The growing global plastic waste problem - lessons for environmental economics policy design and choice

Common environmental economics instruments often used in addressing waste problems have suffered paralysis when it comes to resolving the global plastic waste problem. This study illustrates the use of an Environmental Solutions Decision-making Tree (ESD-Tree), and a plastic waste market in reversing the problem. Several interesting results emerge. These include, banning non-recyclable plastic bags for which the unit cost per use of a close substitute, is less or equal to the unit cost per use of the plastic, provided production of the substitute generates at least as many jobs as the plastic bag. Next, the results revealed that producer-ran and public-ran centres introduced in the proposed plastic waste market work together to eliminate incentives for market participants to deviate from equilibrium market prices. The study derived an implementable second-best tax which internalises plastic waste externalities, and provides an imperfect restoration of the social optimum in the plastic waste market.