Funnels are great things. They allow you to pour a liquid or heavy gas into a narrow-necked container. Like pouring oil into a bottle. I’m thinking more and more of inverted funnels – chimneys spewing various gases out of a narrow spout into the open environment from a point source, like a factory; essentially from a concentrated source to a distributed open vessel.
The same could be imagined in relation to plastic. Factories that resemble the narrow-necked bottle churn out concentrated plastics in the form of products that eventually find their way to every corner of the world in bits of varying sizes. Taking this concept further, we’re talking about the externalities of economic productivity. In other words, they are the impacts on the wider environment (however defined) of the manufacture, distribution and retail of a product or service.
Of course, this includes the greenhouse gas emissions associated with almost all of our production processes.
Until recently, the issuance of the stuff was entirely “free,” or free to the producer. The resulting impact was not included in the “cost” of the final product. That’s because you just pump that stuff up in the air and then it’s gone, right? The logic was that “dilution is the solution to pollution” because the atmosphere (or oceans) is so big that ejecting some gas wouldn’t change the balance. Until the emissions were so great that they shifted the balance and we felt the effects.
And it doesn’t stop with the atmosphere and oceans. Our bodies are also prepared to be recipients of various external effects that have been shown to cause life-threatening diseases. Allergies, asbestosis, various types of cancer (including lung cancer), to name but a few, are the direct result of our stuffing our bodies, willingly or unwillingly, with externals.
Looking a little further at the impact of externalities, we could think of the impact on the workforce (mental health, work injuries) and on society in general, for example in terms of opportunities, obligations and equity.
For centuries, even millennia, externalities as a necessary consequence of production have been largely ignored or even explained away because they were inconvenient or too expensive.
To simplify the point even more, but make it even clearer: Our economies have grown thanks to externalities. We are at an inflection point where we not only see a reversal, but the next big business opportunities and business models are about reversing the process and making money internalizing these externalities.
We inherited this alienated world and now our survival depends on cleaning it up.
We could coin a new term – like reverse economics or internalized economics – to clarify the need and the concept. It’s already happening; Carbon removal certificates do just that, as they are essentially a financial reward for removing greenhouse gases from the atmosphere and trapping them to reduce climate change.
The funnel analogy helps here again.
Current technology uses large fans to extract and concentrate carbon dioxide from the air, and then inject it into rocks, removing the stuff forever. Similarly, startups have sprung up to address the mental health challenges we are familiar with. The same can be said for plastic removal initiatives big and small: microplastic-eating bacteria being developed at universities around the world, and efforts by the non-profit organization Ocean Cleanup to tackle the Great Pacific Garbage Patch. Some reverse economy pioneers use the latest technology. Crispr, the genetic engineering tool, is being used by Nobel laureate Jennifer Doudna to “enhance the natural ability of plants and soil microbes to both capture and store carbon from the atmosphere.”
The intent of the reverse economy is not new, but faces ongoing challenges to providing some sort of public good.
Public goods are products, activities, or services that have collective rather than individual benefits. Whereas most of traditional economics has been the opposite: granting a benefit to individuals or specific audiences, whether in the form of a profit or a product. In the reverse economy, everyone benefits from reducing the greenhouse gas burden on the environment. In the reverse economy, everyone benefits from clean water and oceans. In the reverse economy, everyone benefits from positive mental health.
Unfortunately, it is still more common to finance products and services that bring immediate benefit, pleasure and profit to the customer. Many of the companies in the digital economy continue to create new externalities in the form of financial losses or mental health problems. But I am confident that the future transition from externalizing to internalizing economies is imminent.
Without the right political inputs, e.g. B. Requirements to include externalities in product costs, this will not happen. So the next time we buy, consume, edit, or invest in something, we have to ask ourselves which end of the funnel you’re at — the narrow neck that only benefits you and the maker, or the wide rim Reinforced and social benefits.
The choice is ours and switching to the reverse economy could be as simple as that.
Updated September 20, 2022 at 4:00 am