Eighty percent of plastic waste has low residual value, and these plastics are a large percentage of the waste at the disposal facilities from which much ocean

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2Foreword 3 Executive summary 6Introduction 11 1. What are the origins of ocean plastic debris, 13 and how does it leak into the ocean? 2. What differences across regions require different types 18 of solutions? 3. What leakage-reduction solutions are available, 23 and what are their relevant economics? 4. What can trigger the implementation of leakage-reduction 33 measures in the short, medium, and long term? 5. What are the cornerstones of a concerted program 37 for global action to address this issue? Glossary 40 Core team and technical advisers 43 Notes 44 Contents

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3Foreword The last century has been a time of unprecedented growth and prosperity. But these advancements have come at a price, including significant strain on the world™s natural systems. In terms of the ocean specifically, the assumption has long been that its vastness (there are 5 hectares of ocean for every living person) means it offers an unlimited capacity for waste and can serve as the planet™s ultimate sink. This assumption is wrong. Pollution from sources like storm water and waste-treatment systems or nutrient runoff from agriculture has long been known to cause very real economic and environmental damage. But historically, both the causes and the effects of these types of pollution have largely been considered local or regional issues. Because of its longevity, ubiquity, and sheer volume, plastic debris is now emerging as a new, truly global challenge. (It is estimated that some plastic products retain their original recognizable form 400 years after discharge into the ocean.) Recent research, such as a 2015 article in the journal Science ,1 has highlighted the urgency of preventing unmanaged plastic waste from reaching the ocean, a problem known as plastic-waste leakage. Growth in the global use of plastic-intensive consumer goods is projected to increase significantly over the next ten years, especially in markets where waste-management systems are only just emerging. Unless steps are taken to manage this waste properly, by 2025 the ocean could contain one ton of plastic for every three tons of finfishŠan unthinkable outcome. We know that at least some of this plastic enters the ocean™s food chain, and evidence suggests that it has the potential to do significant harm. We also now have research to suggest that the majority of plastic enters the ocean from a small geographic area, and that over half comes from just five rapidly growing economiesŠChina, Indonesia, the Philippines, Thailand, and Vietnam. 2 These countries have recently benefited from significant increases in GDP, reduced poverty, and improved quality of life. However, increasing economic power has also generated exploding demand for consumer products that has not yet been met with a commensurate waste-management infrastructure. With a focus on where quick action would have the greatest impact, this report suggests that coordinated action in just these five countries could significantly reduce the global leakage of plastic waste into the ocean by 2025. Specifically, interventions in these five countries could reduce global plastic-waste leakage by approximately 45 percent over the next ten years. Of course, extending these interventions to other countries could have even more impact on this global issue. This collective action is most effective if it follows a new, integrated action plan, for several reasons: Ł Solutions must be global. Plastic is the workhorse material of the modern economy. It often moves through global supply chains and supports global companies. And while plastic products can have short useful lives, the longevity of plastic molecules themselves means that plastic waste travels far across borders and into our common high seas. We need a global approach to mitigating pollution from plastic wasteŠan approach that considers region- specific solutions that will prevent this waste from entering the ocean in the first place. Ł Solutions will have diverse benefits. There are many motivations for stopping plastic and other waste from leaking into the ocean. Waste constitutes economic loss of valuable materials; creates health and labor concerns, especially for waste pickers; harms overall ocean productivity, with a substantial impact on fishing revenues; 3 and dilutes the aesthetic and economic value of beaches and other coastal environments. Any one of these reasons in isolation may not provide sufficient motivation to take collective action, but the ocean is inherently connected, integrated, and global. This perspective can serve as the catalyst to bring a new collaborative approach to the problem at the necessary scale.

