We were gratified that Barron’s, the premier investment periodical in the US, recently made its cover story ‘Cheap New Plastic is Choking the World. It’s a Recipe for Disaster.’ We have written how major global corporations like Coca Cola and Pepsi are the leading contributors to the problem: “Coke, The Taste of Pollution” and “Pepsi’s Big Green Lies.” Their role in worldwide, single use plastic pollution, in the oceans and on land, has been well hidden. The companies spend tens of billions each year to convince all concerned they are good corporate citizens. Nevertheless, they have had to promise to do better as studies, unsurprisingly, show that Coke and Pepsi products are more prevalent in ocean plastic waste than other companies. Mondelez and Nestle are not far behind.
Despite being the leading perpetrator, Barron’s found a Coca-Cola official willing to say: “This is an enormous challenge and a crisis.” The article itself concludes that the “global addiction to plastic is turning into an environmental disaster, challenging goals to curb greenhouse-gas emissions and reduce the 354 million tons of waste that’s landfilled or incinerated, or that drifts out to sea each year.” Barron’s says the problem is getting worse, not better with plastic WASTE on track to almost triple by 2060. Global greenhouse gas emissions from petrochemical plants that make virgin plastic are on track to increase from 3.4% of current emissions to close to 10% by 2060. Even the companies that “promised” to use more recycled and less virgin plastic, like Coke, are using more virgin plastic than ever before. (Moreover, most of this plastic is being used to deliver products consisting mainly of sugar, salt, water and chemicals which cause obesity and harm human health.)
A key reason? It costs more to use recycled plastic than new virgin plastic from a petrochemical plant. Consider that the consumer has to put the dirty, used bottle in the blue tub, which gets picked up by a separate garbage truck, that needs to be sorted from the other types of plastic in the tub, that needs to be baled and shipped to a plant that cleans and reforms the material, that then gets shipped to a bottler. New, virgin clear PET plastic used for Coke bottles costs $.54/lb. versus $1.33/lb. for recycled.
It's fine for Coca-Cola and Pepsi to promise a ‘World Without Waste’ to stop using virgin plastic but that goes out the door if it’s going to hurt their profits and their stock prices.
The European countries are either banning single use plastic or putting on such high bottle deposits (to pay the costs of dealing with the garbage) that consumers won’t buy the products. The State of Maine recently passed a law requiring all sellers of single use plastic to pay into a fund to pay to collect and recycle plastic. The UK has imposed a $236 per ton tax on consumer packaged food companies if their products use less than 30% recycled materials. And there is a new high stakes UN conference to be held in May 2023 in Paris to develop a treaty on plastic waste, like the Paris Climate Accord.
Another step would be implementation of a price on recycled plastic that packaged goods companies will pay for recycled plastic indefinitely into the future that is high enough that it becomes economic to build the supply chain for recycled plastic. Municipalities will then be willing to build the necessary transportation and recycling systems because they will be financially rewarded for doing so. Even these solutions don’t deal with large swathes of Asia where old fashion garbage collection services are far and few between. The concentrated ‘Great Pacific Garbage Patches’ in the Pacific Ocean are now twice the size of the State of Texas.
Barron’s, a strong voice for capitalism, laid the facts bare for the investing public to see. The ‘produce and pollute for free’ business model for Coke and Pepsi is not long for this world.
A recycling tip from Barron’s: The only plastics that even have a chance to be recycled in the US are the ones with either the number 1 or 2 marked on the bottom. Everything else goes to the landfill, including all those take-out food containers.
Original Barron’s illustration by Javier Jaen
