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Billions Are Being Spent To Ensure The Future Is Filled With Plastic

Image via tanvi sharma on Unsplash

Everyone has seen the pictures of the ocean riddled with plastic waste. There has been a push in recent years to eliminate plastic waste through such solutions as replacing plastic straws with paper ones that turn soggy or replacing plastic bags with reusable bags.

However, as good as using these non-plastic items may make some people feel, plastic is here to stay and it's not going anywhere. As a matter of fact, some of the world's largest companies are investing billions of dollars to make sure plastic doesn't become a thing of the past.

Companies such as ExxonMobil, Shell, and Saudi Aramco are hedging the anticipated decline of fossil fuels—driven by the debate over climate change, by increasing plastic output. The International Energy Agency predicts that petrochemicals, which is the category that includes plastic, will drive half of the demand for oil by 2050. For context, petrochemicals' current use of oil is approximately 14%.

"In the context of a world trying to shift off of fossil fuels as an energy source, this is where [oil and gas companies] see the growth," Steven Feit, a staff attorney at the Center for International Environmental Law, said.

The World Economic Forum (WEF) predicted in 2016 that plastic use will double in the next 20 years. The WEF pointed out that plastic production increased from 15 million tonnes in 1964 to 311 million tonnes in 2014. Plastic packaging accounts for approximately 26% of the total volume of plastics used, with only 14% of it collected for recycling.

An unlikely result of the fracking boom and depressed natural gas prices in the United States has been an increased supply of plastic feedstock ethane. Fracking operators, in order to offset the depressed natural gas prices, are increasingly selling the ethane they get as a byproduct.

Since 2010, more than $200 billion has been invested in 333 plastic and other chemical projects in the U.S., according to the American Chemistry Council. "They’re looking for a way to monetize it," Feit said. "You can think of plastic as a kind of subsidy for fracking."

With many of these facilities in the permitting process, Beyond Plastics—an organization whose mission is to "end plastic pollution," believes it's close to being too late. "If even a quarter of these ethane cracking facilities are built, it’s locking us into a plastic future that is going to be hard to recover from," Beyond Plastics founder Judith Enck, who is a former director of the U.S. Environmental Protection Agency, said.

Those in support of plastics cite benefits such as making cars lighter and more efficient, insulating homes, extending food’s life and keeping medical supplies sanitary. Keith Christman, managing director of plastic markets at the American Chemistry Council, asked "If you aren’t going to use plastics, what are you going to use instead?"

Despite plenty of companies attempting to phase out plastic, not everyone is fully on board. The Coca-Cola Company, one of the largest contributors to plastic waste in the world, is standing by its plastic bottles as consumers prefer them. "Business won’t be in business if we don’t accommodate consumers," Bea Perez, Head of Sustainability at Coca-Cola, said last week at the WEF. The company will use other methods such as using recycled plastic and improving recycling collection to meet its pledge to use a minimum of 50% recycled materials in its packaging by 2030.

So while it may feel like you're changing the world the next time you pull out that metal straw or bring your groceries home in a reusable bag, the reality is the largest companies in the world are putting their money in a future filled with plastic.

Leftover Crumbs

  • Stick to the script. United States Treasury Secretary Steve Mnuchin is going to be more careful about his comments on the U.S. dollar going forward. Two years ago, Mnuchin caused the U.S. dollar to dive after saying he welcomed a weak dollar. "One of the things I’ve clearly learned as treasury secretary, I’m very careful about my comments on the dollar, because two years ago in Davos, I sneezed, and I said something that I thought was completely calm, and all of a sudden the markets went crazy," Mnuchin said. "I support a stable dollar but I’m not going to make more comments on that."

  • Is it just until the robots take over? Walmart is testing raising its minimum wage for the newly created "team associate" position as it tries to compete with wages offered by Costco, Amazon and Target. The new $12 per hour minimum wage is being tested in about 500 U.S. locations. Walmart last raised its minimum wage in 2018 to $11 per hour for entry-level hourly employees. With Walmart increasingly investing in automation, it may only be a matter of time before the company can satisfy these higher wages by reducing headcount.

  • Don't be evil. United States state attorneys general will reportedly meet attorneys from the U.S. Justice Department next week to share information on their investigations into Alphabet's Google. Google is being probed for monopolistic behaviors that may cause harm to consumers through its online search and Android mobile operating system. The two sides have not yet shared the results of their investigations. An investigation was launched into Google last year by attorneys general from 48 states, the District of Columbia and Puerto Rico.

  • How else would they track what you buy? Bank of France Governor Francois Villeroy de Galhau believes crypto currency could be useful, just as long as central banks are in charge of issuing it instead of private companies. "The use of bank notes is falling extremely quickly and they are wondering whether we need to give citizens the right to digital money that is no longer a physical bank note but which has the same quality, notably the security of a central bank," Villeroy de Galhau said. "Currency cannot be private, money is a public good of sovereignty."

  • What were the bookmakers' odds on this happening? Following the sign-stealing scandal engulfing Major League Baseball, a DraftKings user has filed a class action lawsuit against the league for engaging in unfair and deceptive practices and violating state consumer protection laws. "Plaintiff Olson would not have entered into DraftKings’ MLB DFS contests during the Class Period had he known that the Houston Astros were engaged in the Trash Can Scheme and Astros Replay Room Scheme," the suit read. MLB invested in DraftKings, which allows users to participate in fantasy sports games, in 2015.