This is a response to John‘s post titled “We Need Radical Green Policies” in which he suggests that the way to make people live sustainably is to hit them in their wallets. This is a topic on which I have quite a lot to say!
I agree with John that the only way to persuade more than a minority of people to make material changes to the way they live is to make it expensive to be wasteful. At the moment sustainability for the common man is costly in both time (eg sorting your recycling) and money (eg taking public transport which usually takes longer and costs more than driving (except within London)). Given a choice between two options of equal cost where one is “greener”, I’m sure most people would choose sustainability. Unfortunately that isn’t a choice we are often able to make much at the moment in a world where the price we pay for many products does not reflect their true cost (I’m looking at you Primark) so we are used to paying prices that don’t factor in the long term environmental (or human) cost. In that environment, it is very hard for the sustainable option to be priced competitively.
Unfortunately, one big problem with making it expensive to pollute is that many of the ideas that are thrown about (such as increasing fuel duty) hit the poorest in society hardest (those that can already barely afford to heat their houses) while we, the middle class responsible for much of the problem, can afford to buy our way out of having to face up to the inconvenience of changing the way we live. Unlike John, the increasing price of petrol made no difference to the way I drove. Even at the peak of petrol prices, it was still a cheaper (and much quicker) way to get to London than taking the train and on a Friday night after work, I just want to get there as quickly as possible. As John says, his behaviour changed out of motivation to save money more than out of motivation to save the environment. For me the petrol price didn’t reach the point where my own personal cost/benefit analysis motivated me to change my behaviour to save either! I need to be incentivised just like everyone else.
As John implied, government policy on climate change all comes down to discount rates – how you balance the costs/benefits of action now with the costs/benefits of action later. For us, the benefits of convenient and cheap travel now will certainly result in costs down the line but, unlike in business, it’s very hard to estimate those costs and it will be someone else who pays the price anyway. For all the money parents spend on giving their children the best future they can through education, health care etc, we haven’t yet found a way not to steal from them by using up as many resources as we can from the pot that we share with them.
I’ll take this opportunity to recommend the New Economics Foundation. They’ve been talking for a while about a “triple crunch” – the financial crisis, climate change and increasing energy prices. Interestingly, at the moment the recession caused by the financial crisis has resulted in a reductions in energy prices but this will only be temporary. However, in the long run, as non-renewable fuel prices go up again (as they surely will being a finite supply in a market with demand growth that shows no signs of stopping any time soon) and as renewables technology is refined in efficiency and lowering cost of production, green electricity will eventually become competitive and then cheaper in real terms (ie excluding the green subsidies).
Hopefully this will be the case in other areas where we need to move towards sustainability too (manufacturing, transport, water supply, etc).
Through innovation in policy and technology we need to make saving the world not only possible but easy!
Tags: discount rates, policy, sustainability
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You makes a good point about petrol prices not you, though that mainly indicates to me that you are better off than me! I do take your point about the natural point at which renewables/green alternatives become the natural option as they inevitably will become cheaper at some point. However, there are some issues here with that mindset:
1) It may be 30 years before this happens ‘organically’ without incentives etc by which point it may well be too late
2) Our infrastructure, as in cars, power stations, jobs, supply chains, refineries etc are all focused around fossil fuels and the cost of changing that may significantly delay a wholesale changeover, even when costs become equal or even slightly cheaper.
3) Tax/subsidy energy policy would also be a catalyst for innovation in green technologies
You reminded me of this idea:
http://www.pbs.org/cringely/pulpit/2008/pulpit_20080926_005422.html
Half way though he gets to the point of his plan: prohibit the manufacture and sale of traditional tungsten filament light bulbs. He runs though the numbers and concludes it would save the US (It’s an American blog) 29 billion dollars per year. Every year. Plus there are the inevitable environmental benefits.
As long as sustainability is an add on, it will remain a pesky hindrance / excessive extra on the ‘real / normal’ world.
I think a lot of our problems stem from paradigms of production which are too linear – take materials, process, produce, sell, deal with waste and pollution.
Truly sustainable business takes its cue from natural ecosystems which deomstrate that cycles and interconnectedness can be a source of strength – it designs its products to make no waste, and even to use the waste stream of others as raw materials (all within the limits of the solar budget, and bearing in mind entropy, of which I understand very little!)
http://en.wikipedia.org/wiki/Industrial_ecology
http://www.johnehrenfeld.com/Kalundborg.pdf
And I love NEF. Andrew Simm spoke at one of our events, they’re great people.
Interesting stuff Matt.
With our current processes so geared up to taking raw materials and converting them into some product which is used for a few years and then thrown away and replaced, it’s hard to imagine what truly sustainable business looks like!
Maybe you’ve already seen/heard of the “Story of Stuff” webumentary. It’s on a fairly basic level and I found the presenter a little irritating but it seems to have done an admirable job of presenting some of these kind of ideas to a wider (American) audience.
Darn, I thought I might have invented a word with “webumentary” but it seems not. That’s the third time today I’ve had an idea that I thought was original only to find the internet has beaten me to it!