Report: Pollution cost will be high
Litigation could cost the plastics industry and its insurers $20 billion in the U.S. over the next eight years, according to a report backed by the United Nations and an Australian billionaire.
Companies including petrochemical and consumer goods firms may be liable for the cost of cleaning up plastic pollution, while emerging legal pathways to claim for the harm to society threaten to add to their corporate liabilities. Beyond 2030, legal claims “could be an order of magnitude larger.”
The report from Australian mining tycoon Andrew Forrest’s nonprofit Minderoo Foundation is the first time lawyers and data analysts have modeled how the cost of plastic-related pollution translates into the likely compensation payouts.
The research is supported by the United Nations Environment Programme’s Finance Initiative, a collaboration between the UN and the finance industry.
The $20 billion figure is an order of magnitude smaller than losses the insurance industry has suffered from asbestos-related lawsuits. Credit ratings agency AM Best estimates these at $146 billion, but incurred over decades rather than from the first eight years of claims. Still, the report warns that plastics-related losses could ultimately be comparable in size.
Minderoo enlisted law firm Clyde & Co together with data group Praedicat to calculate the figure by tracing the value of environmental and human health damage, which is estimated to be hundreds of billions of dollars, through the existing legal avenues claimants could take to get compensation. Praedicat’s models attached probabilities to successful claims over the effect of chemicals found in plastics.
Some research has linked chemical additives in plastics to health problems such as infertility, early puberty, developmental issues and metabolic disorders. The report estimates that the global social costs associated with these plastic-related chemicals exceeds $100 billion a year. Using relevant legal precedents including some judgments in the recent opioids lawsuits, the researchers calculated expected liabilities of $20 billion in the US. Other legal pathways resulted in smaller corporate liabilities.