The Edge SME Forum 2018: Plastic in the ocean: When prevention is better than cure

This article first appeared in Enterprise, The Edge Malaysia Weekly, on July 16, 2018 - July 22, 2018.
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Whenever The Plastic Bank founder and CEO David Katz makes a presentation, he usually stuns the audience telling them that cleaning up the oceans is the very last thing the world should be doing.

Despite the numerous videos of wildlife choking on plastic bags or with their heads jammed into cans, Katz is adamant. He even presents an analogy to support his stance. “If you come home and your sink is overflowing, the water is spilling all over the floor and soaking into the walls, what would you start with? Bucket, mop or plunger?”

He pauses and waits for the audience to decide. Then, he offers a simpler solution. “How about we turn off the tap? It would be pointless to mop, scoop or plunge the water if we do not turn off the tap first. Why aren’t we doing the same thing with the ocean?”

Katz points out that there is a catastrophe unfolding, but people are so focused on the effects that they have done nothing to address the cause. “There is a garbage truck of plastic entering the ocean every minute of every hour of every day. Countless birds and animals are dying from just encountering the plastic. We are experiencing the fastest rate of extinction ever.”

Cleaning up the ocean will not address the problem, he says. “Even if the ocean clean-up project, all of the beach recycling programmes, any other well-meaning plastic recycling programmes were 100% successful, they would be too little, too late,” Katz points out during his talk, “Can our oceans’ greatest threat be humanity’s richest opportunity?”, at the IBM Think 2018 conference in Las Vegas in March.

“Humanity is starting to produce over 300 million tonnes of plastic a year and that is growing exponentially. It is estimated that between 8 and 12 million tonnes are racing to the ocean to join the other 150 million tonnes already there.”

This is not a recent issue. “Many people think that through the media and what has been occurring lately, that what they see at the oceans’ edge have just occurred, and that is not the case. This is the accumulation of 60 years of plastic,” says Katz.

Most of this plastic is coming from areas of extreme poverty, he adds. “Over 80% is coming from areas where people cannot even think about recycling. When you are thinking about food, security or lack of education for your children, what time can you give to the idea of recycling?”

That is why he created The Plastic Bank. “We are an ecosystem that reveals value in waste. We have become the largest chain of stores for the ultra, ultra poor — where everything that is available can be purchased using plastic garbage. Everything!”

What can you buy with this plastic? “School tuition, medical insurance, WiFi, cellphone minutes, sustainable cooking fuel, high-

efficiency stoves ... and we have just added fortified milk powder and fuel. We keep wanting to add everything else that they may need but cannot afford,” says Katz.

How does this work? He explains using the example of one of The Plastic Bank’s “collectors”, Liz Narcisse. “Liz can earn a living collecting material from the streets. We help her learn how to collect from door to door or business to business. She brings the material to us and we weigh it and check for quality. Then, we transfer the value into an online account.”

What is important is that she now has a realisable steady income, which she did not have before. “And more importantly, because the value is transferred into a savings account, she now has an asset she can borrow against. We are beginning to give her financial inclusion,” says Katz.

This gives Narcisse a new sense of worth as a human being while providing plastic with a new value.

Katz points out that Haiti is one of the poorest countries in the world, where 200,000 children currently do not have access to education. As a result of this programme, Narcisse — who survived the 2010 earthquake but was left homeless and a widow — can now afford to send her two daughters to school.

“It is no different than Liz walking over acres of diamonds. If there was no bank, no market, no store, no exchange platform, no way to use the value of the diamonds, they would sit on the ground worthless,” says Katz.

“We add value to the material. We sort it, we remove labels, we remove caps. We add value either flaking or baling the material and getting it ready for export as raw material.”

The collected material, known as “social plastic”, is sold to suppliers of companies such as Marks & Spencer (which has commissioned the use of social plastic in its manufacturing) or German consumer goods company Zwilling J. A. Henckels, which uses social plastic directly in its manufacturing. “So, we have closed the loop in that circular economy you hear about,” says Katz.

