Introduction

This document explores why Canada unlike many other OECD member states to make strides to ban single use plastics.

Section I: It Costs Too Much

Compared to their plastic counterparts, paper and alternative compostable/biodegradable materials are significantly more expensive to produce. A plastic bag and straw for instance costs a USD1¢ to produce, whereas a paper one costs 5-6x more. If the material is not paper and is more environmentally friendly, it costs 10-11x more. On top of this, wholesalers can pay upwards of USD$60 for shipping.

For example:

Here I will put a couple of examples – average profits and costs of green stuff

As a result, Canadian wholesalers are forced to charge anywhere from 15% to 200% more to be sustainable.

This means that not every business can afford to be sustainable, and those that are green or at least capable to be green often share one or more of the following characteristics

1. Be multi billionaire corporations that often originate from the USA – Patagonia, Chipotle, Panera Bread, Canada Goose which for example, all use paper bags. Additionally, Whole Foods uses paper bags, compostable cutlery, and donates back to the environment.
2. Be targeted to upper-middle, upper class individuals who are willing to pay the extra premium, which in turn covers the cost of a green product. Examples include Burberry who significantly relies on Solar Power, high end clothing stores, La Vechhia, which is an Italian restaurant on Yonge and Eglington,
3. Make enough profits to be green. One example is Ed’s Ice Cream in Leslieville (Toronto), an ice cream store that uses birch spoons. Canadian wholesaler Greenmunch sells said birch spoons $62/1000 spoons, whereas an equivalent plastic spoon (sold by Uline) can be found for $45 (assuming 5+ boxes are bought).
4. They can afford to be green, but they have no incentive to do so. One such example is Longos who did an experiment 2 years ago to see if customers would react differently if they used paper bags over plastic. Longos found a neutral reaction, thus, they had no incentive to fully commit and quickly switched back to conventional paper bags. The difference between Longos and a company such as Apple, Chipotle, Whole Foods, etc is that the latter companies have a much larger global presence and as such there is a greater demand for them to be leaders in social responsibility.

Thus, the problem is a lack of funds and/or incentive to be green. Yet, other countries were successful. Why?

Section II: The European Model

In March 2019, Europe banned single use plastics effective 2021, and have plastic cleaned up from Europe by 2029. This can be seen as no surprise to many as the EU is known for having one of the strongest environmental policies in the world. The EU understands that plastics cannot be eliminated in one night, and as a result, have issued numerous incentives which will be described below that incentivize businesses to switch from plastic. In turn, this eases the transition from plastics. In addition, the EU has published an entire document on the circular economy of plastics. Many of its ideas will be found throughout this section and the next. The original document can be found here:

https://publications.europa.eu/en/publication-detail/-/publication/33251cf9-3b0b-11e9-8d04-01aa75ed71a1/language-en/format-PDF/source-87705298

European Efficiency Fund

The aim of the EEF is to help the EU member states to reach their collective goals for the 2030 Framework for climate and energy. These goals are but not limited to

1. Cutting GHG emissions by 40%
   
   2. Increasing renewable energy use by at least 27%
      
      3. Improve energy efficiency by at least 27%
         
   It aims to achieve this by providing funds to EU member states for the purpose of
   
   1. Investments into energy savings with targeted private public partnership for the purpose of mitigating climate change.
      
      2. Energy efficiency for economically sound and viable projects
      3. Attract private and public capital into climate financing.
      The fund has major investors from institutions such as CDC and Deutsche Bank, which shows in the soaring amount of the European “Eco Innovation
      

   EU Backed Energy Efficiency Mortgage Bank Team

   In early-mid 2018, the EU decided to co-launch with 35 other European banks, a green mortgage program for businesses and individuals. There is great incentive for buildings to be green as it leads to higher cost savings. However, the problem is that the upfront cost is significantly expensive. For example, solar panels in Toronto can cost as much as 200,000. However, with the green mortgages, this incentivizes parties to go green because they will have a large access to financial assistance.
   

   European Investment Bank (EIB)

   The European Investment Bank is “guided by EU policies in energy, climate change, and external affairs and developments. The EIB notes that the achievement of the EU energy objectives – cheap, clean and secure energy will require significant more investments and will make up 90% of all investment needs. It offers a range of products and services to clients in the energy and related sectors. For example, 2018, their financing loans constructed 26,000 km of power lines and 15228 MW of electricity and of which at least 86% came from renewables.
   They finance projects that support the following
   
   1. “sustainability through renewable energy sources to reduce greenhouse gas emissions and dependence on finite energy resources”
      
      2. “competitiveness in energy supply to create a genuine European single energy market to boost efficiency and control consumer prices”
      3. “energy efficiency technology to support energy-related research, development and innovation”
      4. “supply security through diversification, particularly with indigenous sources to cut the risks from dependence on external supplies”

Note, more information about the EIB can be found here – https://www.eib.org/en/publications/eib-energy-lending-criteria.htm and https://www.eib.org/en/projects/sectors/energy/index.htm

Life+ Climate Action

This programme was set up by the EU 2014-2020 Regulation that establishes the Enviuronment and Climage subprogrames of the Life Programe for said years. The budget is 3.4 billion euros.

