LORREN DE KOCK: Circular plastics economy will spur job creation and development

The obsession with perpetual economic growth, leading to rising consumption of short-lived disposable goods, underlies and perpetuates the failure of the linear economy. The relationship with, and how plastic is managed, is a reflection of this paradigm.

The cause of the plastic pollution problem, validated by research globally, is that the economy is based on linearity — a model of resource extraction, use and disposal, referred to as the “take, make, waste” model.

With rising production and consumption levels, driven by unfettered markets, volumes of waste have risen exponentially, and due to the difficulty of managing it, it leaks into the environment. Yet, the environmental, societal, human health and economic impacts of plastic production and consumption are not factored into the market cost of these products.

So what can be done? A complex problem requires a systems thinking approach to identify the levers of change. The circular economy approach has emerged from the need for a more sustainable economic system. A transition to a circular economy is defined as “a fundamental change in the structure, culture and practices of a societal (sub)system that is the result of a co-evolution of economic, technological, institutional, cultural and ecological developments at different scale levels”.

We know what the environmental benefits would be in Africa on the environmental level by adopting this approach. But what about the economy? A new report commissioned by the World Wide Fund for Nature, “The economic case for a circular plastics economy in Africa: findings and recommendations for Ivory Coast, Kenya and SA”, has responded to this question with evidence of economic benefits for the countries in the study.

Overall improvement

The research takes into account not only the market and indirect costs or externalities of the linear plastics economy, but also the net material savings, mitigation of price volatility (less dependence on imports) and sectoral shifts that would result in job creation and improved livelihoods in the selected African countries.

Using a macroeconomic modelling approach, which compares the linear, business-as-usual with circular plastic economy scenarios, the conclusion was that the transition to a circular plastic economy would lead to positive cumulative effects for all three countries, resulting in additional GDP growth and overall improvement in public welfare and household income.

The parameters for a circular plastics economy were the achievement of the following by 2050:

• A reduction in overall consumption of single-use plastic packaging by 30%, including a phase-out of problematic polymers and formats.
• A total 50% of virgin plastic to be substituted by postconsumer recycled plastic.
• Wide adoption of packaging reuse and refill models with plastic packaging remaining in the economy.

The research modelling found that more localisation and a shift to a service-based economy would create more job opportunities especially for the vulnerable sectors downstream in the plastics value chain. An overall increase in the demand for skilled and unskilled labour suggests that there would be strong potential for an inclusive circular plastics transition. Additionally, informal waste sector workers and waste sector dependants stand to benefit from the transition, which is relevant in developing economies.

In addition to all these economic benefits, SA in particular could avoid costs of more than $475m by 2050 associated with the linear, business-as-usual scenario. But the barriers to this transition remain. SA is locked into the minerals-energy complex as a system of accumulation, with a reliance on fossil fuels to produce goods, including plastic. In this predominantly linear market economy market power is concentrated upstream, similar to a monopoly, hampering innovation.

The entrenched nature of not only the plastics sector but the energy sector and other material value chains linked to fossil fuels maintains rent-seeking behaviour, which is a barrier to the circular economy transition. Knowledge and understanding, enforcement and execution will be needed to overcome these barriers, with the establishment of enabling conditions from deliberate and collaborative policy and private sector interventions.

Industrial policy should be formulated and implemented to channel investment to circular economy activities such as reuse, refill and recycling coupled with more research & development. Removing subsidies for the fossil fuel sector and correctly pricing virgin plastic to factor in the damage to the environment and society is crucial to support the scaling up of secondary plastics consumption and product reuse where possible. Policy instruments such as the Extended Producer Responsibility and Deposit Return Schemes need to be considered and effectively implemented.

The private sector has a critical role to play, with the collaborative work being undertaken by the SA and Kenyan Plastics Pact being a case in point. The education of company executives and board members on the urgency to rethink business practices and decisions and embrace circular economy principles is urgent. Accountability and transparency from the private sector and national governments are key.

SA has the world’s most unequal society, and it is perfectly placed to rethink and action a change to its economic structure to address market power concentration and rent-seeking behaviour. This latest research has shown that the transition to a circular plastics economy is beneficial and can offer an alternative to the current economic system through a new inclusive social and environmental contract.

• De Kock is project manager: circular plastics economy, with WWF SA.