Thursday, March 11, 2010

The True Cost of Stuff

Those of you that have been reading my blog for a while now remember my post about The Story of Stuff by Annie Leonard. Leonard's 20 minute film documents production and consumption of the stuff we use. The Story of Stuff is now a book because there's just so much stuff!

Leonard wrote a very cool article for the Huffington Post the other day about externalized costs and after Mom read it to me I knew I had to share it with you. Mom is obsessed about stuff like Leonard and this article totally made me think that Mom could have written it. If you don't know what externalized costs are keep reading. And even if you do know what they are keep reading. It's important to remember that nothing comes cheap. There's a greater cost to almost everthing we purchase even if we don't realize it. We must understand these costs and what they are doing to the world. My world, your world, everyone's world. We're all in this together.

The Story of Stuff: Externalized Costs and the $4.99 Radio
by Annie Leonard

Walking to work one day I wanted to listen to the news, so I popped into Radio Shack. I found a cute little green radio for $4.99. Pleased with my bargain, I stood in line to pay, but then started wondering: how could $4.99 cover the cost of extracting the raw materials, manufacturing the parts, assembling the radio, and getting it into my hands?

Whenever I go to buy something I get sidetracked, thinking of how it got here. It's an occupational hazard. I spent a decade traveling around the world, visiting the factories where our stuff is made and the dumps where it goes when we don't want it any more. What I learned makes it impossible for me to look at anything and not see the journey it made through the global take-make-waste system.

The metal in that $4.99 radio was probably mined in Africa. The petroleum that went into the plastic probably was pumped from Iraq, and the plastic itself produced in China. The packaging came from forests in Brazil or Canada. Maybe the parts were then shipped across the ocean to Mexico, where some 15-year-old in a maquiladora assembled the radio. There it was put on a truck or a train and shipped to a distribution center in Southern California, then 500 miles north to my local store.

Four-ninety-nine? That wouldn't pay for the shelf space it took up until I came along, let alone the salary for the guy who helped me pick it out.

That's when I realized: I didn't pay for the radio. So who did?

A study currently underway for the United Nations is calculating the cost of pollution and other environmental damage caused by the 3,000 largest publicly held corporations in the world. The study, which will be published this summer, has found that the cost of environmental damage by these companies is $2.2 trillion, or more than one-third of their profits if they were held financially accountable. This includes greenhouse gas emissions, other pollution, and water degradation. The final amount is likely to increase once additional costs -- like toxic waste -- are incorporated.

The Guardian newspaper wrote: "The report comes amid growing concern that no one is made to pay for most of the use, loss and damage of the environment, which is reaching crisis proportions in the form of pollution and the rapid loss of freshwater, fisheries and fertile soils." Economists call that externalizing costs, and it's how corporations hide the true cost of making and selling cheap stuff -- costs that are never recorded on the balance sheets and consumers never see. As David Korten writes in When Corporations Rule the World, "Externalized costs don't go away -- they are simply ignored by those who benefit from making the decisions that result in others incurring them."

What the UN report means is that a big chunk of the profits these big companies are making is due not paying the full cost of extraction, production, distribution and disposal. They are shoving a whole range of costs -- from pollution to climate change to water depletion -- onto us. Communities around the world are bearing the costs with degraded health, soil, water and climate change. That's just not fair.

Which takes us back to the original question: Who paid for that $4.99 radio? Some people paid with the loss of their natural resources. Some paid with the loss of clean air, with increased asthma and cancer rates. Some workers paid by having to cover their own health insurance. Kids in Africa paid with their future: a third of the school-age children in parts of the Congo now drop out to mine metals for electronics. All along the way, people pitched in, or were forced to, so I could buy a radio for $4.99 -- so cheap that if it broke I could just throw it away.

The UN report is a good first step at showing the global scale of externalized costs. If we're going to get our economy and environment back in order, a top priority must be forcing companies to pay the full costs of production. In economist-speak, this means internalizing externalities. That would be a strong motivator to get companies to invest in the cleaner, less polluting approaches and encourage all of us to avoid superfluous consumption.

If the true cost of that cotton t-shirt or iPod was included in the price tag, we might think twice before throwing it out and replacing it before we really need to. Think about that next time you look at those insanely low prices on so much consumer stuff -- who is really paying the full cost of producing all this? Not the companies that sell it.


Melissa and Emmitt said...

hi stubby!
you are so right!
you are so insightful and explain things so well.
i love your blog!
m & e

Stella, Gunther and Betty said...

Wow Stubbs. Your blog always makes us think. Usually to the point that our brains start hurtin'.

You've encouraged mother to do her part. Now she buys all the clearance pet stuff and sends it rescues instead of the stores throwin' it away.

Stella, Gunther and Betty

Tweedles -- that's me said...

Dear Stubby
What you tell us is more interesting to us than anything that we see on tv.
And we know that what you tell is is always true.

THE PUGLET said...

Hey Stubbs!

This sentence gave me chills:

That's when I realized: I didn't pay for the radio. So who did?

Y'know, like when you're watching a scary movie and the music gets all creepy and you just KNOW something really bad is going to happen.

(except in scary movies I close my eyes, but I kept mine open to read your blog)

Stubby said...

Hi Melissa & Emmitt! I'm so glad you love my blog. I found this article very disturbing but not that surprising. Isn't it amazing how we go through life not thinking about this stuff? Time to start thinking!

Stubby xoxo

Stubby said...

Hi Stella, Gunther & Betty! I'm glad I'm making you guys think but sorry that your brains hurt. Your brains just need to get use to thinking about this stuff and soon they won't hurt.

I'm so glad I've encouraged your mom to do her part because I feel like I'm doing my job!

Stubby xoxo

Stubby said...

Hi Tweedles! Thanks for the nice compliment! The tv info is sometimes good, sometimes not. Mom filters stuff out for me so I'm not exposed to all the untruths out there.

Stubby xoxo

Stubby said...

Hi Puglet! That sentence gave me the chills too! I had Mom read it several times and the chills never went away.

There are so many things we think about each day but where our stuff comes from is not one of them. People have become more conscious about where their food comes from and now hopefully they will start learning where everything else comes from too.

Thanks for keeping your eyes open to read my blog despite the creepiness!

Stubby xoxo

PugMoon - with, Bandit, Paisley, & Smokey pugs and their Mom Paula - PAPugMom said...

Stubby; You put things across in a way that really makes me think. Thank you so much for your way with words! It is making an impact on me.

Stubby said...

Hi Paula! I'm so glad my bloggy is having a positive impact on your life! I think that calls for more treats for me!

Stubby xoxo