ISSN: 1391 - 0531
Sunday, February 11, 2007
Vol. 41 - No 37
Financial Times  

Polythene issues

A horrendous offender or an unappreciated servant?

By W.A.Wjewardena, Deputy Governor, Central Bank of Sri Lanka


Polythene under fire: A policeman checks the thickness of a polythene bag sellers’ products

If there is a popular march hailing polythene, who would choose to go at the front of the march? I have asked this question from many people during the last 15 years or so. The answer I always got was that people would march in the procession in the following order: polythene manufacturers, politicians, student leaders, housewives and farmers. All these may march in the procession. But none of them has a reason to march at the front.

The one who would do so would be the person who would get the highest benefit out of polythene. There is none to get a higher benefit out of polythene than the person who owes his life to it. In that sense, trees have the highest incentive to do so. That is because, if not for polythene, trees would be cut, chopped and pulped to make paper to produce substitute carrying bags. Because polythene has substantially met the demand for carrying bags, it has been possible to keep the demand for paper bags to a minimum. Hence, many trees have been able to save their lifespan, thanks to polythene. If trees are grateful for that, they should be the first to march in any procession hailing polythene.

There is a tendency by many to condemn polythene as an undesirable product. In economics, an undesirable product is known as ‘a bad’. ‘A bad’ is a product of which the consumption of an additional unit would reduce the total pleasure (utility) of the consumer, because the marginal utility of consuming that unit is negative. Hence, the continued consumption of the product is considered as a nuisance making the consumer unwilling to pay a price to get it. In other words, when a product becomes ‘a bad’, the seller has to pay the buyer to induce him to consume it. Thus, the ‘bads’ always carry negative prices. In contrast, for a desired product known as ‘a good’, the consumer is willing to pay a price to get it. Hence, for them, there exists a positive price.

Polythene does not qualify to be called ‘a bad’, because the consumer is willing to pay a price to get it for his use. If polythene is a desired product, then, why is there this public protest against it? When one digs into the real reasoning behind the protest, it would appear that the protest is not merely against polythene. It is a protest against the widely spreading consumerism which, many think, has plagued the society. Polythene has been used as a proxy for the disliked consumerism and in that sense, it is an innocent victim.
This may be difficult to understand at the first glance. But, when one examines the real nature of the protest campaign, one may understand that people, at the same time, both love and hate the life they lead in this consumer society. They have erroneously identified polythene as identical with consumerism. Hence, the displeasure they have about consumerism is expressed as a dislike of polythene.

During the last 50 years or so, trade and commerce have expanded several times, along with the growth of income of people throughout the world. The range and the volume of consumer goods consumed by them too have expanded considerably during this period. This created a huge demand for packing bags which was traditionally met out of paper products. Paper is basically produced of wood pulp which comes from trees. Hence, to supply the growing need for paper bags, it would have been necessary to cut trees in large numbers. With the limitation which paper bags has for the re-use of the same several times, it would have been necessary to cut more and more trees to produce the ever rising requirement of paper bags. This would have meant that the entirety of the world’s forest resources would have been finished off within a short period of time. With paper products becoming scarce, the price of paper bags would also have shot up in the market making them unaffordable by ordinary consumers.

The above seems to be a doomsday story to scare people. But, given the level of the consumer demand today, it is not at all improbable. A comparison could be made about the demand for wood for manufacturing furniture needed by people getting rich in deveoping countries. A recent estimate has indicated that, if China’s per capita income increases to the level of a higher middle income country, even the entirety of the forests in Indonesia and half the forests in Malaysia would be insufficient to meet the demand for furniture from the Chinese. If India’s per capita income also reaches the level of China, then the whole of the forests in Myanmar, Malaysia and Indonesia would be insufficient to meet the demand coming from the newly rich in the two countries.

Pressure
The pressure on the world’s wood resources to supply the paper bags for carrying on the expanding retail trade throughout the world was very largely alleviated by the discovery of polythene in mid 1970s by chemical engineers. The quest for this product was hastened when the petro-chemical industry had to further process its waste-matter to raise the profit margins which had been eroded by the increase in the crude oil prices by OPEC in 1970s. The result was the invention of a large number of by-products out of the waste-matter of the petroleum industry. The synthetic yarn, polyester, nylon, plastic, optical fiber and polythene are some of them.
The poly-sack, compared to other types of alternative products had the following advantages:

*First, they were cheaper than other substitutes because it came from the waste-matter of the petroleum industry that had a very low marginal cost.

