Introduction
The total product costs in the modern economy are typically calculated by adding material costs, labor costs, and overhead production costs, typically including rent, insurance, and utilities. Environmental costs are often absent from the equation, as the push to acknowledge the price paid by the environment has started only recently (Zhu et al. 2019).
These are often indirect costs associated with pollution, climate change, and the gradual increases in the price of finite resources. Companies that do not include the environmental factor in their price calculations and which do not use the revenue to make amends to the environment allow for their products to be much cheaper and available to customers, not forcing them to carry the costs of environmental exploitation in the short-term (Zhu et al. 2019). However, these costs may be eventually returned to the population in the long-term through diseases and health issues caused by pollution, climate change altering the living conditions around the world, and various other means of affecting livelihood.
Research Questions
The research question for this exploratory study is as follows:
- How are unpaid added costs for environmental damage transformed into tangible costs for human populations around the world?
- What populations are the most affected by these costs and forced to pay the full price?
- What can be done to mitigate the damage to the environment as a result of careless business practices?
Objectives
The purpose of this study is to explore the mechanisms of how the costs for environmental damage are eventually carried onto the populace. Doing so would enable researchers and the public in general understand that they end up paying the costs no matter what, which could potentially motivate more people and companies to act against it on the political and policy-making levels. Finally, understanding how environmental damage affects the populations in long-term perspective may allow for businesses and policymakers to plan interventions and develop more socially-responsible ways of interacting with nature.
Building Upon Prior Research
As the research is exploratory in nature, it will rely upon prior research in order to establish the current state of affairs regarding pollution, climate change, and its effect on humanity around the world. It will also review specialized studies and synthesize them into one full picture of the world, where individual findings are put in context. Finally, the proposed solutions will be based on how effective various methods that have already been used have proven themselves to be.
Methodology
Strategy and Methods
The proposed strategy for the study is exploratory, utilizing secondary research methods. Information will be derived from relevant peer-reviewed academic journals and articles (Snyder 2019). The primary literature search will be done using keywords, such as environment, damage, costs, pollution, climate change, healthcare, pollution-related illnesses, and others. Publishing dates would have to be between 2015-2021 in order to provide the most accurate data, though some older studies may be selected to provide context. Sources would be retrieved from reliable databases of academic info, such as JSTOR, Proquest, and any journals that the university library has a reliable access to (Snyder 2019). After the primary literature search has been completed, all sources will be manually investigated to ensure they have information relevant to the research question, with sources deemed irrelevant cast aside. Finally, the remaining sources will be processed using content analysis methods and data coding methodology to group sources together based on the similarities and differences in evidence (Snyder 2019).
How Research Questions Will be Answered
Research questions will be answered in the following manner:
- How are unpaid added costs for environmental damage transformed into tangible costs for human populations around the world? – to answer this question, the sources would first need to provide a list of environmental damages caused by businesses, and then evidence of how these damages can negatively impact human population.
- What populations are the most affected by these costs and forced to pay the full price? – comparative analysis of what regions and populations are more affected by pollution and climate change, and which ones less so.
- What can be done to mitigate the damage to the environment as a result of careless business practices? – evaluate interventions that have already been implemented to that effect to develop a set of general recommendations for business and policy-makers to consider.
Literature Review
There is an undeniable fact that economic activity is directly connected to pollution. According to Zhu et al. (2019), production, transportation, extraction of various resources, sustenance of the traditional way of life and livelihood – virtually every activity done by human beings has some kind of a negative cost for the environment. Yang et al. (2018) highlight the more commonplace types of pollution to be derived from economic activity of the human race. These include the global warming, pollution of air, earth, water, and natural habitats of many animals, plants, and creatures, deforestation, resource depletion, and ocean acidification (Yang et al., 2018).
The connection between economy and pollution is exhibited in relation to specific industries. Zheng and Shi (2017) report that resource depletion is largely related to the aftereffects of extraction industries, which provide the economy with raw materials, be those oil, gas, metals, minerals, wood, or any other necessary elements. These industries are also complicit in pollution, with the oil industry being notorious of having put the flow of the Gulf Stream at risk, during the incident with the Mexican Gulf Oil Spill in 2010 (Zheng and Shi, 2017). Water pollution is largely being done by industries producing various goods and requiring water for their operations. These include paper and textile industries, which utilize chlorine and benzene that may cause water pollution (Qadri et al., 2020). Human living is a major contributor to pollution as well, as sewage water and trash often ends up contaminating both water and soil (Qadri et al., 2020).
Air pollution is closely associated to the burning of coal and gasoline, which is used for power generation, heat generation, and transportation (Chen et al., 2019). Coal power plants, which are used everywhere around the world, are some of the most notorious pollutants. In China, coal powerplants account for over 50% of the country’s total energy production, and 28% of all global CO2 emissions (Chen et al., 2019). Gillingham and Stock (2018) state that around 30% of all greenhouse emissions in most developed and developing economies are caused by transportation, ferrying people, goods, and materials back and forth. Most pollution comes from the automotive transportation, followed by planes, ships, and fuel-based railway (Gillingham and Stock, 2018).
