Plastics economy and SIDS

Small states¹, and especially SIDSsmall island developing States (SIDS) were recognized as a distinct group of developing countries at the Earth Summit in Rio de Janeiro in June 1992.
More information on UNCTAD official page., are particularly vulnerable to the tide of plastics pollution and the more general threat of global warming and climate change. One challenge is that plastics are big business, producing both useful products and inputs to products that are ubiquitous to daily life, but which also contribute to pollution and CO₂Carbon dioxide (CO₂) is a colourless, odourless and non-poisonous gas formed by combustion of carbon and in the respiration of living organisms -—
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—-. emissions. As the core inputs of plastic are by-products from the refining processes of fossil fuels, they are extremely cheap and likely to become more so – meaning the threat to SIDS, who are already struggling at the forefront of global warming, will likely get worse. Furthermore, the challenge posed extends beyond plastic pollution’s immediate impact on fishing waters and tourismTourism refers to the activity of visitors -—
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—-. International tourism expenditure is often approximated by the sum of travel services and transport of passengers, reported under balance of payments statistics (see Trade in services). Transport of passengers not considered, tourism represents a subset of travel, as some travelers, such as border-workers, travel for regular work, as they are holding employment contracts outside their usual residential environment. Activities of border-workers and similar travelers do not belong under tourism. -—
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—- resources. It includes the impact of microplastics entering the food chain and their potential toxicity to fish, chemical pollution associated with the plastic life cycle and climate change due to plastics’ carbon footprint.

Global plastics life-cycle trade and SIDS

In early 2021, UNCTAD released a new Plastics Trade database that tracks trade in plastics across its entire life cycle². Plastics trade was estimated to be worth more than US$1 trillion globally in 2018, with sub-sectors, such as plastic textiles and plastic packaging being worth hundreds of billions of dollars as well -—
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—-. This is considerably more than estimated by previous means of measuring plastics trade, such as tallying the products with codes in HSHarmonized Commodity Description and Coding System (HS) chapter 39, Plastics and articles thereof, which does not include the entire lifecycle of plastic products. The UNCTAD database is still in prototype and is being refined, but expectations are that the true figures are even larger. The findings are important because of the large scale of global trade revealed, the significance of trade in the value chain of plastic, and because trade is so broad and multi-faceted, with virtually all countries involved in some way or another, including SIDS. When broadly defined in the category of SIDS and small states, total plastics exports accounted for about 8 million metric tonnes worth around US$15 billion in 2018. For SIDS included in the analytical grouping, the estimate drops considerably to US$260 million and less than ¼ million metric tonnes, but this is still significant when compared to other merchandise exports from these countries. Moreover, while this estimate includes intermediate and final use plastic products made by SIDS as part of global value chains, as well as plastic packaging and textiles, it still is almost certainly a significant underestimate, as the massive volume of ‘embedded plastics’ in other products is not included.

SIDS’ positioning in the global plastics market is complex, reflecting the heterogeneity and diversity of countries in this category. A few are fossil fuel producers; some are hosts to chemical industries that produce plastic; for many, plastics have been a way to diversify their economies and raise value added. All, however, face the health effects of global warming and polluted water, soil and air from plastics production, consumption and incineration, especially those where recycling and waste management facilities are underdeveloped.

Thus, the narrative surrounding plastics is broadening beyond pollution to also include SIDS’ abilities to create jobs and revenues in other areas that depend on clean ecosystems, such as tourism and fisheries. In addition to the global CO₂ costs, the costs to their governments of dealing with plastic refuse in already over-burdened infrastructures are now being factored in. Plastics’ role is being reappraised in SIDS, as elsewhere, amid growing efforts to promote a more circular economy, to reduce single-use plastics and to reduce the production and trade in plastics more generally -—
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—-. Governments, citizens and corporations are giving higher priority to the natural environment as a development issue to help achieve the SDGsSustainable Development Goals (SDG), and more specifically goals 12 (Responsible consumption and production), 13 (Climate action) and 14 (Life below water) -—
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—-. This creates opportunities for small states and SIDS to increase production and enter the market for alternatives to plastic³. For example, producers of alternatives could tap into a global market for plastics textiles and plastic packaging currently worth more than US$260 billion -—
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—-. This potential market is directly relevant to SIDS.

SIDS and plastic trade regulations

SIDS and small states are aware of these threats and, of the 127 measures notified to the WTOWorld Trade Organization (WTO) that are relevant to plastics, the majority have been notified by developing countries. In particular, two SIDS have already notified nine measures: Mauritius and Seychelles -—
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—-. The content of the measures includes mainly bans on the import, sales and manufacture of certain plastic bags (including non-woven polypropylene bags), straws, tableware and kitchenware, as well as plastic and foam boxes. They have been notified as quantitative restrictions under the 1994 GATTGeneral Agreement on Tariffs and Trade (GATT) and under the WTO TBTAgreement on Technical Barriers to Trade (TBT).

Also, Table 2 shows how seven SIDS have introduced bans or plans to phase out or reduce the use of single-use plastics, styrofoam products and polystyrene, signalling a clear and rapid response to impacts of plastic pollution.

New market opportunities for SIDS – alternatives to plastic

SIDS may benefit from growing interest in ‘sunrise markets’ for alternative and substitute materials that can perform the same or similar functions as plastic, but without its negative health or environmental impacts (see table 3). The global plastics, textiles and packaging categories highlighted in table 1, for example, are worth more than US$260 billion in 2018 and could be a target for producers of alternatives. Many island economies are active in these markets as they already possess the required resources, capacities and expertise. For example, some SIDS already export the following plastics-alternative materials: natural fibres (Mauritius), glass (Barbados and Mauritius), and cardboard and paper (Barbados, Fiji).

SIDS need not stop there. A second route to enter the plastics-alternatives economic space is to build capacities and create products that do not yet exist. This could yield promising new solutions once research has been carried out for new processes and designs for plastic-free or less plastic-intensive packing and business methods that imply direct delivery of products or less use of single-use plastics. Some examples that involve a realistic leap from existing comparative advantageComparative advantage is a concept from Ricardian theory of international trade, which describes a country's possibility to produce a good at lower costs relative to a reference good than another country. include new forms of cellulose fibres that could be spun into yarns for packaging and fabrics, or into entirely new materials that could be used for packaging to carry liquids, etc. This is already taking place in some other countries. Additionally, increased capacity in solid waste management, including recycling, will still be mostly needed to absorb any plastics that cannot be reduced, substituted or reused.

Plastics alternatives and policy space for SIDS

To this end, it will be critical for SIDS – and indeed for all developing countries – to ensure affordable access to new knowledge processes and raw materials, as well as to recycling and waste management technologies, whether proprietary or not. Making use of flexibility in the TRIPSTrade Related Aspects of Intellectual Property Rights (TRIPS) Agreement, green patent pooling, preferential licenses, technological incentives and technical support to make use of new or mature but effective technologies will be of great importance. Furthermore, making use of soft intellectual property protection categories such as utility models and industrial design protection may be relevant to allow and promote local and low-cost innovation.