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4Ł Solutions must be effective and fast. The user benefits of plastics are undisputed and will continue to drive massive growth; the ICIS Supply and Demand database projects that plastic production will increase from about 250 million metric tons in 2015 to approximately 380 million metric tons by 2025. The surge is the compound effect of population growth, economic growth, increasing resource intensity, and an unprecedented dominance of plastics as the multipurpose material of our economy. The highest levels of leakage are in regions that also have some of the highest projected growth rates for plastic waste; the quantity of plastic estimated to enter ocean environments in 2025 is double that of 2015. The issue is urgent but not insurmountable; the next ten years are critical. Ł Solutions require a full view of the integrated life cycle. There is no perfect plastic material. Its residual value depends on how the plastic is used, which is typically just one of several criteria considered when designing a product. Sometimes less material is better, sometimes different material is better, and sometimes more material is better. This makes it hard for any single player in the value chain to independently drive full-life-cycle improvements. The need for multidimensional decision making means progress requires an unusually high degree of supply-chain cooperation. Ł Solutions are path dependent. Many actions we take to address the problem now will dictate the viability of other solutions in the future, because today™s decisions will shape materials markets for decades. Large-scale deployment of waste-to-energy technology (such as gasification, pyrolysis, or incineration with energy recovery 4), for example, may help solve the pollution problem associated with today™s plastics, but if not done thoughtfully, it may also hinder the development of plastics that offer higher-residual-value uses at the end of their life cycle. For these reasons, it is important to consider long-term implications of the choices we make today. While well intentioned, existing efforts to address the leakage of plastic waste into the ocean and other waterways are not being undertaken at scale or with the level of strategic interconnectedness required to meet the scope of the challenge. This report is written to inform discussions about how to significantly reduce and ultimately stop plastic-waste leakage, and to present a view of what successful concerted action could look like. Throughout this work, in contrast to much of the existing work on plastic in the ocean, we focus on land-based solutions to preventing leakage, rather than studying the transport and fate of plastic once it is in the ocean. We believe this is the best solution to the problem of plastic waste leaking into the oceanŠstopping leakage in the first place, rather than treating it after pollution has already occurred. Therefore, this work focuses on five questions: 1. What are the origins of ocean plastic debris, and how does it leak into the ocean? 2. Are there significant differences across regions that require different types of solutions? 3. What leakage-reduction solutions are available, and what are the relative economics and benefits of each? 4. What can be done to trigger the implementation of leakage-reduction measures in the short, medium, and long term? 5. What are the cornerstones of a concerted program for global action to address this issue?

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5Although this report looks at all five questions, the main purpose is to highlight viable improvement opportunities that exist today. Therefore, the analysis of how plastic leaks into the ocean, as well as research on near-term solutions and their economics, are at the heart of this work. We believe a speedy embrace and deployment of these opportunities is as important as a dialogue on the more systemic changes in the way plastic is produced and used. This work is a signature initiative of the Trash Free Seas Alliance ® and was made possible by support from The Coca-Cola Company, the Dow Chemical Company, the American Chemistry Council, the Recycling and Economic Development Initiative of South Africa, and WWF. It was led by Ocean Conservancy; the McKinsey Center for Business and Environment has been the knowledge partner in the creation of this report. Advisers to this project include the Global Ocean Commission, The Prince of Wales™s International Sustainability Unit, the Ellen MacArthur Foundation, government and multilateral funding agencies in our focus countries, and a range of technical advisers with waste-management expertise and experience in the plastics and recycling industries. In addition, Ocean Conservancy gratefully acknowledges the generosity of the following funders who are committed to a trash-free ocean and whose support contributed to the development of this report: Adessium Foundation, 11th Hour Racing, Hollomon Price Foundation, Forrest C. & Frances H. Lattner Foundation and Mariposa Foundation. We hope this report will set in motion increased efforts to address the global challenge of plastic- waste leakage through concerted action that ensures all major actors are deeply involved. We also hope it can provide a joint fact base that will underpin the discussion and help focus action on high-impact investments. This work entailed significant literature review, interviews with more than 100 experts and decision makers, detailed case studies of over 20 initiatives aimed at improving waste-management systems, and in-depth work in the Philippines and China. We are very grateful for the substantial support this work has received, and are confident that the community of supporters will continue to grow as the effort builds momentum in the months and years to come. Andreas Merkl Chief Executive Of˜cer, Ocean ConservancyMartin Stuchtey Director of the McKinsey Center for Business and Environment

