by choosing to source materials that contain post-consumer plastics, are biodegradable, or are more easily recycled. Packaged goods manufacturers can also help to reduce plastic waste, as these manufacturers can dictate both the amount and types of plastic used in products and package designs.12 For example, this includes the type of materials, the choice of color, or the use of mixed materials. See Rebecca Davis and Christopher Joyce et al., Plastics: What’s Recyclable, What Becomes Trash – and Why, NPR (Aug. 21, 2019), https://apps.npr.org/plastics-recycling/. Consumers may also play a role by reducing demand for products with short lifespans13 See Noah M. Sachs, Planning the Funeral at the Birth: Extended Producer Responsibility in the European Union and the United States, 30 Harv. Env’t L. Rev. 51, 60 (2006). and conveniently packaged goods.14 See Greg Kelly et al., The New Model for Consumer Goods, McKinsey & Co. (Apr. 2, 2018), https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-new-model-for-consumer-goods. Under this presumption, greater consumer awareness could shift the market away from a dependance on single-use plastics.15 Evidence of public awareness causing a shift in demand, and consequently some shifts in supply. See Stephen Buranyi, The Plastic Backlash: What’s Behind Our Sudden Rage – and Will It Make a Difference?, The Guardian (Nov. 13, 2018), https://www.theguardian.com/environment/2018/nov/13/the-plastic-backlash-whats-behind-our-sudden-rage-and-will-it-make-a-difference. Additionally, consumers can make sure to properly recycle and dispose of plastic waste to reduce the amount of plastic that ends up in the oceans.16 But see Matt Wilkins, More Recycling Won’t Solve Plastic Pollution, Sci. Am.: Observations (Jul. 6, 2018), https://blogs.scientificamerican.com/observations/more-recycling-wont-solve-plastic-pollution/ (arguing that increased consumer recycling will never solve the problems of plastic pollution). From there, recycling facilities can improve technology to increase the amount of collected plastic that is actually being recycled. Currently, a significant volume of recyclable material is often sent to the landfill,17 See Livia Albeck-Ripka, Your Recycling Gets Recycled, Right? Maybe, or Maybe Not, N.Y. Times (May 29, 2018), https://www.nytimes.com/2018/05/29/climate/recycling-landfills-plastic-papers.html (noting that Waste Management threw out about 25% of their recycling). which increases the chances of plastics entering the ocean during transportation.18 See How Does Plastic End Up in the Ocean?, World Wildlife Fund, https://www.wwf.org.uk/updates/how-does-plastic-end-ocean (last visited Nov. 6, 2020).
Challenges to Solving the Ocean Plastics Problem
Spread in the Environment
Once the plastic enters the ocean, natural currents can transport plastics around the globe, meaning plastics from one country can pollute the waters of another. These plastics are found at a range of depths of the ocean, from the surface down to the ocean floor.19 See Dongdong Zhang et al., Microplastic Pollution in Deep Sea Sediments and Organisms of the Western Pacific Ocean, Env’t Pollution, Jan. 10, 2020 at 1, https://doi.org/10.1016/j.envpol.2020.113948. This dispersion of plastics makes cleanup and tracking more difficult.
Absence of Regulation
Ocean plastic management currently suffers from the tragedy of the commons. Most of the pollution is found in the high seas, which have minimal regulation and no private ownership.20 See Brian Palmer, High Seas: Few Rules, Fewer Sheriffs, Nat’l Res. Def. Council (Jan. 16, 2019), https://www.nrdc.org/stories/high-seas-few-rules-fewer-sheriffs. Without regulation, individuals have minimal incentives to take on additional expenses to prevent plastics from entering the ocean. These challenges are only exacerbated by the international nature of the ocean plastics problem. The consequences of local sources of pollution span the entire globe. The harms are distributed across the general public, through the degradation of the oceans and marine life.
Furthermore, ocean cleanup is difficult and expensive. For example, The Ocean Cleanup designed a system to collect plastic waste from the ocean. Just one system cost about 21 million euros (or about $24.6 million).21 This number includes design, development, production, and only one year of operating costs. See Jeff Kart, The Ocean Cleanup Is Starting, Aims to Cut Garbage Patch by 90% by 2040, Forbes (Aug. 28, 2018), https://www.forbes.com/sites/jeffkart/2018/08/28/the-ocean-cleanup-is-starting-aims-to-cut-garbage-patch-by-90-by-2040/#1cc3454b253e. The costs are high, in part because this is a new area of technology and research.22 The first successful deployment of The Ocean Cleanup’s system was only after several years of simply researching the scope of the problem, beginning with a feasibility study published in 2014. See Boyan Slat et al., How the Oceans Can Clean Themselves (2014). In addition, once the plastic has been collected, disposal of the plastic is also generally expensive, especially compared to other materials such as paper or glass.23 See European Environment Agency, Price Development of Plastic, Paper and Glass Waste (Nov. 29, 2012), https://www.eea.europa.eu/data-and-maps/figures/price-developments-for-selected-waste-1. The cost of managing plastic waste after recovery makes recovery itself less economically viable.
Finally, causation is also difficult to pinpoint. Just a single piece of ocean plastics traverses a long chain of control, from raw materials, to production, use, and disposal. Identifying causation can help identify which actors can and should bear responsibility for the plastic waste problems. With no single “wrongdoer,” assigning responsibility is more challenging.
