Economic Analysis of Plastic Pollution: Pricing Failure and Responsibility Reconstruction丨ChinaReplas T&P 2025
ChinaReplas T&P 2025
The 3rd Plastic Pollution Prevention and Control Theory and Practice Forum
Theme: Philosophy of Plastics
Plastic pollution is not only an environmental problem, but also an economic problem . The root cause is that the market mechanism fails to fully reflect the full life cycle cost of plastics. Structural defects in key links such as market pricing, responsibility attribution and recycling systems have led to challenges in plastic pollution control. To solve this problem, it is necessary to carry out systematic reforms from an economic perspective and promote the transformation of the plastics industry to a circular economy through policy tools, market incentives and technological innovation.
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Pricing failure: external costs are not internalized
One of the core economic problems of plastic pollution is pricing failure , that is, the market price of plastic products only covers the production and circulation costs, but does not reflect its external costs to the environment and society. For example, the global economic losses due to marine plastic pollution, such as reduced fishery production, shipping maintenance, reduced tourism and health damage, are as high as US$13 billion each year , but companies do not need to bear these "hidden" costs .
This actually forms an implicit subsidy for virgin plastics , reduces their relative price, leads to overproduction and consumption, and puts recycled plastics at a disadvantage in market competition. According to statistics, the total global plastic production in 2023 has reached 400 million tons , of which only 9% is recycled , and most of the rest goes into landfills, incineration or the environment. This resource mismatch not only exacerbates environmental pollution, but also further solidifies the dominance of fossil-based plastic production.
Possible solutions:
- Polluter Pays Principle (PPP) : Through environmental taxes or pollution compensation funds , companies are forced to bear the environmental costs of plastic pollution. For example, the EU has imposed a "plastic waste tax" of 0.8 euros per kilogram on unrecycled plastic packaging since 2021 .
- Carbon pricing mechanism : Plastic production is highly dependent on oil and gas, accounting for 4% of global carbon emissions . The introduction of carbon trading or carbon tax can increase the true cost of virgin plastics and make low-carbon materials more competitive.
- Support for the recycled plastics market : Setting a minimum usage ratio for recycled plastics (e.g. the EU requires PET bottles to contain at least 25% recycled materials by 2025 ), while providing tax incentives to promote the development of a circular economy for plastics
From traditional manual sorting to intelligent recycling systems, how do plastic packaging stations continue to evolve under the impetus of technological upgrades and environmental protection policies? This live interview will take you to explore industry changes, innovative practices and future development trends:
The evolution and advancement of plastic baling stations
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Responsibility attribution: from “linear buck-passing” to “full life cycle sharing”
Another core issue in plastic pollution control is the unclear definition of responsibilities . In the traditional linear economic model , producers, consumers and governments often shirk responsibilities, resulting in a lack of systematic governance. The circular economy concept emphasizes sharing of the entire life cycle , among which extended producer responsibility (EPR), consumer behavior changes and government policy intervention are key links.
Extended Producer Responsibility (EPR): The EPR system requires producers to assume responsibility for the entire life cycle of plastic products from production, use to disposal . Many countries have established EPR systems, but the effectiveness of their implementation varies. For example:
- India requires manufacturers to recycle 3 million tons of plastic waste starting in 2022, but due to an imperfect recycling system, only 56% of the target has been achieved for flexible packaging (Type 2 plastics) .
- The European Union has implemented the Packaging and Packaging Waste Directive (PPWR), requiring that all plastic packaging be 100% recyclable or reusable by 2030 , but there are still challenges in how to implement it in practice.
- of China have implemented a "producer reverse recycling" model. For example, in 2023, Hainan Province piloted a requirement for beverage companies to set up a plastic bottle recycling network, with significant initial results.
Consumers and government roles: Consumers’ individual behavior plays a relatively limited role in plastic pollution control. Studies have shown that individual behavior changes can only reduce pollution by 5% at most . Therefore, public environmental awareness alone is not enough to solve the problem, and policies and economic incentives must be used. For example:
- Economic lever : After Ireland’s plastic bag tax was implemented, plastic bag usage decreased by 94% within one year , providing a reference for similar policies around the world.
