Plastic packaging is not only an environmental problem, it is economically wasteful, too. Most plastic packaging is only used once, leading to 95 percent of the value of plastic packaging – worth $80-120 billion annually – being tossed and lost to the economy.
Plastic packaging is not only an environmental problem, it is economically wasteful, too. Most plastic packaging is only used once, leading to 95 percent of the value of plastic packaging – worth $80-120 billion annually – being tossed and lost to the economy. The World Economic Forum (WEF) and Ellen MacArthur Foundation (EMF), with analytical support from McKinsey & Company, investigated this problem for a new report that provides a fact-base to inform the choices that need to be made, and challenges decision-makers to rethink the future of plastics.
The New Plastics Economy: Rethinking the future of plastics outlines how applying circular economy principles to global plastic packaging flows could unlock more economic value from these materials and reduce negative externalities. Through the report, which was produced as part of Project MainStream, the contributing organizations hope to “overcome the limitations of today’s incremental improvements and fragmented initiatives, to create a shared sense of direction, to spark a wave of innovation and to move the plastics value chain into a positive spiral of value capture, stronger economics, and better environmental outcomes.”
The organizations claim that they conducted the first comprehensive assessment of global plastic packaging flows for the report, to accurately outline the changes that need to be made. They found some staggering numbers, such as that 32 percent of plastic packaging escapes collection systems. This waste can clog urban infrastructure or join the 5 trillion pieces of plastic that are floating in the oceans, killing marine life, and ending up in our food. The United Nations Environment Program (UNEP) has conservatively estimated the cost of such after-use externalities for plastic packaging, plus the cost associated with greenhouse gas emissions from its production, at $40 billion annually – a cost great than the plastic packaging industry’s profits.
“Plastics are the workhorse material of the modern economy – with unbeaten properties. However they are also the ultimate single-use material,” said Dr. Martin R. Stuchtey of the McKinsey Center for Business and Environment. “Growing volumes of end-of-use plastics are generating costs and destroying value to the industry. After-use plastics could – with circular economy thinking – be turned into valuable feedstock. Our research confirms that applying those circular principles could spark a major wave of innovation with benefits for the entire supply chain.”
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The vision captured in the report involves creating after-use pathways for plastics, drastically reducing leakage of plastics into natural systems, and decoupling plastics from fossil feedstocks. It calls for major collaboration efforts between stakeholders, perhaps through an independent coordinating vehicle that can set direction, establish common standards and systems, and foster innovation opportunities at scale. The EMF plans to establish an initiative to foster cross-value-chain dialogue for global plastics.
“This report demonstrates the importance of triggering a revolution in the plastics industrial ecosystem and is a first step to showing how to transform the way plastics move through our economy,” said Dominic Waughray of the WEF. “To move from insight to large scale action, it is clear that no one actor can work on this alone; the public, private sector and civil society all need to mobilize in order to capture the opportunity of the new circular plastics economy.”
In other EMF news, the Foundation recently announced a new partnership with global innovation and design firm IDEO, “to help capture circular economy opportunities.”
“The circular economy’s system-wide implications require creativity as well as expertise in big picture design,” Dame Ellen MacArthur said. “We are delighted to be working with IDEO as the Foundation’s Design Partner, to help us turn forward-looking ideas into tangible, inspiring visions.”
The specific projects involved in the partnership have yet to be announced, but IDEO, led by its London studio, will work closely with the EMF to contribute design thinking and other expertise. Design thinking is a creative, human-centered approach to innovation. Applying the method could help accelerate the transition to a circular economy, such as through the creation of new business models or standardized product components that enable the redesign of existing systems.
“We feel very excited and privileged to be working with the Ellen MacArthur Foundation to help design the pathways to a more circular economy,” said Tim Brown, president and CEO of IDEO. “IDEO's design thinking approach is itself a circular and systemic form of problem solving and will complement the Foundation's work. Design thinking has a bias towards action and solutions, which will help prototype a new design language for the circular economy.”
This is the EMF’s second specialist partner agreement; McKinsey & Company provided analytical support for The New Plastics Economy report as a Knowledge Partner of EMF. Last year, the WEF, EMF and McKinsey collaborated on a research report that determined that a global circular economy could generate $1 trillion annually by 2025.
Published Jan 19, 2016 2pm EST / 11am PST / 7pm GMT / 8pm CET