The price tag of plastic pollution has been saved
The price tag of plastic pollution
An economic assessment of river plastic
An increasing number of initiatives and studies have put the spotlight on the environmental damage caused by marine plastic pollution. However there is also a financial impact of plastic pollution which has not been discussed in detail yet. Deloitte has developed a comprehensive model to calculate the global economic impact of plastic pollution, and the results are quite shocking.
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What makes this report stand apart?
UN environment reports (UNEP 2015) indicate that multi million tons of plastic waste flows into the sea per year from rivers. The plastic persists in water and breaks down into millions of toxic micro-plastic fragments. Every year more than 100,000 fish, birds, cetaceans and turtles die from ingestion, strangulation, and abrasion from plastic debris.
Plastic debris carries new waves of invasive species, which cause harm as they spread and reproduce. And plastic that washes up on beaches makes regions unattractive for tourists and property buyers, resulting in direct financial impact for tourism and the real estate sector respectively.
Until now, the discussion has mostly been about the ecological damage caused by the plastic soup. This study from Deloitte adds another dimension; it also makes financial sense to combat plastic pollution and to prevent it.
Based on the attached economic assessment model developed by Deloitte NL, plastic waste in rivers and oceans led to costs between $6-19 billion to key economic sectors for 87 coastal countries last year. The study makes a compelling argument for local governments, companies and NGOs to take decisive action and prevent further pollution, if not, the costs will continue to climb in the coming years.
We estimate marine plastic to cost 87 coastal countries a whopping USD 19 billion. And these costs are rising...
Whom did we consult?
Based on a model developed by The Ocean Cleanup to estimate global emission of waste from rivers into oceans, researchers from Deloitte calculated the worldwide costs and economic damages from the land sourced plastic waste. The team assessed cleanup costs and lost income for the fisheries & aquaculture, and tourism industries. The study is unique as it covers 87 coastal countries and creates the first integral economic perspective, consolidating existing studies and data points.
The greatest costs related to plastic waste can be attributed to cleanup. If the floating plastic waste in the rivers, ports and marinas had been fished out of the water and stranded plastic cleared from beaches, it would have cost $5.6-15 billion. Plastic pollution also eats into earnings for the fisheries and aquaculture industry ($0.3-4.3 billion) and tourism ($0.2-2.4 billion).
The cost estimates are based on data from existing research papers, news articles and global datasets. The situation in five countries was mapped out on the basis of over 50 indicators collected from other studies. To calculate the costs and damages for other countries, data was collected for indicators that could be commonly applied to all countries. In cases where data was not available, extrapolations were made on the basis of the waste density in those countries’ rivers, and adjusted in consideration with local purchasing power parity, inflation, and currency conversion to US dollars.
How do we get realistic?
Deloitte professionals conducted constant sanity checks while collecting and extrapolating data. The team looked at the costs from different dimensions to ensure results were cross verified and arrived at a close to accurate estimate. Assumptions were made to have the most pragmatic approach. For example, only inhabited coastlines were considered for cleanup, instead of the entire coastline since it is logical to assume that governments and local municipalities would prioritize cleanup budgets for inhabited areas in comparison with remote isolated coastal areas.
The damage to ecosystems and the knock-on effects for human health were not —for now — included in the estimated costs. The true cost of plastic pollution is most likely higher than portrayed in this study. Besides cleanup, fisheries & aquaculture, and tourism, where some grey literature exists, the accumulation of plastic waste in aquatic environments has many other obvious economic, ecological and societal impacts. There was a lack of sufficient available data for other cost items at country-scale, such as for example the impact on valuation of real estate in coastal areas, for the researchers to arrive at realistic costs.
The final estimated costs and damages of plastic pollution as calculated by Deloitte are therefore conservative. Yet the results are shocking. Deloitte applauds the clear call to action that speaks from this thorough piece of research.
Economics are key in our ambition to deploy up to 1000 Interceptors in rivers around the world. If it’s cost prohibitive, the cleanup is simply not going to happen. The metric that truly matters is the cost per kilogram of plastic collected. Because the Interceptor is so efficient in harvesting plastic, and because it’s a series produced product, it has the lowest cost per kilogram of any existing solution. With Deloitte’s work to calculate the cost of not removing plastic from rivers, it becomes crystal clear that deploying interceptors might be less expensive than deploying nothing at all. To clean or not to clean? That is no longer a question. Boyan Slat, Founder and CEO at The Ocean Cleanup.
Since 2017, Deloitte is supporting The Ocean Cleanup, across functions, to further professionalize their organization and operations. So far, around 20 projects have been executed by 131 Deloitte colleagues, who spent almost 8,400 hours worldwide to support The Ocean Cleanup - from which 7,600 hours in the Netherlands, provided by the Deloitte Impact Foundation. Read more about this partnership.
The research and assessment model used are comprehensively described in the Technical Paper. The results are published in an interactive visualization on The Ocean Cleanup’s website. Visitors can see the plastic waste outflow per country and the costs resulting from that waste.
*) Deloitte is official knowledge partner of The Ocean Cleanup through the Deloitte Impact Foundation.