Externalities: brands stick us with the bill for waste

An externality is when one party's actions affects another party that was not involved in the decision to take that action. For example, if a factory releases pollution into the atmosphere, that is a negative externality for the people living around the factory. To nullify this externality the factory would have to compensate the residents with a share of their profits equal to what the residents' air has been devalued by.

The accepted norm until recently was to focus only on the financial transactions of the factory, they only had to pay their suppliers for materials or pay their landlord rent but the neighbouring residents were left to fend for themselves. More externalities are being taxed and even though the taxes aren't always accurately directed back to those negatively affected, social and environmental measures are more regularly being used along with financial measures to determine value.

The waste from packaging of consumables is a massive negative externality. Global brands like Coca-Cola and McDonald's are responsible for a large portion of the world's waste like soda cans, burger wrappers, paper cups, paper bags, plastic cutlery and boxes. The customers of these brands are jointly responsible for producing the waste although one could argue they sometimes have limited choice as to the amount and type of packaging of the products they consume.

Companies use packaging as an advert for their brands. Their packaging is carefully designed to strengthen the market presence of their brand and to promote their products. This graphic branding that many products have is an important asset to the brands but it also makes it easier to pin the responsibility of certain waste on the people responsible. A large percentage of the waste in the world bears the Coca-Cola logo. Surely a company whose name is on waste should be partly responsible for the effects of that waste. Compensation for waste that is already in our environments could be hard to achieve but taxing brands for waste with their name on it in the future might generate revenue that could be put to good use but more importantly it might force companies rethink the amount and type of packaging their products are sold in.