Microplastic’s Microaggression: The Economics of Ocean Suffocation

Plastic pollution is slowly yet meticulously suffocating our oceans - the terrifying plastic swathes in the ‘Great Pacific Garbage Patch’ are a testament to this. By 2050 there might be more plastic than fish in our oceans based on weight (The Economist, 2018), and ‘microplastics’ aggravate this environmental catastrophe. It is no longer only about rubbish-strewn beaches, clogged rivers, or turtles getting entangled - choking on neon plastic. Instead, because of microplastic infiltration (plastic debris less than 5mm), organisms on every trophic level are affected.

Blue Economy Woes

Plastic inevitably affects economic sectors reliant on the ocean whilst wreaking havoc on marine life. A prime example is the coastal tourism industry where picturesque beaches and turquoise seas are the expected norm. A loss in aesthetic value, however, carries a steep economic cost. In the South Korean Goeje Island, one marine litter incident led to lost revenue between US$27.7 - 35.1 million in 2011 compared to 2010 and a 63% reduction in visitors (Jang et al, 2014).

The fishing industry also faces potential devastation in a myriad of ways. Not only is there expensive repair expenditure (prompted by plastic debris extensively damaging fishing equipment/vessels), but also cleaning costs due to microplastics sticking to propellers and nets. Then there are revenue losses due to fewer, poorer quality fish because of ingested plastic. ‘Ghost fishing’ (fish unintentionally caught by discarded gear) is another culprit for reducing fish stock and endangering non-target species. Derelict fishing traps, for instance, pose an estimated loss of US$300,000 on Blue marketable catches in Virginia (Bilkovic et al, 2011).

Tragedy of the Commons

Despite marine litter being a universal problem, nations that depend on marine-related industries become economic victims. Coastal communities bear the burden of awareness campaigns and clean-up costs to keep tourism afloat or to prevent flooding and disease caused by plastic build-ups. Thus, equity concerns arise from how polluters escape the costs of marine plastic pollution.

Undeniably, plastic pollution arises because of market failure. The full economic cost of producing and disposing of plastic along with the negative intangible welfare costs on human health and the ecosystem are unaccounted for. This social cost is approximately US$2.2 trillion per year (UNEP, 2014; Ricke et al, 2018; Beaumont et al, 2019; Zheng and Suh, 2019, cited in Forrest et al, 2019, p.2).

As Figure 2 illustrates, with producers facing a marginal cost and consumers facing a perceived zero cost, widespread plastic demand without market moderation leads to a Tragedy of the Commons. The negative externalities of marine pollution are unrepresented in the price, resulting in the huge production and consumption of plastic, with this detrimental allocative inefficiency occurring at a low “symbolic” price (UNEP and GRID-Arendal, 2016, p11). Additionally, clean seas are public goods which are vulnerable to free riding, so polluters benefit without bearing the full cost (Newman et al, 2015) - unintentionally incentivising marine degradation.

Policy Instruments

One-off indulgences in plastic products that have century-long lifespans have left a legacy of pollution to clean up. Apart from better waste management systems (especially in developing nations), an ideal sustainable solution is a more ‘circular plastic economy.’ One that minimises waste yet utilises the maximum value of the plastic product before regenerating it into a new good. Thus, diverging from the current linear ‘make, use, and dispose’ economy model (Barra and Leonard, 2008).

Other policies include bans like the EU-wide ban on intentionally added microplastics to cosmetic products by 2020 or the 2018 EU ban on single-use plastic products. Although potentially difficult to enforce, bans may be efficient for a good when there are small marginal benefits, but high marginal social costs linked to its production/usage or improper disposal.

Plastic taxes are another possibility as they increase private costs for producers and encourage ‘green design innovation.’ Denmark, for instance, saw a 60% reduction in plastic bag usage one year after a tax introduction (Earth Policy Institute, 2014). Theoretically, this is a ‘Pigovian Tax’ which seeks to achieve a more socially optimum consumption by ‘internalising the externality’ and making the polluter pay. 

However, given how there is a default bias towards single-use plastics like bottles, consumers may be indifferent to any increase in price (inelastic demand), making the tax ineffective and unequally regressive on lower incomes. Furthermore, once the shock of the charge wears off, plastic bag usage may increase as consumers get used to the fee – a ‘Rebound Effect’ (Convery, McDonnell and Ferreira, 2007).

Additionally, since consumers are paying for the bag (a market exchange) there is a crowding-out of guilt and reduced motivation to be eco-friendly (Chandra, 2018).