EPR as a Solution to Plastic Waste
Extended producer responsibility (EPR) allocates responsibility for the management of post-consumer waste on the producers.24 See Extended Producer Responsibility, Organisation for Economic Co-Operation and Development, https://www.oecd.org/env/tools-evaluation/extendedproducerresponsibility.htm (last visited May 16, 2020). This can take multiple forms, including actual physical responsibility of taking the waste goods from the consumers at the point of disposal, administrative management of the disposal infrastructure, or financial responsibility. EPR is touted as a useful tool to address some of the negative externalities of production.25 See Kleoniki Pouikli, Concretising the Role of Extended Producer Responsibility in European Waste Law and Policy Through the Lens of the Circular Economy, 20 ERA Forum 491, 493 (2020).
Benefits of EPR
To start, EPR can be used to cover costs needed to manage existing pollution and to remedy harms stemming from that waste.26 See Sachs, supra note 13, at 81 (noting collection is typically performed by municipalities). In the context of plastics, EPR could extend to ocean cleanup. EPR shifts the economic burden of plastic waste further upstream onto producers, away from those who directly suffer the harms of plastic waste.27 See Organisation for Economic Co-Operation and Development, The State of Play on Extended Producer Responsibility (EPR) 8–9 (2014), https://www.oecd.org/environment/waste/Global%20Forum%20Tokyo%20Issues%20Paper%2030-5-2014.pdf. Secondly, producers exercise at least some control over the degree and nature of plastic waste generation. As with general product liability theory, internalization of the downstream costs of plastic waste should incentivize upstream decisions to minimize these downstream harms, so long as the upstream solutions are less expensive than their downstream liability.28 See Sachs, supra note 13, at 53. Furthermore, EPR leaves flexibility for industry actors to innovate and develop their own mechanisms to efficiently reduce harms.
Concerns with EPR
Critics are skeptical of the practical significance of design incentives. There are various forms of EPR, which each allocate financial liability somewhat differently. If responsibility is determined collectively based on industry or product type, rather than the specific producer’s actual contribution to the waste problem, then any upstream incentives may be significantly diluted. Producers that are grouped together may face collective action problems.29 For example, some producers can free ride on design improvements made by others within their fee group. See Atalay Atasu & Ravi Subramanian, Extended Producer Responsibility for E-Waste: Individual or Collective Producer Responsibility?, 21 Prod. & Operations Mgmt. 1042 (2012). The efficacy of collective EPR schemes will depend on the relationship between producers within the fee group and whether that relationship can control free riding. Alternatively, EPR responsibility could be determined based on each producer’s individual contribution to plastic waste. These EPR systems more directly internalize the downstream costs,30 See Sachs, supra note 13, at 75. but can be difficult and costly to implement.31 See Atasu & Subramanian, supra note 29; see also id. at 76–77 (expressing skepticism in applying true cost internalization for more complex e-waste products and identifying “many EU EPR programs have defaulted to collective responsibility as a matter of practical necessity”).
Another critique is that EPR schemes place excessive burdens on upstream producers and manufacturers and too little on consumers and government entities. For one, consumers still retain control over waste disposal, after use.32 See Sachs, supra note 13 (noting industry challenges that the consumer is the polluter and therefore is the one that should pay). There is a moral hazard that consumers have no incentives to dispose of plastics properly if producers are paying to manage the waste problem. Secondly, even if the consumer properly disposes of plastics, many countries currently lack plastic waste management capacity and instead export plastic waste to other countries in East Asia and Pacific.33 The United States, Japan, and Germany were the top exporters to China. With the new import regulation in 2018, countries are shifting to other nearby countries. The new plastic importers may see an increase in mismanaged waste due to flooding their recycling supply chain. See Sara Kiley Watson, China Has Refused to Recycle the West’s Plastics. What Now??, NPR (June 28, 2018), https://www.npr.org/sections/goatsandsoda/2018/06/28/623972937/china-has-refused-to-recycle-the-wests-plastics-what-now. Once exported, there is little oversight over how this plastic is subsequently managed.34 See Roger Harrabin, Bill Proposes Ban on Plastic Waste Exports, BBC: Sci. (Jan. 30, 2020), https://www.bbc.com/news/science-environment-51315458; The Plastic Waste Trade in the Circular Economy, Eur. Env’t Agency (Jul. 23, 2020), https://www.eea.europa.eu/themes/waste/resource-efficiency/the-plastic-waste-trade-in. China’s ban and the increased awareness of mismanaged plastic waste have pushed some governments to consider banning exports to certain countries. In 2010, 60% of the global mismanaged waste came from East Asia and Pacific. See Hannah Ritchie & Max Roser, Plastic Pollution, Our World in Data (Sep. 2018), https://ourworldindata.org/plastic-pollution#all-charts-preview. As one producer notes, truly addressing the plastic waste problem would require the burdensome development of an entirely new industry around plastic waste management.35 See OECD Joint Workshop on Extended Producer Responsibility and Waste Minimisation Policy in Support of Environmental Sustainability ¶¶ 57–58 ENV/EPOC/PP(99)11/Final/Part1 (May 4–7, 1999) [hereinafter OECD Joint Workshop].
Similarly, EPR also raises equity questions about the global allocation of responsibility. In 2014, China was the largest producer of plastics materials at 26 percent, followed by Europe and the NAFTA countries at around 20 percent each.36 See Plastics – the Facts 2015, PlasticsEurope (2015), https://www.plasticseurope.org/application/files/3715/1689/8308/2015plastics_the_facts_14122015.pdf. Yet, in 2016, it is estimated that the United States generated the most plastic waste in the entire world and contributed the most plastic waste to coastal environments.37 See Kara Lavender Law et al., The United States’ Contribution of Plastic Waste to Land and Ocean, 6 Sci. Advances, no. 44, 2020, at 2 (accounting for both direct and indirect pathways, such as the US exports to other countries which are subsequently mismanaged). The question of allocating responsibility between producer and consumer also implicates the allocation of responsibility between developed versus developing nations.
