True Cost is the Solution to Our Climate Crisis

In our brainstorming sessions at Adbusters, one tantalizing idea kept popping up: If you dig deep into the innards of the capitalist algorithm, you discover a glaring flaw. It’s that the vast majority of humankind’s carbon emissions are unpriced. We buy a car for $35,000, then drive it around for ten years creating thousand dollars’ worth of global warming. Who pays for that damage? Do future generations have to clean up our mess? The illogic extends from the gas we pump into our cars to the smart phones we carry in our pockets to the Big Macs we wolf down at McDonald’s. Out of the billions and billions of transactions made every day in our global marketplace, only a tiny fraction reflect their true cost. And each one drives us a little closer to global system collapse. With every bogus transaction, another drop of meltwater slides off an iceberg, another puff of CO2 rises to the sky, another bubble of methane wafts up from the tundra. If we keep repeating that mistake, billions of times a day, week after week, month after month, year after year, what do you think will happen?

To date, only a handful of economists have bothered to think about the true cost of what we buy and do. They speak the language of efficiency and have taught the whole world to do the same. So why are so many of our leading economists silent, then, on these, the greatest inefficiencies of all? Why are our markets not telling the truth? Why are we selling off our natural capital and calling it income? Why is the profession of economics committing such a monumental system error?

Let’s figure this out. What is the real cost of shipping a container load of toys from Chongqing to Los Angeles? Or a case of apples grown in New Zealand to markets in North America? And what is the true cost of that fridge humming 24/7 in your kitchen . . . that steak sizzling on your grill . . . that car sitting in your garage? What are the by-products of our way of living actually costing us? Grab
a calculator and let’s get at this. Instead of watching economists pontificate endlessly about interest rates, stock-market swings and GDP growth, let’s put them to productive big-picture use crunching the real cost of things.

We start with the little stuff: plastic bags, coffee cups, paper napkins. Economists sleuth out the eco-costs — say it’s five cents per plastic bag, ten cents per cup and a fraction of a cent per paper napkin — and those we tack on. We’re already doing that with the various eco-fees and eco-taxes included in the price of tires, cans of paint and other products. But now, spurred on by the ever worsening climate crisis, we abandon the concept of ancillary fees and taxes and start implementing true-cost pricing right across the board.

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TRUE COST PLASTIC

After raiding nature’s warehouse of wood and stone and metal, we turned, in the early 20th century, to plastics. Here was something cheap and strong to build a space-age world.

Now that miracle invention is choking our landfills, polluting our rivers and oceans and poisoning our bodies and food chains. The Organization for Economic Cooperation and Development predicts plastic use will nearly triple by 2060. Canada and the European Union have banned single-use items and some activists and scientists are advocating capping and reducing plastic production and use But it’s obvious that none of this will be nearly enough to fix the problem.

Here’s a strategy that will.

Economists do the research and come up with their best estimate of the environmental and health price we pay — say it’s $500 per ton. Every manufacturer, corporation and retailer that uses plastic in their business will then be required to account for that. Maybe it’s a surcharge of 25 cents on every bottle of Coke. If Coca Cola can’t take a hit like that on their margin, they’ll have to change their business model. Likewise, the automobile industry will have to redesign their cars. Food producers and supermarkets will have to adapt. Every business that uses plastic will have to adjust their business model.

The cost of living will go up, and that’ll hurt. But plastic packaging will gradually disappear from our lives. We’ll buy our groceries in paper, cardboard and glass containers. We’ll wash our plates, knives and forks and use them year after year, some for a lifetime. The garbage gyres in the oceans will shrink and finally disappear. Microplastics will stop plugging the tissues of every mammal including us. And the nightmare of bringing up our children in a world awash in plastic will slowly fade away.

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TRUE COST DRIVING

Once we add on the environmental cost of carbon emissions, the cost of building and maintaining roads, the medical costs of accidents, the noise and the aesthetic degradation of urban sprawl, your gasoline powered automobile will cost you around $100,000, and a tank of gas $350. You’ll still be free to drive all you want, but instead of passing the costs on to future generations, you’ll pay up front.

