New research by Eunomia on behalf of the Minderoo Foundation has explored how a polymer premium, working in tandem with cost recovery mechanisms and public funding, could help fund implementation of the Global Plastics Treaty. The premium has potential to channel valuable resource into reducing plastic pollution, especially in low- and middle-income countries.
Under a polymer premium, countries would collect a fee (US$60-$90) from producers for every tonne of primary plastic polymers they produce. These countries would retain part of the revenue, and the rest would be distributed among low- and middle-income countries to address plastic pollution and associated problems.
The analysis, presented in our report Funding the Implementation of the Plastics Treaty: The central role of the polymer premium, explores how revenue from the premium could be rapidly deployed in a targeted way according to the different needs of recipient countries. It could be used, for example, to:
- develop safe and sustainable waste management systems
- clean up legacy pollution
- address the human health impacts of plastic pollution
- support upstream transformation to a circular economy – supporting elimination, substitution and reuse systems
- enable a just transition
The premium would work in combination with public funding, such as official development assistance, and other forms of private funding to fund implementation of the treaty. The Co-Chairs Report on Finance, resulting from intercessional expert meetings in Bangkok, notes the important roles of both private and public sector funding in addressing plastic pollution. It recognises that public financing can “only partially address the funding gap” and that private sector involvement is key to achieving the treaty’s objectives.
To work effectively, the polymer premium would supplement rather than replace mechanisms that recover the costs of managing waste plastics, such as Extended Producer Responsibility (EPR). Such cost recovery is essential to attract private investment in sustainable waste management infrastructure and support its ongoing operation. Indeed, revenue from the premium could be deployed strategically to build technical and institutional capacity for managing waste and spur the rapid development of EPR systems.
In the short term, the premium could fund strategic capital expenditure to establish and scale up infrastructure for collection, sorting and treatment. It could also support operating expenditure for waste management systems. Once systems are up and running, EPR could fund ongoing operating expenditure.
According to Dr Chris Sherrington, Head of Environmental Policy & Economics at Eunomia, who directed the study: ‘The polymer premium is an extremely dynamic instrument that could be key to driving wider system change. Primary polymer production is the ultimate source of all plastic pollution, and a fee like this would require producers to cover some of the costs of that pollution. We’ll hopefully soon have an ambitious Global Plastics Treaty in place, but it will need viable funding sources if it’s to be implemented effectively. The polymer premium could make a real difference to achieving the treaty goal of ending plastic pollution by 2040.”
You can download the full report here: https://eunomia.eco/reports/funding-the-implementation-of-the-plastics-treaty-the-central-role-of-the-polymer-premium/
