Gästbloggare
At Almedalen last week, in seminars about the environmental impact of two very different sectors – food and buildings – I heard the same two words: ”too cheap”. In one seminar it was Johan Rockström talking about food production: in another it was Johnny Kellner talking about buildings.
Both are examples of the failure to price externalities. Johan Rockström said very explicitly ”food is too cheap because the planet is paying.” Johnny Kellner, advisor to Veidekke and the Swedish government, said ”the problem is that energy is too cheap.” He could have gone on to say ”because the climate is paying.”
Climate impact is just one of many externalities that should be priced into everything we buy. Others include health impacts of salty and sugary foods, treatment of polluted water and loss of biodiversity. But it’s pricing of greenhouse gas emissions that we’ve come furthest with.
There are a few products in Sweden whose climate impact is taken care of through carbon offsetting, such as Max Hamburgers’ meals, Arvid Nordquist’s coffee and Arla’s organic milk and Smiling Faces’ office coffee. But what about all the other thousands of products we buy?
If climate change is going to be addressed seriously, someone will have to pay. I did a few back-of-the-envelope calculations to work out how much some prices should increase, based on Sweden’s current carbon tax rate of 1120 kr/ton CO2e and here are the results:
1 kg cheese 18 kr
Small packet of crisps 0.5 kr
T-shirt 8 kr
Packet of oats 1 kr
Office chair 100 kr
Iphone 6 95 kr
The extra costs would not be so much per purchase, but given the volume of consumption today, the impact would be considerable.
Firstly there would be a huge amount of capital available for investments in reducing and offsetting emissions. Secondly consumers would begin to change their buying habits in response to the new prices. Thirdly manufacturers would become more active in reducing emissions because doing so would give them a competitive advantage.
In all sectors it’s time that externalities were priced. For pricing emissions we have to hope that a global agreement is reached at the forthcoming COP in Paris. If that happens then my next visit to Almedalsvecka may cost a little more, but at least I won’t be expecting the planet to subsidise my trip.
