According to The Guardian, the study of the 3,000 biggest public companies in the world found the estimated combined damage was worth at least US$2.2 trillion in 2008 — a figure bigger than the national economies of all but seven countries that year.
Conducted by the UK firm Trucost and due to be published this summer, the newspaper said the damage costs equal 6-7% of the companies’ combined turnover, or an average of one-third of their profits.
“What we’re talking about is a completely new paradigm,” Richard Mattison, Trucost’s chief operating officer and leader of the report team, told The Guardian recently. “Externalities of this scale and nature pose a major risk to the global economy and markets are not fully aware of these risks, nor do they know how to deal with them.”
Greenhouse gases that cause climate change account for more than half the $2.2 trillion estimate, the newspaper adds, noting power companies that burn fossil fuels and other heavy energy users will likely be found responsible for more environmental damage than most other sectors.
The report will no doubt be eagerly awaited by some environmental and lobbying groups that have long been calling for companies to be forced to pay a much higher proportion of the costs of their environmental damage. In addition, economists studying the total external costs of energy generation, which includes various types of pollution, will be interested in the published report.
What’s at stake, of course, is whether companies will be forced to comply with the so-called “polluter pays principle” by governments increasingly under fire to balance existing and future social needs along with environmental, economic and energy challenges.
The European Wind Energy Association (EWEA) welcomes any report that sheds light on the true costs of energy production, and is also looking forward to seeing the full results of the Trucost report.
The wind power industry is proud to be emissions and pollution free, to use a fraction of the water of most ‘conventional’ energy sources and to have the lowest lifecycle emissions of all power plants.
As world leaders continue trying this year to reach a new and strengthened post-Kyoto agreement on limiting greenhouse gases, it is worth reminding them that, as Mattison says, an entirely new paradigm is required if the much discussed green energy revolution is to be successful.
Already part of that revolution, wind power encourages policy makers to have an open debate about the costs and benefits of energy production, to ensure there is a fair and proper price for carbon and other pollution, and to create a level playing field when it comes to market access and subsidies.