- Points incentive : Zhejiang's "Blue Cycle" plan increases citizens' active recycling rate through methods such as garbage classification points exchange . Currently, more than 1 million users have participated, and the plastic recycling rate has increased by more than 30%.
- Smart recycling : Sweden has launched smart trash cans that increase the plastic bottle recycling rate to 98% through AI recognition and automatic point rebates.
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Ambiguous property rights: the economic dilemma of the recycling system
A major obstacle to plastic recycling is the economic feasibility of low-value waste plastics . Plastics such as films and composite packaging are often difficult to enter the formal recycling system due to high recycling costs and low profits . For example:
- There are about 500 polyolefin recycling companies in China , but only 10% are regulated companies . A large number of small workshops dominate the market, resulting in unstable quality of recycled materials .
- In the United States, the recycling rate for low-value plastics is less than 5% , far lower than PET bottles (29%) and HDPE (30%).
Possible solutions:
- Mandatory classification and subsidies
- Germany's "Green Dot" system requires producers to pay recycling fees, promotes the development of recycling infrastructure, and increases the recycling rate of low-value plastics.
- Shenzhen, China, is piloting a "Plastic Recycling Fund" to provide subsidies for plastics that are difficult to recycle but have high environmental risks (such as PVC and composite packaging), in an effort to increase recycling motivation.
- High-value technology empowerment
- Blockchain + traceability : A Zhejiang company uses blockchain technology to trace the source of marine plastics, improve traceability, and increase the premium of recycled materials to 30%-50% .
- Chemical recycling : Compared with traditional mechanical recycling, chemical recycling can degrade plastics into monomers and increase the application value of waste plastics. Companies such as Loop Industries have already achieved commercialization.
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Plastic pollution is not only an environmental problem, but also an economic problem. Its governance needs to go beyond the traditional environmental perspective and re-examine the entire life cycle value chain of plastics from an economic perspective. At present, the market price of plastics fails to fully reflect its external environmental costs, resulting in "hidden subsidies" that promote the overproduction of virgin plastics, while the imperfection of the recycling system further exacerbates resource waste. In addition, the unclear attribution of responsibilities has made plastic pollution governance face the dilemma of "linear buck-passing", and it is urgent to transform to a "full life cycle sharing" model.
How can policies and market mechanisms work together to build a more sustainable plastic economy? This topic will be discussed in depth at the ChinaReplas T&P 2025 3rd Plastic Pollution Prevention and Control Theory and Practice Forum , which will bring together global experts to jointly analyze the economic roots of plastic pollution and explore systematic solutions to promote the industry's transformation to a circular economy.
ChinaReplas T&P 2025
The 3rd Plastic Pollution Prevention and Control Theory and Practice Forum
Conference theme: Philosophy of plastics
Sponsor: China Synthetic Resin Association
March 18, 2025 , 19:00-23:00 , Suzhou
Conference language: Chinese and English simultaneous interpretation
Conference content (continuously updated)
Part 1: The philosophy of plastic is the philosophy of man
- The relationship between human creations and the natural order ● The changing role of plastics in the course of history ● Value trade-offs and choices ● Thinking about the relationship between plastic pollution, people, and institutions ● Analysis of the causal chain of plastic pollution
Part 2: Plastic pollution from an economic perspective
- Wrong pricing
- No responsibility required
- Unclear property rights
Part 3: Comparison of theoretical studies on global plastic pollution governance and philosophical reflection
- The logic behind prohibiting restrictions on alternatives
- Confusion of policy logic under the disorder of subject
- Philosophical thinking on mainstream governance solutions
Part 4: Difficulties in Practical Control of Plastic Pollution
- Philosophical basis for systemic solutions
- Clarity of responsibilities: Who should be held responsible for plastic pollution?
- Source of expenses: Who will pay for the cost of plastic pollution control?