Pain Points
The circular economy is still in its infancy globally, significantly so in the United States. Laws regulating and promoting a circular economy are patchwork in the United States and lack a comprehensive approach. This strategy (or lack thereof) can result in regulatory blind-spots failing to address areas that could have the largest impact on pollution reduction. For example, concern over plastic pollution in the ocean has prompted multiple state and local bans on plastic straws, single-use plastics, and microbeads. However, research studies have shown that plastic waste largely comes from packaging (47 percent) and textiles (14 percent) and that microplastics in the ocean mostly come from synthetic textiles (35 percent), tires (28 percent), and city dust (24 percent). Yet, while there is some legislation on packaging, there is almost none regulating plastic pollution from textiles or roadways.
Additionally, many wealthy countries, including the United States, send their recyclable waste to developing countries to reduce costs, reduce domestic landfill, and meet recycling targets. Two types of waste contribute significantly to this problem—clothes (as a product of fast fashion) and electronic waste (e-waste). Many of the clothes that end up in landfills overseas are unsold products, which is wasteful on the front end (polluting environment and wasting energy to produce and ship an unused product) and wasteful on the back end (clothes pile up in landfills, can take up to 200 years to biodegrade, and are as toxic as discarded plastics given more than 60 percent of fabric fibers are now synthetics derived from fossil fuels). In regards to e-waste sent overseas, almost 83 percent of electronics are dumped or incinerated because formal e-recycling is expensive. Rudimentary recycling practices of e-waste is toxic to those processing it, contaminates groundwater and soil, and incineration pollutes the air and damages the ozone layer. Plastics are also sent to developing countries for recycling and often end up being burned illegally or dumped in landfills or waterways. And global demand of plastics is increasing, playing a significant and integrated role in global value chains of the modern economy.
A Push to Change: Consumers and Corporate Accountability
Companies have an incentive to adopt circular practices, even if they are not required to do so. One study found that sustainability was a critical driver of consumer behavior and that Gen Z and Millennial customers were 27 percent more likely than older generations to purchase a product if they thought that the brand cared about people and the planet. The younger generation’s preference for sustainable brands will be significant; the purchasing power of Gen Z and Millennials is expected to surpass Boomers by 2030 with up to $68 trillion transferring to the younger generations. In response, some companies are integrating circular economy practices into their business models. For example, in 2022, Publix, a supermarket chain, provided farmers with 54 million pounds of food waste to use as animal feed and eliminated over 360,000 pounds of plastic waste.
Other companies attempt to profit from young consumers by marketing themselves as sustainable without adopting sustainable practices. This practice is often called “greenwashing” and can establish liability under consumer protection laws for false advertising. For example, a court rejected an argument by StriVectin Operating Company that it could include the words “REEF SAFE* SUNSCREEN” on the front of its sunscreen products because fine print on the back of the packaging clarified that the product lacked two ingredients thought to harm coral reefs. Furthermore, engaging in greenwashing has led to claims of breach of fiduciary duty. Consider, shareholders brought derivative action against Exxon Mobil Corporation for misleading the public on climate change and its impact.
However, liability claims against companies are not always successful and can take years to move through the appellate process. In 2021 Earth Island Institute, a public interest organization, filed a suit against Coca-Cola Company for engaging in false and deceptive marketing and representing itself as a “sustainable and environmentally friendly company” even though it is “one of the largest contributors to plastic pollution in the world.” The D.C. Court dismissed the case for failure to state a claim under the District of Columbia Consumer Protection Procedures Act (CPPA). The case is under the process of appeal.
Currently, the law on greenwashing is in its early stages, but more suits are expected on the horizon. While the risk of liability may incentivize companies to think twice about marketing their brands dishonestly, the law needs to develop to encourage companies to adopt circular economy practices into their business models to make big change.
What Is Being Done? Legal Frameworks Arising
The move toward a circular economy has mostly been driven by states or local governments. For example, multiple states have adopted recycling content mandates and have been advancing legislation designed to promote a circular economy for plastics and increase market demand for recyclables. Recently, California adopted a bottle bill to encourage recycling and reduce littering. Illinois also passed a law allowing consumers to bring their own reusable containers to restaurants to take home leftovers. However, while states have taken the lead, the federal government has made some strides. For example, after the Break Free from Plastic Pollution Act of 2021 (S.294) failed due to a lack of bipartisan support, Congress has introduced a new Break Free from Plastic Pollution Act of 2023 (S.3127) and, if passed, will amend the Solid Waste Disposal Act to “reduce the production and use of certain single-use plastic products and packaging, improve the responsibility of producers in the design, collection, reuse, recycling, and disposal of consumer products and packaging, and prevent pollution from consumer products and packaging from entering into animal and human food chains and waterways.”
The Recycling Enhancements to Collection and Yield through Consumer Learning and Education (RECYCLE) Act was also signed into law as part of the Infrastructure Investment and Jobs Act (IRA) in 2021 and provides up to $15 million in funding for recycling initiatives. Moreover, the Environmental Protection Agency (EPA) is in the process of implementing the National Recycling Strategy, which focuses on implementing a circular economy with a goal of increasing the recycling rate in the United States to 50 percent by 2030. Recently, in June 2023, the United States participated in the eighth meeting of the Greening Government Initiative (GGI)—a summit designed to enable countries to exchange information, methods of innovation, and best practices to meet Paris Agreement climate change commitments—to discuss how national governments can advance a circular economy.
While the regulatory trend in the United States is toward a circular economy, it is only a start. State and local regulations are inevitably patchwork and are subject to blind spots. They also cannot address international concerns associated with shipping waste overseas. Many of the initiatives of the federal government are in the beginning stages of implementation (and risk not being adopted). The federal government is behind the curve in implementing circular economy strategies and some experts expect developing countries to “leapfrog the West” in embedding circular principles. The United States, as a major contributor of GHG emissions, needs to take a more significant role in promoting circular economy practices and work with developing nations rather than against them. Notably, the United States is not a party to the Basel Convention, which is a global agreement ratified by 188 countries that obligates parties to regulate the trade of covered wastes. While U.S. importers and exporters are still affected by the agreement, joining the convention would be a step in the right direction for the United States to address the significant problem of waste dumping and incineration overseas. Furthermore, in its efforts to increase recycling efforts, the United States should not lose sight of adopting front-end circular economy practices that can prevent pollution from entering the waste-stream to begin with.
Comprehensive adoption of a circular economy is important in mitigating the effects of climate change. As a leader of GHG emissions, there is great need for the United States to adopt circular economy practices. Companies seem to be responding to the shifting cultural preference for sustainability quicker than the government, and the law on greenwashing is developing to address bad actors. While legislation supporting a move toward a circular economy is adopted patchwork state-by-state, the federal government is beginning to recognize the need in adopting circular economy practices nationally. There is much more work to be done in this area of law.
