The Quaker United Nations Office (QUNO), in collaboration with Eunomia Research & Consulting Ltd., is excited to share the findings from Phase 2 of our initiative, Plastic Money: Turning Off the Subsidies Tap. This report builds on the foundational insights from Phase 1 and deepens the exploration of subsidies provided to the production of primary plastic polymers (PPPs), focusing on their role in exacerbating plastic pollution and contributing to other environmental problems.

Understanding the Scale of Plastic Subsidies

• In 2024, subsidies to PPP production were estimated at USD 45 billion, and are projected to rise to USD 78 billion by 2050 under a business-as-usual scenario.
• A large share of these subsidies is concentrated in specific regions. For example, Saudi Arabia is expected to account for USD 38 billion in subsidies in 2024 alone.
• When combined with other environmentally harmful subsidies (EHS) across sectors such as fossil fuels, agriculture, and transport, the total annual value of EHS reaches an alarming USD 2.7 trillion, further underscoring the economic distortions driving environmental degradation.

Plastic Production and the Impact of Subsidies

• Global production of commodity polymers is projected to increase from 306 million tonnes in 2024 to 590 million tonnes by 2050, driven in part by subsidies that lower production costs and promote investment in plastic manufacturing.
• China remains the largest producer, with 103 million tonnes in 2024, followed by the United States with 40 million tonnes. These figures underline the concentration of plastic production in a few key economies.

Exploring the Impact of Subsidy Removal

The report models a scenario in which all subsidies for PPP production are removed and reveals:

• Economies heavily reliant on subsidies, like Saudi Arabia, would have seen a reduction of 2.38 million tonnes in 2024. Smaller reductions are observed in other economies such as Iran.
• Removing subsidies would, by contrast, have negligible effects on the prices of most plastic-containing consumer goods. For instance, the price of a bottle of water would increase by just 0.75%, while higher-value consumer goods like dresses would see an increase of only 0.08%.

Policy Implications and Global Context

• Removing subsidies aligns with international commitments under frameworks like the UN Framework Convention on Climate Change and the Kunming-Montreal Global Biodiversity Framework. It represents a critical step in reducing greenhouse gas emissions, combating pollution, and promoting sustainable development.
• The report provides information and insights that can inform discussions at the upcoming Fifth Session of the Intergovernmental Negotiating Committee (INC-5) in Busan, Republic of Korea, where negotiators will deliberate on measures to develop a global treaty to end plastic pollution.

Next Steps

This Phase 2 report represents a significant contribution to the global understanding of subsidies in the plastics sector and their broader economic and environmental implications. As part of our commitment to advancing systemic solutions to the global plastic crisis, the full Phase 2 report will be available for download on this page between 25–29 November 2024 to coincide with INC-5 discussions.