On the flipside, others may be concerned about consumers bearing the brunt of the costs under EPR. After all, even if producers are directly responsible, these increased costs can still be passed to the consumer through increased prices.38 See EPA, Guidelines for Preparing Economic Analysis, at 8-5, 8-9 (2010).
Government Programs Utilizing EPR
A few limited jurisdictions have implemented plastic EPR schemes with varying degrees of success. Germany was one of the first countries to shift the costs of packaging waste (including plastics) to producers in 1991.39 See The Producer Pays, Knowledge@Wharton (Apr. 4, 2017), https://knowledge.wharton.upenn.edu/article/the-producer-pays/. This has been paired with more systematic improvements of lower recycling costs and improved packaging materials optimization. See Joachim Quoden, Effects of the Introduction of an EPR Management System on the Economy, in Organization for Economic Cooperation and Development, Economic Aspects of Extended Producer Responsibility 120, 127, 130 (2004). Additionally, Der Gruener Punkt (“Green Dot”) certified those companies that reduced plastic packaging and made the packaging easier to recycle.40 See Our Goal: Closing Loops – Together for the Environment, DerGrünePunkt https://www.gruener-punkt.de/ (last visited Nov. 6, 2020). Some have expressed concerns about the high price tag of the system.41 See Sachs, supra note 13, at 72 (citing a cost of 1.8B8 billion euros a year, but failing to provide the comparable cost savings and benefits). Still, recycling rates increased for all materials, including plastics,42 See Clean Production Action, Extended Producer Responsibility, Clean Production Action, at 16 (2004), https://www.cleanproduction.org/static/ee_images/uploads/resources/EPRtoolkitColourFinal.pdf. and the program has generally been considered successful in meeting targets.43 See Sachs, supra note 13, at 69. Several other European countries have since followed suit, creating EPR schemes in connection with the EU Packaging and Packaging Waste Directive.44 See Council Directive 94/62/EC, 1994 O.J. (L 365); see also id. at 68 (“EPR legislation has been adopted, or is about to be adopted, in all twenty-five EU Member States, and for the most part, the objectives of European EPR programs to reduce landfill impacts and stimulate a closed-loop recycling system are being met.”).
More recently, in 2018, India developed a nascent EPR scheme to support its single-use plastic bans.45 See Priyanka Pulla, Making India’s Polluters Pay, The Hindu (Dec. 15, 2018), https://www.thehindu.com/sci-tech/energy-and-environment/making-indias-polluters-pay/article25753356.ece Implementation has been trickier, due to the large informal market for plastic recycling.46 See id. Several producer responsibility organizations (PROs) have formed, which allow companies to pool resources and take advantage of economies of scale. See Dinesh Raj Bandela & Richa Agarwal, Whose Waste Is It?, DownToEarth (Feb. 10, 2019), https://www.downtoearth.org.in/news/waste/whose-waste-is-it–63077. However, rather than developing a larger collection infrastructure to help reduce mismanaged waste, many PROs are simply purchasing the plastic from the informal market. Id. Additionally, EPR in India struggles from the lack of guidelines and targets.47 See Pulla, supra note 45. However, India is committed to the EPR model and is developing a nationally unified working model and stricter EPR policies.48 See Zia Haq, New Guidelines to Put Recycling Onus on Plastic Manufacturers, HindustanTimes (Oct. 7, 2019), https://www.hindustantimes.com/india-news/new-guidelines-to-put-recycling-onus-on-plastic-manufacturers/story-kQ4n9pOTq6x605sAa24y5K.html.
Theory of Voluntary EPR
Because voluntary programs are not limited by state boundaries, they allow for cross-jurisdictional cooperation. A global solution helps address the global plastic supply chain. Voluntary programs also promote efficiency. They are quicker to set up than governmental instruments. Additionally, EPR uses financial incentives to drive industry innovation and development. Voluntary programs will adapt to a changing industry to maximize efficiency. At the same time, a voluntary EPR scheme may minimize direct government management, reducing administrative costs that would otherwise be covered by taxpayers.
However, there are certainly shortcomings to voluntary programs. To start, there is the baseline question of garnering support. It is not immediately clear why companies would voluntarily take on greater liability. Even with a few industry supporters, there remains the challenge of obtaining high levels of voluntary participation. Of the companies that do voluntarily commit, there needs to be some mechanism to motivate and ensure compliance. Finally, if the requirements are set too loosely or superficially, companies may abuse these voluntary programs for marketing or public relations benefits, without taking any real actions.49 See Jane Hoffman & Michael Hoffman, What Is Greenwashing?, Sci. Am. (Apr. 1, 2009), https://www.scientificamerican.com/article/greenwashing-green-energy-hoffman/. This concern of greenwashing creates a risk of voluntary EPR schemes doing more harm than good.
