My take on the progress on the Global Treaty for Plastic Pollution

The latest round of negotiations for a legally binding Treaty for Plastic Pollution (INC4) just concluded in Ottawa last night at 3am (huge respect for the negotiators); PCX Solutions joined as an accredited observer, so here is my take.

There are still many differing options included in the draft text, which will be the basis for the next negotiation round in Korea in November but streamlining progress has been made. The big question remains about the overall scope of the instrument.

The process can seem lengthy and even painful, especially to businesses that want clear global rules to align their plastic strategy with and be prepared for upcoming legislation. It is also slow for environmentalists which see the continuous flow of plastics entering into nature, especially our oceans (in the meantime 2,000 truckloads every day). One negotiator I spoke to was involved in the Paris Agreement negotiations, for her this process is very fast – so it is a matter of perspective.

The fact is that we are trying to solve a huge and complex problem requiring the coordinated deployment of a wide array of solutions, which takes time. The business coalition proposes a start-and-strengthen approach which seems prudent at this point.

The very encouraging point for me is that things are already happening to drive impact. There will always be people / companies / countries that want to hold back the progress and not change the status quo, but so many other people want a change and are working on solutions.

I am also glad that formal intersessional work has been agreed, including one work stream on potential sources and means that could be mobilized for implementation. Financing this transition became a central topic of discussion during INC4, both in various side events and during the negotiations itself.

US$1.64 trillion are needed by 2040 to beat plastic pollution and this needs to come from all players involved in the value chain. The Minderoo Foundation and the country of Ghana proposed a plastic fee that plastic producers would need to pay for the production of virgin plastics which attracted a lot of interest; EPR is also clearly a low hanging fruit for all stakeholders. Both are based on the polluter’s pay principle.?

Innovative financing mechanisms such as outcome based financing and plastic credits were discussed more in depth, with the The World Bank Group hosting a number of events, and highlighting their support of plastic credits through their recently issued $100M Plastic Credit Bond. Plastic credits are one solution to channel funding into the highly underfunded waste sector in developing countries.

Virgin plastic is simply too cheap, and plastic waste has no value. If we want things to change, we have to assign a value to it.

From the discussions it became clear that CAPEX is critical, and many companies are currently interested in investing in infrastructure, but then there is a lack of OPEX to support the effective utilization of this infrastructure on an ongoing basis.?

During INC3 I spoke to a PET recycler in Nairobi and he said that some years back his business was going ok but now with low virgin plastic prices, and increasing volatility in the prices for rPET, he can't pay stable wages. But we want him to succeed. We want him to produce rPET and we want him to pay fair wages.

If we want to change the market dynamics, we have to price in the externalities which cheap virgin plastic is causing.

If companies take responsibility for their plastic footprint through EPR laws that include plastic credits as one tool for companies to comply, which is the approach in the Philippines, the economics of virgin plastic change. The cost of credits becomes part of the cost of doing business, effectively raising the overall unit cost of plastic inputs. Companies become more willing to pay for recycled plastic as the price gap is reduced and the cost of the credits is an important incentive to reduce their footprint.

Plastic credits can generate immediate positive environmental and social impact - the projects registered under our Plastic Pollution Reduction Standard (PPRS) have a combined capacity of 250 million kg of clean up and processing - which can be deployed today. They can work in both voluntary and compliance-driven markets, complementing EPR schemes. And they can change the long-term unit economics of plastic.

But they need to be verified and fully traceable, and be registered under a robust standard such as our PPRS or Verra, or at least adhere to the Minimum Requirements published by the PREVENT Waste Alliance just before INC4.

I am very hopeful that all financing options are given a chance, based on the magnitude of the problem. Together, we can further improve the mechanisms and guidelines around plastic credits. A lot of money is needed to ensure we are keeping plastic pollution out of nature and transitioning to a circular economy, especially for developing countries - for a just and inclusive transition.?

What are your key takeaways? Please share in the comments.