He points out that even if people do not contribute directly to this effort, they can do so through their consumer choices. “If you buy a shampoo or laundry detergent that is packaged with social plastic, you are directly contributing to the extraction of ocean-bound material and alleviating poverty at the same time. That business model is replicable in all sorts of different ways.”

In more advanced markets, this can work in another way. “Any individual, household, office or group can return their deposit refundable recycleables and instead of taking the cash, they have the opportunity to deposit that value in the accounts of the poor around the world. So, we can now use our recycling to create recyclers around the world. One bottle deposited at home could help extract hundreds around the world while simultaneously providing hope and education and everything else the world needs,” says Katz.

There are so many ways this can work.

Energy giant Shell has invested in The Plastic Bank’s plastic offset programme, which works like carbon offsetting. “But plastic offsetting invests in recycling infrastructure where it does not already exist. It provides an incentive for the poor providing a price increase to grow collection rates,” says Katz.

In the slums of Manila, the Philippines, the smallest grocery markets are now accepting social plastic weight as a form of payment. As there are hundreds of thousands of grocery markets throughout the city, the impact is tremendous. “All they need to get started is a simple scale and a smartphone,” says Katz.

This works because there is nothing complicated about this model. “Social plastic is money. Social plastic is cash. A globally recognisable, transferable and tradable currency that, when used, alleviates poverty and cleans the environment simultaneously,” he says.

Katz points out that humans have produced more than eight trillion kilogrammes of plastic. “Almost all are still here as waste. And at roughly 50 US cent per kg, we are potentially unleashing US$4 trillion in value.”

What The Plastic Bank is doing is essentially gamifying recycling. “It is a bit of Candy Crush and a bit of multi-level marketing. We are adding fun and formality into an informal market. As we continue to build the app, it adds rewards and incentives, group prizes, status, price stability and price buoyancy for the poor,” says Katz.

“I believe that social plastic can be the new bitcoin, but for the earth. And available to everyone.”

The Plastic Bank is now open in Haiti, Brazil and the Philippines. “We have just made an agreement for Indonesia and made commitments to go to India and the Horn of Africa, starting with Ethiopia,” he says.

Although it only started in 2013, it has already collected millions of kilogrammes of material. “We continue to add more partners and more customers. More importantly, we are increasing our collection rates every day. Every day, there are new collectors enrolling in the programme,” says Katz.

“And Henckels has committed to more than 100 million kg of material a year. At roughly 50 US cents per kg, that is US$50 million a year in the hands of the poor in emerging economies.”

When trash has a value, it is no longer trash. The Plastic Bank has effectively flipped the paradigm. If a bottle on the road is worth a certain amount of money, would it remain on the road or be allowed to clog up the rivers, canals and oceans? “If you turn it into cash, it is very easy to enrol people. The greater the rate we give for the plastic, the more people want to be involved. It is all a cash equation,” says Katz.

How did he come up with the idea? “I was attending an executive programme at the Singularity University, where one of the seminars was on 3D printing and manufacturing. 3D Systems CEO Avi Reichental was teaching us what was emerging.”

Reichental was wearing a belt he had 3D-printed, which caught Katz’s attention. “It was interesting. When he finished talking, I asked him how much a belt like that sells for and he said, ‘US$80’. I asked him how much the material cost. US$10.

“At that very second what I learnt was it was the shape of the plastic that revealed the value, not the plastic itself. And if we could change the way people viewed plastic, that could create the same kind of effect.”

Katz points out that people are used to seeing discarded plastic as garbage because of the shape of it today. “And it is not. You could buy the same volume of material as a headlight for your car and spend hundreds of dollars because it is a different shape.”

He believes in the profound impact of what The Plastic Bank has started. “What we are providing is an opportunity for everyone to be part of the solution and not the pollution. So, maybe cleaning the ocean is futile. Plastic is negatively buoyant and it sinks. But preventing ocean-bound plastic? That could be humanity’s richest opportunity,” says Katz.