Our planet is facing serious ecological challenges – and one of the most striking is that plastic is choking our oceans, harming wildlife, and even finding its way back into the food chain.
A growing concern for governments worldwide
In December 2017, all 193 United Nations countries signed a resolution to eliminate ocean plastic pollution. While no specific targets were set, disappointing some observers, it is hoped that this will provide impetus for future action.
Historically, China has imported waste from other nations, which it has then disposed of or recycled. However, as of the beginning of this year, China has implemented stricter regulations regarding what it will accept, including a ban on plastic waste. This raises challenges for companies that previously exported plastic waste to China for processing, and will create new opportunities for local recyclers. The US in particular has been hit hard by this new law, having shipped nearly 4,000 containers of recyclables to China per day before the ban was imposed. Reports note ‘mountains’ of waste piling up at facilities across the country.
Reasons to be positive
In 2016, California was the first US state to impose a state-wide ban on plastic bags. Other counties and municipalities, such as Austin, Texas, Cambridge, Massachusetts and Seattle, Washington have imposed 5-10 cent fees. While a ban on plastic bags was proposed in New York City and did not pass, New York State’s plastic bag recycling law requires large retailers to take back all types of film plastic for recycling, including single use plastic bags.
In 2015, the UK government introduced a 5 pence levy on all single-use plastic bags, which has since resulted in an 80% reduction in their use, proof that the public is willing to change its habits. In January this year, it also announced that as part of a refreshed environment strategy, the UK will aim to eradicate all avoidable plastic waste by 2042. ‘Reflections’ on a 25 pence ‘latte levy’ on disposable cups may yield further action. In 2016, France passed a law that will see plastic utensils banned by 2020.
Worldwide, the issue of ‘microbeads’ has hogged headlines. These plastic pellets are typically 1mm in size or smaller, and are included in many cosmetic and cleaning products. Their use is now facing either stringent regulation or an outright ban in many countries and a number of US states.
Opportunities for investors
Changes to how economies deal with plastic are urgently required, giving rise to new opportunities for investors, including:
For information about the Pax Global Environmental Markets Fund, which invests in companies that are developing innovative solutions to resource challenges – including water, energy, waste, and sustainable food & agriculture – please visit the Fund page here.
The statements and opinions expressed are those of the author of this report. All information is historical and not indicative of future results and subject to change. This information is not a recommendation to buy or sell any security.