Consumerism economic solution, environmental sin?, 12°

Roger K. 77°

Myself and one of my colleagues, David Pearce, have been discussing economics related to the environment. It became apparent quite quickly that the economic paradigm which exists is both the cause and solution to environmental degradation.

The economic theory of 'growth at all costs' is without a doubt vastly responsible for some of the greatest environmental issues facing the plant. I recently read an economic assessment by Clive Hamilton on the United States reticence to sign the Kyoto Protocol. The reason George W (who conincidentally is funded by Exxon) gave for not signing was that it would "have a negative economic impact, with layoffs of workers and price increases for consumers."

Hamilton concludes that given the Bush administrations assessment come 2012 if it signed the Protocol would it cost the US economy 1% in growth - not a recessional 1% but 1% of the budgeted 40% the economy would grow anyway. As he puts it, signing the Protocol would cost the US 4 months growth! The real question is, what does it cost the planet?

That said myself and Dave are of the belief that the economics which reign the world can also save it. Free market economics mean that the market dictates what it wants - if the market demands it wants low carbon products it will mean those with reticence will have to fall into line or go bankrupt (economic failure!).

Tell me what you think.......can the market facilitate change?

7 replies

Most of the "green" or sustainable products today are successful for two reasons. First they either save the consumer money through energy savings (appliances, cars, light bulbs, additional insulation in home building), or they protect from perceived health threats (organic food, low-VOC products, non-processed consumables).

As our social consciousness grows, we are seeing that local produced goods and services are starting to find some success, but compared to the amount of disposable "stuff" we import from every corner of the earth, that contribution is still too meager to make any kind of substantial difference. Fundamentally what we are lacking is a social desire to reduce consumption. The United States generates an unacceptable amount of carbon within her borders, but what about all the carbon and toxins produced in China that are a direct result of our consumerism? If we didn't demand the disposable "stuff", they wouldn't build and ship it.

Creating a consumer-based (demand side) movement to actually make the markets work for our health and well-being instead of against it will be a huge responsibility for the American people and one that is going to take generations to fully mature.

If the science of climate change is correct, we don't have a generations worth of time to spend waiting for the global markets to come around.

I completely agree that we need to significantly change our approach to consumerism, however I am not very confident that the impact will happen in a time-frame our species can tolerate.

Written in July 2008

Charles M. 110°

The biggest problem I see with economics as a tool is that it tries to model things far simpler than they actually are. Or, stated differently, economists sometimes measure stuff that does not accurately measure the economy.

Take for example GDP. That is an indicator that is easy to measure but really does not measure the true output of an economy. Most particularly it does not take into account sustainable practices like subsistence production.

For example let us consider three different scenarios:
1) There are two people who both make a loaf of their own bread and get a dozen eggs from their chickens. Daily output: 2 loaves of bread and two dozen eggs. GDP: zero.

2) There is a small-time baker who bakes two loaves of bread. He sells one loaf for $1. There is a small time egg producer who produces 2 dozen eggs and sells one dozen for $1. Daily output 2 loaves of bread and 2 dozen eggs. GDP $2.

3) Same as 2, except the bread and eggs sell for $5 each. Same output. GDP: $10

All of these economies have generated the same output, yet their GDP is vastly different.

Interesting that you mention Exxon. As Marilyn Waring said, the Exxon Valdez disaster was an economic success (as measured by GDP) because the clean up generated huge expenditure which pumps up the GDP.

When broken economic measurements are used to drive economic decisions then bad decisions are made and problems will get worse, not better.

Written in July 2008

Rudy C.

I agree, these "green" solutions need to viable products in the market. My belief is in wind farms and solar panels. The technology must be solid and the savings must be real. Once we get a proper working model for delivering mass energy to all the people, the economics of it all will take care of itself.

Written in May 2010

One of the main problems with a continued growth model is that the current path is dead end, and present generations have demonstrated through their consumer behaviour that they have undervalued future generations. People conceptually like the idea of changing towards a greener path, but just don't want to actually give up anything that they presently have in order to do so.

The failure of COP 15 in Copenhagen highlighted how unlikely a global agreement on tackling climate change is, and even if one is thrashed out will it be effective, equitable, or even accountable? There is however an opportunity to employ economic tools to drive the market in the right direction. We need a stable price for carbon and for it to be priced into carbon intensive products and industries globally. This will allow for renewable technologies to compete more fairly against heavily subsidised carbon based energy sources. Cheap products produced in a carbon intensive manner will suddenly be not so attractive to buy with a carbon tariff added on, and make product produced in a less carbon intensive manner more sucessful.

Ultimately the only way to achieve this is to have the political will to support it through policies. Germany has demonstrated this by becoming a world leader in solar panel production and installation despite it being a not particularly sunny country.

If we had an 'energy race' between the USA and China to produce renewable energy technologies - in the same way as the space race spurred on that industry - for sure we would suddenly see more affordable product on the market. I vote that economic tools and the free market have a far greater chance of achieving a positive change than any other system we have.

Written in May 2010


Written in July 2014

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