Accounting for externalities means reduced food waste

A post to NPR Cosmos and Culture blog again:
Taking a Bite Out Of Energy Consumption

As long as we allow economic externalities to persist, we will have an economy that gives everyone perverse incentives to do the wrong thing.

Food is sold in our distorted markets at an artificially low price. Externalities mean that much of the resource depletion costs and pollution costs associated with food production are not reflected in the price structure.

What we call a free market cannot effectively favor the most environmentally responsible players if these environmental costs are hidden, if they are not part of the cost-benefit analysis.

So called 'free' markets are actually corrupt markets when externalities are involved and where commons or public property rights are not respected.

Accounting for externalities will make the price of food go up. When we have to pay more for food, we will be more careful not to waste it.

When we account for externalities, ALL industries will have to pay for environmental impacts. Then they will be more interested in reducing those impacts.

We have seen growing awareness of the persistent assault by corporations on ecological health and the corporation has become quite the villain in our contemporary struggle-for-social-justice narrative.

Corporations have always been externalizing machines, but now availability of the easier sources of natural resources is fading fast, and the more difficult sources are being tapped, while global demand continues to grow. This portends a day of reckoning, when resources to sustain civilization are no longer available.

In this context, the 'more difficult source' of petroleum and natural gas is the material derived from fracking, which involves injecting deadly poisons into the ground, where they can mix with groundwater. The 'difficulty' is shifted to the future generations who will be faced with polluted water.

Another difficulty is that a possible source of helium for future generations (those layers of shale and clay) is destroyed in the process of breaking up those layers. (Why there is no mention of the fact that this process squanders helium reserves is a complete mystery to me.)

When externalities are accounted for, the profit-seeking tendency of the corporation matches the interests of the larger society AND the larger community of life: Effort is put into reducing environmental impacts, to the benefit of the corporation AND everyone else.

Whether we talk in terms of economic externalities or neglect of public and commons property rights, we need to correct this serious defect in our economic system. We need to start accounting for externalities, but we have a news media that doesn't even mention externalities in their economics reporting. Nor do they mention public property rights in relation to natural resource wealth when they report on poverty and disparity of wealth generally.

When we take account of externalities, the increased incentive to seek ways to reduce environmental impacts will mean a multitude of little changes and many big changes, in all industries. In relation to management of our food supply, higher food prices will mean that we will see changes ranging from restaurants offering smaller portions to save money, to more shoppers asking produce managers for discounts on their grade 'B' produce, to shifts toward less or no meat consumption, an so on...

Biodiversity as a public good:
http://gaiabrain.blogspot.com/2010/01/respect-public-property-rights.html

If natural resource wealth is recognized as belonging to all, then the proceeds from these fees (a monetary representation of this wealth) will be shared among all the world's people. Although accounting for externalities will mean price increases for food and other things, the people at large will be better off because this representation of natural wealth will be shared equally (no one will be impoverished by the policy change).

And we will all be better off because the economic system and our global society will be made sustainable through the appropriate economic incentives toward resource efficiency and reduced environmental impact.

This paradigm shift toward respect of public or commons property rights along with private property will mean a moderating of the boom and bust of the business 'cycle', and it will mean a potential cure for that existential instability that we see as the arc of civilization of thrive and collapse. These two instabilities are really the same phenomenon seen at different scales.

Cure for what ails the planet:
http://gaiabrain.blogspot.com

Biological Model for Politics and Economics:
http://gaiabrain.blogspot.com/2007/09/gaia-brain-integration-of-human-society.html

Mon Mar 12 2012 19:06:07 GMT-0500 (Central Daylight Time) http://www.npr.org/blogs/13.7/2012/03/11/148138657/taking-a-bite-out-of-energy-consumption