the present invention is a composition comprising either : a ) a high internal phase ratio emulsion having water as a continuous phase and a thermoplastic hydroxy - functional polyether as a disperse phase ; or b ) a stable aqueous dispersion of the thermoplastic hydroxy - functional polyether . the composition of the present invention addresses a need in the art by providing a thermoplastic coating that exhibits an excellent barrier to oxygen and carbon dioxide , but which barrier properties are not adversely affected by contact with water . the composition is particularly useful in the paper packaging industry where biodegradability and resistance to spoilage of food is desirable .