ValuCred is a consortium led by Yunus Environment Hub, Nehlsen & Rodiek, and BlackForestSolutions. It is one of the first projects promoted by PREVENT Waste Alliance, with funding from the German Federal Ministry for Economic Cooperation and Development (BMZ) and the Röchling Stiftung. The aim of ValuCred is to design an internationally applicable system to finance sustainable plastic waste management services. Plastic waste is widely regarded as a pressing environmental problem, with only around 9% of all plastic waste ever created having been recycled, according to the UNEP. This is a particularly concerning issue in less developed countries, where estimates show that over three billion people do not have access to adequate waste management services. Though the discussions of plastic pollution usually focus on the environment, it is important to highlight the humanitarian impacts too, which are not borne equally or fairly between different groups – whether that is age, gender, or wealth.
ValuCred aims to address both the social and environmental aspects of plastic pollution. This includes designing new tools for the sustainable financing of waste management services in low-income countries. This would be different to current services like plastic credits – credits that are generated when initiatives remove plastic from the environment, which businesses can buy to partially offset their plastic footprint. Yunus Environment Hub authored and published a report on the plastic credits market which found that it is very volatile and not yet fit for purpose. The report received international recognition and YEH was invited to speak at several international conferences such as UNEP’s Sea of Solutions event in November 2021 and the Plastic Free World Conference in Cologne in 2021.
One of the key problems the report highlights is that many companies are working with plastic credits, but there is no governance framework, nor central methodology, and so everyone is doing something different. This, in the end, works for no-one. ValuCred wants to create a standard process model (SPM) to streamline and harmonise the activities of the market participants. The focus from the beginning was streamlining the different players in the market to work on a process model that they can then use as a template. The SPM will act as a guide towards a world without plastic pollution and where people are paid a living wage for their work. A report released by GA Circular in 2019 found that of the nine South East Asia cities surveyed, 97% of all PET that was collected for recycling was done so by informal workers. These workers from the waste sector are usually paid by kilogram and not time, which makes gaining regular income even more difficult for them.
Furthermore, YEH released a research paper which examined how to best remunerate waste workers. Existing mechanisms like the World Bank’s International Poverty Line were analysed for their ability to calculate a reasonable living wage, but most were found to be insufficient when applied to informal workers in the plastic waste sector. The Global Living Wage Coalition was deemed to be the most reasonable basis for determining how best to remunerate waste workers to ensure a decent living standard.
Pilot partners will test the ValuCred SPM via its digital interface to find out which processes are happening, and how local waste management services are operating. Data will be collected to highlight operational and funding gaps in plastic waste management, which, in turn, will help to design a circular system that works for all stakeholders in the plastic sector. ValuCred tests are planned in India, Vietnam, Ghana, Angola and Brazil.
To find out more about plastic credits, you can find links to our research paper and report on plastic credits here and our work recently featured in China Dialogue Online Magazine here: Can ‘plastic credits’ help solve the waste crisis? (chinadialogue.net).