Why do Green Products Costs More?

When I told my friends and family about the business I was starting, the first response I got was usually “well as long as it costs the same as conventional products.” To that end I have three points.

1. Conventional farmers and manufacturers are not in the business of destroying our planet. They have chosen to use virgin resources, chemical and synthetic fertilizers, pesticides, and ingredients and pay sweat-shop wages because it is cheaper. Given the rise of Walmart and other discount giants, the trade-off from a business perspective appeared to be worth it. It’s just a bummer that our forests and rivers and oceans are being depleted, natural eco-systems destroyed, cancer-rates rising and the planet is melting.

In economics there is a term call “true cost accounting” which means an economic model that seeks to include the cost of negative externalities into the pricing of goods and services. Supporters of this type of economic system feel products and activities that direct or indirectly cause harmful consequences to living beings and/or the environment should be accordingly taxed to reflect the somewhat hidden costs. However, the cost of many goods and services that are currently affordable, and often taken for granted, could see an extreme rise in costs if their “true costs” are accounted for. According to a Forbes media estimate, if one accounted for the types of pollution caused by the manufacturing and the use of a new car, then the price of would rise by over $40,000.

But we do pay these costs eventually in clean up efforts downstream, health care costs, and the irrevocable loss of valuable ecosystems. So next time you are tempted to pick up that $6 t-shirt from Old Navy (which will probably wear out in a season) consider the true cost of that purchase.

2. Many of the technologies involved with creating recycled and organic products are new and they tend to be employed by smaller companies who do not have the economies of scale of the large conventional manufacturers. Give them time, and a little of your purchasing power and they will become as efficient as traditional manufacturers.

3. We happily pay more for bottled water than gasoline (though the price of gas is catching up quickly). We are not in the habit of adding up the weekly purchases of our disposable products such as bottled water, sandwich bags and paper towels. When we begin to do the math we find that reusables are usually the more economical choice.

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