Making a material difference: The impacts of a change to plastic‐free clothing

Dominic White and Niven Winchester

Australian Journal of Agricultural and Resource Economics, 2025, vol. 69, issue 1, 200-231

Abstract: In 2022, the United Nations (UN) endorsed a resolution to end plastic pollution, with an objective to have a legally binding agreement in place by 2024. The clothing industry uses a significant amount of plastic, which generates plastic pollution through both the mismanagement of clothing waste and microplastics released during the washing of clothes. Consequently, clothing needs to be made without plastic fibres or synthetic chemicals to comply with the UN's resolution and stop contributing to plastic pollution. In this paper, we develop an economy‐wide model and impose a tax on the conventional clothing sector or subsidise plastic‐free clothing in different regions until all clothing produced is free of plastics and synthetic chemicals. We analyse the impact of these policies on GDP, welfare, output and land use across six policy scenarios. If only some regions tax clothing production and not others, the production of conventional clothing increases in untaxed regions (i.e. there is conventional clothing ‘leakage’). As clothing producers import some of their plastic inputs, increased production of conventional clothing in untaxed regions dampens the reduction in plastic production in regions with a clothing tax. Conventional clothing ‘leakage’ does not occur in the subsidy scenarios, and global plastic production decreases by more compared with tax scenarios. Under both a tax and the subsidy, synthetic chemical and plastic‐free clothing production increase global demand for ‘natural’ alternatives such as plant‐based fibres, oil seeds, natural rubber and forestry products. This causes significant land use change in the model at the expense of food‐based agricultural products.

Date: 2025
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