Interview

Viable Alternatives

Angela Noronha, Business Development Director at SecondMuse, says there can be no “room for misinterpretation” in future rounds of plastic treaty negotiations.

Humanity produces more than 430 million tonnes of plastic per year, with the bulk of it landing in landfill, incinerated or leaked into the environment where it causes untold environmental damage, with only 9% of that total successfully recycled. 

To address this issue, policymakers have introduced various rules, initiatives and schemes, including the extended producer responsibility (EPR) laws which force manufacturers to manage their products after use, encouraging them to design more recyclable products, set up collection systems, or cover the costs of recycling and disposal.  

Some governments have also established plastic taxes or levies on plastic bags or packaging to discourage their use and incentivise alternatives, while other nations, including the UK, Kenya, India and Bangladesh, have banned or restricted single-use plastics to encourage the use of more sustainable alternatives or reusable materials.

But while plastic bans are certainly a step in the right direction on the journey to eliminating waste and pollution, their effectiveness is limited without viable alternatives for businesses and consumers to adopt, according to Angela Noronha, Business Development Director at SecondMuse, an impact and innovation company that works with communities focused on climate, equity, and technology. 

New solutions do exist, such as biodegradable alternatives or reuse refill models, which promote a circular economy approach, minimising plastic waste and its environmental impact, but these alternatives are not yet viable at scale. 

“Few solutions are even close to cost parity with plastics today, with a lot more work and investment required to help green alternatives become financially viable,” Noronha tells ESG Investor.

For reuse models to work effectively, for example, businesses require a mindset shift, she says, whereby they stop optimising just for their own operations and instead focus on building better coordination with other companies operating in the same city or nearby districts – sharing the cost of infrastructure and waste management services.

“New thinking, continued support for innovation, and a lot more cross-silo, cross-sector dialogue are essential,” says Noronha.

When EPR laws are designed without necessary inputs from industry and innovators, she says, “that’s going to cause problems.”

Plastic’s subtle advantage

For plastics use to diminish at the scale necessary to protect the planet and its inhabitants, the economics must make sense. 

Speaking to ESG Investor, Nicholas Vijverman, Programme Manager of the New Plastics Economy team at the Ellen MacArthur Foundation, said that it was often not financially viable for a business to have single use alternatives at this point in time.

“There are environmental benefits that have economic benefits,” he said. “But at this point it’s just not cost-competitive yet, which keeps companies a bit reluctant to invest alternatives.”

But Noronha believes that companies must not accept the current situation as an “absolute truth”, noting that some of the price difference between plastic and greener alternatives stems from changeable factors like subsidies. 

According to Organisation for Economic Co-operation and Development (OECD) data, global fossil fuel subsidies close to doubled in 2021, with the International Monetary Fund (IMF) forecasting they will grow to 7.4% of GDP in 2025, up from 6.8% in 2020.

“Plastic production is subsidised by the fossil fuel industry, making virgin plastic artificially cheaper than its actual cost,” she says, noting that this is driven primarily by a failure to incorporate the true costs of collection, environmental impact, and community health into the price of plastic. 

Consequently, it enjoys an unfair discount in the market, with a pound of virgin high-density polyethylene (HDPE) costing 54 cents versus US$1.33 for recycled material – a 146% premium, according to data from Chemical Market Analytics. 

“Rectifying this would involve internalising these costs, narrowing the cost differential in a way only policy could achieve,” explains Noronha. Besides that, she believes the private sector can improve the economic viability of plastic alternatives through other means as well, such as aggregating demand or implementing advanced market commitments.

Unfortunately, such methods are not yet common procurement practices, but the effectiveness of these tools in other markets give her hope they could work for plastics. 

No excuses 

A third meeting of the UN-facilitated Intergovernmental Negotiating Committee (INC-3) took place in Nairobi, Kenya, from 13 to 19 November, where governments convened to negotiate a Global Plastics Treaty.  

The session, however, ended in disappointment and frustration as policymakers allowed oil-dependent countries to lower ambition on ending plastic pollution and, in the process, potentially derail progress towards the adoption of a global treaty. 

“Governments are allowing fossil fuel interests to drive the negotiations towards a treaty that will absolutely, without question, make the plastic problem worse and accelerate runaway climate change,” said Graham Forbes, Greenpeace Head of Delegation to the Global Plastics Treaty negotiations and Global Plastics Campaign Lead at Greenpeace USA.  

“We need to find a way forward without oil and gas producers dictating the terms of our survival […] When the negotiations resume in Canada in April 2024, our leaders must be ready to show a level of courage and leadership we have yet to see.” 

When asked what needs to occur at the next INC meeting to edge closer to an ambitious plastics treaty, Noronha underscores the need for clarity throughout the negotiations as any “room for misinterpretation” that creates potential loopholes will result in further delays. 

In her view, a lack of clarity will be used by the oil and gas industry as an excuse to lower ambition. Certainty regarding specific incentives or disincentives, banned or penalized chemicals, and approved or disapproved project types for immediate funding would accelerate progress, Noronha insists.   

“Clearly sourced commitments into structures that will fund the transition away from plastics is also crucial,” she says. When capital begins to flow into a clearly defined fund and its predetermined use cases are transparent, Noronha adds, it will greatly benefit groups developing projects across the plastic hierarchy.

Funding is needed both to scale up methods that work, and to develop innovative new materials and business models, so having both use cases pre-approved is key.

Further, it’s critical for the upcoming treaty discussions to have representation from waste pickers, project developers, innovators, and not just from plastic-producing companies and/or governments, she says. 

This inclusivity is necessary, Noronha explains, to avoid a one-sided treaty that ignores the realities of key stakeholders, especially often-excluded voices like island nations and informal workers. 

If governments do eventually deliver on a truly ambitious treaty, the environment, business and investors will be provided some long-awaited and much-needed impetus for action.

“Businesses will always optimise for what’s in the best interest of their shareholders,” says Noronha, and, therefore, without a legally binding global plastics treaty setting the bar everything is seen as optional.

She adds that clear guidelines, prices, or directives set by a global agreement on plastics will force urgency on large brands’ side and in turn spur demand for green solutions, aiding their development.

But Noronha is quick to point out that the outcome of the plastics treaty should not delay businesses and investors from taking action. 

“Because unanimity is required, the final version often becomes so watered down that people feel it’s not effective or doesn’t meet their hopes,” she says, adding that organisations, regardless of the treaty’s outcome, must be prepared to transform their operations, understand the different actors in their supply chain and determine how to collaborate with them to drive meaningful change. 

“They must be ready to answer questions about how to make green procurement and solutions more viable, and be ready to start the journey irrespective of the treaty’s content,” she says.  

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