Business and Sustainable Development Commission Report
Read this report, which demonstrates the business case for the SDGs and the US$12 trillion a year market opportunity available to companies that embrace the mission and lead with a strategic vision.
2. Major Market Opportunities Opened Up By Delivering The Global Goals
2.4 Pricing of externalities would increase the value of market opportunities
The report's sizing of opportunities is based on current prices. However, these largely do not reflect the cost of a range of externalities, in particular GHG emissions, and they include various subsidized and unpriced resources, including water, fossil fuels, and food. The value of these resource subsidies globally is estimated to be over US$1 trillion a year.
"The effects of pricing externalities properly is most striking in the food system".
To understand the impact of removing subsidies and properly pricing resources, the research takes a subset of the top opportunities and reprices three components for which reliable data is available: carbon, water, and food (Exhibit 6). This "real" pricing increases the overall value of opportunities by almost 40 percent. The effects are most striking in the food system, where pricing of externalities almost doubles the total value of opportunities to reduce food waste. Impacts on energy and materials opportunities are also significant: the size of the opportunity in renewables rises by 46 percent, driven by carbon pricing and by a similar amount in energy efficiency in non-energy intensive industries.
Exhibit 6:
Pricing externalities into top market opportunities adds almost 40% to their value