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6Executive summary The amount of unmanaged plastic waste entering the oceanŠknown as plastic-waste leakageŠ has reached crisis levels and has caused significant economic and environmental damage. The problem warrants a collective global response. The first step should focus on the five countries that together account for between 55 and 60 percent of the total plastic-waste leakage; this report describes an integrated set of measures (or levers) that together could reduce leakage in these five countries by 65 percent and reduce total global leakage by approximately 45 percent by 2025. This is the prerequisite for successfully ending plastic-waste leakage entirely by 2035. For each lever, the report specifies costs and plastic-waste-leakage reduction potential. Total costs of implementing these levers could be contained at an estimated $5 billion a yearŠan investment with significant returns to the entire economy. That amount could largely be met through typical project-financing mechanisms involving the public, private, and multilateral sectors. Private industry has an important role to play in catalyzing public and private investment by strategically reducing capital costs and investment risk. Assembling the appropriate financing approach, along with the need for political commitment, location-specific data and analysis, and action to align government policies and regulatory environments, will require coordinated action across public and private stakeholders. Although each set of actions described in the report has a different lead timeŠwith effects in the short, medium, and long termŠthey all require an immediate start if we as a society are to move toward peaking and then essentially eliminating the leakage of plastic into the ocean. The agenda described in this report recognizes ongoing efforts such as capital-light improvements to uncontained dump sites located near waterways and heavy penalties for dumping of waste into waterways by waste-transportation systems. But it also suggests new priorities, acceleration of existing initiatives, increased private-sector commitment, and a focus on fiocean-smartfl measures geared primarily toward reducing leakage of plastic to the ocean. And while this report focuses on five countries with especially high levels of plastic-waste leakage, we believe it also sets forth a replicable model that can be applied in other countries that would benefit from improved waste- management systems. An article in the February 13, 2015, issue of the journal Science added to an already robust body of research suggesting that the volume of plastic leaking into the seaŠestimated at approximately eight million metric tons a yearŠgreatly exceeds any previous estimates. 5 Evidence of the environmental and economic damage is mounting. In a business-as-usual scenario of unchecked plastic-waste leakage, the global quantity of plastic in the ocean would nearly double to 250 million metric tons by 2025. A broad range of stakeholders from the public and private sectors is aligning on ocean plastic as a major global issue. Capitalizing on this momentum requires a global agenda, underpinned by a strong understanding of the possible solutions and their economics. This report is meant to provide a basis for global action. It is the result of corporate and nongovernmental-organization (NGO) parties coming together on this issue and represents emerging collaborative action across the consumer-goods value chain and between the private, public, and social sectors. To arrive at our recommendations, we looked at five key questions:

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82. Are there significant differences across regions that require different types of solutions? Existing leakage pathways and resolution mechanisms vary among countries, depending on the urban/rural makeup (for instance, population levels, the amount of waste generated per square kilometer, and the degree to which waste is aggregated at dump sites), the level of existing investment in waste systems and infrastructure (as it stands, collection rates vary widely), and local incentive policies (for instance, electricity feed-in tariffs). So any portfolio of solutions must take these regional differences into account. For example, in low-collection countries, the priority should be to push collection levels to 80 percent over the next decade (the current average in these countries is about half that). In places that already have high collection rates, post-collection leakage should be reduced to about 1 percent. 3. What leakage-reduction solutions are available, and what are the relevant economics of each? Programs and interventions in the five high-opportunity countries would require a ten-year effort that starts immediately and takes advantage of the economic leverage points identified in this report. Specifically, we compiled and evaluated 33 different solutions, creatingŠfor the first timeŠan approximate ocean-plastic-mitigation cost curve. This cost curve measures solutions in terms of estimated cost (dollars per metric ton of leakage avoided) and potential impact (metric ton of leakage avoided), and is accompanied by further analysis on ease of implementation. Based on this analysis, several levers are most effective: Ł Closing leakage points within the collection system by optimizing transport systems to eliminate illegal dumping, and closing or improving dump sites located near waterways. Ł Increasing waste-collection rates by expanding collection service, as plastic waste is more than twice as likely to leak into the ocean if it remains uncollected. Stopping the growth in absolute metric tons of leaked plastic would require that the weighted average collection rate in the five focus countries be doubled, from roughly 40 percent to nearly 80 percent. Ł Using a variety of waste-to-fuel (e.g., gasification) or waste-to-energy (e.g., incineration with energy recovery) technologies to treat waste in areas with high waste density. The choice of waste treatment should, of course, align with local priorities, local regulations, and electricity tariffs. (Using these technologies does not preclude a portion of high- residual-value plastics being recovered by the informal sector for recycling.) Pyrolysis also is an option in the medium term; if the cost structure for this technology improves by 25 to 35 percent over the next five years, it could become even more widely used as a substitute treatment option. Ł Manually sorting high-value plastic waste and converting much of the remainder to refuse-derived fuel (RDF). This lever, which is specific to areas with low waste density, entails extracting for recycling the 20 percent of plastic waste that has high residual value and converting a substantial portion of the remaining 80 percent to refuse-derived fuel for use in the cement industry. This RDF could replace 3 percent of total coal consumption. The results of these analyses dispelled some commonly held misconceptions. For example, analysis suggests that recycling alone is not a solution, as about 80 percent of the plastic- waste stream is too low in value to incentivize extraction, and almost 30 percent cannot be distinguished at a polymer level without additional investment in optical sorting equipment.

