What if companies had to pay?
ACHTERGROND - A recent report shows the cost of various industries on our natural capital.
The environment is a public good. We all share and depend on clean water, a stable atmosphere, and abundant biodiversity for survival, not to mention health and societal well-being. But under our current global economy, industries can often destroy and pollute the environment—degrading public health and communities—without paying adequate compensation to the public good. Economists call this process “externalizing costs,” i.e. the cost of environmental degradation in many cases is borne by society, instead of the companies that cause it.
A new report from TEEB (The Economics of Ecosystems and Biodiversity), conducted by Trucost, highlights the scale of the problem: unpriced natural capital (i.e. that which is not taken into account by the global market) was worth $7.3 trillion in 2009, equal to 13 percent of that year’s global economic output. In other words, under our current economic system companies are forcing global society, their governments, and future generations to pick up a $7.3 trillion tab, and that was just in 2009. Just as importantly, the study found that none of the “high impact” industries would be profitable if they accounted for their natural capital.