The farming industry has a massive environmental cost on the areas they are located in, that is often not reflected in costs. Plant and animal farms are some of the greatest consumers of potable water, and the locations they are placed in are major sources of air and soil pollution due to the use of fuel-based farming equipment, various aerosols to protect the crops from pests and insects (Cesoniene et al., 2019). Animal farms are a major source of methane pollution into the atmosphere (Cesoniene et al., 2019). Human activity is responsible for roughly 60% of all methane released into the atmosphere, and farming takes 45% of it. Overall, the world’s yearly methane releases constitute about 360 million tons (Shindell et al., 2017).
Pollution has various effects on human life around the world, but it affects different regions to different degrees. Some of the regions suffering the most from pollution and other destructive human activity include Southern Asia, Africa, and South America (Babatola, 2018). The former suffers the most from air and water pollution. Countries like China and India are where the production facilities for most of the world are located – these two countries collectively stand for more than 25% of the world’s GDP and for a third of its population (Babatola, 2018). It is estimated that these countries lose roughly 2.4 million people a year from health complications caused by air pollution (Babatola, 2018). Africa suffers the most from the effects of climate change – it has been noted to be the main cause of droughts sweeping through the continent for the past decade. These droughts have limited the supply of water to populations, resulting in poor crops, reduced hygiene, and little water available for drinking (Ahmadalipour et al., 2019).
South America is one of the primary sources of food supplies and wood harvested from its rainforests, which is used in textile and paper production. Thus, the primary issues with pollution it faces are those of deforestation and contamination of its rivers (Martins et al., 2017). These issues have caused unbalanced water levels, floods, and droughts, which have severely affected the local farming industry. Argentina alone had lost 22% of its national reserve, estimated at 8 billion dollars, during the drought of 2016 (Martins et al., 2017). These costs represent some of the untapped economic issues underlying careless consumption of resources by the economy, not highlighted in the prices.
Pollution has numerous costs that are taken off the extraction and manufacturing sector and placed upon the population, public, and medical sectors of the economy. Landrigan (2017) states that the current costs for health complications caused by air pollution alone are at 25 billion a year worldwide, and would increase tenfold by 2016, reaching to an approximate 330 USD per person per year. Total health costs for different kinds of pollution, including air, soil, water, food, and others, are currently estimated between 240 billion USD to 630 billion USD (Preker et al., 2016). The precise numbers are difficult to estimate due to the difficulty of attributing diagnoses and health conditions to specific environmental hazards.
Accounting for ecological costs of an enterprise is the purpose of sustainable and socially-conscious strategies. Xiong and Wu (2021) state that companies have the potential to either include environmental fees into overall costs or take a cut of their margins to invest in various measures of protecting the environment. These measures include resource renovation programs, such as forestation efforts, rational resource consumption (recycling, upcycling), sustainable resource alternatives, and managing the negative effects on the population (Xiong & Wu, 2021). Examples of such could include water-heavy industries donating to water initiatives in Africa, packaging industries switching to biodegradable plastic, paper, or package-less products, as well as investing into health programs for poor populations (Xiong & Wu, 2021).
Conclusions
Added costs for environmental damage are often overlooked in traditional economics, but are coming to the forefront as humanity becomes more aware of them. The unaccounted costs are difficult to predict, as they return in the form of health complications, natural disasters triggered by the global warming, damages to land and water supplies, and through various other channels. Companies need to adopt a more proactive and socially responsible approach to tackling these issues.
The first step would be to ascertain the types of damage their individual businesses are causing to the environment, and then include the costs of remedying these damages through various actions. Some examples of strategies utilized now include sustainable energy sources, zero-emissions products, and investing into sustainable infrastructure. The proposed research would explore in-depth into the industries and technologies behind the problem as well as the costs they impose on the rest of the world. The solutions presented will be evaluated based on their effectiveness and cost-efficiency. The final article will offer a well-rounded view on what the existing body of knowledge has to offer on the subject, with insights to be used by businesses, policymakers, and the greater scientific community.
Reference List
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Babatola, S. S. (2018) Global burden of diseases attributable to air pollution. Journal of Public Health in Africa, 9(3), pp. 1-10.
Cesoniene, L., Dapkiene, M. and Sileikiene, D. (2019) ‘The impact of livestock farming activity on the quality of surface water’, Environmental Science and Pollution Research, 26(32), pp. 32678-32686.
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Qadri, H., Bhat, R. A., Mehmood, M. A. and Dar, G. H. (Eds.). (2020) Fresh water pollution dynamics and remediation. Springer Singapore.
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