Leo Čunderlík explores how climate change changes everything.
We are on the precipice of climate change tipping points beyond which there is no redemption’ were the words of James Hansen, father of climate change awareness. According to the IPAT equation, environmental degradation is the product of three factors: production, affluence and technology. All of these aspects are linked to individuals’ consumption preferences. What people choose to eat, where they decide to travel, even how their homes are arranged affects their impact on the environment. Therefore, it is perhaps the case that consumption needs to be made more sustainable if we want to avoid falling over the cliff.
With rapid population and economic growth, consumption of natural resources is growing exponentially. This, unfortunately, has had environmental repercussions. The core sectors driving consumption-based emissions are transportation, housing and food. Take transportation: increases in per capita ownership of vehicles and total miles driven by citizens — expected to rise fourfold by 2050 — will cause massive increases in emissions. Regarding housing, the growth rate of emissions slowed due to better energy efficiency standards and technologies, but this has been more than offset by a growing number of homes and an increase in electrical appliances per household. Finally, increased consumption of meat and dairy products, highly processed food, and an increase in ‘food miles’ due to globalization of food chains pose sustainability issues. According to a recent analysis by Sustainable Europe Research Institute, it is estimated that for every 7 kilograms of consumed products, the ‘ecological rucksack’ may be as much as 60 kilograms. It has hence been shown that the world is consuming 50% more than is environmentally sustainable. As a matter of mathematics, this suggest consumption needs to fall by a third. The image of people consuming only two thirds of what they consume today might be disturbing, yet, perhaps, inevitable.
Behind Consumption Habits
The ecological footprint is unevenly spread across the globe, and this spread indicates that global environmental issues can be linked to consumption habits of high-income countries. Research by Christian Aid indicates that the average American consumes over 90 kilograms of resources per day; the figure for the average Asian citizen is only 14 kilograms. Yet the poorest are those far more vulnerable to environmental hazards, suffering from rising sea levels and issues with food security.
The reasons for overconsumption in developed nations could be linked to growing affluence, but also to the satisfaction of individual’s personal needs. One argument is that in today’s neo-liberal, globalised world, societies have been introduced to a wider array of goods and thus adopted excessive and wasteful habits. Buying goods online with just one click and ordering a flight ticket in less than a minute consume more of the surrounding world than we may realise. Additionally, economic globalization has resulted in off-shoring consumer goods from developed to developing countries, and thereby off-shoring CO2 emissions. For example, the US shift on average 11 percent of national CO2 emissions to exporting countries, which distorts the appearance of domestic consumption habits and so undermines the argument that the government should address the issue of over-consumption. Another perspective suggests human nature is the driver of excessive consumption. Economically, individuals can be viewed as having utility functions of tastes that markets respond to; that is, demand creates its own supply. And so, perhaps the resource depletion and environmental degradation can be assigned to individual shortcomings, and consumerism should be resolved by altered and enlightened preferences.
In this sense, education is essential and a sustainable consumption can be achieved via informed, decentralized consumer choice. However, neither education nor awareness about ecological impact of consumer actions guarantees environmentally responsible behaviour. Due to barriers such as availability or affordability of sustainable products, individuals may find themselves unable to respond to their ecological citizenship preferences and incapable of expressing their attitudes at market level. Alternatively, sustainable consumption may be restrained by feelings of powerlessness that individual action will not make any difference. Furthermore, if people take actions in the context of sustainable consumption, they tend to overlook the big issues that often outweigh smaller actions such as recycling. The sustainable consumption strategy that relies on small acts of sovereign consumers has an inherent problem in that it addresses, paradoxically, global problems. Moreover, it may also be argued that transferring the responsibility on individuals is unjust, and disadvantages the world’s poorest people for whom increased consumption is necessary. Rather than exerting global demand for people to resort to sustainable consumption, it is probably necessary for governments to play a corrective role.
Government as Potential Saviour
Such a corrective role, it is argued, is necessary since market participants do not consider the external costs of their consumption. One of the major projects that aimed to reduce carbon emissions and achieve a more sustainable path of consumption practices was the EU Emissions Trading Scheme, implemented in 2008. Essentially, the scheme acts as a tool to commit the market to environmental goals by imposing caps on the amount of emissions that can be produced. If companies produce more CO2 than they have allowances, they are required to buy new emission permits, and if they produce less CO2, they can sell those remaining. However, the free allocation of allowances means that firms are able to emit a certain amount of carbon without any charges. And so, they have not reduced carbon emissions significantly. Although Laurence Tubiana, CEO of Europe Climate Foundation, claimed that this permit scheme helps achieve emission goals ratified in the Paris Agreement, it is evident that conventional industries reliant on fossil fuels are undermining efforts to reduce emissions. Originally, the European Union proposed a carbon tax that failed to be implemented since voting on tax requires unanimity. The leverage and lobbying power of certain industries allowed them to block the proposal by convincing governments of the severe economic repercussions such a move would have. The threat of industries leaving countries resulted in support for carbon market and abandonment of the carbon tax.
While such cap & trade policies aim to regulate quantities, taxation brings about the regulation of prices. As long as the relationship between the cost of emitting and the amount emitted is known with certainty, then these two regulatory systems can be made identical. However, since this relationship is not known with certainty, theoretical analyses into environmental economics — for example, by Martin Weitzman, Professor of Economics at Harvard — usually find that a carbon tax is more effective as a tool to protect the environment and achieve sustainable consumption. In the light of this evidence, governments should intervene and provide policies of full-cost pricing to make ‘green’ products price-competitive. That is, setting a tax rate that fully internalises the cost of negative externalities. Additionally, it would raise government revenue that can be further used to tackle sustainable consumption. For example, more eco-efficient alternatives such as public transport could be invested in. In all, it has been estimated that taxation could reduce emissions in the U.S. alone by almost 123m tons.
However, some argue against the carbon tax. Due to its regressive nature, the tax is disproportionally a burden on the poor and would only deepen the equality disparities in the world. It is also inherently unfair to involve developing countries in this process, as they have historically not polluted at anywhere near the per capita levels of the developed world. On top of this, many researchers such as Andrew Sayer emphasise how dependent affluent countries are on energy from fossil fuels, and conclude that it may be hard to implement major cutbacks in emissions without a corresponding reduction in growth. And so, the question that needs to be answered is whether we are prepared to sacrifice economic development to achieve environmental sustainability. In the end, we might have no choice.