The World Is Regulating Plastics Through a UN Treaty – The Time to Engage Is Now
The world is in a race to address climate change and other environmental issues that have percolated to the top of the political agenda. That is why two years ago, world governments tasked the United Nations with developing an ambitious treaty to end plastics pollution.[1] Next month, environmental decisionmakers will meet in Ottawa to discuss the substantive elements of the treaty in detail, including the policy options it may put forth.[2] Other negotiations will follow over the course of 2024.
The outcome of the negotiations will significantly impact the plastics industry and all those that depend on it. However, just how these negotiations play out, how industry and other stakeholders engage in the process, and who ultimately influences key tenets of the treaty can produce vastly different results.
So, What Are the Potential Outcomes of the Plastics Treaty?
The treaty, which is being debated in a collaborative, iterative process[3] by UN member countries, is broadly weighing two outcomes.[4]
Scenario One: The treaty would focus on the end-of-life of plastics by promoting recycling and improved circularity and waste management measures. However, country groups like the High Ambition Coalition have pushed back on this approach, advocating for an emphasis on the full lifecycle of plastic and underscoring the need to restrain, or even cap, plastic production and consumption and pointing to insufficient recycling efforts to date.[5]
Scenario Two: The treaty would more strictly limit the production of plastics, including through the use of export controls, global bans, and phase-outs on plastic types or uses categorized as avoidable and harmful. While this course of action may potentially reduce plastic waste and pollution, it also stands to generate major risks for plastic producers and the countless industries that rely on plastics as an input for critical applications. These include:
- Job disruptions for workers in the plastics manufacturers industry and in the end user industries
- Market distortion within and across countries, and increased production, design, waste management, and compliance costs;
- Unrealistic phase down timelines that may leave countless industries scrambling to identify, develop, and deploy suitable plastics alternatives;
- Limited exemptions that neglect critical applications in areas like medicine, technology, and defense;
- Material and financial waste generated as recent investments in improved plastics products and recycling initiatives are rendered obsolete;
- Supply chain and industry partnership disruptions;
- Trade disruptions, due to export controls and/or a fragmented regulatory environment as different countries ratify, interpret, and implement the treaty at different paces and in varying ways;
- Reputational risks for companies that rely on plastics to deliver key products and services around the world, regardless of their efforts to enhance sustainability; and
- Undermined environmental goals if sustainable applications of plastic become too costly.
The negotiations are tackling other substantive questions as well. One, for instance, is whether the treaty will include a definitive list of plastic products, polymers, and other chemicals to be regulated. Another is whether the treaty will be adopted by formal consensus as is customary, or by majority vote as some stakeholders prefer.
Particularly for global companies that operate across borders, the negotiations could have serious implications: even if countries fall short of producing a global, legally binding agreement, the treaty may nonetheless inspire national or state-level legislation that will carry deleterious effects for a wide array of industrial sectors. Importantly, the final text of the treaty may be interpreted differently by different countries, making it highly onerous for global companies to maintain operations and meet diverse compliance requirements across borders.
As negotiations move forward – and with the future of the plastics industry and its many related value chains hanging in the balance – it is critical that industry achieve a robust understanding of the policy proposals being tabled for national application, develop input to inform the treaty negotiations, and actively engage with policymakers.
How Exactly Can Industry Take Action?
The United Nations Environment Program, the specialized agency overseeing this process, is convening negotiating rounds that allow for stakeholder participation and input.[6] While being present in these rounds is a must, it is most important that industry proactively and regularly engage with stakeholders to discuss how different versions of the treaty could play out upon implementation, as well as the different economic and environmental consequences that could stem from them.
As part of this process, industry must closely consider the various policy proposals and regulatory approaches that are being presented, as well as their feasibility and potential unintended consequences. Indeed, it is critical that the industry should provide its unique on-the-ground expertise on what could be a sustainable solution and what could be problematic in the short, medium, or long run. This type of engagement will be critical to inform evidence-based approaches that stakeholders can consider in between negotiating rounds, as well as in the run-up to their last scheduled formal meeting, slated for the end of the year.
Businesses, NGOs, and other stakeholders are already engaging in this process. Groups like the Business Coalition for a Global Plastics Treaty, convened by the Ellen MacArthur Foundation and WWF, are making ambitious policy recommendations focused on reducing plastic production, promoting a circular economy, and preventing and remediating hard-to-abate micro- and macro-plastic leakage.[7] This ongoing engagement makes it imperative for relevant industry stakeholders to make themselves heard as well.
How We Can Help
The treaty – considered the most significant global environmental agreement since the Paris Climate Accords and hailed as historic for its emphasis on legally binding enforcement measures[8] – is poised to transform the plastics industry and all who rely on it. With its strategic communications practice specializing in global policy risk forecast, FTI Consulting is uniquely positioned to help companies:
- Understand the treaty and its most influential stakeholders;
- Stay apprised on the policy recommendations that are surfacing as part of the negotiations;
- Connect with and navigate the multilateral organizations that are shaping the policy thinking in between negotiation sessions; and
- Determine the best path forward.
Over the last 40 years, FTI Consulting has established itself as a market-leading global consulting firm that brings together distinct capabilities and industry experts to serve as the trusted advisor to clients when they are facing their greatest opportunities and challenges. As countries address plastics pollution and related policies, FTI Consulting can guide manufacturers and end users in identifying and activating opportunities to obtain the best policy outcomes in national and global processes.
[1] “Historic day in the campaign to beat plastic pollution: Nations commit to develop a legally binding agreement,” United Nations (March 2, 2022), https://www.unep.org/news-and-stories/press-release/historic-day-campaign-beat-plastic-pollution-nations-commit-develop
[2] “Fourth Session (INC-4),” United Nations (last accessed March 18, 2024), https://www.unep.org/inc-plastic-pollution/session-4
[3] “Towards a Global Treaty to End Plastic Pollution,” Center for International Environmental Law (last accessed March 18, 2024), https://apps1.unep.org/resolutions/uploads/ensuring_meaningful_stakeholder_involvement_in_the_plastics_treaty_negotiations_public_participation_compressed.pdf
[4] Valerie Volcovici, “Plastic recycling in focus as treaty talks get underway in Paris,” Reuters (May 29, 2023), https://www.reuters.com/business/environment/plastic-recycling-focus-treaty-talks-get-underway-paris-2023-05-29/
[5] “End Plastic Pollution by 2040,” High Ambition Coalition (last accessed March 18, 2024), https://hactoendplasticpollution.org/#:~:text=The%20High%20Ambition%20Coalition%20to,the%20full%20lifecycle%20of%20plastics
[6] See supra note 2.
[7] Business Coalition for a Global Plastics Treaty (last accessed March 18, 2024), https://www.businessforplasticstreaty.org/
[8] Emma Bryce, “First steps agreed on plastics treaty after breakthrough at Paris talks,” The Guardian (June 6, 2023), https://www.theguardian.com/environment/2023/jun/06/first-steps-agreed-on-plastics-treaty-after-breakthrough-at-paris-talks
