true cost accounting

Syllable breakdown

Dictionary meaning

an approach to economic accounting that seeks to incorporate the full social, environmental, and health costs of production and consumption that are not captured in market prices — known as externalities — so that the true cost of goods and services is visible to decision-makers; true cost accounting for food, for example, would add to supermarket prices the costs of greenhouse gas emissions, water pollution from agricultural runoff, biodiversity loss from habitat conversion, and healthcare costs associated with diet-related disease; proponents argue that making externalities visible is essential for rational resource allocation and for driving a transition to more sustainable production and consumption patterns