Valuing Our Values

12/27/2012 04:18 pm ET | Updated Feb 26, 2013

What's the cost of an iPhone 5? Seems like an easy question. If you're willing to sign away two years to a mobile provider you can take home Apple's latest sliver of glass and silicon for $199, which just about covers Apple's manufacturing costs. If you'd rather be contract-free, an unlocked iPhone upgrade will set you back at least $700.

But sticker prices and production costs only tell a piece of the story. The new iPhone isn't only the latest technological gizmo to capture consumer adoration, it's also an icon for our era of globalized supply. According to Sourcemap, a project from MIT's famed Media Lab, each glistening rectangle contains silicon from Norway and Russia, lithium and copper from Chile, rare earth metals from China and Brazil, and cobalt from Congo. These materials then get melded into components via manufacturing hubs in China, Japan, South Korea, Singapore, Switzerland, Germany, the Netherlands and the U.S., which in turn ship back to China for final assembly and distribution.

Each step in the process adds to cost, but not always to the price you pay. Of course there are expenditures for labor, land, energy, mining, R&D and manufacturing, and these expenses eventually get passed on to you. But there are also costs you don't see, like heavy metal pollution from Apple's suppliers in China, and child labor, slavery and rape connected to cobalt mining in central Africa. Substantial amounts of energy and water are also used at each link in the iPhone supply chain, impacting local air and water quality, and contributing to global climate change and biodiversity loss.

Economists call these unseen costs "externalities." They're not unique to iPhones, but attached to nearly every decision you make, whether it's a new pair of jeans, a trip to the grocery store or a contribution to your retirement account. As supply chains have industrialized and globalized, these externalities have become increasingly difficult to see, and the true cost of each product and service has been harder to quantify, even as the scale of human impacts on the planet are defining a new geologic age, the Anthropocene.

The good news is that technology is not only the problem, it can also be the solution. Advancements in supply chain tracking and life cycle assessment science are illuminating externalities, and smartphones can now put this information in the palm of your hand. Sustainability has become so fashionable that it's hard to sift through the sea of green labeling to sort out fact from marketing fiction, but there are now apps that rank products and brands based on sound science. Perhaps the most prominent is GoodGuide, an app founded by a UC Berkeley-based professor that calculates social, environmental and health scores for thousands of products. You can also calculate the number of slaves that support your lifestyle at, or track how your spending links to money in politics using Sunlight Foundation's Checking Influence service.

However, a more sustainable global economy depends not just on better information about externalities. Sustainability also depends on making that information meaningful and engaging, and aligning incentives to make better decisions on a daily basis. Fortunately there are already some apps for that too, like Opower and WattzOn, which gamify your home energy use, and Recyclebank, which rewards you for green activities. The growing ubiquity of social networks (e.g. Facebook) means we can all instantly share our experiences, and tout status upgrades beyond dollars and cents.

What's still lacking though, is an app that tracks sustainability in all aspects of your life, and both informs and rewards you for making choices that align with your personal values. I'm now working alongside a stellar team of scientists and engineers from Stanford, UC Berkeley, Harvard and MIT to build this app. Our effort is called Oroeco, and our mission is to reorder the global economy for sustainability by tracking the impacts of each dollar you spend and invest, then add rewards that make sustainable living as addictive as Angry Birds or Words with Friends.

Oroeco starts by automatically linking to your credit and bank accounts, using technologies similar to the popular personal finance service. Then we connect your spending and investment to scientific databases that calculate externality impacts throughout a product's life cycle, beginning with data from UC Berkeley's CoolClimate calculator. And, most importantly, we're working to make this all fun, by letting you compare, collaborate and compete with your Facebook friends, as well as earn points, prizes and real-world deals. We'll be launching Oroeco's beta service in early 2013, and personal sustainability enthusiasts can sign up before Jan. 1 to test Oroeco's first app through Indiegogo.

Personal pitch aside, the tread is clear: We're entering an era where information technology will drive clean technology adoption by empowering and incentivizing us all to make better choices. Technologies that turn your phone into your pocketbook, like Square and Google Wallet, will only accelerate this trend. This is good news for consumers, who can now base decisions on more than just price, perceived quality and marketing pizzazz. It's also good news for companies that want to clean up their supply chains (and most do), who finally can market quantitative sustainability improvements to both their customers and shareholders.

The tools and motivations for this trend are now going global. The Chinese are more concerned about environmental degradation than Americans, according to research by Ogilvy, mainly because air and water quality issues in China are orders of magnitude more extreme. And cheap smartphones are flooding into developing markets, leapfrogging hundreds of millions from traditional subsistence lifestyles to internet connectivity.

As an increasingly connected global population swells to over 10 billion by 2100, and globalized production continues to push externalities beyond borders, the information channels and necessity for sustainable consumption will only increase. Informed consumption may also prove our best hope for solving our planet's seemingly intractable issues, like climate change. International negotiations have thus far failed to convince the developing world to commit to greenhouse gas reduction targets, but a per capita emissions tracking approach could yield a more equitable alternative, particularly since a large portion of developing world emissions are driven by Western demand.

So the true cost of an iPhone is based not just on the assorted journeys of its component parts, but also on how you use it. We're all voting with our wallets every day, and information technology is now enabling you to see exactly what you're voting for. The power to shape the world you want to live in is literally in your hands. The more you use this power, and share it with your friends, the more your individual actions will scale up to real, systemic change. Hopefully, you'll even have some fun in the process.