Australian Economic Note: The ask has a growth problem
There could be one ton of plastic waste in the world’s oceans for every three tons of fish in the year 2025. AlphaBeta Director Fraser Thompson last week spoke at the Responsible Business Forum, a gathering co-hosted by the United Nations, to help business leaders, policymakers and NGOs explore new ways of reducing marine plastic waste.
Plastics have revolutionised the way we live and consume goods. Yet our growing appetite for plastic products and packaging is causing massive environmental problems. An estimated 8 million tons of plastic waste end up in the world’s oceans each year and by 2025 this amount is projected to reach 250 million tons – which means there could be one ton of plastic in the sea for every three tons of fish. Once ingested, plastics can inhibit the growth of marine animals, increase their tumour risk, lower their reproduction rate and weaken their ability to detect and evade predators.
More than half of the global plastic in oceans comes from Asia
Asia is at the heart of the challenge. Its rapid economic growth, lack of waste collection systems, and large number of archipelagos make it easier for plastic to enter the oceans. More than half of the plastic leaking into the ocean comes from just five countries: China, Indonesia, the Philippines, Thailand, and Vietnam.
‘Industry is waking up to the plastic waste challenge’
– Fraser Thompson, Director, AlphaBeta Singapore
Companies are increasingly aware of the issue. Many have launched industry-specific initiatives to tackle plastic waste, but what is missing is a broader industry collaboration in Asia, said AlphaBeta Director Fraser Thompson.
“Industry is waking up to the plastic waste challenge,” said Dr Thompson, who last week spoke at the Responsible Business Forum in Singapore to help businesses, governments and NGOs understand what needs to be done to significantly reduce the amount of Asian plastic waste that leaks into the oceans each year. The Responsible Business Forum, co-organised by the UN, is a gathering for committed leaders from industry, government and the civil society. Together they try to forge new partnerships to tackle persistent development challenges.
Three lessons to help stem the tide of plastic waste
AlphaBeta has been working with Food Industry Asia (FIA), an industry body representing leading food and beverage companies in Asia. Many FIA members, including Unilever, Nestle, and Danone, have been actively pursuing their own initiatives to address plastic waste issues, but now they have decided to come together to explore what they could do as an industry.
According to AlphaBeta Director Thompson, changing our wasteful attitude towards plastics will require leaders to incorporate three lessons:
1. Effective action needs a shared sense of what matters. A range of initiatives exist to tackle plastic waste. However, their effectiveness is at risk if little is known about the levers needed to make a difference. AlphaBeta analysis, in collaboration with FIA, has identified 45 potential levers to reduce plastic waste in the ocean. For example, there is scope to change product designs, improve collection systems and extract more value from waste streams.
2. We need to think of waste management as a system. To create impact, we should look at the entire process of waste management and not just at individual elements, such as treatment and recycling. Some innovative approaches, including “reverse tipping fee” incentives by governments, exist. But government departments and ministries need to collaborate for such programs to be impactful. In many Asian countries, responsibility for waste issues at the national level is spread across various ministries and agencies.
3. Sound waste management can be financially attractive. AlphaBeta research shows improving waste management processes can generate attractive returns for investors – if certain conditions are met. For example, there is a need for guaranteed waste feedstock volumes, more opportunities for monetising waste, better access to capital (as only 4% of the largest 500 developing world cities have a sufficient credit rating to access capital markets), and mechanisms to alleviate political risks.
AlphaBeta research shows reducing plastic is a sizeable business opportunity
AlphaBeta’s own research suggests that reducing and recycling plastic packaging represents a sizeable business opportunity that could be worth up to US$65 billion in 2030. However, only 15 percent of all plastic packaging produced globally is currently collected for recycling, generating a recycling value yield of only 30 percent. In other words: more than 95 percent of the economic value of plastic packaging is lost.