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9Bans on plastic bags can be effective, but only in specific retail channels and heavily regulated locations. Lightweighting, or reducing the quantity of plastic in packaging, reduces the growth rate of plastic consumption by only a few percentage points while also reducing the incentive for waste workers to manually extract some items, since items will contain less material that can be resold. 4. What can be done to trigger the implementation of leakage- reduction measures in the short, medium, and long term? Based on our findings, three sets of actions are needed. The first two will help reduce plastic- waste leakage in the five focus countries by 65 percent over ten years of implementation (i.e., by 2025, assuming a launch in 2015), which is roughly equivalent to reducing global leakage by 45 percent), and together with the third would help ensure that plastic-waste leakage peaks before 2030 and then continues to decline until the problem is essentially eliminated. 1. Short term. Accelerated development of collection infrastructure and plugging of postcollection leakage to create an almost 50 percent annual leakage reduction by 2020, which would also help ensure availability of sufficient waste feedstock to support waste treatment at scale. 2. Medium term. Development and rollout of commercially viable treatment options to convert over 60 percent of plastic waste to material or energy, using technologies that are already viable or can be developed at an accelerated pace. This would reduce leakage by nearly 16 percent by 2025, for a total reduction of 65 percent by that year. 3. Long term. Innovations in recovery and treatment technologies, development of new materials, product designs that better facilitate reuse or recycling, adoption of alternative food- and beverage-dispensing concepts, and adherence to the broader principles of circularity to ensure a more sustainable plastic life cycle. Together with the short- and medium-term initiatives, these longer-term actions have the potential to essentially eliminate plastic-waste leakage from the priority countries by 2035. Time to impact will differ significantly, but all three sets of actions should be initiated now to achieve the full potential impact by 2035. The first set, which focuses on improving collection and plugging postcollection sources of leakage, can be done fastest, as the mechanisms to do so are well established. Given the high economic growth and the emergence of a consuming class in the focus countries, we believe it is critical to get this first set of actions to deliver outcomes soon. The solutions will need to move faster than the growth in the problem. This study focuses on the first two sets of actions because we believe they make it possible to achieve dramatic improvements in the short and medium term. Moreover, these two sets of levers are not plastic specific; they target the entire waste stream and as such can be a solution for land-sourced marine debris in general. If executed today, the total program would cost about $5 billion a year but would largely overlap with existing efforts to improve waste management in these booming economies. (For example, China is already in the process of expanding its capacity for incineration with energy recovery.) An accelerated program in the five countries, however, will require high-performing public- private partnerships launched in conjunction with appropriate enabling national and local policies and effective enforcement once policies are in place. Capital-investment plans, waste-management budgets, and existing donor/multilateral project spending can be leveraged toward the program™s goals; however, private-sector investments will likely be required to reach the reduction targets. The chemical and consumer-goods industries could help catalyze public and private investments by strategically reducing capital costs through, for example, equity participation, first-loss positions, offtake agreements, and price guarantees. The third set of actions is critical to sustaining decreased plastic-waste leakage in the long term, but as the impact would be predominately beyond 2025, these actions have received less focus in this report.

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105. What are the cornerstones of a concerted program for global action? Because of the scale of the problem, the next ten years will be critical. Current international momentum around this issue has created a window of opportunity for developing a global agenda that can resolve this tremendous challenge. The architecture of such a global program will have to reflect the local nature of waste management, secondary material markets, and consumer and waste-worker communities. It will also have to recognize the role of the largest producers of resin, packaging, and consumer goods. Bringing together these different stakeholders and interests will require a coalition, which must have a central mechanism for creating alignment and harnessing the unique abilities of each constituency to contribute to the global solution. This coalition should develop and execute an implementation plan along the following six areas for action: 1. Political leadership and commitment. Obtain real and meaningful commitments from national governments, governors, and mayors to set and achieve ambitious waste- management targets. 2. On-the-ground wins. Provide local fiproofs of conceptfl for integrated waste-management approaches in carefully selected beta cities (chosen based on the joint economics of good waste management and local co-benefits). This will require global expertise in waste- management engineering, innovative on-the-ground delivery mechanisms, and formal project financing. 3. Critical mass. Using lessons learned in beta cities, build a best-practice transfer mechanism that can accelerate the transfer of global expertise to high-priority cities and regions. 4. Prerequisites for funding. Ensure that required project-investment conditions are met in the private, public, and multilateral sectors alike. Work with industry (likely the plastic-resin, packaging, consumer-goods, retail, and waste-management sectors) on mechanisms to de-risk waste-management project-finance investments. 5. Technology-implementation support. Provide state-of-the-art waste-management technology providers with detailed data on waste composition, volume, and pathways; local infrastructure; wage structure; waste-picker systems; feedstock-supply security; energy prices; feed-in tariffs; and offtake agreements. 6. Issue prioritization. Bring leadership and strategic focus on solutions to the ocean-plastic challenge as part of the global policy agenda on the ocean. Increasing clarity about plastic-waste leakage volumes and the waste™s effects on the ecosystem, as well as new information about solution economics and action leversŠtogether with emerging private-sector, government, and multilateral supportŠmakes this a good time to elevate the agenda for reducing leakage from the global plastic value chain. This study outlines a path that can generate considerable benefits to communities, preserve the bioproductivity of the ocean, and reduce risks for industry. It shows that, over the next ten years, concerted action in the form of a $5 billion annual ramp-up in waste-management spending could create a vibrant secondary resource market, trigger investment in packaging and recovery systems, and let the ocean thrive. The drivers of the ocean plastic-reduction agenda should convene and jointly define the architecture of such a global program, the actors who should be involved, and the funds required to drive a flagship initiative that stands for a new, collaborative, and effective way of addressing this global challenge.

