Sales prices in the market do not reflect the real costs. The costs of pollution, climate change, biodiversity loss, unfair labour, exploitative trading and other elements of unsustainable practice are not included. Oiconomy Pricing enables producers to calculate the full price of their products. This is based on preventing all Planet, People, and Prosperity related ’externalities’, the negative impacts created in the full value chain.
The full details of the calculations are available here.
The word real is a bit confusing, perhaps you mean true?
Thanks for your comment. The word ‘real’ may be a bit confusing. In this world of full cost accounting various labels are used to express the intentions to calculate more than just the market price of a product, but to include also the externalities, costs paid by others in society than the economic actors in the product’s value chain. Other synonyms are ‘true’, ‘full’, ‘fair’ etc. For a good overview and the different approaches with their pro’s and con’s you can read this article “In search for ground rules for product-oriented full cost accounting methods: Ensuring construct validity” (download for free here)
The Oiconomy team