Plants producing the building blocks for plastics, petrochemicals, are disproportionately located in areas with minority populations. The bulk of petrochemical production is concentrated in poor communities of color in Texas, Louisiana, and the Ohio River Valley. Pollution from petrochemical plants exposes nearby households in “fenceline communities” to toxic emissions, driving up rates of cancer, respiratory disease, and other life-threatening conditions. Studies show that those living within 10 miles of a petrochemical facility face the greatest risk to bladder, breast, colon, lung, lymphoma, and prostate cancer. Living near petrochemical facilities is also linked with adverse birth outcomes, asthma and respiratory illnesses, and kidney disease.
The environmental justice problem of pollution from plastic manufacturing constitutes a market failure. In economic terms, petrochemical production causes negative externalities. Negative externalities are adverse consequences of producing or using a product imposed on the public without cost to the consumer or producer. Therefore, the cost of a product will be lower than if that price included this externality. Looking at the market as a whole, an unregulated free market creates an inefficiently high quantity of a product or service with a negative externality.
When an externality occurs, the government can implement policies to force internalizing the cost. This can be accomplished by regulating the behavior, taxing the behavior, or providing incentives to encourage mitigation of the consequences of the behavior. Some policies combine these approaches. Imposing a tax on the product or service can correct the externality. Taxing the externality imposes the cost of this adverse consequence on the consumer or producer, allowing the market to operate properly. With environmental taxation, the market shows the appropriate price signal. This “polluter-pays” concept has been a feature of tax policy discussions for many years.
The reinstated Superfund tax does not specifically target plastic pollution but may have some effect. The Infrastructure Investment and Jobs Act of 2021 reinstated the Superfund excise tax, which applies to a list of chemicals, including those primarily used in the manufacture of single-use plastics like ethylene and propylene. Until its reinstatement, the Superfund excise tax had not been collected since 1996. The 2022 balance in the Superfund was $67 million, down from a peak of $4.7 billion in 1997. Beginning again in mid-2022, the Superfund excise tax applies to the sale of certain chemicals like ethylene and propylene at a rate of $9.74 per ton. The Superfund excise tax goes into the Superfund, which is available to remediate environmental harms to land if no responsible party can be found. The Superfund’s purpose is to clean up uncontrolled or abandoned sites containing hazardous substances when there is a release or threat of release of pollutants and contaminants into the environment. The Superfund excise tax may modestly increase the cost of manufacturing plastic from petrochemicals, but it is not designed to reduce single-use plastic.
The REDUCE (Rewarding Efforts to Decrease Unrecycled Contaminants in Ecosystems) Act primarily takes a tax approach to discourage the production of plastic packaging from “virgin” plastic feedstock. It is a straightforward excise tax on virgin plastic resins predominantly used for single-use plastics. The tax was proposed to start at $0.10 per pound in 2024, gradually increasing to $0.20 per pound in 2026. It would be imposed upstream on the plastic resin producers, presumably integrated oil companies. The proposal also establishes a Plastic Waste Reduction Fund that could support plastic waste reduction and recycling activities, including improving recycling infrastructure. The fund could be used to carry out marine debris reduction, detection, monitoring, and cleanup activities and to address environmental justice and pollution impacts from the production of plastic.
Maine and Oregon were the first states to impose plastic taxes in legislation enacted in 2021. Maine’s law creates a new extended producer responsibility scheme whereby the Maine Department of Environmental Protection will set the packaging fee schedule on producers based on the per-ton costs derived from collecting and processing a given producer’s packaging material. The fees will go into a packaging stewardship fund. Oregon’s law is similar, requiring producers to join a producer responsibility organization (PRO) and the Environmental Quality Commission to establish a per-ton fee that the PRO will pay to collectors of mixed waste.
Senator Cory Booker (D-NJ) introduced the Protecting Communities from Plastics Act in 2022, building on the Break Free from Plastics Pollution Act of 2021, which included a mix of phaseouts of certain single-use consumer products, an extended producer responsibility for those and other products, and deposit or charge requirements at the consumer retail level. This proposed legislation has a greater focus on environmental justice, requiring the U.S. Environmental Protection Agency to assess the public health impacts on nearby communities from facilities that manufacture, process, recycle, or otherwise use plastics or plastics-related chemicals.
There is currently no federal incentive in the United States to reduce and reuse plastic or for producers to use recycled plastics. However, the White House Council on Environmental Quality has published aspirational “guiding principles” on chemical safety and plastic pollution. The principles recognize that plastic pollution is an environmental justice issue and note that plastic and product manufacturers should bear responsibility for addressing plastic pollution. The principles prioritize the reduction of single-use plastics and acknowledge that the United States cannot recycle its way out of the plastic pollution crisis. The executive branch has limited ability to control plastic pollution without legislation, but it is taking some action. For example, Secretary of the Interior Deb Haaland has ordered the phaseout of single-use plastic products on federally managed lands by 2032.
The United Kingdom (UK) has taken the environmental taxation route to reducing plastic pollution. The UK’s plastic packaging tax, which took effect in April 2022, applies to plastic packaging produced in or imported into the UK. Plastic packaging is defined as packaging that is predominantly plastic by weight. The tax rate has been adjusted for inflation, and in April 2023, it increased to £210.82 per tonne. Almost 40 percent of the total plastic packaging manufactured or imported into the UK was subject to the tax. The UK collected £276 million in plastic packaging tax in the 2022–23 fiscal year.
A plastic tax, perhaps including a strong element of liability arising from plastic production and distribution, could provide revenue for innovation and specifically pay for remediation of legacy plastic waste that is not listed as Superfund hazardous substances. If punitive enough, it should make petrochemical companies think twice about expanding their reach. The threat of federal and state litigation might encourage second thoughts, too, but litigation is expensive. Former New York City Mayor Michael Bloomberg has pledged to invest $85 million to block the construction of 120 planned petrochemical plants in Texas, Louisiana, Pennsylvania, Ohio, and West Virginia. However, litigation may be the only option if there is no other policy to prevent plastic pollution from occurring in the first place, like the New York attorney general’s “first-of-its-kind lawsuit” against PepsiCo filed November 15, 2023, seeking remediation of plastic waste along the Buffalo River.
The toxic pollution and climate-changing carbon emissions from plastic production make it clear that plastic production is an environmental justice issue. Climate change, as well as other environmental hazards, disproportionately affects disadvantaged populations across the globe. Human vulnerabilities to climate change include hunger, water shortage, coastal flooding, and increased risk of disease. The climate justice movement grew out of the environmental justice movement, which combines notions of environmental sustainability and everyday environments with demands for social justice. In a prescient 2004 report, the Congressional Black Caucus identified the likely impacts of climate change on the U.S. African American population: a disproportionate burden from the health effects of climate change, including deaths during heat waves and from increased air pollution; disproportionate impact from extreme weather events and spread of infectious diseases; and increased unemployment and economic hardship due to the economic instability caused by climate change. Plastic taxes are another policy tool for justice.
