Roisin Greene
Co-director, Global Plastic Action Partnership
The proliferation of pollution has led to a catastrophic situation that threatens our planet, livelihoods and health. One solution to this challenge is investing in a circular economy.
A circular economy is an economic system designed to be restorative and regenerative. It aims to keep products, components and materials at their highest value and utility at all times while minimising waste and pollution. It can help us attain our climate goals and reduce the impact of plastic pollution on our planet.
Encouraging investments for a circular economy
The transition to a circular economy for plastics requires significant investment, and focusing our attention on how to generate the capital needed is crucial. The UN plastics treaty will set the stage for countries to adopt policies designed to incentivise and de-risk investments from the private sector.
So far, financing has been channelled towards ‘trending’ areas such as renewable energy and energy efficiency. In fact, without further intervention, up to 13% of the global carbon budget by 2050 will be attributable to greenhouse gas emissions from the plastic life cycle alone.
The transition to a circular economy for
plastics requires significant investment.
Government policies that benefit the environment
Encouragingly, we are already observing some positive developments. In 2018, the Indonesian Government launched the world’s first green sukuk (Islamic) bond with a US$1.25 billion issuance. Morgan Stanley similarly drew a comparison between the plastic industry and India’s renewable energy market, which began with limited funds but benefited from government policies that removed hurdles to capital allocation.
As a starting point to unlock access to finance, the right policy frameworks should be developed that incentivise investment. Transparent, equitable and predictable policies can lead to an enabling environment for the circular plastics economy and catalyse reliable funding sources.
Partnerships to address financing gaps
National Plastic Action Partnerships, such as those set up by the World Economic Forum, create a reliable ecosystem for catalytic capital to take off by establishing common objectives and a framework for action that is owned and driven by government and diverse local stakeholders. This boosts confidence among public and private financiers, unlocking access to finance. In addition, partnerships take into consideration how to best channel the required capital to traditionally marginalised groups who need it most.
The financing gap to address both the climate crisis and plastic pollution is substantial. Policymakers, private investors and public capital holders must collaborate to bridge the financing gap and act on these challenges effectively and at scale. By working together, we can create a sustainable future and protect our planet from the devastating impact of plastic pollution.