Natural Capital: What Is the True Cost of Food?

Author:
Anna Behrend

A kilogram of new potatoes this week costs just €1.29 in some German supermarkets. But is that the whole story? Not by a long shot. Environmental costs are almost always completely ignored. Some, though, are trying to change that.

One-and-a-half kilograms of new potatoes for just €1.29 ($1.47), lettuce on special this week for just €1.49: The bargains from the weekend grocery shopping pile up on the kitchen table. Strawberries, at €3.99 per kilo, are still pretty expensive, but the season hasn't really started yet. So how are these prices arrived at, and do they reflect the products' true value?


The prices of bananas, beef, bread and other foodstuffs are determined primarily by supply and demand -- and sometimes by subsidies, quotas and price speculation. But the prices do not include contributions made by nature. These contributions include such things as the use of clean water or fertile farmland. Harmful chemicals, gases or polluting particles emitted during production are likewise not factored into the price, neither for producers nor consumers.


"Natural capital quite often is free. And quite often it's undervalued because it's free," says Richard Mattison, CEO of Trucost. His company has taken on the task of putting a price tag on nature. Using mathematical models, Mattison and his co-workers are attempting to identify the value lost when companies destroy or pollute the environment. "We make sure that the value of these natural systems is recognized," Mattison says. Trucost's calculations are intended to help companies optimize their production processes, assist investors in gauging environmental risks and allow scientists to better research the economy's dependence on natural resources.

George Monbiot believes this is the wrong way to go. This approach, the British author and environmentalist said in a 2014 lecture, "is not to protect the natural world from the depredations of the economy." Monbiot believes that putting a price tag on the environment is akin to subordinating its protection to capitalism. Principles such as commercialization and the pursuit of economic growth, he says, have been extremely damaging to the living planet. Approaches like that of Trucost, he believes, are now trying to present those same principles as the planet's salvation.

But for Mattison, the link between natural resources and monetary investment is clear. "In places where trees have been cut down, we've seen big droughts and the consequence of those droughts means you have to spend money. It's real money that you're spending: financial capital because you've lost natural capital."

The article's full-text is available here.

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