Applications of Voluntary EPR
Despite concerns, some private, voluntary EPR schemes have emerged in the plastic industry. Not surprisingly, a few non-profit and NGO driven initiatives have emerged. The World Wildlife Fund has introduced the Extended Producer Responsibility Project.50 See Extended Producer Responsibility Project, World Wildlife Fund (Oct. 28, 2020), https://wwf.panda.org/?356332/Extended-Producer-Responsibility-Project. WWF’s efforts are focused on developing EPR legal regimes in target countries around the world, primarily in Asia and South America.51 See Xin Chen, WWF’s EPR Project at a Glance, World Wildlife Fund, http://d2ouvy59p0dg6k.cloudfront.net/downloads/20190905_wwf_s_epr_project___external.pdf (last visited Nov. 6, 2020). Additionally, Project STOP works together with local government, industry, and other partners to develop waste management systems in communities with “high levels of ocean plastic leakage and dedicated government support,”52 See Our Approach, Project Stop, https://www.stopoceanplastics.com/our-approach/ (last visited Nov 6, 2020). leveraging funding from the plastic industry to address post-consumer waste.53 See, e.g., Pasuruan, Project STOP, https://www.stopoceanplastics.com/en_gb/pasuruan/ (Feb. 20, 2020). This project may have also sourced some funding from an external government. Due to the community-tailored nature of this undertaking, it will be difficult to scale this program quickly. Another model is the Minderoo Foundation, which focuses on resin producers. Its goal is to use a voluntary EPR to push up the price of virgin plastics, helping to drive greater innovation and decrease the costs of recycled plastics.54 See Lisa Cox, Andrew Forrest Launches US$300m War on Plastic to Tackle Ocean Pollution, The Guardian (Sept. 25, 2019), https://www.theguardian.com/australia-news/2019/sep/25/andrew-forrest-launches-us300m-war-on-plastic-to-tackle-ocean-pollution. As it is still in its early conception phase, it remains to be seen how industry will respond.
Other initiatives are supported by a combination of public and private funding. The Recycling Partnership works together with municipalities around the US to develop curbside recycling infrastructure. Supported by a combination of city funds with private sector donations,55 See We’re All in This Together, The Recycling P’ship, https://recyclingpartnership.org/funding-partners/ (last visited Nov. 6, 2020) (noting funders ranging from ExxonMobil to Amazon, and the Plastics Industry Association). it has helped to collect about 230 million pounds of recyclable plastics and other materials. Circulate Capital is an investment management fund. It formed Circulate Capital Ocean Fund (CCOF) which is dedicated to preventing ocean plastic, with a goal for plastic recycling to be a profitable investment.56 See Newsfile Corp., Circulate Capital Closes US $106M Fund to Protect Asia’s Ocean from Plastic, Yahoo! Fin. (Dec. 4, 2019), https://finance.yahoo.com/news/circulate-capital-closes-us-106m-152600477.html. Several private corporations are investors in CCOF, including the first investor, PepsiCo.57 Several other major plastics companies joined soon after, including Coca-Cola, Danone, Dow, Procter & Gamble, Unilever, and Chevron Phillips Chemical. See id. There is also a mix of public funding as the initiative is backed by USAID.58 See Our Story, Circulate Capital, https://www.circulatecapital.com/ (last visited Nov. 6, 2020). Although still relatively new, CCOF is working with over $100 million and has announced two investments in Asian plastic recycling companies.59 See Our Investment Portfolio, Circulate Capital, https://www.circulatecapital.com/investments (last visited Nov. 7, 2020) These hybrid publicly-privately funded organizations may benefit from a financial advantage.
Finally, some initiatives are both funded and lead by industry. Terracycle, a private recycling company focused on hard-to-recycle plastics, runs a recycling program financed by product goods manufacturers and free to consumers.60 See Free Recycling Programs, Terracycle, https://www.terracycle.com/en-US/brigades (last visited Nov. 7, 2020). Some companies include a fundraiser aspect to the collection drive. In this voluntary, individual EPR program,61 Collection and recycling are free for consumers, and the costs to the producers are directly connected to the costs of recycling the packaging waste. packaging for each brand family is collected separately, simplifying both the allocation of cost and the recycling processing. However, this system places considerable onus on the consumer to sort out all packaging and would likely be very difficult to scale. Several other industry-led initiatives have also emerged. The Kenya Association of Manufacturers has proposed a three-year plan for shifting responsibility to plastic producers.62 See Kenya Plastic Action Plan, Kenya Ass’n of Mfrs. (Nov. 2019), http://kam.co.ke/kam/wp-content/uploads/2019/12/KPAP_Document-pages.pdf. Several companies have also formed a consortium to support innovation in chemical recycling.63 See Citeo, Total, Recycling Technologies, Mars and Nestlé Join Forces to Develop Chemical Recycling of Plastics in France, Total (Oct. 12, 2019), https://www.total.com/media/news/press-releases/citeo-total-recycling-technologies-mars-and-nestle-join-forces-develop-chemical-recycling-plastics. This indicates a readiness for industry actors to join forces and collaborate on the plastic waste problem.
The proliferation of these voluntary EPR schemes highlights the potential of a well-developed initiative with the right participants.
Analysis of NPE, and how it might support a voluntary EPR scheme
The New Plastics Economy (NPE) is a non-profit charity of the Ellen MacArthur foundation. Its mission is to promote a circular economy for plastics.64 See The Initiative, Ellen MacArthur Found., https://www.newplasticseconomy.org/about/the-initiative (last visited Nov. 7, 2020). Launched together with UN Environment in October 2018, one of the organization’s projects is the Global Commitment.65 See New Plastics Economy Global Commitment, Ellen MacArthur Found., https://www.ellenmacarthurfoundation.org/assets/downloads/13319-Global-Commitment-Definitions.pdf (last visited Nov. 7, 2020) [hereinafter NPE Global Commitment]. It invites a diverse set of signatories from both the public and private sectors66 Specifically, recycling companies, raw materials producers, governments, NGOs, and investors. to work towards a set of circular plastics economy targets by 2025. These 2025 targets vary by signatory, but largely focus on increasing recycled content and using recyclable materials.67 For example, packaged goods companies’ targets are based on their plastic packaging, whereas recycling industry targets are focused on increasing capacity and quality. See NPE Global Commitment, supra note 65, at 2. Industry signatories include major leaders in the “fast moving consumer goods” industry, “plastic packaging producers” and “global retailers”68 See New Plastics Economy Global Commitment: June 2019 Report, Ellen MacArthur Found. (June 17, 2019), https://www.newplasticseconomy.org/assets/doc/GC-Report-June19.pdf [hereinafter NPE Global Commitment 2019 Report]. and represent “20% of all plastic packaging produced globally.”69 See The Initiative, supra note 64.
