A fair price reveals the costs hidden behind a product, material, service, or supply chain. The market price shows what is paid at the checkout or on an invoice. The societal price also reveals the costs incurred by people, nature, and society: CO₂ emissions, air pollution, water usage, biodiversity loss, health damage, underpayment, or waste. A fair price is not a moral judgment, but a way to make hidden societal costs visible and comparable. As a result, choices in procurement, design, product development, and policy can be better substantiated.
Market price, social price and external costs
The market price primarily covers direct costs such as labor, materials, production, transport, margin, and taxes. Many effects on climate, health, nature, and society are not fully included in it. These effects are called external costs. The societal price consists of the market price plus a substantiated valuation of those external costs. In practice, this serves as decision-making information, not automatically as a new consumer price tag.
Which hidden societal costs are becoming visible?
- Environmental costs — CO₂ emissions, water and air pollution, land use and biodiversity loss.
- Social costs — underpayment, unsafe working conditions and health damage in the supply chain.
- Chain-wide effects — costs at suppliers, often in scope 3 of the footprint.
Shadow prices: valuing securities in euros
A shadow price expresses a societal impact in euros when that impact has no ordinary market price but represents real value or damage: a ton of CO₂, air pollution, health effects, water consumption, or biodiversity loss. Shadow prices are used in social cost-benefit analyses, policy considerations, sustainable investments and impact research.
Eco-cost analysis for products and materials
Eco-cost analysis provides insight into environmental damage based on the costs required to prevent or mitigate that damage. This is particularly useful for products, materials, design choices, and value preservation. New Economy uses eco-cost analysis to compare alternatives and to reveal where the greatest impact lies within a product or supply chain.
How New Economy calculates
New Economy works with a combination of public standards, data sources, and calculation models. Depending on the request, this includes the GHG Protocol, GHGP databases, public emission factors, eco-cost analysis, and Idemat, among others., life cycle analysis (LCA), Environmental Product Declarations, CE Delft environmental prices, SCBA shadow prices, CO₂ prices, and proprietary calculation models. The outcome is usually not an absolute figure, but a substantiated indication or range, with explicit assumptions, sources, and uncertainties.
Transparency regarding sources and calculation models
Public data sources, calculation steps, assumptions, and proprietary calculation models are made public where possible. This helps clients, partners, and other parties to verify, improve, and reuse calculations. Not everything can be made public: license-bound source data, confidential client data, privacy-sensitive information, and paid data files are not republished. However, it is stated which source was used, which version is relevant, and how that source was applied in the calculation. More on this on the pages Methods, sources and calculation models and Open calculation models.
From making damage visible to regenerative value
A fair price makes visible where damage occurs. Regenerative Work goes further and also focuses on recovery, strengthening, and positive value. Therefore, New Economy combines social pricing with design, strategy, cost-benefit analysis, business development, and concrete implementation plans.
Frequently asked questions about a fair price
A fair price reveals the societal and environmental costs behind a product, service, material, or supply chain. This concerns costs that are not fully reflected in the market price, such as CO₂ emissions, air pollution, water usage, biodiversity loss, health damage, or social costs.
The market price is the price paid on the market. The societal price takes a broader view and includes external costs. This provides better insight into the consequences of a choice, product, or supply chain.
A shadow price is a calculated value used to express societal effects in euros. This is necessary when effects do not have an ordinary market price but do represent societal damage or value.
Usually not. A fair price calculation is often a substantiated indication or range. The quality depends on the available data, chosen scope, sources used, and assumptions.
Depending on the demand, New Economy uses, among others, the GHG Protocol, GHGP databases, public emission factors, eco-cost analysis, Idemat, LCA data, Environmental Product Declarations, CE Delft environmental prices, SCBA shadow prices, CO₂ prices, and its own calculation models.
New Economy makes public source references, assumptions, calculation steps, model versions, and bandwidths where possible. License-bound source data, confidential customer data, and privacy-sensitive information are not republished.
Want to visualize the societal cost of a product, material, or supply chain? View SCBA Companies or Product Footprint, or take contact to explore the possibilities.
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