How compatible is cost externalisation with sustainable development?


After our second lecture on Sustainability and “Our way of life”, I seriously wondered whether there is any compatibility between cost externalisation to maximise profit and the concept of sustainable development. It appears to me that these 2 concepts exclude each other. Indeed, I find it difficult for the poor countries to even start developing while they are bearing the development cost for the richer ones to sustain growth.

  To maximise profit in the north, one needs to minimise cost from the global commodity chain in the south. Quite unfortunately, this approach comes with a lot of environmental consequences for the poor countries. These consequences vary according to the context from child labour, environmental pollution to war and political unrest.

 The extreme damage case of cost externalisation might be linked to the war for mineral resources in the Congo for which the British paper Time reports in these terms:

 “Global Witness claims that multinational companies are furthering a trade in minerals at the heart of the hi-tech industry that feeds the horrendous civil war in the Democratic Republic of Congo (DRC).”,8599,1912594,00.html

 Some analysts refer to this global commodity chain as “blood computers”. It is amazing that developed countries enjoy latest technology paid for by war and blood from poor countries. Nowadays, almost every mobile phone, every computer, every play station… carries the scar of war, rape, murder and killing in the developing world.

 The simple question to meditate about will be without doubt: “is it worth to be technologically developed in the north at the expense of the south? Should we under such conditions talk of sustainable development?”

 I will appreciate your comments on the topic!


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3 Responses to “How compatible is cost externalisation with sustainable development?”

  1. rlinton Says:

    My automatic response is of course to say no, it’s not reasonable for one group of people to profit at the expense. However, the fact is that this is the situation that we find ourselves in. The question is, what do we do about it? To cease such arrangements altogether would obviously remove the problem. It would also no doubt bring about the de-growth that we’ve been talk about as essential to acheiving the emissions targets mentioned in lecture 2.

    However, my concern is that in saying this we are losing sight of the individual, which as we all know from Meera’s lectures should be at the centre of development. If we remove these global commodity chains a vast number of livelihoods will be lost in both developed and developing countries – and I will go out on a limb here and assert that it’s the poorest people in both regions who will be worst affected. What happens to them?

    Morally I think this is a very easy question to answer. But practically, I think the issues are far more complex.

  2. u0913063 Says:

    The situation is indeed disheartening. But you know, as we continue to empower the poor people out there in Africa and else where, these companies would be forced to find a more responsible and sustainable way of making capital. Education, education and education for all ,as set out clearly in the MDG.

  3. Mampa Diatezua Says:

    An externality is a side effect generated as a result of consumption or production choices by one individual or entity and involuntarily reveived by another individual or entity. The decision maker’s analysis or calculation deliberately or inadvertently ignores the consequence. The decision maker avoids “internalizing” a particular consequence and thus externalizes any cost or benefit. The recipient bears the burden of a negative (i.e., costly) externality and gains the value of a positive (i.e., beneficial) externality.
    A negative externality imposes a burden elsewhere while benefiting the source through avoidance (i.e., externelization) of a cost. A classic example is air or water pollution. The polluter damages someone else and thereby avoids the cost of pollution control. Negative externalities particularly raise important issues for business ethics and law. Not generating, or at least compensating for, a negative externality comports with the ethical principe of avoiding unjustifiable harm to others when feasible to do so. A good citizen does not dump refuse on the road to avoid the inconvenience of finding a garbage can. Someone else pays the cost of that dumping.

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