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Towards a Circular Plastics Economy: Policy Solutions for Closing the Loop on Plastics

CSS Publication Number
Full Publication Date
April 23, 2019

Over the past 50 years, plastic has emerged as one of the most ubiquitous materials in modern society. In the form of packaging, plastic has provided us with immense convenience and utility, particularly with regards to food preservation, safety, and environmental impacts, compared to alternative materials. Against this backdrop, the combination of single-use plastic packaging and low recycling rates has led to a global plastic pollution crisis, yielding more intense public and governmental scrutiny towards plastics than ever before. Simultaneously, China’s National Sword policy, which imposes strict contamination limits on imported recyclables and outright bans many popular plastic packaging types, has catalyzed immense disruption within the recycling ecosystem. Collectively, these disruptions have sharply reduced the availability of viable end markets for recycled plastic, ultimately leaving recyclers and governments around the world with nowhere to sell their plastic recyclables.

Given this confluence of events, plastic packaging stakeholders face a critical juncture in determining plastic’s role within our society. Specifically, how can we sustainably produce, consume and dispose of plastic packaging in a manner that allows us to realize the material’s vital value? In other words, how can the plastic packaging industry, policymakers, NGOs, and other involved stakeholders design and advocate for a more circular plastics economy?
This research seeks to answer this question based on the hypothesis that the use of public policies that facilitate the recovery and recyclability of plastics worldwide is critical for achieving the systemic changes required for the transition to a circular economy. As such, this research examines a wide array of policy tools around the world that have been implemented to reduce plastic pollution and increase plastic recycling rates, with the goal of providing the packaging industry and other stakeholders with insights and recommendations regarding the advantages and disadvantages of different policy options.

Policy Analysis

Our research focuses on two main types of policies: Command-and-Control, in which governments establish regulations with which the private sector and the public at large must comply, and Market-Based, in which governments use financial incentives to influence the actions of private firms and consumers. Our analysis further categorizes these policies based on their end goals: increasing plastic recycling rates, reducing plastic consumption, or developing plastic recycling end markets. Throughout this research, we evaluate policy tools within the context of both rigid and flexible packaging comprised of all types of plastic materials.

In order to compare the advantages and disadvantages of the policies depicted above, we rely on evaluation criteria designed using decision science methods. The evaluation criteria are intended to represent some of the most salient issues encountered throughout our research, though they may not represent the full spectrum of criteria important to all stakeholders. Our criteria are grouped into four categories and attempt to answer some of the questions listed below:

  • Waste Management

How does the policy impact plastic recycling rates? How does it impact the quality of the plastics recyclables stream? Does it increase landfill diversion rates and reduce leakage points in the solid waste management stream?

  • Implementation & Operations

Can the policy be applied to multiple plastic materials, or is it particular to one? Does it have a level of administrative complexity appropriate to its goals and context? To what extent is it compatible with existing policies and practices, and is it scalable across multiple geographic contexts?

  • Funding & Economics

Does the policy have a stable and sustainable funding mechanism? Does it advance the price parity of post-consumer recycled plastics relative to virgin plastic materials?

  • Sociocultural Factors

Does the policy promote environmental justice, ensuring that the costs and benefits of plastics recycling are fairly distributed among different socioeconomic groups? Can the policy be adjusted to fit different sociocultural contexts, or is it particular to one?

Key Findings & Recommendations

Our analysis reveals the following key takeaways, which can be utilized by all stakeholders to inform future policy around the world:

1. Voluntary, industry-led initiatives have an important role in addressing plastic pollution, but ultimately legislation passed by governments is still needed.
Industry-led initiatives are an important component in the transition to a circular plastics economy. However, they also have significant drawbacks, including a lack of transparency, accountability and harmonization between programs. This underscores the need for formal governmental legislation. Mandatory governmental policies are even more essential in developing countries, where the drivers of industry action on sustainability, such as consumer demand and citizen activism, are weaker.
2. Deposit-refund systems are the most effective policy instrument for increasing plastic recycling rates.
Numerous academic studies and real world case examples indicate that deposit-refund systems are the most effective and economically efficient policy instrument for increasing recycling and reducing litter. Moreover, they also benefit recyclers and end users of recycled plastic by ensuring low levels of contamination and thus higher quality of the materials being recycled. Finally, they can be applied to a variety of products and materials and implemented in both developed and developing country contexts.
3. Product bans and product taxes have mixed success in reducing plastic consumption and can present additional drawbacks.
Bans and taxes may be counterproductive in that product alternatives often present their own set of negative environmental impacts. Furthermore, the prevalence of plastic packaging can significantly challenge governance efforts, leading to inconsistent or absent enforcement. These circumstances may enable bribery, as well as the formation of black markets. Lastly, while bans and taxes promote pollution reduction, they do not support circularity and thus do not allow society to take advantage of the beneficial uses of plastics.
4. The best policy for developing end markets for recycled plastic is unclear.
Tradable permits and virgin resin taxes are likely more economically efficient than recycled content mandates, but they lack adequate proof of concept. While both policy instruments have been applied successfully to other products and substances, further research is needed to explore their feasibility for plastic packaging.
5. Establishing recycled plastic traceability systems can be an intermediate step in developing end markets for recycled plastic.
If governments lack capacity to implement and enforce command-and-control or market-based policies, they can consider recycled content disclosure requirements. Governments can work with recyclers, converters, and brands to establish post-consumer recycled content certificate schemes and standardize means of reporting.
6. In addition to the above findings, the following best practices should be included in the development of new waste and recycling policies:

  • Clearly define policies’ objectives and scope
  • Take a systems-level, life-cycle approach
  • Prioritize transparency in cost structure and use of revenue
  • Develop fee structures that incentivize the use of sustainable product design
  • Prevent anti-competitive activities among producers, producer responsibility organizations and waste management firms
  • Identify and mitigate opportunities for free-riding
  • Develop independent and adequately funded monitoring and enforcement mechanisms
  • Foster collaboration across the value chain
  • Support immediately implementable short-term solid waste management strategies that do not jeopardize long-term sustainability

Ultimately, each policy instrument has its own advantages and disadvantages, and policy development must always be tailored to the specific objectives and context of the country in which it is being implemented. However, our findings indicate that, in general, policies that incorporate the use of economically efficient financial incentives and can feasibly be enforced are most effective at decreasing plastic pollution and increasing recycling rates. Additionally, the systemic nature of plastic pollution and recycling necessitates a combined suite of policy options that target multiple points of the plastic packaging value chain. Through the use of well-designed public policies, along with technological innovation, product redesign, infrastructural improvements and consumer education efforts, we can move our world closer to the creation of a circular plastics economy.

Research Areas
Urban Systems and Built Environment
Publication Type
Master's Thesis
Digital Object Identifier
Full Citation

Carr, Alexandra, Éamonn Fetherston, Lauren Meyer, and Thomas Makled. (2019) “Towards a Circular Plastics Economy: Policy Solutions for Closing the Loop on Plastics.” Master’s Project, University of Michigan: Ann Arbor: 1-115.