The Trucost Report – The Final Nail In The Coffin For Sustainable Capitalism?
Last month, the environmental consultancy firm Trucost published a report entitled “Natural Capital at Risk: The Top 100 Externalities of Business.” The report calls into question the validity of sustainable capitalism as a new paradigm.
Detailing the total “unpriced natural capital” consumed by the world’s largest industrial sectors, the report found that, in 2009, the top 1,000 “global primary production and primary processing region-sectors” (a certain industry located in a certain region) failed to pay for USD7.3 trillion of natural resources and services they used.
Standing at 13% of global economic output for that year, the majority of these costs were greenhouse gas emissions (38%), water use (25%), land use (24%), air pollution (7%), land and water pollution (5%) and waste (1%).
Perhaps the most startling finding was that, of the top twenty global region-sectors ranked by environmental impact, not one would have been profitable if environmental costs had been fully priced and integrated into cost calculations – not one region-sector made enough profit to cover the environmental damage that their operations wreaked. Clearly, the difference between the current global economic system and a sustainable one is not one of degree, but of type.
Claims that sustainability can be realised within the global capitalist system centre on the belief that environmental resources and services can be fully integrated into the neoclassical economic model, and that the capitalist incentives of efficiency and profit will serve to ensure that environmental resources are not degraded. However, “environmental economics is a contradiction in terms” and the Trucost report underlines this.
Correcting the environmentally damaging elements of capitalism does not simply amount to correcting minor flaws in an otherwise successful system – there are features inherent to the capitalist mode of production (i.e. the need for constant expansion and consumption) that make conventional capitalist growth incompatible with a radical level of environmental protection.
The environment, unlike other marketable resources (such as labour), is not “divisible… almost never reach[es] equilibrium… changes are frequently irreversible” and is demonstrably finite. It is precisely this nature that means that environmental degradation does not fit into the neoclassical model of capitalist economics.
The Trucost report is surely the final nail in the coffin for the elusive goal of sustainable capitalism.
It evidences the fact that environmental factors cannot be integrated into the current economic system, as profits generated are not sufficient to fully cover the costs of the devastating levels of environmental damage that industry causes. Despite the green-wash that has become more popular as consumers become increasingly environmentally aware, the fact is that the goal of an entirely sustainable economy is irreconcilable with the pursuit of traditional capitalist economic growth.
Environmental concerns, dictated by the finite reality of the natural world, cannot be properly addressed within a system that prioritises growth above all things – if we are serious about sustainability, then our love affair with consumption, expansion and profit must end.
About the Author Sophie Tyldesley
Having completed her BSc Politics and International Relations, Sophie Tyldesley is now studying an MSc Governance and Policy, with the view to becoming an Environmental Policy Researcher.