*Second, it was also lighter and therefore, was easy to carry from place to place.

*Third, it was also stronger and therefore could be used to carry a fairly heavy load thereby reducing the transportation and ware-housing costs.

*Fourth, it was water-proof. Hence, it could be used in any weather condition.

*Fifth, it had the flexibility to use for any type of packing or carrying purpose.

*Sixth, it could be produced easily on a large scale and transported and stored without additional cost or inconvenience.

*Seventh, it could be supplied in printed form to meet the taste of consumers as well as producers.

*Eighth, there was practically no limitation of the raw materials needed for its production, because such raw materials came from the larger petro-chemical industry.

The above were the reasons for the wide popularity of polythene as a packing material. None of the other traditional substitutes could beat it, due to these specific advantages uniquely possessed by it. Hence, the period since late 1970s witnessed a rapid popularization of polythene not only as a packing material, but also as a multiple user product.

The increased use of polythene definitely benefited the society. But, along with that use came the unfavourable development of polythene being dumped every where, especially in urban centres. This was very widely observed in places where people gathered in large numbers. Since polythene normally takes a longer time to decay, such polythene got accumulated on the surface of the earth. They created the additional problem of clogging drains and providing comfortable breeding grounds for mosquitoes and other disease carrying insects. The littering of the environment with polythene bags was also not acceptable on aesthetic grounds. It eroded the natural beauty of the environment. Hence, people had every reason to criticize the use of polythene in large quantities disregarding the numerous benefits it provided to them.

Decay
It is true that polythene takes a longer period to decay than paper. Yet, compared to many other products which people had been using traditionally, polythene has a much shorter life. Take, for example, glass, ceramic, steel and concrete.

These items would not decay even in thousands and thousands of years. Hence, the environmental degradation caused by the dumping of such items in the environment is persisting much longer than that is caused by polythene. As a result, if anyone protests against polythene on the ground that it takes a longer time for bio-degradation, then he cannot ignore these other products which are non-biodegradable at all.

The anti-polythene campaign would have been fueled by many factors. First of all, the widespread polythene use would have been taken as representative of high consumerism which is hated by many people. Hence, there is a natural dislike of the item by the very people who use it. Second, unlike other longer persisting items, polythene is used in large quantities and, as a result, dumped in large quantities.

This creates an ugly scene in the environment raising objections to the accumulation of polythene on aesthetic grounds. Third, there is no effective mechanism or incentives for re-cycling polythene. Hence, polythene is eliminated from the environment only after it has run its natural course of decaying which usually takes about six to twelve months. Fourth, on socio-politico grounds, polythene is a by-product of the much disliked petro-chemical industry and therefore, the general ill-feeling towards the giant petroleum companies is extended towards polythene as well.

The anti-polythene lobby appears to have mistakenly identified polythene as the master. But, polythene is a servant and for that matter, a versatile and innocent servant. It has been able to meet many needs of the society: hygienic, consumer, production,distribution, consumption and even those of children and old people. Its use by people has definitely made life easier and more convenient. Imagine the challenge of a farmer who has to carry water from a distant place to his field without losing any of such water to ground absorption. Either he has to carry that water on his shoulders making a number of trips back and forth or construct a canal with concrete at a high cost. With polythene, he does not have to do either. Farmers in Israel have laid polythene on canal beds and allowed water to flow freely through the desert to far away farms. The cost of carrying water in this manner has been relatively lower than alternative methods.

Disposal the problem
The issue relating to polythene has been created not by polythene per se. It has in fact been created by the inappropriate management of the use and disposal of polythene. This has arisen from the common habit which many people have been accustomed to, when it comes to treating day to day waste. They are simply wont to drop litter in any place without consideration for the underlying environmental consequences. As a result, polythene bags which are used extensively are also dumped in all places. That is why places often frequented by people have the highest incidence of being littered with polythene. It has been the common experience of those who travel along the Galle Face Centre Road in the morning to witness an army of cleaners busily collecting polythene bags that had been left on the Galle Face Green by the previous night’s visitors to the place. Some of the polythene bags so dropped have been flown by the sea winds into the barbed wire fences on the other side of the road making a very ugly spectacle.

