Choosing Policy Instruments

Choosing Policy Instruments

Targets reflect where the society wants to be in future. Technical and behavioral measures discussed thus far provide information about the potential to meet these targets. This potential becomes reality only if economic actors—including firms and households—are willing to implement these measures. As discussed earlier, in the absence of government interventions to correct market and policy failures, economic actors tend to follow linear and polluting business models. Policy instruments are needed to encourage them to willingly undertake technical and behavioral measures that achieve society’s targets. Well-selected and -designed policy instruments—especially economic ones—provide incentives for firms and households to innovate and search for new, previously unknown technical and behavioral measures to reach the targets.

The goal of plastics policy reforms should be the creation of effective, commercially self-sustaining markets for the prevention and substitution of the most environmentally harmful plastic materials and products, and for the sustainable waste management activities, such as waste collection, sorting, recycling, material recovery, and safe disposal of what cannot be circulated within the economy. Self-sustaining markets mean that firms and households find it in their own interest to change their consumption and production behaviors and adopt existing circular products and business models (or invent new ones). Building the capacity of relevant institutions and managing social and distributional issues and political economy challenges should always be integrated into policy reforms.

The choice of policy instruments is usually guided by the following criteria:

• Environmental effectiveness (changes in plastic flows through the economy and in plastic pollution attributed to policy reform) • Economic impact on a country and financial impacts on economic actors (winners and losers) • Social impact on vulnerable households • Acceptability and political economy of reforms • Scalability; replicability; sustainable market creation; positive spillovers to the rest of the economy, such as jobs, skills, and innovation • Institutional and administrative feasibility • Ancillary impacts, such as health, safety, air pollution, GHG emissions, and others

There are far fewer decision-support tools to inform the choice of policy instruments than to inform the previous steps in the plastic pollution management process. Chapter 4 offers a closer look at existing practices with regard to use of policy instruments in isolation and combined. It also introduces a new formal decision-support tool for ex ante assessment of the multidimensional impact of plastics policy instruments.