University of the people

BUS 1103 - Microeconomics

Dr. Mitra Farkhani

November 01, 2024

Plastic waste in our oceans has turned into a pressing concern with serious effects on

nature's balance and economy, as well as public well-being issues at stake too. The latest UNEP

Report (2021) predicts a sharp rise in plastic pollution by 2030, underscoring the need for swift

measures to tackle this issue. Plastic pollution serves as an example of how environmental harm

and health risks from plastic products mostly affect society overall rather than the actual

producers or users of plastics. This report delves into the effects of plastic waste and investigates

the market inefficiencies caused by these external factors while assessing the efficiency of

existing policy measures designed to address this urgent issue.

The Global Concern of Plastic Waste and Marine Pollution

The problem of plastic pollution is a serious concern for marine life and biodiversity, as it

affects over 800 species in various ways, such as ingestion, entanglement, and habitat destruction

(UNEP, 2021). Improper disposal practices of waste significantly contribute to the pollution in

oceans, where an estimated 8 million tons of plastic find their way annually (Jambeck et al.,

2015). Marine creatures often confuse plastics for food, which can result in blockages or harmful

substances accumulating in their bodies. This not only disrupts the natural balance of ecosystems

but also poses risks to human health when microplastics enter the food chain.

The economic effects of waste have a significant impact on industries that depend on

healthy marine environments; fisheries suffer from equipment damage and declining fish stocks,

while tourism sector in affected areas experience decreased footfall due to waste accumulation

on beaches. The study conducted by McIlgorm et al. (2011) suggests that the Asia Pacific region

faces an annual cost of approximately $1.26 billion as a result of plastic pollution in the ocean.
These financial challenges underscore the widespread consequences of plastic waste and

emphasize the urgency of implementing comprehensive policies and systemic solutions to

address this issue.

Efficiency Implications of Plastic Waste Externalities

Plastic pollution is an example of market failure caused by negative externalities. The

environmental and health impacts of making and getting rid of plastic are not factored into the

cost of the product itself. As a result, people tend to use much plastic, which leads to a lot of

waste. This mismatch between what it costs individuals and what it costs society as a whole ends

up causing resources to be used poorly and outcomes that are not as good as they could be often

referred to as the "tragedy of the commons.”

The widespread use of plastic highlights a flaw in the market system where immediate

convenience for consumers takes precedence over the long-term impact on the environment and

ecosystem health. An illustration of this issue is seen in the availability of cheap single-use

plastics that promote a disposable mindset and hinder sustainability efforts. Moreover,

governments and local communities often shoulder the burden of handling plastic waste and

cleaning up contaminated areas instead of directing those resources towards public health or

educational initiatives. This mishandling perpetuates a cycle of waste generation and

environmental degradation, underscoring the necessity for interventions that align financial

incentives with ecological responsibility.

Policy Interventions and International Collaborations to Address Plastic Waste

Policymakers and international organizations have acknowledged the importance of

tackling plastic pollution through initiatives such as the G20 Osaka Blue Ocean Vision that seeks
to eradicate new plastic marine pollution by 2050. The European Union ban on single-use

plastics has shown tangible results in cutting down on plastic usage. However, the impact of

these measures relies heavily on how they are enforced and adhered to in different regions

(European Commission 2019).

One instance of successful intervention involves the extended producer responsibility

(EPR) policy that requires manufacturers to take responsibility for their products after consumer

use. Policies like EPR have proven beneficial in several countries by motivating manufacturers

to create products that are recyclable and minimize waste. Challenges persist in guaranteeing that

efforts to reduce plastic within a country do not lead to increased plastic pollution elsewhere due

to insufficient global oversight. In addition to that point mentioned earlier, bioderived plastics

have been put forward as an option; however, they have received backlash for their

environmental ramifications in the manufacturing process and slow rate of breakdown in sea

settings.

Global collaboration continues to play a role in achieving long-term benefits in

addressing marine pollution issues like the Clean Seas initiative and the UN's Sustainable

Development Goal 14 framework aimed at reducing such environmental threats effectively.

While progress has been made through these initiatives, challenges like constraints, differing

levels of governmental commitment, and unequal availability of waste management facilities still

pose obstacles. These hurdles underscore the intricacies involved in combating pollution through

policy measures and emphasize the necessity for holistic and scalable approaches that integrate

sustainable manufacturing practices, recycling efforts, and innovative solutions.

To sum up, the worldwide issue of waste highlights the urgent necessity for policy

changes to tackle harmful impacts on nature and economies alike. Governments and
Organizations are acknowledging waste as a significant market flaw and are progressing towards

sustainable resolutions; however, there is still a lot to accomplish. Measures, like prohibiting

single-use plastics and implementing producer responsibilities alongside international

collaborative efforts, show positive results but also unveil the challenges in putting them into

practice. To tackle this situation effectively, it will necessitate collaborative worldwide actions,

sustained advancements in materials and recycling techniques, and a change in consumer habits

towards adopting more eco-friendly practices.

European Commission. (2019). Single-use plastics: New rules to reduce marine litter.

Jambeck, J. R., et al. (2015). Plastic waste inputs from land into the ocean. Science.

McIlgorm, A., Campbell, H. F., & Rule, M. J. (2011). The economic cost and control of

marine debris damage in the Asia-Pacific region. Ocean & Coastal Management.

UNEP. (2021). From pollution to solution: A global assessment of marine litter and

plastic pollution. United Nations Environment Programme.

Mankiw, N. G. (2020). Principles of Economics (8th ed.).

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Keenan, D., Moledina, A., Richardson, C., & Sonenshine, R. (2023). Principles of

microeconomics (3rd ed.). OpenStax. Licensed under CC 2.0.