Comment by babybjornborg

Apparel firms exist not to clothe people as common sense would suggest but to make a profit, and this practice of erring on the side of overproduction is more profitable than under production. The perfect solution would be to produce exactly the number of goods they will sell, but forecasts aren't perfect so they overproduce. Firms are already incentivised by profit to not waste, so this adds another incentive and removes the pollution externality they have been enjoying. So now either they err closer to under-production and risk missing out on sales or secondary market supply of their goods increases leading to possible brand dilution. So in the end the value of these companies ends up lower than before, less pollution, and apparel is cheaper. I'd like to know more about the equity and carbon effects of the process they will need to now follow. So they trade destruction with shipping a crate to Africa. What is the difference? Firms will be less profitable, manufacturing is reduced, who is impacted by that?