The Story of Stuff - Annie Leonard [166]
3. Internalize Externalities
As you’ve seen throughout this book, many costs of making, transporting, and disposing of all the Stuff in our lives are basically ignored by businesses, which set artificially low prices to attract consumers. Yet those “externalized costs” are piling up—stress, disease, and other public health crises, environmental impacts, social erosion, and damage to future generations—while none of these are reflected in the price tags on Stuff. The New York Times recently ran a front page story about indigenous communities around the world that are threatened with actual extinction because of climate-related changes in the natural systems on which their survival depends. The Kamayurá tribe in the Amazon depends on fish for survival, but as water warms and disappears, fish populations have collapsed. Dr. Thomas Thornton of the Environmental Change Institute at the University of Oxford was quoted as saying, “They didn’t cause the problem, and their lifestyle is being threatened by pollution from industrial nations.”12 The extinction of whole cultures is among the most serious hidden costs of polluting industries I can imagine.
Many economists still argue that the miraculous hand of the free market will adjust prices and influence supply and demand such that everything will stay in some “optimal” balance. But optimal for whom? The failure to account for externalized costs encourages excessive consumption and unfairly leaves others to pay the real cost of our systems of production and consumption, while business owners earn illegitimately high profits since they aren’t paying the full expenses of their operations. That’s a market failure if ever there was one.
Paul Hawken notes, “Instead of markets giving proper information, everything else is giving us proper information: our air sheds and watersheds, our soil and riparian systems, our bodies and health, our society, inner cities and rural counties, the breakdown of stability worldwide and the outbreak of conflicts based on environmental shortages. All these are providing the information that our prices should be giving us but don’t.”13
Calculating costs for social and ecological losses ranges from straightforward to impossible. How do you adjust the price of a laptop to reflect the cancer and neurological damage in workers, the loss of habitat for gorillas in the Congo’s coltan reserves, and the contamination of soil and groundwater after the computer gets trashed? Prices go way up, that’s for sure.
The price of gasoline, for example, was about three dollars per gallon in the United States in 2007, which reportedly reflected the costs of discovering the oil, pumping it to the surface, refining it into gasoline, and delivering the gas to service stations. It did not include the cost of providing tax subsidies to the oil companies, building public infrastructure to facilitate their operations, health care in communities where the oil is drilled or processed, or, of course, the significant costs associated with climate change. It also excluded the enormous costs of maintaining a military presence in the oil-producing regions of the Middle East to secure our access to that oil. A study by the International Center for Technology Assessment found these costs would total nearly twelve dollars per gallon of gasoline—bringing the total to fifteen dollars per gallon.14
Economist Dave Batker adds that while internalizing externalities is necessary, it’s not the whole solution: “Rather than figure out the economic cost of poisoning a child with mercury and adding that to the bill for your coal-fired electricity, the companies should have to stop emitting mercury, period. Let’s ban these toxic products and processes outright. For those costs that don’t threaten to push us across a critical ecological threshold or damage people’s rights to life and health, internalizing those costs into the price of the product corrects for market failures.”15
4. Value Time over Stuff
There’s ample evidence now that working too much leads to greater stress,