When CEO's of corporate giants descended on Davos for the 2019 World Economic Forum to discuss the most pressing issues facing the global economy, the topic of plastic pollution loomed large. The conference program dedicated multiple panels to transforming the plastics economy and reducing pollution.

Plastic packaging has created a crisis on global and local scales. The vast majority of plastics have never been recycled. They break down into micro-plastics, poisoning the oceans and then the soil, and ultimately enter the human food chain and without a creative action, matters will only get worse. Greenpeace and other advocates at the Forum suggested that top plastic polluters, will soon be pressured like the coal industry to make major changes, or that they might even be held liable for damages, like big tobacco was in the 1990's.

At the local level, recycling isn’t profitable for governments like it once was. Chinese processors, previously the largest consumer of low-grade recycling, are no longer as willing to purchase America’s reusable waste. As of February 2018, they began enforcing tighter standards on America’s waste, and local governments are struggling to adjust. As a result, cities are paying a hefty price to divert plastics, paper, and other recyclable goods.

This new reality has hurt communities across the country. For instance, it now costs Franklin, New Hampshire $129 per ton to recycle, whereas it used to generate $6 per ton in profit when its program first began in 2010. At $68 per ton, it’s now cheaper to just throw everything in its incinerator. At this rate, these costs will send recycling back to the dark ages of public waste disposal. To keep up, cities are investing millions to more efficiently sort materials to meet new Chinese standards and keep up with corporations changing their packaging.

In Arizona, the city of Phoenix is spending $4.5 million to update the North Gateway Recycling Facility. They are expected to recoup their investment within a couple years, according to the Public Works Department. Most of the cost—$3 million—will be fronted by a zero-interest loan from the Closed Loop Partners, a venture capital fund supported by Walmart, Johnson & Johnson, and other major corporations to finance sustainable infrastructure.

Developing local recycling infrastructure is necessary. Changing consumer and producer habits is even more important. The Closed Loop Fund also works with local governments to implement better programming that help households use less and recycle what they do use.

On the production end, Nestlé acknowledges that “half of all bottles are not recycled – a significant amount end up in landfills or as marine debris.” This past January they committed themselves to not only 100 percent recyclability in all products by 2025, retiring single-use plastics, but also developing compostable paper-based materials and biodegradable polymers with the rollout of its Nestlé Institute of Packaging Sciences.

Nestle’s strategy, like those of many other corporations, assumes a take-make-dispose model, relying on customers and local governments to recycle their products and make sure they don’t end up in a landfill, or worse. Companies like Nestle are showing they understand the environmental costs associated with their products, but a more effective approach would be to invest in the product itself—specifically, its packaging. Notwithstanding their growing concern for where their packaging ends up, companies produce packaging as cheaply as possible. With low oil prices, it is often cheaper to produce more plastic than to recycle what already exists.

An alternative paradigm is to close the loop and design products for reuse. If companies instead retained ownership of packaging, they can reduce waste but also improve the customer experience. Loop, a project announced at Davos this past January, is working with large, multinational consumer goods companies to embrace and implement new multi-use business models.

With Loop, customers order items online, put down a deposit on the packaging ($0.25 for a bottle of Coca-Cola, for example), and then buy goods at local prices, delivered to their front door. Shipping is delivered by UPS and free after a few orders. Once customers finish using products, the containers are left in a Loop-branded tote on their doorstep, picked up, cleaned, and then returned to the producer—and their deposit is returned, even if the containers are damaged. What was previously single-use packaging can now be used up to 100 times for some products.

Loop’s model is new and unproven, but there are reasons for optimism, especially given the potential for improved customer experience. Containers are cutting-edge and sleek—from metal deodorant cases to thermos-like ice cream cartridges that keep contents cold up to 36 hours. This is in addition to the added convenience of front-door delivery.

But this model of the multi-use container doesn’t have to just be for large multi-nationals. In fact, until it scales, Loop will have to ship some items across the country, from where the new packaging is made to consumers’ doorsteps. The environmental benefits of multi-use packaging could be washed out if inefficient supply chains result in high transportation emissions. Compared to lighter plastics, transporting heavier containers for beverages, for example, can require 40 percent more energy and more than quadruples costs per bottle. This might be why Loop plans to launch in only a handful of major cities for the foreseeable future.

Local entrepreneurs should see the circular, multi-use economy as an opportunity. Local milk or organic egg subscriptions could thrive under such a model—goods not necessarily needed on-demand but in constant supply. Moreover, delivery might not be best in some cases. Local stores familiar with commuting patterns and public transit could rely on the rising popularity of refill services, buy in bulk, and compete with online retailers as a convenient stop just on the way home from work, eliminating transportation costs (and emissions). Further, branded packaging and carrying bags can cultivate a loyal customer following.

With the current volatility of the recycling market, a sure-fire way to reduce plastic waste is to avoid using plastics in the first place. Multi-use packaging offers consumers a much-desired alternative and a market opportunity for any company, big or small, looking for an edge. While industry alone can’t solve the plastic pollution crisis, businesses and their customers can do their part—and stand to benefit—from moving to the circular economy.

John Trujillo

Principal at Circonomy Solutions LLC