Mixing fossil- and bio-polymers for internalisation of environmental damage: An evidence-based model-theoretical economic analysis

Abstract

Environmental problems resulting from the use of plastics in mass products are becoming increasingly serious, and the exploitation of scarce oil resources also poses unimagined long-term risks. Economic models attempt to demonstrate the effectiveness of regulatory measures, but instead of retaining polluting technologies and reducing market volume, petroplastics in products could be gradually replaced by compensating biopolymers. This study investigates how much of the original market volume is recovered by plastics substitution while maintaining market-related efficiency criteria. To this end, an economic market model is developed and information on estimated damage potential and willingness-to-pay is supplemented by means of a consumer study. The static analyses show that, depending on the estimates, the optimal and most efficient market volume after substitution is between 79.5% and 84.7% of the former market volume in petrochemical goods. The higher the damage estimate, the lower the most efficient bioplastics share, but at least 50% and at most 90.7%. Complete substitution is inefficient and requires consumers to perceive a much higher utility from biopolymers compared to the estimated avoidance of damage. All in all, the biopolymer treatment of synthetic products, such as clothing, is proving to be a promising internalisation technology, but requires further market analysis.