True Cost Accounting and the need for a rights-based approach in food systems transformation

True Cost Accounting: Shedding light on hidden costs but facing challenges

True Cost Accounting (TCA) in food systems aims to expose the hidden costs of food production, such as environmental harm and social impacts, which are often ignored in traditional pricing. For example, the price of lemons grown in Mexico and exported to the Netherlands doesn't reflect the pollution from fertilizer runoff that harms local communities and biodiversity.

In this blog post, I argue that while TCA can shed light on some of the unrecognized harms, trade-offs, and power relationships or even asymmetries within food systems, it still has some critical limitations. In fact, if not carefully designed, its application could potentially result in unintended and harmful consequences.

One major issue is that TCA uses a capital-based framework that treats food as an asset with environmental, social, and economic dimensions. This model includes human rights only as a part of "social capital"*, which is insufficient to address all impacts on fundamental rights. Furthermore, even if we quantify all human rights-related externalities, TCA doesn’t fully address who sets the values, who enforces these changes, or how those harmed are compensated in meaningful ways. TCA’s transparency can only be effective if these questions are resolved and if it adopts a more comprehensive approach to human rights.

"Not everything that counts can be counted" - William Bruce Cameron

While TCA aims to assign value to the externalities of food production, not everything can be valued monetarily. Different stakeholders—farmers, Indigenous communities, and consumers—experience the impacts of food systems differently, and economic measures often fail to capture these variations. For example, water is often valued purely in terms of agricultural productivity, but for many Indigenous peoples, water holds deep cultural significance that cannot be quantified. If we are to respect the rights to self-determination and self-development, we must acknowledge that TCA's emphasis on valuation and monetization may not capture what is truly important to certain groups.

Assigning monetary value to harm within food systems raises ethical questions about whose lives and rights are valued and how much they are worth. Pesticides, for instance, are widely used despite causing severe health and environmental damage, with marginalized communities facing the worst impacts. Indigenous children, for example, are six times more likely to suffer from pesticide poisoning** and people of color face disproportionate risks of pesticide exposure. However, some True Cost Accounting studies do not take into account that certain groups may be disproportionately affected by the negative effects. Treating these issues as economic externalities risks reinforcing the idea that certain rights can be bought or negotiated, when they are, in fact, fundamental.

Accountability and the risk of unintended consequences

A central goal of TCA is to encourage better practices by making hidden costs transparent. However, even if all costs could be monetized, this alone might not lead to positive changes. Assigning a price to harmful practices can, in some cases, normalize them. For example, a study that examined parents' tardiness in picking up their children from daycare found that imposing fines increased late pickups because parents saw the fine as a fee rather than a deterrent. Similarly, "green solutions" to environmental issues, like carbon credits, often involve projects in the Global South and risk violating local rights to self-determination. Although TCA could theoretically address power imbalances, it might actually reinforce them if applied without safeguards that protect fundamental rights.

Moreover, in the name of sustainability, projects meant to offset environmental harm can lead to violence against those who defend their land and resources. For example, Indigenous territories contain many of the world’s key minerals needed for green energy transitions, yet these projects often ignore local rights and result in environmental degradation and displacement.

Conclusion: Moving toward a rights-based approach TCA can be a powerful tool to reveal hidden harms in the food system, but it must be applied with a rights-based approach that prioritizes fundamental rights over mere economic valuation. As the saying goes by William Bruce Cameron (1963), "not everything that can be counted counts, and not everything that counts can be counted".*** True transformation requires transparency that does not simply assign prices but ensures accountability, justice, and respect for all affected parties. The process must involve diverse perspectives and give voice to those most impacted by these decisions. Only by embedding human rights at the core of TCA can it support a more equitable, sustainable food system transformation, moving beyond monetization toward genuine justice and equity.

Acknowledgments

The author wants to acknowledge and thank the empathic editorial work of Levi Adelman and members of the TMG Research project CLIF for their comments and contributions.

*cf. Social and Human Capital Coalition (2019).; TEEB-for-Agriculture-and-Food-Operational-Guidelines-for-Business.pdf; Applying the TEEBAgriFood Evaluation Framework: Overarching Implementation Guidance

** United States and United Nations pesticide policies: Environmental violence against the Yaqui indigenous nation

***Cameron, W. B. (1963). Informal sociology: A casual introduction to sociological thinking. (No Title).

International Treaty Council (2023). Guidance information for consideration by the joint meeting on pesticide management as a basis for amending the International Code of Conduct on Pesticide Management. Tucson, Arizona. (Accessed 11/21/2024)

Impacts of cotton monoculture on health and the environment in Mato Grosso,2022 (Accessed 11/21/2024)