By: Lisa Alers-Hankey
In today’s global economy an estimated 95 percent of the material value of plastics is lost after single-use, amounting to a value between $100-150 billion dollars annually. The Canadian economy only recycles nine percent of plastics, leading to vast amounts of economic value being lost to landfills. Furthermore, the production and end-of-life care of plastics uses vast amounts of carbon, for example, waste in landfills emits around 26 megatons of carbon dioxide per year. The plastics industry provides an example of circular economy principles which will be essential in helping Canada reach its net-zero commitments.
A circular economy aims to reconnect consumption and production by reducing and recapturing waste, reducing value lost in the process. To transition towards a circular economy, Canada must dramatically reduce its waste and reimagine its waste handling. The most significant way this can be done is by swapping single-use plastics for reusable materials. For example, metal that can withstand sanitization and refilling can replace plastic bottles. On this matter, and as discussed in the previous article, the federal government has made two commitments it claims will help Canada get to net zero and a circular economy.
First, the federal government made a platform commitment of “Zero Plastic Waste by 2030,” claiming to create a circular economy by requiring 50 percent of input material for plastics to be recycled. This will increase the demand for recycled plastics and possibly catalyze domestic plastic-recycling markets. This policy will not lead to zero plastic waste but will increase the demand and supply for recycled plastics – effectively increasing the quantity of plastic goods on the market. Only the down-stream impact of increases to plastic cost resulting from the policy could drive industry to plastic alternatives. In short, the “Zero Plastic Waste by 2030” is a far cry from a strong policy to promote a circular economy.
Secondly, the federal government has made a commitment to a single-use plastics ban. However, this ban only targets six types of plastic goods and thus does not go far enough to capture the full scope of the waste problem. For example, the ban does not cover plastic packaging or the plastics which are the most difficult to recycle. These policies will not facilitate Canada attaining a circular economy, which poses the question – what polices could be enacted to get there?
A circular economy would require a dramatic reduction in the production of single-use plastics and waste in general. Plastics remain expensive to recycle and can only be recycled a handful of times before significant reductions in their quality occur. Importantly, neither of the above policies directly target or facilitate a substitution away from single-use packaging.
To directly target the need for substitution from plastics and single-use packaging substitutes, the federal government could implement a combination of taxation and regulation. The government could tax those who create single use items or provide a tax break for companies already taking back and reusing their waste. Furthermore, the government could mandate companies to change packaging or hold industry accountable for the waste they create. The regulatory capacity required to monitor and enforce these changes would be great; however, the further back along the supply chain the easier; for example, if the government focused regulatory efforts on imports and production the accountability framework would be more manageable than targeting each business. This would have the effect of taking single-use packaging off the market over time, forcing businesses to adapt to other and more environmentally conscious options. However, due to the scale of change required for Canada to reach a circular economy, a combination of taxation and regulation would be most beneficial. Moreover, policy should be implemented at the federal level due to the scope of the plastics and waste problems. A nation-wide policy would prevent corporations from moving to jurisdictions with more relaxed policies. However, a risk remains that corporations could move out of Canada to countries with more lax restrictions.
The government should consider a suspension bridge style model of taxation and regulation – where subsidies are introduced and slowly clawed back as a regulatory framework in introduced over time – to push industry towards a circular economy. The policy model works by implementing a generous subsidy for compliers which is phased out as regulations come into place. By starting with a generous tax break for companies already practicing a circular business model, the government would create an incentive for other companies on the cusp of circularity to make the final push to reduce their waste. The government should implement a sunset clause for this benefit as more companies adopt. However, for the companies that hold out on a linear economic model, the government should phase in a regulation which requires companies to be responsible for their waste and limits the availability of new plastic resins. One way to achieve this would be to continually expand on the single-use plastics ban by adding a list of items each year. Additionally, as the subsidy is phased out, the government could move towards taxing waste-producing companies on the volume of waste they create.
This model would work by supporting circular economy compliers, whose products are typically more expensive by changing the relative costsof single-use plastics and materials increasingly expensive and harder to obtain for companies and reducing the costs of using reusable packaging. Furthermore, such a model would delegate responsibility to industry and producers, rather than individuals – who are commonly overburdened when pursuing environmental goals.
All this is not to say the government should give up on its current proposals; however, policies should be strengthened and repositioned to align more with the goal of attaining a circular economy. A combination of taxation, subsidies and phased in regulation would allow industry time to innovate and develop viable solutions while ensuring progress towards a circular economy in Canada.
Lisa Alers-Hankey is a Master of Public Policy candidate at the University of Toronto’s Munk School of Global Affairs and Public Policy with a collaborative specialization with the School of the Environment. Her interests include climate change, environmental and economic policy. Lisa is interested in making public policy development and implementation accessible and reflective of communities. She holds an Honours Bachelor of Arts in Public Policy and Ethics, Society, and Law from the University of Toronto.