The writer had the opportunity to witness thousands of foreign workers congregating into the Central Hong Kong Square every Sunday for relaxation, entertainment and companionship. They usually bring meals that have been wrapped in polythene covers, sit in groups and partake such meals together with their friends or fellow countrymen. Yet, the following day morning, there is not even a sign of any polythene bag left behind by them on the Square. As a commonly agreed rule, all are neatly deposited in the litter bins placed for that purpose, so that the cleaning staff could easily collect them over the night for disposal. Hence, what is needed is the exercise of discipline and not banning of manufacturing of polythene.

The polythene industry is a large industry that provides livelihood to many thousands of people. In addition to those who are directly engaged in manufacturing, there are wholesalers, retailers, distributors and other service providers who are indirectly engaged. If polythene is banned, then it becomes necessary to provide alternative employment to them, for otherwise it would generate a grave social issue. The undisciplined use of polythene by many consumers should not be a reason to punish those who earn their livelihood from the polythene industry.

The issue with polythene is the absence of a proper mechanism for re-cycling. The leadership for same should be given by the polythene manufacturers, but there is no incentive for them to do so, on account of the high re-cycling costs. If the regulators are concerned about arriving at a sustainable solution, they should induce the manufacturers to progressively raise the level of re-cycling over the years. This could be attained through a policy known as a combination of both positive and negative incentives. Instead of banning manufacturing, the level of consumption could be curtailed by raising the price of polythene. One way to attain that objective is to impose an additional tax on the industry in such a way that the tax would be passed onto the consumers.

This is a negative incentive for expanding the industry and can be categorized as a sin tax similar to those imposed on tobacco and alcohol. Then, those manufacturers who would commence re-cycling should be granted tax credit to the extent that they would use re-cycled raw materials for manufacturing. It is not possible to meet the entirety of the raw material requirements out of recycled polythene. Hence, the attainment of a raw material ratio of about 50 percent through re-cycling would be an acceptable attainment. The tax collected from the manufacturers could be paid back to them in full, if they reach this level of re-cycling. This constitutes the positive incentive part of the strategy.

In order to effectively implement the strategy, it is necessary to incorporate re-cycling audits to the accounting systems of the manufacturers. The purpose of a re-cycling audit is to record the extent of the use of re-cycled raw materials in a manufacturing process and assess its efficacy as a long term sustainable strategy. For this purpose, the whole range of re-cycling process should be clearly documented so that the auditors could accurately measure the level of the use of re-cycled raw materials in the manufacturing of polythene. Since granting tax credit involves money, the accuracy and the reliability of the audit report is of vital importance for the success of the scheme.

An additional non-monetary incentive for re-cycling is the national recognition of those manufacturers who have made the highest contribution to the re-cycling efforts. For this purpose, an award in the style of the best green manufacturer could be established and awarded annually to the company with the best performance in this area.

Action
The course of action suggested above involves governmental intervention and therefore may be objectionable to some. But it constitutes the application of market principles to incentivise the manufacturers for increasing the level of re-cycling and, through it, reducing the level of polythene dumped as solid waste-matter in the environment. The collection of used polythene for re-cycling could be made a part of the various poverty alleviation programs aiming at the poor by getting them into self-employment projects on the subject.

It, therefore, appears that the regulators have over-reacted to the currently perceived menace of polythene by banning the production rather than punishing the real offenders. The identification of the servant as the offender and leaving the real culprits unpunished would not solve the perceived environmental issue that is attributed to the haphazard disposal of polythene. What is necessary is to manage the disposal appropriately so that the issues such as clogging of drains, creation of unaesthetic spectacles and threat to animal life due to accidental swallowing could be successfully tackled. For this, it is necessary to treat polythene as a servant and allow that servant to retire gracefully once it has provided its useful service to the society.

 

 

 
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Copyright 2007 Wijeya Newspapers Ltd.Colombo. Sri Lanka.