Externalities

Externality: The uncompensated effect of one individual's activities on a bystander's well-being.

Negative Externality: When there is a negative influence on the bystander, Negative

externality not only explains how plastic pollution can be an economic problem but also clarifies
why the expenses of contamination are not reflected in the market.
Positive Externality: When the impaction the bystander is beneficial.

Details of positive and negative externalities

Positive Externalities:

Planting trees: not only do trees green the area, but they also help with keeping the air clean
and can provide shade.
Maintaining your house and garden: the well-maintained property is not only nice for the
owner; it also does neighbors a favor.
Personal hygiene: washing your hands not only decreases your risk of getting sick, you also
prevent germs from spreading to other people. (However, wastewater has also increased the
spread of antibiotic resistance)

Negative Externalities:

Greenhouses: The light from greenhouses may irritate nearby neighbors and have an impact on
wildlife.
Wind turbines: they create noise pollution, affect migrating birds and decrease property value
in the vicinity. (However, they also reduce carbon emissions by clean energy production).
Cigarette smoking: this leads to passive smoking, negatively affecting nearby people. (May on
the long-term also lead to increased healthcare costs for lung cancer treatment).

The environmental cost of plastic is not accounted for in the market: neither producers nor
consumers are responsible for the contamination. Instead, the expenses are paid by society
and the environment.

Public policy towards externalities

A variety of stakeholders and lobbying groups are battling for and against the production of
plastic and the pollution that results from it. In over 200 plastic clean ups worldwide, organized
by Break free from plastic, the major polluting corporations were identified.
Ø Coca Cola, PepsiCo and Nestlé were found to be the top three corporations together creating
14% of plastic that was found in the clean ups.

Two sides… two stories

From one perspective, corporations have a vested interest in the continued manufacture of plastic since it is a
low-cost, lightweight, and safe packaging material that can be used for a variety of applications.
Ø In 2018, 73 European industries wrote a statement together calling to “safeguard the market of
packaging and packaged products,” in reaction to an EU single use plastic directive.
Ø This illustrates the motivation of industries to keep producing plastic, as transitioning to other
materials will likely cost them money.

On the other hand, many NGOs call for action against plastic pollution, and shame corporations
who are creating the pollution. NGOs and people have called out firms whose products have
been detected in the water, on beaches, or in other natural places, for example, as part of
Greenpeace's #IsThisYours campaign.
Ø Greenwashing is something corporations do to make themselves look more environmentally
friendly and sustainable. They can advertise a sustainable product their selling to improve their
reputation, while still engaging in environmentally damaging practices