Compatibility of EPR and NPE
Both EPR and NPE consider the entire lifecycle of the product, seeking to minimize waste in product design and promote recycling of any waste product. 70See Louis Dawson, ‘Our Waste, Our Resources; A Strategy for England’–Switching to a Circular Economy Through the Use of Extended Producer Responsibility, 21 Env’t. L. Rev. 210, 214 (2019); see also Pouikli, supra note 25, at 493. The Global Commitment is focused primarily on forward-looking improvements, targeting design and production decisions to reduce plastic waste in the long run. However, these design changes will take time to implement, and plastic waste has already been accumulating in the environment for many years. A voluntary EPR scheme would place financial responsibility on the plastic industry for any existing and remaining waste, helping to complete the circular economy.
Additionally, NPE creates a solid working framework to introduce an EPR scheme for plastic waste. In fact, pairing EPR with a series of production-side targets addresses the concerns about the limited influence of a collective industry EPR scheme on upstream factors such as product design and production.71 See discussion supra “Concerns with EPR.” For example, the Global Commitment to “take action to” address single-use and unnecessary packaging72 NPE Global Commitment, supra note 65. is also an upstream goal of EPR, since it would help to reduce the volume of plastic entering the oceans. Signatories also commit to set recycled content targets.73 See id. This supports EPR by driving up demand of recycled plastic materials. Importantly, signatories commit to “100% of plastic packaging to be reusable, recyclable, or compostable.”74 Id. This also complements EPR by reducing recycling costs and improving recycling rates.
Together, NPE and EPR will further reinforce incentives to reduce and improve plastic packaging, and increase recycling, while providing funding to address existing plastic waste and environmental degradation.
75 See Signatories, Ellen MacArthur Found., https://www.ellenmacarthurfoundation.org/resources/apply/global-commitment-progress-report/signatories (last visited Nov. 19, 2020).
EPR is also compatible with the structure of NPE. Due to the international scope of the problem of the plastics problem, it is valuable that NPE works across borders with minimal transaction costs. Because NPE is a private entity, there are no jurisdictional restrictions or need for international treaties as NPE continues to grow and expand its reach.76 Currently, NPE signatories are based in 44 different countries, including the 20 different government entities. See id. Under a global EPR scheme, companies operating in multiple countries can sign as a single entity encompassing all subsidiaries. Those companies can then more efficiently adopt uniform corporate policy and designs to meet EPR requirements, across the different countries in which they operate. Additionally, an international EPR scheme helps to address the global nature of the plastic supply chain. In contrast, government mandated EPR programs, such as Germany’s packaging waste program discussed above,77 See discussion supra Section “Government Programs Utilizing EPR.” have been directed towards specific jurisdictions, resulting in fractured and inefficient treatment.
It is also valuable that the Global Commitment brings together actors from various aspects of the plastic industry. EPR is bolstered by the support from all parts of the supply chain. Optimal product design would incorporate environmental considerations from the choice of raw material through to the product distribution. This helps to address the causation problem, by including all industry actors that are in the chain responsibility. NPE helps to bring together each of these different parties under the shared goal of developing a circular economy to reduce plastic waste.
Governance of NPE
Compliance will be one of the most important hurdles for voluntary EPR. While there are many motivators to comply, which will be discussed below, they may not be sufficient to secure compliance if compliance costs outweigh the benefits and the environmental goals become unprofitable.78 In contrast to, for example, self-regulating standards in the tech industry, where the disadvantages of noncompliance are much greater. See Enforcement of Transnational Regulation 55 (Fabrizio Cafaggi ed. 2014).
Currently, NPE relies on public reporting to encourage compliance. NPE publishes a cumulative annual report compiling the progress of each signatory towards the 2025 targets.79 See generally NPE Global Commitment 2019 Report, supra note 68; The Global Commitment: 2020 Progress Report, Ellen MacArthur Found. (Nov. 2019), https://www.ellenmacarthurfoundation.org/assets/downloads/Global-Commitment-2020-Progress-Report.pdf [hereinafter NPE Global Commitment 2020 Report]. Companies that fail to submit a report are explicitly identified, creating some public accountability.80 See NPE Global Commitment 2020 Report, supra note 79, at 7 n.2. NPE could also consider providing a certification system as a further compliance tool, not unlike Germany’s Green Dot program.81 See supra subsection “Government Programs Utilizing EPR”; see also Singapore’s “Reduced Packaging” Eco-label, Towards Zero Waste, https://www.towardszerowaste.gov.sg/waste-streams/packaging-waste/ (last visited Nov. 7, 2020). The fact that some of the signatories are dominant actors in their respective industries, may further increase the competitive value of such a certification and spur increased participation.
NPE Global Commitments currently take the form of rulemaking. NPE sets standards and signatories define targets consistent with these standards. If the NPE standards become more demanding, signatories will be interested in governance controls that promote the legitimacy of NPE.82 Legitimacy is important for attracting signatories and exerting influence. It can help to ensure efficiency, prevent arbitrary decisions, ensure that decisions still align with the intents and purposes of the NPE, and account for the will of the signatories. See generally Richard B. Stewart, The Normative Dimensions and Performance of Global Administrative Law, 13 I CON 499 (2015). A voluntary EPR program that collects fees would open additional questions of how the resources should be directed and utilized, which further drives the need for legitimacy.83 See, e.g., id. at 502 (discussing concerns of disregard). This could be achieved through implementing global administrative law tools of transparency, participation, reason giving and review. In its current form, it is not clear which if any of these are present.
