Full Cost Accounting

There is the idea in sustainable business called full cost accounting. This idea encourages and requires the complete notation and inclusion of all costs created within a process. This process can include services, product manufacturing, energy sources (like gas), food gathering etc.

Gasoline prices are the easiest idea to apply full cost accounting with, as most everyone has at least once had to pay at the pump. The numbers I put into this post are not legit numbers, but a generalization to get the point across.

Okay, so gas right now is $4.10 a gallon. That's a lot, as over the weeks and months the price keeps going up and people shout about the unfairness of it all.

"Are you kidding? Back in my day gas was just a dime!"

But what is that $4.10 covering? The cost of the actual liquid being pumped into your car, some taxes, and some other odds and ends, like the bit the gas store gets for giving the product and service of gasoline.

What's not covered?

The cost to transport the gas to the station.
The cost of refining the oil to gas.
The cost of transporting the oil to the refineries.
The cost of the drill equipment.
The trucks themselves.
The stations.
The employees working at the stations.
The oil spills and effects on the natural world.

I could keep going, but you get the idea. Some sources put the true cost of gas at $15 dollars. I'll be nice and give you a link to read (and watch a video) early this week. It was published February of 2012, so is decently current.

http://www.treehugger.com/fossil-fuels/true-cost-gasoline-closer-15-gallon-video.html

If we had full cost accounting applied to our gas we would be paying that $15+ dollars a gallon without any problem.