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11Introduction Plastic is one of the most versatile inventions of our time and has unrivaled application at a material level. But it has become evident that in the absence of basic waste management and advanced recovery systems, the single-use nature of plastic increases the likelihood that unmanaged plastic waste will reach the ocean, which acts as the planet™s ultimate sink. Plastic has been identified as a major component of marine debris, because of its prevalence in the waste stream and its longevity. 7 While there are currently no widely accepted scientific estimates of the ocean™s absorptive capacity of plastics, the issue is of high importance. Once in the ocean, plastic particles are highly persistent. Persistence varies by polymer as well as the form and use of the plastic itself, but in many cases, the plastic is believed to exist in recognizable forms for hundreds of years. After the form is no longer recognizable, it is unclear how long the smaller particles continue to circulate. This poses a challenge to ecosystems, especially given that plastic is known to absorb other pollutants and is consistently found in nearly all forms of marine life. The Joint Group of Experts on the Scientific Aspects of Marine Environmental Protection (GESAMP), a UN-sponsored advisory body, concluded that microplastics can affect the physiology of host organisms and potentially compromise their health. Studies have also linked plastics to physiological stress, liver cancer, and endocrine dysfunction in fish that ingest them. 8 And there are indications that ingesting plastic can affect fertility in female fish as well as the growth of reproductive tissue in male fish. 9 This is a problem not just for marine life, but also for the global fishing industry, which employs 55 million people, is valued at approximately $220 billion, 10 and provides 15 percent of the world™s dietary protein. Some studies have shown that plastic even affects lugworms, amphipods, and other organisms at the very base of the marine food web. 11 The complex toxicology of plastic and its associated substances and the ways they affect the oceanic food chain, including humans, will require further study. There has long been a vacuum in what is an increasingly global, increasingly vocal debate about the health of the ocean. Specifically, there has been little quantitative analysis of either the sources or the amount of plastic that leaks into the ocean. Therefore, no holistic, phased solution set has been proposed to address this problem. Recently, however, a series of analytical endeavors, including the analysis represented in this report, have begun to fill this void. A paper published in early 2015 in Science estimates that approximately 8 million metric tons of plastic leaks out of the global economy and into the ocean each year. 12 This suggests that in the absence of meaningful interventions, the world™s ocean will contain nearly 250 million metric tons of plastic by 2025. But like an iceberg, the visible manifestation of the plastic problem is very small. Both the vast quantities of waste such as the North Pacific gyreŠsometimes referred to as the fiGreat Pacific Garbage PatchflŠand the considerable quantities of waste routinely found during annual beach cleanups around the world are likely less than 5 percent of the plastic that enters the ocean every year. 13 The remaining 95 percent is not at the surface and is essentially impossible to extract at scale once it has entered the ocean, which suggests that efforts to control this issue must address the land-based sources of waste, rather than symptoms of pollution once it reaches the ocean. The massive growth to date in plastic-waste leakage stems from a substantialŠand entirely predictableŠincrease in the overall use of plastic. This increase is correlated primarily with decreasing poverty, growing incomes, and rising consumption in fast-growing emerging markets, coupled with underdeveloped waste-management systems in these countries. To date, a significant portion of global leakage (estimated by Science to be between 55 and 60 percent) comes from five emerging markets where growth is particularly fast: China, Indonesia, the Philippines, Thailand, and Vietnam. 14 However, it must also be noted that more than 25 percent of leakage originates outside Asia, so the struggle to reduce plastic-waste leakage into the ocean remains a global effort.

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