Introduction
In our marketplaces, products, which can include both goods and services, are offered for exchange. Usually this means products are exchanged for some financial reward, whether money or other financial exchange mechanism.
Often under competitive constraints, businesses offer their products for the highest possible price to maximise their potential profit return. In simple terms, businesses seek to widen the gap between what a product costs them, and what they can receive for it when on-sold. With similar considerations, customers seek to minimise their financial outlay introducing a sort of tug-of-war between businesses and customers, where the one wants to widen the gap and the other wants to narrow it.
In the process of their development and production, the cost of products increases with each successive level of value addition. By the time therefore that products reach the shop shelf, and I’m referring here to tangible goods, they will have gone through multiple levels of value addition, each of which will incur a cost to the value-adding agent. The end cost, and likewise the price to the customer, are thus reflected in these successive financial increases.
Customers are conditioned by the marketplace
Price and value are not the same. While customers are certainly interested in getting value-for-money, many remain conditioned by the functioning of marketplaces. By which i mean, to get what they are looking for, for the lowest price possible. Everybody likes a bargain, so the saying goes. Hence, competition and consumer interest in the marketplace, while not exclusively so, are highly driven by price.
When is a bargain not a bargain?
The essence of what I have been talking about above has implicit cost considerations. Where’s the cost, and who or what bears the brunt of the cost? A bargain may seem like a bargain at the time, but is it really? Let’s take a look.
Externalised costs (externalities) and degeneration
We need to recognise and acknowledge that there are costs that are not internalised to products. These costs are for the most part hidden. They are seldom seen, but they are experienced. Often they’re experienced far away on another continent and/or country. Out of sight out of mind so to speak! These are called externalised costs. In the following paragraphs we’ll take a look at some of these externalised costs.
What are these externalised costs?
There are the costs to the natural environment associated with the removal and depletion of the finite natural resources that are either built into, or contribute to, the products that are made available to customers. I can hear you asking the question……….
How do we attach a cost to and put a price on the depletion of finite natural resources?
More to the point, we could ask……..how do we cost the consequences of finite natural resource removal and depletion when these consequences include among others, the exacerbation of climate change, increased atmospheric pollution, ocean acidification, ozone depletion and so on?
Yes, it’s a complex question isn’t it, and because it is so, it remains mostly ignored. I say mostly, recognising that there are a few exceptions which I’ll take a look at in a later post. But for now, I’m just talking at the broad level.
Economists have a history of ignoring the natural world
A long history exists of economists – specifically, growth economists – ignoring the value of natural capital in their unabated promotion of infinite growth (Jones 2025). This has certainly been the case since around the time of the onset of the industrial revolution. A time where a notable shift occurred away from agrarian markets to markets driven by manufacturing and mass production. From the consideration of natural capital to a reliance on other non-natural capital bases.
Growth models dominate economic thinking
Sadly, things haven’t changed much either, in spite of the introduction in more recent years of other economic models designed to shift consumption away from a degenerative posture. These include among others: green economics, the wellbeing economy and degrowth.
To this day, growth models dominate economic thinking, and consequently, most political agendas. One example highlighting this, tells the story of how at a meeting between the renowned then 16-year old climate activist from Sweden, Greta Thunberg, and France’s then President Emmanuel Macron, Macron is reported to have said “France is unable to decrease its emissions because of its economic growth (Hine 2023, P112).
Returning to the issue of externalised costs. Aside from those directly related to the natural environment, we shouldn’t forget the indirect externalised costs borne by both humanity and other species arising as a consequence of overstepping planetary boundaries. For example, those costs associated with the negative socio-health implications of respiratory and cardiovascular disease from air pollution, malnutrition from failing crops, or population displacement due to extreme weather events (Planetary Health Alliance).
Increases in QOL have come at a cost!
The transgression of planetary boundaries has largely been attributed to actions associated with the development of our economy from pre-industrial time to current (Stockholm Resilience Centre). Yes, our quality-of-life has arguably increased exponentially over this time – but at what cost?
Planetary health negatively impacted
The more we depend on the extraction of finite resources to supply what is essentially a degenerative economy, i.e., to fuel ever-increasing product want lists, the greater the negative impact on planetary health. And yes, as a consequence, we and future generations will continue to pay the price for our degenerative actions – unless we change!
The cost to human and other species health
Other externalised costs not directly mentioned thus far, include the costs to the health and longevity of other species. Also, the cost to communities associated with the depletion of localised finite resources and the cost to cultures often lost in post industrial society. In addition, the cost to global society with many populations marginalised due to marketplace activity, where consumerism and materialism are the dominant paradigms offering the fallacious promise of happiness and wellbeing.
Summary
The implications of what I have written above, while perhaps a little heavy, are clear I hope. Quite simply, we are not covering the true costs associated with our heavy consumption-oriented degenerative lifestyles. The marketplace, and thus our economy as we know it, is thriving on the depletion of the finite resources that are necessary to maintain planetary health. The problem is our degenerative economy. Clearly, we can’t go on like this. Things have to change. We can’t keep supporting an economy that advocates for infinite growth. In short, we need transformational monumental change.
Conclusion
I have highlighted in this post that we have historically failed to internalise externalised costs in the price of products. Consequently, we have not been paying their true price.
By the same token, it wouldn’t suffice to simply internalise these costs moving forward. Why? Because, other than perhaps the natural consumer attrition that would result if products were to increase significantly in price, and by implication, reduce demand, doing so wouldn’t alter a continued reliance on degenerative extraction and depletion processes. It might potentially slow the pace of degeneration, but recall, reduction alone isn’t regenerative. So, while perhaps a step in the right direction, it doesn’t lead us to where we want to be – a regenerative future.
The only way forward is to develop and advance a new way of being, and, inherent in this new way of being, is the development of a regenerative economy. However, recall too that in the same way that a regenerative business needs a regenerative economy, a regenerative economy, as an important part of a regenerative future, requires every aspect of our lives to be supportively regenerative. So yes indeed, the required transformation is monumental. A big question you might ask, is whether we’re up for it?
Points for reflection
- Are we up for the monumental change required?
- What do we need to do to get there?
Future post
In Part 4 of this series, I explore what some of these regenerative initiatives look like and suggest ways that we can all incorporate regenerative practices into our daily lives.
References
Hine, D. (2023). At work in the ruins: Finding our place in the time of science, climate change, pandemics and all the other emergencies. Chelsea Green Publishing.
Jones, C. F. (2025). The Invention of Infinite Growth: How Economists Forgot about the Natural World. Simon and Schuster. ISBN 978-0-86154-004-4.
Planetary Health Alliance: Last viewed 10 July 2026. https://planetaryhealthalliance.org/research-resources/?interventions%5B%5D=32#filter
