Targeted recycling policies will deliver 68 per cent greater recycling gains than a 5 per cent cap on virgin plastics production, according to a new Oxford Economics study.
The report, commissioned by the International Council of Chemical Associations (ICCA), compared two scenarios: a modest 5 per cent cap on virgin plastics production and a second that targets stronger collection and recycling incentives in regions with the greatest potential to reduce mismanaged plastics waste.
Oxford Economics used the modelled leakage outcome under a 5 per cent production cap as a common benchmark to calibrate the remaining scenarios. This allowed the study to compare each scenario’s effects on recycling, prices, output and welfare on equal terms.
How targeted incentives could benefit
The findings showed that targeted collection and recycling policies and incentives would deliver:
- More recycling: a 33.6 million metric tonne increase, compared with 19.9m/t under the cap, yielding approximately 68 per cent more recycled plastics
- Stable plastics prices: a 0.2 per cent decline in total plastics prices (combining virgin and recycled plastics prices), compared with an 8.5 per cent increase under the cap, which has the potential to raise costs on consumers, disproportionately impacting low-income households
- Far less harm to consumers: a $0.5bn decline in global household welfare, a measure of the real value of goods and services consumed by households, compared with a $128.4bn decline under the cap
- Stronger economic performance: a $0.2bn increase in global output, compared with a $20.2bn decline under the cap
Second study phase
The study, ‘Evaluating Policy Pathways to End Plastic Pollution’, is the second phase of Oxford Economics’ analysis for ICCA. It builds on the 2024 study, ‘Mapping the Plastics Value Chain’, which documented the plastics industry’s global economic footprint and examined the potential consequences of constraining production.
The latest report suggested that under the production cap scenario, household welfare would decline by $38.5bn in East Asia, $37.7bn in western Europe, $22.1bn in North America, $8.8bn in Southeast Asia, $6.1bn in the Middle East, and $6.0bn in Latin America.
“Plastics are deeply embedded in products and supply chains, and other materials cannot readily replace them in many applications,” said Alice Gambarin, one of the report’s authors and associate director at Oxford Economics.
“That makes demand for plastics relatively inelastic. When virgin supply is capped, demand does not simply disappear or shift to other materials. Instead, prices rise across the plastics value chain, increasing costs for businesses and consumers and lowering household welfare.”
Same leakage reduction, lower cost
In contrast, the report suggested that targeting recycling incentives based on each region’s potential to reduce mismanaged waste would achieve the same global leakage reduction at far lower economic cost.
In that scenario, recycling could increase by 20.5m/t in South Asia and 13.7m/t in East Asia – the two regions where the model identified the greatest absolute opportunity for improvement.
The findings called for a global agreement that mobilises finance, builds capacity, and enables governments to focus resources to tackle plastics waste leakage most effectively in their communities.
“This study shows that environmental ambition and economic wellbeing do not have to be in conflict,” said Marco Mensink, ICCA council secretary and director general of the European Chemical Industry Council.
“The global plastics pollution agreement is an opportunity to boost a circular economy worldwide by expanding plastics recycling and reuse, while tackling plastics waste pollution by prioritising solid waste collection for the 2.7 billion people worldwide who still lack access.”
