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If the biggest companies in the world had to account for all the environmental damage they cause, could they still turn a profit? According to a UN-supported analysis, no way.

In fact, the 3,000 largest publicly-traded companies were responsible for $2.15 trillion in environmental damages in 2008 – but these damages are often written off as “externalities” and are not accounted for on the bottom line. What’s even worse, these externalities cost the global economy an estimated $4.7 trillion per year in health and social costs, lost ecosystem services and pollution.

Marine debris on Kamilo Beach, Hawaii, washed up from the Great Pacific Garbage Patch. (Image Credit: Algalita)

Marine debris on Kamilo Beach, Hawaii, washed up from the Great Pacific Garbage Patch. (Image Credit: Algalita)

These figures come from Natural Capital at Risk, a 2013 report on the top 100 externalities of business produced by a combined effort of the United Nations Environment Programme, TEEB (The Economics of Ecosystems and Biodiversity), the World Business Council for Sustainable Development and Trucost consulting firm.

Valley of the Drums, a toxic waste site in Kentucky, United States, 1980. (Photo Credit: EPA)

Valley of the Drums, a toxic waste site in Kentucky, United States, 1980. (Photo Credit: EPA)

As Greenpeace points out in its breakdown of the report, almost no business on Earth would be profitable if it accounted for every greenhouse gas it emitted into the air, how much land it monopolized and poisoned, and how many diseases were spread in relation to its products. One example is the mercury that Chisso Chemical Corporation dumped into a Japanese bay for four decades, and that resulted in the deaths of nearly 1,800 people and the spread of birth defects and disabilities in 10,000 more. Obviously, the impacts to health and environment don’t stop there.

“The unpaid costs of modern industry include the honey bee collapse that affects global pollination, the massive health effects of endocrine disrupting chemicals from the hydrocarbon chemical industry, and of course, global warming that will impact humanity and all of nature into the future,” writes Greenpeace International co-founder Rex Weyler.

Fire at toxic waste storage site at Krasny Bor, May 24, 2008. (Photo via WikiMedia Commons)

Fire at toxic waste storage site at Krasny Bor, May 24, 2008. (Photo via WikiMedia Commons)

The Natural Capital at Risk report investigated a broad swath of industries, including agriculture, forestry, fisheries, mining, utilities, cement, steel, paper and petrochemicals, and concluded that no sector generates enough revenue to cover its real, external costs.

The report calculates that these costs tally up to an astounding $7.3 trillion per year, or 13 percent of the global economic output in 2009.

Coal ash being stored in the West Pans. (Photo: Richard Webb)

Coal ash being stored in the West Pans. (Photo: Richard Webb)

The majority of these costs were incurred via greenhouse gas emissions (38 percent of the total), followed by water use (25 percent), land use (24 percent), air pollution (seven percent), land and water pollution (five percent) and waste (one percent).

 A high-resolution aerial survey photograph of the coal ash spill at the Kingston, Tennessee power plant. The spill occurred in December 2008 when a dike holding the toxic waste "failed." (Image Source: Tennessee Valley Authority via SkyTruth)

A high-resolution aerial survey photograph of the coal ash spill at the Kingston, Tennessee power plant. The spill occurred in December 2008 when a dike holding the toxic waste “failed.” (Image Source: Tennessee Valley Authority via SkyTruth)

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3 Responses

  1. horsedrag says:

    All cancer is man made.

  2. Barry Wray says:

    The economics are revealing, but the implied conclusion that no companies would be profitable is really a reverse premise. The point should be that the true cost of responsible production, within a properly designed regulatory standard that assures preservation of resources and responsible waste management, would be included in the cost of production and then the true cost of goods and services would be accounted for at the consumer price level.

    Cleaning up the environment should never be a goal, option, or by product of production. Responsible production is the only answer, and data like this is the first step in making the sustainable case of how to produce with more efficiency. Cleaning is a negative penalty on production, but has been the historical practice for many industries that have used water, air and land as free dumping grounds. Responsible production is accountable and I submit, would result in greater global production over time by removing man-made negative consequences. These consequences are nearly impossible to quantify in terms of the drag of global productivity improvement.

    A great example is the current upstream tragedy of South Fl that has caused the severe eruption of cyanobacteria as the eutrophic water from farming upstream was released in mass on helpless downstream ecosystems. The cost of cleaning is insurmountable and the cost to tourism, property values and livelihoods is severe and difficult to measure. The cost to property values alone would dwarf the cost of responsible farming and other upstream practices. I’m sure the residents would much rather pay more for produce, including Sugar, than to try to clean up their mess.

    The Gulf of Mexico “dead zone” caused by the Mississippi River outflow, is another great example, but who knows how much this kills in terms of seafood production? The BP oil Spill continues to cause vast salt marsh erosion, that adds flooding risk to the southern portions of Louisiana.

    Great article, and it should encourage us all to work towards fully accountable production, where the cost of clean production is used as the basis for a profitable sales price.

  3. Dorothee Custer says:

    Thank you Barry Wray, for pointing out the obvious!

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