Cost shifting

Cost shifting

I guarantee that at some point in your day you shift a cost.

Something done will benefit you at the expense of someone else and, in far too many instances, ultimately impact on the environment.

But don’t feel too bad for you are not alone. We all do it.

Every day I put waste items in the garbage. When the kitchen bin is full, I empty it into the dustbin that each week is collected. My garbage is transported to a landfill where it is covered with layer after layer of trash from my neighbourhood and periodically capped with soil. In time my garbage decomposes and releases methane to the atmosphere and a smell to the surrounds.

I trust that the landfill facility is well managed so that any smell is contained and that nothing too toxic leaks into the groundwater.

I know that my garbage is going to be in the ground for a very long time carrying risk of contamination so I also hope that the landfill site is well chosen and remains contained.

Of course I pay for the collection, transport and management of my garbage that in modern times might include the capture and flaring of the methane. But these costs are really to cover the collection actions and not the long-term contamination risk.

That risk is external to my transaction. I do not expect to pay if the structural engineer got it wrong.

What if I wanted to do something about this external cost? It is impossible to live in a modern city and not generate at least some garbage.

I might compost any green waste at home. This would be good, as would diligence in filling up the recycling bin. I could separate all the plastic bags and send them to a recycler. And, of course, take reusable bags to the grocery store. And even if I were diligent in these things there would still be some packaging around the cheese or the preschitto that would need a bin.

When I’m out and about there is coffee, the muffin, the business lunch, the snacks my wife so lovingly packs into my man bag and goodness knows how much garbage from Tuesdays take away sushi.

The reality is that there is a packaging externality created in our modern world. Just now we are beginning to realise that the oceans are copping most of this cost as huge plastic gyres and then surreptitiously returning some of it to our bodies in the seafood we consume.

The truth is that every resource we consume creates an externality somewhere. Greenhouse gases, ozone depletion, water pollution, smoke, dust… You get the idea.

Human ingenuity changes the way ecosystems function and we are not always sure by how much or with what consequence. When the consequence is the depletion of function that humans find useful then it is a cost. And if we’ve ignored the cost by assuming its either of no consequence or absorbed by the system without undue pain then we have shifted it.

Shifting costs is pervasive and hard to stop. Everyone does it all the time, individually and collectively.

There is little point in beating yourself or a drum on this though. It is impossible to live as a modern human and not shift costs. It is an inevitability built into our lifestyles and the commerce that creates them.

However, it is possible to become much more aware of this reality and at least give some thought to the external costs of the things we do.

In time, thinking might even change us a little bit. Perhaps enough to stop the gyres accumulating out of control to rise out of the water and take over the world.