The True Price Movement: Making Externalities a Language People Understand

In this episode of Radio Tipping Point, host Mike Boyle speaks with Hans Baumers and Estefania Marti Malvido from the Netherlands to discuss the concept of „true pricing.“ Mike introduces the idea by citing research from the Dutch Central Bank, which found that in 2015, the environmental damage caused by the Dutch economy amounted to €50 billion, or 7.3% of the country’s GDP. He notes that for some industries, these „externalities“ would nullify up to 44% of their profits, questioning the sustainability of the current economic system.

Hans and Estefania, who work at Impact Institute and True Price, explain their mission to measure and quantify these external costs, both positive and negative, that are not included in a product’s market price. The true price is what a product would cost if the damage caused throughout its production—such as pollution, climate change, and social issues like underpaid labor—were accounted for. They stress that showing this true price is the crucial first step toward change.

Estefania, whose background is in food policy, adds that while the concept of externalities has existed for a long time, it is often taken for granted. She notes that companies like True Price are pushing for change because continuing with business as usual is no longer an option. The team reflects on how the idea of true pricing, once considered „crazy“ 12 years ago, is now gaining traction, with a growing movement and even recognition from a Dutch competition authority.

The conversation delves into the political challenges, particularly the shift to the right, which may be slowing down environmental regulations. Hans suggests that this political climate could force people to realize that they cannot rely on politicians to save the day, accelerating grassroots efforts. The hosts and guests discuss using money as a communication tool to make abstract environmental and social costs understandable to the public, as „money is a language that people speak“. They share an example of a pilot program where a catering company labeled lunch menus with their „true price“ versus „untrue price“ to raise awareness. Ultimately, the episode highlights that while nature is often perceived as free, the costs of its degradation are real and are paid by someone, whether it’s underpaid workers or future generations.