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