The article in the url below introduces the concept of true cost accounting:
"As pricey as a run to the grocery store has become, our grocery bills would be considerably more expensive if environmental costs were included, researchers say. The loss of species as cropland takes over habitat. Groundwater depletion. Greenhouse gases from manure and farm equipment. For years, economists have been developing a system of 'true cost accounting' based on a growing body of evidence about the environmental damage caused by different types of agriculture."
At first glance, I equated this to the lifecycle pricing that is a component of strategic CSR. But, on reading further, the article makes clear that the people at True Price (the Dutch nonprofit the authors worked with to generate the data in the article) do not want to alter prices (by embedding all costs), but instead want to place the 'true cost/price' next to the actual price (as a signal to impact behavior). In other words, they want to charge the current price and advertise the true cost, rather than charging the true price:
"Now, emerging research aims to translate this damage to the planet into dollar figures. By displaying these so-called true prices, sometimes next to retail prices, researchers hope to nudge consumers, businesses, farmers and regulators to factor in the environmental toll of food. The proponents of true cost accounting don't propose raising food prices across the board, but they say that increased awareness of the hidden environmental cost of food could change behavior."
The data is still imperfect, but is more comprehensive than I have seen elsewhere, demonstrating the extent to which costs we incur today are externalized onto future generations. Take beef, for example, where the retail price for 1lb is listed as $5.34, but the "estimated full price" is listed as $27.36 – an "estimated environmental cost" of $22.02 that is currently not being charged.
While I understand why they are proposing this less conflict-ridden approach, and agree the signal will have some effect, I also think the impact of this approach will likely be considerably weaker than directly changing the price.
Take care
David
David Chandler
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The Hidden Environmental Costs of Food
By Lydia DePillis, Manuela Andreoni, and Catrin Einhorn
September 19, 2024
The New York Times