The annual reports provide detailed information on the performance of the signatories, which is an important achievement of transparency in the plastics industry.84 See NPE Global Commitment 2020 Report, supra note 79, at 63–65. However, there is minimal transparency from NPE itself. For example, little information is provided on the decision-making process for defining the Global Commitment general goals and individual targets. As such, it is also unknown to the general public how much participation signatories have in the NPE.85 This is both on the individual level for setting targets, but also more generally for defining the underlying goals of the Global Commitment. Specifically, also, whether the “core partners” who formed the original signatory group have any special involvement. Participation is particularly relevant now, as the NPE was set to review and modify the Global Commitment by October 2020.86 See NPE Global Commitment, supra note 65, at 1. There is some degree of reason-giving in setting the Global Commitments, in the detailed Global Commitment Definitions.87 See id. Similar publications on the decision-making process would help support the implementation of an EPR scheme. Currently, NPE does not penalize individual signatories for failing to meet targets. However, if enforcement mechanisms are adopted to support a voluntary EPR scheme, a review process for its enforcement decisions will be more important for legitimacy. These governance mechanisms can increase administrative costs, but they would improve performance and legitimacy.
Motivating Factors for Signatories to Commit to an EPR Scheme within NPE
Currently, only a few international instruments discuss ocean plastics, and they are generally of limited scope.88 See, e.g., Sara Savarani & Bryce Rudyk, Ocean Plastic Pollution: A Survey of Existing Global Agreements and Proposals for Reform, Guarini Ctr. on Env’t, Energy & Land Use L. (2018). See generally Luisa Cortat Simonetti Goncalves & Michael Gerbert Faure, International Law Instruments to Address the Plastic Soup, 43 Wm. & Mary Env’t L. & Pol’y Rev. 871, 881 (2019) (noting that the instruments do not directly address the issue of ocean plastic pollution). However, there is growing interest in regulation both at the national89 Individual countries may choose to adopt domestic EPR policies. Singapore is requiring companies to collect data on their plastic packaging and conducting a feasibility study on the implementation of an EPR scheme. Packaging Waste, Towards Zero Waste, https://www.towardszerowaste.gov.sg/waste-streams/packaging-waste/ (last visited Nov. 7, 2020). In the US, the bill “Break Free From Plastic Pollution Act of 2020” was introduced to the Senate in February 2020. It includes a specific provision for marine cleanup in the participation fees. Break Free From Plastic Pollution Act of 2020, S.B. 3263, 116th Cong. § 12102(b)(3)(B)(ii)(II) (2020). and international90 At the international level, there is push for a new UN treaty to address plastic waste. See, e.g., NGOs and Businesses Call for UN Treaty on Plastic Pollution, Ellen MacArthur Found. (Oct. 14, 2020), https://www.ellenmacarthurfoundation.org/news/ngos-and-businesses-call-for-un-treaty-on-plastic-pollution. scale. The European Commission recently adopted a comprehensive Circular Economy Action Plan as one component of the European Green Deal.91 See EU Circular Economy Action Plan, Eur. Comm’n, https://ec.europa.eu/environment/circular-economy/ (Oct. 11, 2020). The resolution committed to more specifically target policy at production and manufacturing to address packaging waste and plastics.92 See Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, §§ 3.3–3.4, COM (2020) 98 final (Nov. 3, 2020). As the Commission develops specific directives and policy frameworks, and until the regulatory gap is filled globally, there is significant potential for the plastic industry to set their own international standards that lawmakers across different jurisdiction may follow and adopt legislation consistent with industry norms.93 See Steven Sarno & Lauren Hopkins, The Rise of Mandatory Product Stewardship Programs, ABA (July 1, 2015), https://www.americanbar.org/groups/environment_energy_resources/publications/trends/2014-2015/july-august-2015/the_rise_mandatory_product_stewardship_programs/. Signatories may benefit from voluntarily adopting an EPR scheme, as such a scheme could pre-empt pending and future government regulation.
As evidenced in other industries, early movers are sometimes able to shape the regulatory environment, at least on the national scale. PaintCare, formed by manufacturers, advocated and developed model legislation for a mandatory EPR scheme.94 See id. In British Columbia, the Pharmaceutical Manufacturing Industry voluntarily formed a product stewardship program to set standards in managing the proper disposal of leftover pharmaceuticals.95 See OECD Joint Workshop, supra note 35, at 67. The manufacturers explicitly engaged in this voluntary program with the hope of spurring regulatory action, and “on the understanding that the provincial government would later bring in a ‘level playing field’ regulation to ensure that all manufacturers abide by the same rules.”96 Id. Government regulation followed just one year after in 1997,97 See Post-Consumer Residual Stewardship Program Regulation, B.C. Reg. 111/97 (Can.), repealed by Recycling Regulation, B.C. Reg. 449/2004 (Can.). and other provinces in Canada have adopted similar legislation.98 See, e.g., Collection of Pharmaceuticals and Sharps – Responsibilities of Producers, O. Reg. 298/12 (Can.); Waste Reduction and Prevention Act, C.C.S.M. 16/2010 (Can.); Environmental Protection Act, R.S.P.E.I. 1988, cap. E-09. Furthermore, the original stewardship association has since grown to encompass much broader responsibility, and remains producer funded. See About HPSA, Health Prods. Stewardship Ass’n, http://healthsteward.ca/about/about-hpsa/ (last visited Nov. 7, 2020).