Plenty of people will dismiss the concept as unrealistic and dangerous. There will be howls of protest. Traditional lefties will point out how true cost would create a two-tier regime in which the ultrarich can afford to emit as much frivolous CO2 as they like, while for the bulk of humanity everyday life will be more miserable than ever. Politicians will dismiss it as electoral suicide. Industries will lobby vehemently against it — at least in the beginning. But as the planet heats, and all
the other strategies have failed, true cost may turn out to be the only way left to avoid total climate catastrophe. And once it kicks in, we’ll see a fundamental transformation in how we get around on our planet. Car use will plunge. Ride sharing and bicycling will spike. People will live closer to work. Demand for monorails, bullet trains, subways and streetcars will surge. A paradigm shift in urban planning will calm the pace of city life. Cities will be built for people, not cars. Our skies will be clearer. Breathing easier. Minds calmer. The specter of the climate emergency will no longer preoccupy our every waking moment.

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TRUE COST EATING

We estimate and add in the hidden costs of our industrial farming and food processing systems. That chicken that was never allowed to spread its wings and walk outside will cost you $50. The price of imported groceries will include the true cost of shipping them long distances. An avocado from Mexico will cost you $25. You won’t be able to indulge so often. And that shrimp from Indonesia? Once the eco-devastation of mega farming and container shipping are added on, it’ll run you two or three times what you’re paying now. A Big Mac will cost a lot more. So will most meats, produce and processed foods. You can still eat whatever you want, but you’ll have to pay the real price.

It will be tough at first, especially on lower-income families. But the cost of organic and locally produced food will fall and provide a good alternative. Local farmers will be celebrated. We’ll grow tomatoes on our verandas, eat at home more and maybe lose some weight and be a little healthier. Bit by bit, purchase by purchase, lifestyle change by lifestyle change, our diets and food systems will creep toward sustainability.

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TRUE COST SHIPPING

For years it’s been ridiculously cheap to use mega tankers to ship container loads of stuff across oceans. Much of that will stop. Our current way of exporting and importing goods, the one economists have been touting as a way to spur growth, but which depends on a mightily subsidized ocean transportation system, will no longer fly. The cost of all imported items at Walmart, Amazon and multinational megamarts will soar. The whole tenor of world trade will heave. Exports and imports will stabilize at a reduced level. Billions of purchases every day will come back to your neighborhood. Globalization — capitalism’s bred-in-the-bone burden — will cease to be the dominant economic paradigm. Modest fleets of cargo ships will go electric, or sail around the world on wind.

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TRUE COST SEARCHING AND SCROLLING

What we call “the cloud” is actually 8,000 data centers peppered throughout the world, and they gobble an enormous amount of energy every year.

According to a recent study, a typical Google search from a desktop computer generates about 7g of CO2. Two Google searches generate as much carbon as boiling a kettle for a cup of tea. Big Tech downplays how much energy their servers use, but make no mistake, the demands are going to go through the roof as everyone starts putting machine learning to personal use.

Since the beginning of the digital revolution, we’ve largely ignored the real cost of our online lives. But now the time has come to rethink our scrolling like we’ve already rethought our eating, driving and flying. In other words: stop doing it mindlessly. Stop doing so much of it, and let’s figure out how to calculate and internalize the costs.

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NEXT LEVEL ACCOUNTING: THE SOCIAL AND PSYCHIC COSTS

You’re cruising along an eight-lane highway and suddenly everything lurches to a halt. There’s a lot more going on here than a hefty blast of carbon wafting into the air. A traffic jam is a huge collective stress event. There are health costs to being pinned in your car, on a dammed river of steel, fingers tightening on the wheel, blood pressure rising. Mental health costs too. A recent Swedish study found that a daily commute of forty-five minutes increases your chance of divorce by 40 percent.

The psychic costs that our current system imposes on us are horrendous, and we’re just at the very early stage of realizing how devastating they really are.

What is the psychic cost of advertising, that daily broadside of pro-consumption messages that’s pickling your neurons? Or the mental toll of obsessively checking your phone — basically tugging on the leg-hold trap of Big Tech’s surveillance algorithms, over and over and over? Or the psychological damage of urgency, the punitive ticking clock that every link in the supply chain and every component of the gig economy runs on? Or the social solidarity cost of losing most of the indie shops in your neighborhood as Starbucks, Domino’s and Home Depot muscle their way in. Ask yourself, what’s happening to your soul when you’re walking like a zombie in a mall at Christmas with Silent Night playing in the background? All this is part of the True Cost story — and so must eventually be part of the accounting — of the epidemic of mood disorders, anxiety, loneliness and depression now sweeping the planet.

