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How COVID-19 Could Change the Economics of the Plastic Recycling Sector Issifu, Ibrahim; Deffor, Eric Worlanyo; Sumaila, Ussif Rashid

Abstract

The price of oil has a great influence on prices of recycled plastics and, therefore, plastic recycling efforts. Here, we analyze the effects of the ongoing COVID-19 pandemic on crude oil price and how this, in turn, is likely to affect the degree of plastic recycling that takes place. Impulse response functions and variance decompositions, calculated from the structural vector autoregression, suggest that changes in crude oil prices are key drivers of the price of recycled plastics. The findings highlight that because plastics are made from the by-products of oil, falling oil prices increase the cost of recycling. Therefore, the price of recycled plastics should be supported using taxes while encouraging sustained behavioral changes among consumers and producers to selectively collect and recycle personal protective equipment so that they do not clog our landfills or end up in our water bodies as plastic waste.

Item Metadata

Title
How COVID-19 Could Change the Economics of the Plastic Recycling Sector
Creator
Issifu, Ibrahim; Deffor, Eric Worlanyo; Sumaila, Ussif Rashid
Contributor
University of British Columbia. Fisheries Economics Research Unit
Publisher
Multidisciplinary Digital Publishing Institute
Date Issued
2021-09-26
Description
The price of oil has a great influence on prices of recycled plastics and, therefore, plastic recycling efforts. Here, we analyze the effects of the ongoing COVID-19 pandemic on crude oil price and how this, in turn, is likely to affect the degree of plastic recycling that takes place. Impulse response functions and variance decompositions, calculated from the structural vector autoregression, suggest that changes in crude oil prices are key drivers of the price of recycled plastics. The findings highlight that because plastics are made from the by-products of oil, falling oil prices increase the cost of recycling. Therefore, the price of recycled plastics should be supported using taxes while encouraging sustained behavioral changes among consumers and producers to selectively collect and recycle personal protective equipment so that they do not clog our landfills or end up in our water bodies as plastic waste.
Subject
plastic recycling; crude oil; impulse response functions
Genre
Article
Type
Text
Language
eng
Date Available
2022-01-12
Provider
Vancouver : University of British Columbia Library
Rights
CC BY 4.0
DOI
10.14288/1.0406262
URI
http://hdl.handle.net/2429/80645
Affiliation
Science, Faculty of; Non UBC; Oceans and Fisheries, Institute for the
Citation
Recycling 6 (4): 64 (2021)
Publisher DOI
10.3390/recycling6040064
Peer Review Status
Reviewed
Scholarly Level
Faculty; Researcher
Rights URI
https://creativecommons.org/licenses/by/4.0/
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CC BY 4.0