More simply, behavioural economics or ‘nudges’ could be used to influence eco-conscious social norms. Japan increased the plastic bag refusal rate by 40% simply by asking customers if they wanted a bag, illustrating the impacts of “changing the default” (Ohtomo and Ohnuma, 2014).

Sea of Change

The emergence of this marine epiphany, however, is prompting blue sustainability. International co-operation (like the 2019 Basel Convention), cross-sector regulations, green packaging and consumer awareness about wasteful consumerism are rapidly increasing, making a unified multi-pronged approach for marine plastic pollution possible.

By Andrea Fernandes

References:

Barra, R. and Leonard, S. (2018) Plastics and the circular economy [online]. Available at: https://www.stapgef.org/sites/default/files/documents/PLASTICS%20formatted%20for%20posting.pdf (Accessed: 24 June 2020)

Bilkovic, DM. et al. (2014) ‘Derelict Fishing Gear in Chesapeake Bay, Virginia: Spatial patterns and Implications for Marine Fauna’, Marine Pollution Bulletin, 80(1-2), p114-123 [online]. Available at: https://doi.org/10.1016/j.marpolbul.2014.01.034 (Accessed: 5 July 2020)

Chandra, G. (2018) Charge for Use or Nudge to Reuse? Suggestions for Policy Interventions to Discourage Plastic Consumption [online]. Available at: https://www.europarl.europa.eu/news/en/headlines/society/20181116STO19217/microplastics-sources-effects-and-solutions (Accessed: 29 June 2020)

Convery, F., McDonnell, S. and Ferreira, S. (2007) ‘The Most Popular Tax in Europe? Lessons from the Irish Plastic Bags Levy’, Environmental and Resource Economics 38, p1-11 [online]. Available at: https://doi.org/10.1007/s10640-006-9059-2 (Accessed: 30 June 2020)

Earth Policy Institute (2014) The Downfall of the Plastic Bag: A Global Picture [online]. Available at: http://www.earth-policy.org/plan_b_updates/2014/update123 (Accessed: 3 January 2020)

EASAC (2020) Packaging plastics in the circular economy [online]. Available at:https://easac.eu/fileadmin/PDF_s/reports_statements/Plastics/EASAC_Plastics_complete_Web_PDF.pdf (Accessed: 9 July 2020)

Forrest, A. et al. (2019) ‘Eliminating Plastic Pollution: How a Voluntary Contribution from Industry Will Drive the Circular Plastics Economy’, Frontiers in Marine Science [online]. Available at: https://doi.org/10.3389/fmars.2019.00627 (Accessed: 5 July 2020)

Jang, YC. et al. (2014) ‘Estimation of Lost Tourism Revenue in Geoje Island from the 2011 Marine Debris Pollution Event in South Korea’,Marine Pollution Bulletin, 81(1), p49-54 [online]. Available at: https://doi.org/10.1016/j.marpolbul.2014.02.021 (Accessed: 7 July 2020)

Newman, S. et al. (2015) ‘The Economics of Marine Litter’ in Bergmann M., Gutow L., Klages M. (ed.) Marine Anthropogenic Litter, p356-394 [online]. Available at: https://doi.org/10.1007/978-3-319-16510-3_14 (Accessed: 4 July 2020)

Ohtomo, S. and Ohnuma, S. (2014) ‘Psychological Interventional Approach for Reduce Resource Consumption: Reducing Plastic Bag Usage at Supermarkets’, Resources, Conservation and Recycling 84, p57-65 [online]. Available at: https://doi.org/10.1016/j.resconrec.2013.12.014 (Accessed: 28 June 2020)

The Economist (2018) The known unknowns of plastic pollution [online]. Available at: https://www.economist.com/international/2018/03/03/the-known-unknowns-of-plastic-pollution (Accessed: 26 June 2020)

UNEP (2018) The missing science: Could our addiction to plastic be poisoning us? [online]. Available at: https://www.unenvironment.org/news-and-stories/story/missing-science-could-our-addiction-plastic-be-poisoning-us#:~:text=As%20many%20as%2051%20trillion,seas%2C%20seriously%20threatening%20marine%20wildlife. (Accessed: 26 June 2020)

UNEP and GRID Arendal (2016) Marine Litter Vital Graphics [online]. Available at: https://gridarendal-website-live.s3.amazonaws.com/production/documents/:s_document/11/original/MarineLitterVG.pdf?1488455779 (Accessed: 29 June 2020)