Externalities: Revealing Hidden Natural Costs Through Labeling Legislation

The planet is going through a mass extinction event brought on by human influence: biodiversity elimination, habitat destruction, climate change, and many other cascading effects. The toll on nature is already unconscionable, yet this is already effecting human populations as well, and will only exponentially increase in the coming years. It won’t just be our children experiencing this crisis, it is us, now. It is already happening. Arguably a primary reason for these environmental issues falls to environmental externalities in our economic systems.

The only way to fundamentally address this is through a systemic introduction of labeling or reporting the environmental costs of products and services. Externalities are the hidden costs, or the costs not calculated in the production or use of a good or service. Through a lack of transparency, intentional obfuscation, and willful or pure ignorance, we as a species profoundly lack knowledge on how the products and services we consume affect the world around us. In fact, of 1000 global primary production sectors, none generate the profit needed to cover their cost in natural capital (TruCost, 2013).

The only way we can even have a chance to mitigate our impact is to be provided that data before we spend our money. As such, products and services must report their impacts on the environment through a standardized metric or grade on a label or report that is easy to understand and will capture information on biodiversity loss, climate change, pollution and waste. The only way for this to effectively take hold and maintain transparency is through governmental legislation and the associated infrastructure to provide a method for businesses to make such a calculation.

This paper describes the effort to design such policy, provide it to legislators and pass it. Most ideally, this would be integrated into a larger systemic bill designed to economically shape the country in a sustainable way. As such, this initiative is being proposed as an amendment to be added to House Resolution 109, the “Green New Deal.” Assimilating this as a specific initiative within the GND, which is currently more or less a framework of mission statements, provides a more solid groundwork for a successful legislative effort. The underlying concept is to enable the consumer with needed and usable information. There is no true guarantee of a “happy ending,” but at its core, it will help to hold businesses accountable and ultimately empower the common consumer to make informed choices, from whence the fate of our planet can at least be decided honestly.