The Polymer Premium: A Fee on Plastic Pollution

Countries are negotiating a global treaty to end plastic pollution. This analysis finds that developing countries, specifically, will face a significant financing shortfall to implement an ambitious treaty to end plastic pollution by 2040. They estimate that costs will exceed available funding by at least US$350 to 500 billion, requiring governments to bridge the gap or risk undermining the treaty’s objectives of protecting human health and the environment

Financial contributions from producers of primary plastic polymers, in the form of a plastic pollution fee (Fee), could provide a critical means of covering this gap. Our analysis demonstrates that a Fee of US$60 to 90 per tonne of primary polymer – or just ten cents per kilo – would fully close the financing gap.

The Fee would be game-changing for the treaty to end plastic pollution. An ambitious treaty with a Fee could virtually end mismanaged plastic waste entering the environment by 2040 and protect human health. It would also reduce greenhouse gas emissions, remediate some of the vast quantities of legacy plastic pollution already in the environment, ensure a just transition for waste workers and address the negative human impacts across the plastic life cycle of production, use and waste.

On the other hand, an ambitious treaty without a Fee would inevitably be far from successful in ending plastic pollution and stemming human health impacts. Failing to address the financing gap would result, for example, in five times more mismanaged waste entering the environment annually by 2040 compared to a treaty with a Fee (50 million tonnes compared to 10 million tonnes).

Even assuming the full cost of the Fee is passed on by producers to their customers, a fee of US$60 to 90 per tonne would increase the price of primary polymers bybonly 5 to 7 per cent on average. Moreover, because the cost of primary polymers is typically only a small part of the price of final plastic products, the impact on consumer prices would be significantly diluted: to just a fraction of a single percentage point. Cost-of-living impacts would, therefore, be negligible even for the most price-sensitive consumers on very low incomes (US$1 to 2 per person per year).

In a time of unprecedented pressures on government budgets globally, the Fee represents a breakthrough idea for the treaty negotiations. A small premium on primary polymer prices would deliver positive environmental and human health impacts on a global scale, without any significant negative social or economic impacts.