Pricing & Distribution
Traditionally many of the social and environmental costs of doing business were not met by companies nor reflected in the prices that their customers were charged. They were treated as “externalities”, or as bills for others to pick up and pay. In theory these “others” were meant to be governments using the taxes that they had raised on consumers and producers, but in practice it has often meant passing those costs down to future generations.
Developing a more sustainable economy will require those “externalities” to be put back into markets and their prices. This can happen through voluntary action, or through additional taxation (such as a carbon tax on fossil fuels). Pricing can be used to “demarket” harmful products such as cigarettes or scarce or finite products like fossil fuels. Developing more sustainable markets may also require a switch in emphasis away from the purchase price of a product towards the lifetime cost of owning and using it. This would encourage the design, purchase and consumption of products with greater energy efficiency and longevity.
Distribution of products is an area where much of the sustainability impacts of products occurs through the burning of fossil fuels to transport products throughout global supply chains. There are also social implications to distribution in terms of the accessibility of products, particularly in markets such as financial services where there are concerns about the exclusion of disadvantaged customers through the closure of bank branches and post offices.
Another important aspect of distribution is in terms of the role of retailers, since with the concentration of grocery retail throughout Europe, retailers have a tremendous potential to influence manufacturers and customers. Although in the UK retailers like the Co-op have been very proactive in addressing a range of social, ethical and environmental issues, there is concern that the size and price competitiveness of the major retailers is such that it leads to a lack of consideration of sustainability issues such as the working conditions of agricultural labourers or the environmental costs associated with products.
This project is concerned with the behaviour of consumers and producers who are willing to pay more to protect the environment.
Presentation on road pricing and sustainability.
Pricing policy and water resources.
Energy pricing and sustainability.
A briefing paper on the costs of sustainability.
UN report on sustainable transport pricing and charges.
The UK’s Sustainable Distribution Strategy
The Chartered Institute of Logistics and Transport’s sustainable distribution forum.
Paper on performance measurement in sustainable distribution systems.
US report on reducing transport packaging.