Climate & Environment
True Cost Accounting (TCA)
Definition
True cost accounting is an approach to measuring and valuing the full costs and benefits of economic activity — including externalities normally invisible in prices: pollution, health damage, ecosystem degradation, underpaid labour, alongside positive impacts such as carbon sequestration and community benefit. Most developed for food systems (the TEEBAgriFood framework), TCA studies estimate the hidden costs of global food systems in the trillions of dollars annually — more than the sector's market value added.
References
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This reference provides supporting context for how “True Cost Accounting (TCA)” is defined and used.
Overview
How it is used
The framework structures food systems policy analysis, the UN Food Systems Summit follow-up, corporate impact valuation pilots, and impact-weighted accounts research.
Why it matters
Markets optimise what they measure; true cost accounting measures what markets ignore — the first step to prices that tell the truth.