Economics 1



Negative externalities explain why plastic pollution is also an economic problem; it explains that the costs of pollution are not accounted for in the market. In this module we will explore the concept of externalities in relation to the plastic pollution problem. We will also briefly focus on the issue of environmental justice. A case study of tourism in Bali illustrates the issue of negative externalities of plastic pollution, and discusses possible solutions.


Key concepts: externalities, waste management, economic sectors, stakeholders, per capita, environmental justice



  1. Introduction: What are externalities?

    1. Positive and negative externalities.

    2. Plastic pollution: A negative externality.

  2. The root of the problem

    1. How much of it? Plastic in numbers.  

    2. Per country vs per capita waste.

    3. Stakeholders and lobby groups.

    4.  Environmental justice

  3. Case Study: Tourism in Bali

    1. Tourists and plastic pollution

    2. Working on solutions: Tourist tax

Learning outcomes

At the end of this module students:

  •  Can describe the difference between positive and negative externalities, and how plastic pollution is explained as a negative externality.

  • Can explain that negative externalities indicate market failure, and can discuss options on how this can be  solved through incentives in the market.

  • Can list which actors play a role in the issue, and explain where the problem comes from .

  • Can describe to concept of environmental justice in the context of plastic pollution.

  • Are able to apply the concept of negative externalities to various case studies.



Economics 2

Collective Action Problems


Situations in which people fail to cooperate even though it would be in their (collective) interest to do so, are collective action problems. In this module we will explore why plastic pollution is a collective action problem and why the issue has not been resolved, even though it is in our best interest to do so. We will discuss the polluter pays principle as a possible solution to deal with plastic waste. Finally, we will discuss two examples of individuals who are taking responsibility and working to solve plastic pollution.


KEY CONCEPTS: collective action problem, tragedy of the commons, typology of goods, free riding, common pool resources, polluter pays principle



  • Introduction

  • Two parts of collective action problems

    • Tragedy of the commons

    • Free riding

  • How to deal with collective action problems?

  • Polluter pays principle

    • Deposit refund schemes

    • Plastic bag tax

  • Who owns the ocean?

    • Garbage patches in international waters

    • Common pool resource management

  • Inspiring individuals

Learning outcomes

At the end of this module students can:

  • Describe the concept and theory of collective action problems, and explain how this applies to plastic pollution

  • Describe the four types of goods, and explain what common pool resources are and why no one takes responsibility to govern them.

  • Discuss how the ocean complicates the plastic pollution problem by crossing boundaries and demanding intergovernmental management.

  • Explain how the polluter pays principle may help in solving plastic pollution and similar collective action problems.