For conventional economists, True Cost is a frightening, heretical concept. Once implemented, it will reduce the flow of world trade, curb consumption and slow growth. It will force economists to rethink just about every axiom they’ve taken for granted since the dawn of the industrial age.

The efficiency of size will be challenged. The hidden cost of Walmart coming to town, revealed. The logic of never-ending growth on a finite planet thrown back in economists’ faces.

“Progress” itself will be redefined.

There’ll be angels-on-a-pin debates about the psychological and social costs of our most sacred values like unfettered freedom and hyper-individuality. A fascinating new branch of economics called psychonomics will emerge.

Transitioning towards True Cost will be the most challenging and disruptive economic / social / cultural project we have ever undertaken.

But it will also be magically transformative.

In a True Cost world, there’ll be no need for pleading and hectoring, no need to wallow in conflicting consumerist emotions. No one will be badgering you to eat less meat. No one will make you feel guilty about owning a car, or for going on that holiday to the Bahamas. None of that. All you’re being asked to do is become a consumer in a new kind of marketplace.

Instead of “lowest price wins and don’t ask too many questions,” market forces will align in surprising new ways. You will become part of a worldwide process in which every one of the billions of market transactions made every day are working for rather than against us.

In the current language of economics, the costs you don’t see, the ones that don’t show up in the models, are dismissed as “externalities” — just the trims and ends left over when you run the growth numbers. Only a handful of economists have bothered to think of these costs as anything other than marginalia — a few paragraphs in Gregory Mankiw’s Principles of Economics textbook.

True Cost will put a shine on “the dismal science.” Economists will suddenly have a crucial purpose in life: to calculate and fold in all the costs of our way of doing business. This will ground them and give them something real to do. It will create a virtuous, forward-looking occupation out of a retrograde one. The profession will be a highly desirable path to pursue — something a young grad is proud to devote their life to. Environmentally minded students will stream into Econ 101, because not it incorporates sociology, anthropology and psychology. It is the Queen of the Sciences, the essential discipline for nudging our global system onto a sustainable path.

HOW TO DO IT

The Universal Product Code (UPC) is the perfect mechanism for implementing True Cost. Almost every product sold around the world already has a UPC code on it. It was originally created to speed up the checkout process and track inventory at grocery stores. Now it becomes an essential part of the True Cost project. The human experience of buying something is transformed. When you swipe it, a True Cost price adjustment automatically kicks in. All the costs of making and marketing and shipping and distributing the product you’re buying are baked into the price. Adam Smith’s invisible hand is suddenly being used in the most profound way to adjust your purchasing behavior. Bit by bit, you accept the idea that you should always pay the True Cost of everything you buy.

One swipe, one truth. Sticker shock: take it or leave it.

“It’ll never fly,” say many of the environmental luminaries we’ve put this to. It’s just way too radical and impractical.

Nothing of this scope, on this scale, has ever been tried. To most people, it feels like about Plan D — after all the more ‘sensible,’ green- energy, carbon tax and techno options have been kicked around.

Just on the level of human psychology, True Cost is a big, big ask. Self-indulgence is the kingly spoils of consumer capitalism. We love our dish washers, spin dryers and airflow toasters. We love our throw-away diapers, pre-washed veggies and ready-to-eat dinners delivered right to our door. And we love cruising in our automobiles with our favorite music playing. The idea of giving some of that up, of living tougher, more austere lives is anathema. We’re talking about curbing the personal freedoms we’ve taken for granted for centuries. “Dammit, my right to pig out, play hard and put pedal-to-the-metal is constitutionally protected!” Americans will say. Anything less is heresy. We can’t do this. We won’t do it. Go to hell!

But as the planet heats, the mood will change. Ecological collapse is a slow-motion catastrophe. You don’t feel it yet, you cannot grasp the urgency of it. Because your hair isn’t on fire. Yet. But once we pass a tipping-point — and we’ll absolutely know it when it happens — when resource skirmishes erupt into full-scale battles, and slow violence turns into fast violence, and suddenly it’s your children who are hungry and your house that’s being swept away and your country that’s failing . . .

That’s when you’ll forget “It’ll never fly” and reach for the ax on the wall.