In economics, we always consider cost of capital and labor wage when setting the price of products. Theoretically, when the cost of capital and labor wage increase, the price of products would increase as well. Historically, economists have thought of economics and the environment as a trade-off, which means you can do well by one or the other, but not both. "Full cost accounting", is the term used for dealing with the fact that the days are over when companies didn't have to worry about things such as chemical disposal, emissions and cleanup. In early days, the regulation rules was not as strict as today's, so companies did not have to spend much money on the capital cost. Thus,consumers paid less money on products than today.
I have read from the newspaper that cleaning up chemical messes is growing ever more costly. For example, the DuPont company agreed to pay up to $600 million in fines and settlement costs over environmental damage caused by production of Teflon and Gore-Tex. Other companies also face costs in the hundreds of millions of dollars to clean up chemicals such as dioxins, perchlorate, mercury and asbestos.Typically in manufacturing Teflon, requiring a toxic chemical called PFOA. However, the company discovered manufacturing Teflon using carbon dioxide instead of PFOA. The DuPont company invested $275 million in a plant in North Carolina that makes one form of Teflon using PFOA free method. It seems like the company paid some extra costs on the proudction line, but possibly saving a fortune in long-term cleanup costs. By investing on this green chemistry capital, the company does not have to pay another 600 million dollars fine in the future. For consumers like us, this investment in green chemistry will provide better (cheaper) price and enviornment.
http://www.usatoday.com/news/science/2004-11-21-green_x.htm
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I am glad that the government are actively getting involved and have strict regulations to which these companies must abide by. The primary goal of a company is to make money so they do not care much about what they are doing to the environment as they try to create products using the most cost effective ways. Government regulations such as giving fines to companies for improper disposal of waste will force them to look for alternative methods. Because the government is in theory working for the people I believe that getting people to be more aware and more involved in these issues would be a vital part in protecting the environment.
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