Wealth doesn't just magically materialize into your bank account. It comes from the ground, human effort, the flesh of animals, the sun, and the atom. The global economy is driven by nature, and yet it's not usually found on the accountant's balance sheet. Perhaps it should be. I'd like to know the true cost of the stuff I buy. Embodied energy and carbon footprint calculations are a good start, but it would be nice if the product itself came with a True Cost number or rating, like the nutritional information on a cereal box or the Energy Star rating on a refrigerator.
When True Cost is factored in, conflict diamonds become a morally expensive choice to make when they're fueling turmoil in the world. Likewise clothing made in sweatshops. Organic tomatoes flown in from Chile may be less expensive at the register, but how much carbon dioxide was released into the atmosphere flying/driving them to your table? What's the energy cost of living in the suburbs compared to living downtown? Do the people who made the clock hanging on my wall get paid a fair wage and receive healthcare? Just how bad for the environment is the laptop on which I'm typing?
People are already seeking out this information when making buying decisions. The closer it is to the point-of-sale, the easier it is for consumers to make a choice based on that information, and a rating right on the package would help people make good decisions and drive companies to make products with better True Cost ratings.
Jason Kottke is the editor of Kottke.org
"The global economy is driven by nature, and yet it's not usually found on the accountant's balance sheet"
I deal with balance sheets and P&L reports day in and day out and this direct correlation never crossed my mind. It is a remarkable observation. A US GAAP, IAS or IFRS (International Financial Reporting Standards) requirement to reflect the true costs, that are non-monetary yet tangible and intangible, in the financial statements will be a fantastic structural adjustment to the world commerce. Every point mentioned above is important enough to be brought into the "total financial picture". A pipe dream for now but a dream makes for a good starting point.
I am afraid to think through, but is it possible that 50% to 70% of the world commerce is for naught? Like shipping New Jersey tomatoes to Alabama and importing tomatoes into NJ from Chile? A close observation of our daily garbage will reveal that 80% or more of it is "packaging" - robust packaging to withstand ardous travel across thousands of miles, so robust indeed for the most inconsequential items like a few ounces of thirst quenching fluid, or detergent and the list goes on and on.
This dirty laundry needs to be aired. worldchanging.com might be the maytag washing machine that we have been waiting for. I am hooked on this website and my family is suggesting that I get help with counselling. Cheers.
I've been thinking about these costs for awhile but it crystalized when I bought a flourescent bulb from Phillips. I was'nt really paying attention when I grabbed it from the rack- I was focused on saving a few pounds of carbon by replacing a higher wattage bulb.
When I got home I realized it was in a plastic blister pack that required some serious scissors to open. When I finally got it out I was depressed to see a pile of plastic and cardboard packaging, plastic that would be on the planet long after I'm dust.
So stupid. Create an energy saving product and pack it lin petro products. We need to drastically change consciousness so people start to vote with their dollars when buying even 'green' items like this.
hear hear! Wired recently ran some chartporn of how 'eco-friendly alternatives' like laundered diapers and mugs use far more energy than their 'wasteful' counterparts. I'd love to see more example of that and have the manufacturers begin to get involved in the discussion.
Wonderful! Calculating "true cost" for the benefit of economics discussions is one thing, but placing it on product packaging for consumer information is a complete other.
I have a few theories about innovation (energy saved through inventions and technology; the pre/post invention economic balance) to add to this... but even this sort of information should be made available to the consumer. No more "blanking out" the provenance/cost of a product, no more excuses for the same. Bravo!
I would love to toss some ideas around in a discussion - is there any sort of place where people talk about this kind of thing?
Great idea - how can we get this started? I was thinking along the same lines when I saw ads for the new types of foam bedding and I wondered what the true cost of that would be from manufacture to disposal.
Yesterday I happened to see a tiny fraction of Oprah with Julia Roberts. (I don't watch Oprah religiously) I wonder why Oprah did not grab the chance to promote: re-use, recycle, when mentioned how Julia is keeping and bringing plastic bags back to the supermarket for a nickel each.
In the US, the question I was given at the check-out was/is: plastic or paper. In NL where I moved back 5 years ago, the question is: do you need a bag? Or we have to ask for a bag (sometime one buys more than planned). We generally bring our own, old, tatterd plactic/shopping bags, or used the empty cartons provided by the supermarkets to carry out shopping. We bring out plastic or glass bottles back to the stores because we have to pay 'redemption cost' on each bottles/crates. For large plastic bottles is 25 cents etc. 2 years ago Ireland started putting 'tax' on EACH plastic shopping bags (I think is 30 cents), therefore forcing shops to reduce giving free plastic bags to customers etc. etc. etc.
The point is not about money alone, but to educate us not to waste. If we look at the packaging we have these days, not only wasteful, but all these wrapping add to the cost that the consumers have to shoulders. Perhaps another way is to force shops/manufacturer to disclose how much is the actual cost of the goods, and how much on wrapping.
In principle this is a good idea. This concept reminds me of some of the points Patagonia founder Yvon Chouinard made in his recent book, _Let My People Go Surfing: The Education of a Reluctant Businessman_. In it, Chouinard outlines Patagonia's environmental philosophy and discusses the concept of "cause no unnecessary harm". His view is that there is no such thing as "sustainability", and that everything has a beginning and an end, such that we have to question our philosophies in relation to everything. Your suggestion for a "true cost" label addresses this.
For example, Chouinard gives the example of how Patagonia had to question its relationship with cotton and usage of it in manufacturing. As a company, they learned the true cost of cotton production, and took steps to lessen the social and environmental impact of their own production methods. Chouinard also suggests that organic clothing is worse for the environment than synthetics, even though most petroleum-based synthetics biodegrade poorly. Examining the true cost of organic textile production as compared to synthetic textile production suggested-- to Chouinard and Patagonia at least-- that synthetics are "more sustainable" becuase the lifecycle of synthetic textiles is greater. When you wear a nylon shirt for a few years and you decide you're done with it, the plastics in the nylon can be recycled into something new, including new textiles. Organics have a shorter lifespan, and can't as easily be recycled into new materials.
Of course one could debate Chouinard's specific points, but the idea of "true cost" is a good one, and the ability to ascertain such costs more readily is a fantastic idea. It would allow all of us-- companies and individuals alike-- to more easily understand and examine the impact production has on the world.