The food chain is the transformation of nutrients that an organism has learned to digest and use. Depending on the type of food, physical characteristics have developed to optimize assimilation and yield for access to this resource. Lions have sharp teeth and fangs and are larger than zebras. Zebras have a digestive system (symbiosis) adapted to the ingestion of cellulose, and flat teeth favouring chewing, rather than pulling. The vulture, scavenging, to develop a pouch, the crop, a pre-stomach, allowing it to isolate a first phase of digestion that would be fatal to us, and uses a hooked and sharp beak. Darwin by observing the beak of finches, which according to the diet, had different beaks, discovered evolution: a consequence of the necessary adaptation of the species.
This specialization of the links of the food pyramid, are the ideal example to introduce the problem of the value chain in economy.
In economy, the value chain (the backbone of any company) is very similar. We will see how this makes the problem complex, then we will focus on the value chain of the company (and explain how this does not alter the objective of monitoring externalities by company).
What does the job of a car manufacturer involve?
A car manufacturer today is mainly an assembler. He designs new models, then orders bodywork, brakes, engine, … Manufacturers have become principals, who at the same time have lost their skills in the manufacture of brakes, engines, …
When we think about the responsibility of a car manufacturer, and the impact it has on society, we have to ask ourselves the question of its supply chain:
This question is obviously not limited to suppliers but also to suppliers of suppliers:
This simple question on the value chain makes the problem much more complex. Nevertheless, the question must be asked: What is the balance of externalities for?
It serves to show the efforts made by the company to improve its environmental, social and economic impact.
Shouldn’t we therefore focus on the company’s value chain?
Yes, but what about the social costs in this case?
We asked the question about the impacts of the company and it value chain. Nevertheless, we should not ask the same question about the social costs and their evaluation. Indeed, it is one thing to focus on the company’s value chain, but it is another to restrict (by symmetry) the evaluation of social costs.
An example: for energy, as irreversible, we proposed to take the cost in renewable equivalent.
Thus the cost of 1 kWh of wind (and renewable) energy is known. Nevertheless this evaluation is made in relation to private costs borne by the company in charge of the development. But should we not put the same constraints on this evaluation of the cost of development, by taking the social costs and not the private costs. In such a case, or should we stop in the value chain expressed in social costs and not in private costs.
The proposal would therefore be to apply this degree principle to the balance of externalities, each degree corresponding to a level in the value chain in the calculation of the balance of externalities. Thus the degree makes it possible to directly qualify the quality of the information provided. It also allows for a gradual approach to the evaluation of the balance of externalities.
It should be noted that Yann Moulier-Boutang has proposed to distinguish two “degrees” of externalities:
The notion of degree in the balance of externalities is strongly inspired by it, but the object is different. In the case of externalities, the notion of degree is an element of qualification of externalities, limited to 2 degrees. In the second case (balance of externalities), it is a measure of the quality of the data in the balance of externalities.
Darwin by observing the beak of finches discovered the evolution, as a consequence of the adaptation of the species. It was not a question of spontaneous adaptation to an environment, but of a progressive result, by successive passes.
Concerning the balance of externalities, this is the approach we will use, an approach associated with a measure, the degree of depth in the value chain.