« We have to go from bad prices to real prices » – Insurance for Pets

Last month, Bionext spoke with Michel Scholte, co-founder and director of True Price, about what constitutes a real price. In addition to his work at True Price and the Impact Institute, Michel is currently also Minister of the New Economy, an initiative of CSR Netherlands. With the Minister of the New Economy, MVO Nederland wants to send a signal to politicians in The Hague that there is a growing group of people with a vision of accelerating towards the new, future-proof economy.

Michaël Wilde, director of Bionext and Michel Scholte. The conversation took place in Amsterdam in the True Price Store on the Haarlemmerplein.

Michel, for those who don’t know exactly what True Price is, can you explain that in a few sentences?
Michel: « It’s not all that complicated. How much it costs to make a product depends on many different factors. It’s not just the cost of raw materials and labour, you also have to think of the damage to people and environment.These external, also called hidden costs, are currently not passed on in the market price.Climate change, soil depletion, pollution of air, water and impoverishment of agricultural land, but also child labour, industrial accidents and underpayment of parties in the production chain are all examples of external costs. »

« At True Price we calculate more than thirty ecological and social impacts. By making these costs transparent and adding them to the market price, the true price is created. We have to move from bad prices to real prices. »

Why is it important that we pay a real price?
Michel: « The current economic system is simply going completely wrong. While a very small group benefits to the maximum, the lion’s share of the population and future generations are the victims of this. The external costs are not borne by the producer, but be carried by the rest of society. »

You can only change the system if we first calculate what the external costs are. All parties in the chain can then take measures. But true pricing gives policymakers in particular an instrument to change laws. Think, for example, of a CO2 tax or a reward for ecosystem services. If companies include the social and environmental costs in their prices, a fairer system is created and sustainable production is stimulated.

What do you think is the impact of true pricing on the organic sector?
Michel: « The biggest difference between organic and conventional agriculture is that the organic sector does not use artificial fertilizers and chemical crop protection agents. These are, in addition to monocultures and animal proteins, the most important problems in agriculture. The production of fertilizers causes enormous CO2 emissions and has a negative impact on nature, just like the crop protection products. Organic farming does not use these agents and is therefore very valuable in that respect. But organic is not there yet, there are also external costs in organic farming. »

« If we include all external costs in the calculation of the price of a product, I expect that the price differences between conventional and organic will decrease and organic products will become a lot more competitive. It is simply not fair that the harmful costs of conventional agriculture to be paid by others. »

What kind of impact do you expect on the entire food sector?
Michel: « All forms of agriculture that do “recovery, compensation and prevention”, such as agroecology, biological or truly regenerative, will become increasingly important. There will also be much more transparency. This will lead to more and more people go deeper and take much more responsibility for their own impact, so more will be eaten locally and with the season. »

Will the consumer pay more?
Michel: « The consumer is already paying for the damage, just not through the groceries. That is now done through taxes and health insurance, for example. So in my opinion there is no net financial impact on a majority of consumers. In addition, we see that people really do is willing to pay the real price, provided you know for sure that there are no profiteers who will take your hard earned euros away. »

What advice do you have for policymakers?
Michel: « We have currently set up an economic system where everything revolves around prosperity and much less about dignity and well-being. We must reorder these principles. First dignity, then well-being and then prosperity. In fact, we must return to the Universal Declaration of Human rights. »

« As human beings, we have the right to facilities such as food, freedom, peace, water and nature. In short, a livable planet with an eye for our fellow human beings. To get there, we advocate radical transparency. It will become impossible to hide harmful behavior So my advice is: ‘Be ready. If you are going to be naked, you better look good.' »

In the Greenpaper Prize, Bionext explains more about the real price of organic.

Source: Bionext