It’s objectives are

1. Help move towards a resource-efficient, low carbon and climate resilient economy, improve the quality of the environment and halt and reverse biodiversity loss;
   
   2. Improve the development, implementation and enforcement of EU environmental and climate policy and legislation, and act as a catalyst for, and promote, the mainstreaming of environmental and climate objectives into other policies and practices;
      
      3. Support better environmental and climate governance at all levels, including better involvement of civil society, NGOs and local actors; and
      4. Support the implementation of the 7th environmental action plan.
         

They give incentives to projects that support climate change adaptation and/or mitigation. An example of adaptation is when they financed a project that climate proofed social housing in the UK. An example of an mitigation project is when a business developed a software to track GHG emissions to reduce Greece’s carbon footprint, which was significantly high. The software is called Waste-C-Control.

“According to the WASTE-C-CONTROL software tool results, the anticipated GHG emissions reductions from the implementation of the LAPS over a 20-year period were 1 600 kilotonnes CO2 eq (65%) for Eastern Macedonia and Thrace; 192 kilotonnes CO2 eq (36%) for Western Macedonia; and 75 kilotonnes CO2 eq (18%) for Chania.” More information can be found here – http://ec.europa.eu/environment/life/project/Projects/index.cfm?fuseaction=search.dspPage&n_proj_id=3703

Horizon 2020

Another EU backed project that loans to businesses that capture carbon, renewable energy, smart grids and other innovative technologies. In October 2018, two projects got the loans:

1. €60 million loan will help WindPlus consortium to install a wind farm that will float in deep waters off the Portuguese coast
   
   2. €17 million will enable project Greenway to expand its network of charging stations for electric vehicles on a large scale across Central and Eastern Europe.

   Statewide Rebates/Incentives Real Estate

   Many states have their own incentives and tax credits for real estate development projects such as France which has an interest free eco loan for the cost of conserving home energy and installation of septic tank.
   

   Social Banks

   Emergence of Social Entrepreneurship banks of which their sole purpose is to invest in green products such as paper bags. Find that example!

Conclusion

As seen in this description of EU incentives, it is much easier for businesses, and as a result, Europe as a whole go green if there are incentives to do so.

A Canadian Application to the European Model

The Canadian banking market is very concentrated as it is dominated by a few banks. In addition, Canada has the advantage of being less populated than other OECD states. To make a similar impact as the EU, Canada should delay their plastic ban a few years since it is significantly behind. Perhaps 2024.

Right away, the government should issue an EU-like fund and work with the banks (and other stakeholders in the financial sector – e.g. accounting firms such as KPMG) to provide lucrative incentives to businesses and individuals who go green. In addition, businesses should be penalized (dependent on size of business and amount used) should they use plastic.

However, before we conclude, it is important to note that certain plastic alternatives are worse than others. For example, while paper is compostable, relying on paper can lead to deforestation, and paper uses 3x more water than plastic. This leads to the concept of tiers. The more green something is, the more incentives you should get.

It is important to note that products made with recovered plastics and/or biodegradable plastics are not much better for the environment than typical plastic because they require the addition of chemicals that cannot degrade; in addition, the notion of alternative products such as bamboo should not be considered green because they come from China, in which does not have strong carbon standards, and they are often made with 60% resin. This includes those that are considered 100% organic. Such products should only be sold in Canada if they are native to Canada

Like the EU, this forces consumers and businesses to use plastic alternatives

Conclusion

Single use plastics, despite the claim that it can be turned into energy, it is dangerous for a society to be dependent on waste. Rather, Canada should take an EU approach and harmlessly force consumers and businesses to use plastic alternatives. They will have no choice but to be green in order to save money.

Suggestions

1. Make the ban on plastics sometime between 2023-2025
2. As a transition, follow a similar model as proposed or similar to the EU model.
3. Advertise the importance of the environment and make it a collective societal responsibility rather than as a political tool. We are all in this together. It benefits the parties because it shows that Canada when in crisis is above petty rivalries.