Some signatories support the NPE vision of a circular plastic economy for moral reasons. These likely include the signatories who have already met many of the NPE commitment targets even prior to joining as a signatory. For example, rPlanet Earth is a packaging company which was founded on sustainable principles,99 See generally rPlanet Earth, https://www.rplanetearth.com/ (last visited Nov. 7, 2020). so many of the virgin and difficult-to-recycle plastics were never even part of its portfolio.100 See NPE Global Commitment 2019 Report, supra note 68, at 300. Purpose-driven companies are increasing in popularity, both in and out of the environmental sphere.101 See generally Josh Bersin, The Rise of the Social Enterprise: A New Paradigm for Business, Forbes (Apr. 3, 2018), https://www.forbes.com/sites/joshbersin/2018/04/03/the-rise-of-the-social-enterprise-a-new-paradigm-for-business/?sh=3aa05d3671f0. Good ethics boosts public trust, improving the longevity of the business.102 See Edelman, Edelman Trust Barometer 2020 Global Report 24 (2020). The signatories who support NPE for moral reasons will likely feel similar obligations to address ocean plastic pollution, and thus may be willing to voluntarily adopt an EPR policy.
Some of the benefits from EPR are more concrete, such as economic gain. Consumer demand is pushing industry to indicate their commitment to sustainable business practices. The choice to join the Global Commitment signals a commitment to sustainability and can provide good publicity. Additionally, a growing number of investors are interested in sustainable companies.103 See, e.g., Index Family Overview, SAM, https://www.spglobal.com/esg/csa/indices/index (last visited Nov. 19, 2020); Sustainable Investing, BlackRock, https://www.blackrock.com/us/individual/investment-ideas/sustainable-investing (last visited Nov. 7, 2020). Joining the Global Commitment and taking real responsibility to make the company more sustainable could translate to greater access to capital, as more investors consider sustainability to be a core deciding factor. Many of these same benefits will exist in the context of EPR. The only question will be the level of responsibility and whether the cost exceeds the value of the economic benefit.
Furthermore, plastic waste management is becoming a part of the business model. Companies at various points in the plastic supply chain are vertically integrating by acquiring recycling facilities. As a result, plastic producers have a greater financial stake in the recycling business and are internalizing some of the costs of plastic waste management.104 See Alan Barton, To Go Circular, First Go Vertical, U.S. Chamber of Commerce Found. (April 16, 2018), https://www.uschamberfoundation.org/blog/post/go-circular-first-go-vertical. These acquisitions are driven in part by an increased demand for recycled plastics.105 See, e.g., Jared Paben, Indorama Provides Details on Purchase of PET Recycling Firm, Plastics Recycling Update (Feb. 26, 2020), https://resource-recycling.com/plastics/2020/02/26/indorama-provides-details-on-purchase-of-pet-recycling-firm/ (acquisition of Green Fiber International by Indorama); Jared Paben, How Much Indorama Paid for a U.S. PET Processer, Plastics Recycling Update (June 5, 2019), https://resource-recycling.com/plastics/2019/06/05/how-much-indorama-paid-for-a-u-s-pet-processor/ (acquisition of Custom Polymers PET by Indorama); Megan Smalley, Taiwanese Company Acquires Phoenix Technologies International, Recycling Today (June 4, 2019), https://www.recyclingtoday.com/article/taiwan-far-eastern-new-century-acquires-phoenix-pet-recycler/ (acquisition of Phoenix Technologies by Far Eastern New Century). For example, DAK Americas cited “consumer interest in sustainable products” as a key factor for its acquisition of Perpetual Recycling Solutions.106 Colin Staub, Brand Owner Demand Leads to Perpetual Purchase, Plastics Recycling Update (Jan. 16, 2019), https://resource-recycling.com/plastics/2019/01/16/brand-owner-demand-leads-to-perpetual-purchase/. Similarly, Imerys Performance Additives, which produces mineral-additives for plastics among other materials, fully acquired the plastic recycler Regain Polymers,107 See Imerys Acquires UK Plastic Recycler, Recycling Today (Sept. 17, 2017) https://www.recyclingtoday.com/article/imerys-acquires-uk-plastic-recycler/. possibly due to increased demand for recycled plastics stemming from the EU Directive 94/62/EC.108 Cf. Bringing Plastics Full Circle, Imerys Performance Minerals, https://www.imerys-performance-additives.com/your-market/recycled-plastics#environmental-benefits (last visited Nov. 7, 2020) (noting the need for an increase of local recycling in Western markets and attributing the EU directive as the reason for developing an improved recycled plastics technology). Even larger companies, such as Ikea, are purchasing a stake in plastic recycling.109 See Press Release, Morssinkhof Rymoplast, Morssinkhof Rymoplast builds a new plastics recycling plant in the Netherlands (Jan. 15, 2018), https://www.morssinkhofplastics.nl/wp-content/uploads/2018/01/Press-Release-Morssinkhof-Rymoplast-Heerenveen.pdf (noting the investment from Ikea is spurring the construction of a new recycling facility). These new hybrid producer-recycler companies will benefit from an EPR requirement that helps to increase demand for recycling while decreasing the processing costs.
