While it is important that we work to ensure that plastic stays in our economy and out of the environment, retributive policies, including economic measures like taxes, are not helpful to increase recycling rates and instead can have significant unintended consequences. Contrary to their intended outcomes, punitive economic measures can negatively impact consumers, industry workers, and the environment by causing supply chain disruptions and market distortions that have cascading impacts across sectors.
Any policies aimed at reducing plastic waste must ensure that there are healthy end markets for post-consumer plastic products and recycled plastic material. The viable, pragmatic solution is increased investment in recycling infrastructure, which is currently at insufficient levels to keep up with supply of plastic products and demand for recycled plastic resin. Rather than isolating industry with economic measures meant to punish them, increased collaboration between government and industry can ensure that all plastic is recovered and recycled.
Senator Sheldon Whitehouse’s recently introduced Rewarding Efforts to Decrease Unrecycled Contaminants in Ecosystems (REDUCE) Act is the perfect example of a bill that, while perhaps well-intentioned, would have negative impacts on everyone from the workers manufacturing plastic products to the consumers using them. Furthermore, the likelihood the bill will be revised to pay for unrelated priorities means it may not actually increase the use of recycled plastic or fix plastic waste challenges, and will actually have negative environmental impacts. With the aim of making recycled plastic resin cheaper than virgin resin, the Act would place a 20-cent per pound tax on all virgin plastic resin used for single-use products and packaging.
In theory, a policy like this is intended to make recycled resin cheaper by comparison and more attractive to manufacturers of plastic packaging and products. But the reality is more complex. The real issue is that without significant investment in recycling infrastructure, the supply of recycled plastic resin cannot meet rising industry demand for recycled content. By increasing the price of plastic, virgin or recycled, everyday consumer products will become more expensive. As inflation rises in the United States, basic foodstuffs are already becoming more expensive. Any additional price increases for food and beverages, which rely heavily on plastic packaging, will decrease access, and increase strain on families that are already struggling due to the COVID-19 pandemic. This is exactly what an excise tax will do, all while doing nothing to increase recycling rates or reduce waste.
Instead of placing poorly thought-out and overly burdensome taxes on plastics, government should work with industry to support the construction of new recycling facilities that will allow companies already asking for more recycled plastic to access this valuable material. By updating old infrastructure and focusing on building new, advanced recycling infrastructure, we can increase recycling rates and meet growing demand for recycled plastic.
Similar to resin tax under consideration in the United States, the United Kingdom is reviewing a Plastic Packaging Taxthat would place a tax of £200 per metric ton on all plastic packaging that is not made with at least 30% recycled plastic. Unfortunately, the punitive way in which this bill is set up disregards the root problem – there is simply not enough recycled plastic to meet this new recycled content minimum. There are better ways to impose fee structures that have sufficient safeguards to ensure that funds are reinvested into recycling infrastructure to protect the safety and integrity of valuable products.
While the United Kingdom is experiencing slight upticks in recycling rates, the country still lacks sufficient infrastructure to produce the amount of recycled plastic resin that is needed to meet the 30% threshold for all plastic packaging produced. Instead of reducing waste and increasing recycling rates, this tax will merely raise prices for consumers, unavoidably passed on by producers. By requiring a higher amount of recycled content without providing access to more recycled material, companies cannot meet new standards. Such policies do not create a better system to reduce waste, nor does it encourage circular economy growth – only leaving industry between a rock and a hard place.
Plastic deserves praise for its affordability and the numerous environmental benefits it provides, not legislation that limits the use of this highly versatile and necessary material. Higher prices will not only weigh on the accessibility that plastics provide but will also hurt environmental goals to reduce emissions and save water and energy. Instead, plastic waste challenges require all stakeholders to be welcomed at the table to solve this issue. Punitive economic measures that target and isolate industry are not the answer. Such measures have negative unintended consequences that fail to address the root of the problem. Industry is already investing billions in traditional and advanced recycling systems to ensure that all plastic is recycled and stays in the economy. Continued support for these efforts and collaboration with government will boost recycling rates further and reduce waste.