We must green the market

Everywhere we look, the prices of goods don’t reflect the true environmental costs of their production

Modern capitalist markets are among the most amazing institutions humankind has ever created. They are mighty engines of innovation and wealth. They allow societies to quickly adapt to a world full of disruptions and surprises. And by linking billions of producers and consumers every day, they generate price signals that help people around the world decide what to make and what to buy.

But when it comes to conserving Earth’s natural environment, our markets are badly broken. For our planet’s future – and for our future prosperity – we must fix them.


The underlying problem is that we don’t pay the true environmental costs of making, using and getting rid of the products we buy. Take the gasoline we use in our cars. Every time we push down on the accelerator pedal, we emit a blast of carbon dioxide that contributes to global warming. Our children and grandchildren will pay for this warming – in the form of higher food prices from drought, heat waves and floods, greater health expenses from diseases that thrive in warmth, more property damage from storms and rising seas. Those huge future costs aren’t reflected in today’s gasoline’s price. In effect, our children and grandchildren are subsidizing our current mania for driving.

The same problem arises with electricity from coal-fired power plants. This electricity may seem relatively cheap, but air pollution from these plants is a major cause of thousands of premature deaths in Canada each year – costing our society billions of dollars. And the plants’ enormous carbon emissions also contribute to climate change. Because neither power companies nor their customers pay the full costs of coal electricity, cleaner sources of electricity (like wind or solar) are relatively more expensive in the marketplace, even though their overall cost to society is often less.

Indeed, everywhere we look, we see products whose prices don’t reflect the true environmental costs of their production. Local food often costs more than imported food, because we don’t pay for the climate change caused by getting it to our tables or the damage to soil and water from poor farming practices. Recycled paper usually costs more, too, because we don’t pay for the loss of virgin forests or for the water and air pollution from making non-recycled paper.

Globe and Mail