More indirectly, many signatories will benefit from the participation of other signatories due to economies of scale. For each individual company to individually attempt to clean up ocean plastics, the startup costs may be too high110 See Kart, supra note 21 and accompanying text. and the process too inefficient.111 For example, another method involves manually removing plastic, but it is slow and inefficient relative to the rate of input. Compare Cleaning the Ocean, Rivers, and Coastlines, One Pound at a Time, https://4ocean.com/progress/ (updated Nov. 6, 2020) (highlighting 11,282,623 pounds of waste recovered from the ocean since 2017) with Jenna R. Jambeck et al., Plastic Waste Inputs from Land into the Ocean, 347 Science 768, at 770, https://advances.sciencemag.org/content/6/44/eabd0288 (estimating between 4.8–12.7 million MT of plastic entering the oceans each year). If more parties contribute to the costs of cleanup, they can collectively fund more expensive but more efficient ocean cleanup projects and research. In order to increase these benefits, some of the larger companies may be able to exert sufficient influence as a dominant actor in their industry, inducing both business partners and competitors to also join the NPE.112 See Richard B. Stewart, Michael Oppenheimer & Bryce Rudyk, Building Blocks for Global Climate Protection, 32 Stan. Env’t L.J. 341, 358 (2013) (identifying the role of dominant market actors as a building block in the context of reducing greenhouse gas emissions). The benefit may be greatest to the smaller signatories who would not otherwise be able to fund any significant cleanup efforts on their own. These companies would contribute comparatively small financial amounts, while still being able to publicize the larger, collective initiative. Nonetheless, all signatories could benefit from the economies of scale that a collective EPR scheme could provide.
Additionally, the economies of scale can benefit signatories in their business operations, such as reducing the cost of waste management for recycling companies. Sorting out and sending non-recyclable materials to the landfill is an added cost that can be reduced if the other signatories, such as raw plastic manufacturers and packaging producers, increase recyclable content. Similarly, packaged goods companies seeking to use more post-consumer content in their packaging will benefit from expanded recycling capacity and increased production of recycled plastic. This incentive continues up the supply chain to packaging manufacturers and raw materials producers, who will also benefit from the increased supply, and consequently reduced price, of recycled plastics.
Pre-existing Voluntary Commitments
Many signatories already engage in some form of donations or investments for plastic recycling and ocean management. These voluntary contributions are, in some ways, a sort of voluntary EPR, and indicate a willingness to contribute to some of the downstream costs. Some are funding research and innovation to address ocean plastics.113 See, e.g., Press Release: The Partnership Announces First Investment in Pathway to Recyclability Initiative, Recycling P’ship (Nov. 6, 2019), https://recyclingpartnership.org/press-release-the-partnership-announces-first-investment-in-pathway-to-recyclability-initiative/; see also Cutting River Plastic Waste, Benioff Ocean Initiative, https://boi.ucsb.edu/active_projects/river-plastics-pollution (last visited May 17, 2020). Most resembling an EPR scheme, Coca-Cola pledged to recycle as many plastic bottles as it produces.114 See Daniel Thomas, Davos 2020: People Still Want Plastic Bottles, Says Coca-Cola, BBC (Jan. 21, 2020), https://www.bbc.com/news/business-51197463.
Rather than building a new organization from scratch, NPE provides a foundation in circular economy goals and a working group of participants across the industry and world. While these motivations may not cover all actors in the plastics industry, they could be enough to gather a critical mass for a voluntary EPR scheme. Although imperfect, NPE provides a good starting point.
I propose that a voluntary EPR program is compatible with the New Plastics Economy’s existing Global Commitment and could be integrated into the program. However, this important step would not be a “silver bullet” solution to the global plastics pollution, merely a step in the right direction. Just as the plastics problem involves multiple actors around the globe, so too must the solution involve multiple parties addressing the problem from different approaches. This is one proposal to take advantage of the flexibility and global reach of a private institution and the compatibility of EPR with a circular economy.
There is still significant room for regulatory action. Governments can support EPR by requiring producer participation and supporting enforcement. Or, governments can take parallel action by banning single use plastics, subsidizing recycling, and defining material standards, among many others.
Unfortunately, the COVID-19 pandemic has disrupted many lives and caused businesses to rethink existing operations. On one hand, it might delay progress of plastic waste initiatives. Economic downturns place financial pressures on companies, which can lead to less voluntary spending,115 Cf. Bruno Berthon, Sustainability and the Great Recession, The Guardian (Sept. 24, 2013), https://www.theguardian.com/sustainable-business/sustainability-great-recession.24, 2013). and the drop in oil prices pushes down the price of virgin plastics.116 See Luke Denne, Coronavirus Pandemic Threatens to Undo Progress on Plastic Pollution, NBCNews (May 15, 2020), https://www.nbcnews.com/science/environment/coronavirus-pandemic-threatens-undo-progress-plastic-pollution-n1207231. At the same time, consumer demand for single-use plastics is rising, as consumers place perceived public health benefits from single-use plastics, such as plastic grocery bags, over sustainability.117 See Laura Tenenbaum, The Amount of Plastic Waste Is Surging Because of the Coronavirus Pandemic, Forbes (Apr. 25, 2020), https://www.forbes.com/sites/lauratenenbaum/2020/04/25/plastic-waste-during-the-time-of-covid-19/#1efbe7547e48. On the other hand, as the world seeks a pathway to recovery, it is an opportunity to build back better.118 See generally The Circular Economy: A Transformative Covid-19 Recovery Strategy, Ellen MacArthur Found. (Oct. 27 2020), https://www.ellenmacarthurfoundation.org/assets/downloads/The-circular-economy-a-transformative-Covid19-recovery-strategy.pdf. The increased plastic demand underscores the importance of an effective waste management system. Promisingly, many signatories have indicated continued if not increased commitments despite the current global pandemic.119 See NPE Global Commitment 2020 Report, supra note 79. As the world recovers, a voluntary EPR may be one important mechanism to address our plastic waste problem.