The Economics of Plastic Pollution: Policy Instruments for Reducing Single-Use Plastics

Abstract

Plastic pollution has emerged as a pressing environmental and economic concern in the 21st century, particularly driven by the proliferation of single-use plastics. These items, while inexpensive and convenient, impose vast externalities on ecosystems, public health, and economic productivity. This paper critically examines the economic foundations of plastic pollution and evaluates the efficacy of various policy instruments aimed at curbing the use and production of single-use plastics. Employing an economic lens, we analyze market failures associated with plastic consumption and explore corrective mechanisms such as taxes, bans, extended producer responsibility, and subsidies for alternatives. Experimental evidence and international case studies highlight the relative performance of these policies in achieving environmental and economic efficiency. By quantifying external costs and modeling consumer and producer responses to interventions, this paper offers a comprehensive framework for designing plastic reduction policies that balance equity, efficiency, and feasibility. Our findings suggest that a combination of instruments—tailored to regional economic conditions and integrated within circular economy principles—yields the most sustainable outcomes.