The story is five years old. The author, the inimitable David Roberts, has since moved from Grist.org to Vox.com. But it was still a good move when Environmental News Bits Curator Laura L. Barnes, sustainability information coordinator at the Illinois Sustainable Technology Center, reposted Roberts’ report that “none of the world’s top industries would be profitable” if the US$7.3 trillion in “unpriced natural capital” they consumed each year were factored into their financial bottom lines.
The post opens with an explanation and critique of the notion of “externalities”, operating costs that businesses impose on others rather than paying them themselves. “For instance, industrial processes can put pollutants in the air that increase public health costs, but the public, not the polluting businesses, picks up the tab,” he explains. “In this way, businesses privatize profits and publicize costs.”
Roberts frets that “wrapping this notion in a bloodless technical term tends to have a narcotizing effect. It brings to mind incrementalism: boost a few taxes here, tighten a regulation there, and the industrial juggernaut can keep right on chugging.” On the other hand, “if we take the idea seriously, not just as an accounting phenomenon but as a deep description of current human practices, its implications are positively revolutionary.”
As an example, Roberts cited a report for a branch of the United Nations Environment Programme by an organization now known as the Natural Capital Coalition that tallied the “unpriced natural capital” consumed by the world’s top industrial sectors. It put the tally for more than 1,000 “global primary production and primary processing region-sectors” at $7.3 trillion per year, 13% percent of global GDP in 2009. (It defined a “region-sector” as a specific industry in a specific part of the world, like wheat farming in East Asia.)
The study found that greenhouse gas emissions consumed the largest share of unpriced natural capital, at 38%, followed by water use at 25%, land use at 24%, air pollution at 7%, land and water pollution at 5%, and waste at 1%. Its top five region-sectors were coal-fired power generation in Eastern Asia, cattle ranching and farming in South America, iron and steel mills in Eastern Asia, wheat farming in Southern Asia, and coal-fired generation in North America.
“Of the top 20 region-sectors ranked by environmental impacts, none would be profitable if environmental costs were fully integrated,” Roberts writes. “Ponder that for a moment: None of the world’s top industrial sectors would be profitable if they were paying their full freight. Zero.”
He adds that “that amounts to a global industrial system built on sleight of hand. As Paul Hawken likes to put it, we are stealing the future, selling it in the present, and calling it GDP.”