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Plastic pollution: the plastic treaty setback in Geneva and the road ahead
Felix Philipp
Circular Economy and Materials Research Lead, Lombard Odier Investment Managers
key takeaways.
Divisions persist between countries seeking to limit production and those focussing on waste management
Plastic pollution carries major health and climate costs, far beyond visible waste
The absence of an ambitious treaty opens the door to regional coalitions and decentralised initiatives
Markets, finance, and innovation are already accelerating the shift toward sustainable alternatives.
The fifth round of negotiations for a global plastics treaty concluded in Geneva on 15 August without agreement. Following three years of diplomatic efforts, countries remain deeply divided on approaches to addressing plastic pollution. While this represents a significant setback, it also clarifies the challenges ahead and opens new pathways for action.
Understanding the impasse
The core disagreement centres around whether to limit plastic production at its source or focus primarily downstream, on waste management and recycling. The “High ambition coalition”, formed of nearly 100 countries, advocated for production caps and binding commitments on hazardous additives. A smaller but powerful group of oil-producing nations, including the USA, China, Russia and Saudi Arabia, blocked an ambitious treaty, insisting instead on downstream solutions.
The core disagreement centres around whether to limit plastic production at its source or focus primarily downstream, on waste management and recycling
This divide and the collapse of the negotiations reflects deeper economic and political realities. Petrochemicals have become the fastest-growing segment of oil demand, accounting for 75% of growth. As transportation fuels face declining demand, the petrochemical sector represents a critical pivot for oil-producing economies.
The consensus-based negotiation process also gave every nation effective veto power, a challenging approach in times of political fragmentation and eroding institutions. Industry representatives outnumbered many national delegations, with fossil fuel lobbyists exceeding the combined representation of all EU member states. The draft text swelled to nearly 1,500 sections marking disagreements, quadruple the number from the start of the week.
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The stakes beyond waste
Plastic pollution extends far beyond visible litter. Microplastics now appear in human lungs, bloodstreams, and placentas. The Lancet estimates annual health costs at USD 1.5 trillion globally. Without intervention, plastic production is projected to reach one billion tonnes annually by 2040. Plastic production contributes 5% of industrial greenhouse gas emissions, surpassing aviation. Current recycling rates remain below 10% globally. Each day brings 1.1 million metric tonnes of new plastic production. The equivalent of one garbage truck of plastic enters the oceans every minute. These figures underscore why waste management alone cannot solve the crisis.
Despite Geneva’s disappointing outcome, momentum continues to build through multiple channels. Regional coalitions are forming among committed nations. The European Union and several countries are advancing extended producer responsibility policies and mandatory recycled content requirements.
The challenge isn’t technological but systematic: aligning policy, finance, and business practices
Leading businesses recognise that clear global standards would secure markets rather than threaten them. They understand that regulatory certainty enables long-term investment in sustainable alternatives. UN analysis indicates that existing solutions could reduce plastic pollution by 80% by 2040. The challenge isn’t technological but systematic: aligning policy, finance, and business practices.
The Geneva experience highlights how institutions designed for an earlier era struggle with contemporary challenges. When consensus rules allow small minorities to block progress affecting billions, reform becomes necessary. Future negotiations might benefit from voting mechanisms or "coalitions of the willing" that can proceed without universal agreement.
The focus must shift from waste management to comprehensive circular economy strategies. This means designing products for durability, developing bio-based alternatives, and creating economic incentives that make sustainable choices profitable. Removing subsidies for virgin plastic while supporting recycling infrastructure would level the playing field.
When consensus rules allow small minorities to block progress affecting billions, reform becomes necessary
Investment patterns already show market recognition of this transition. Companies developing alternatives attract growing capital. Innovation continues across materials science and business models, proceeding independent of treaty negotiations.
Driving momentum forward
National governments can implement production limits and design standards through regional agreements. Extended producer responsibility schemes can shift costs to manufacturers, incentivising better design. Procurement policies can create demand for alternatives.
The health evidence alone justifies action. As understanding grows about plastic's impact on human biology, public pressure will intensify. The tobacco regulation precedent shows how initial industry resistance eventually gives way to public health measures.
Financial institutions increasingly recognise plastic-related portfolio risks. Insurance companies face rising pollution damage claims. These market forces may drive change faster than international negotiations.
A pragmatic path
Geneva's outcome disappoints those hoping for immediate global action, yet it liberates willing actors from waiting for consensus. No treaty might, in hindsight, be preferable to a treaty without ambition. Countries, cities and companies committed to addressing plastic pollution can pursue ambitious targets without being held back.
Geneva marks not an ending but a clarification
The energy invested in treaty preparations hasn't dissipated. It's redirecting into initiatives at various scales. Progress often happens through distributed action rather than centralised agreements. The treaty process will likely resume with modified procedures. Meanwhile, work continues through other channels. Innovation advances. Alternatives scale. Public awareness grows. Market dynamics shift.
Geneva marks not an ending but a clarification. The path forward requires pragmatic recognition of political realities while maintaining systemic ambition. The plastic crisis demands action at every level, with or without a global treaty. That action is already underway and will accelerate regardless of diplomatic timelines.
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This is a marketing communication issued by Bank Lombard Odier & Co Ltd (hereinafter “Lombard Odier”).
It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a marketing communication.
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