ZEF: Land use mediated GHG emissions and spillovers from increased consumption of bioplastics

Bioplastic production is a small but fast growing sector in the global bioeconomy, which may benefit from public support measures in the future as governments seek to promote more sustainable consumption patterns. Here we assess the potential net economy-wide impacts of a 5% bioplastic target relative to current plastic consumption in the main producing regions.

We compare two alternative policy strategies to achieve the target in a general equilibrium framework that allows for substitution between conventional and bio-based plastics: a subsidy on bioplastics versus a tax on fossil-based plastic consumption. Our study is the first to quantify global greenhouse gas (GHG) emissions from an increased demand for bioplastics on a global scale, produced from arable crops, considering both direct and indirect land use change (LUC). The tax provokes a contraction of all sectors that employ plastics, which leads to a drop of 0.07% in global real GDP, whereas the subsidy has no significant effect on the global economy. Both tax and subsidy reduce world demand for petroleum products, by 0.37% and 0.07%, respectively, boosting demand for sugar- and starch-based feedstock in the bioplastic industry. This leads to emissions from LUC globally, which correspond to a carbon payback time of 22 years on average, with the associated annual abatement costs of over US$2000 per tonne of CO2-eq. The tax has greater GHG reduction potential in bioplastic producing regions but generates greater economic and environmental spillover effects in countries that do not enforce the target. Results show that promoting bioplastic consumption is not a cost-effective strategy for climate change mitigation if based on conventional feedstock, due to market-mediated GHG emissions from LUC. Bioplastics are not necessarily more sustainable than conventional polymers just because they are bio-based, although further assessment of potential environmental gains associated with biodegradability and recyclability is desirable.

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Interview with Dr. Neus Escobar

Source: Notification Center for Development Research University of Bonn (ZEF), 19.03.2019