Sustainable Consumption and Economic Concerns for a Better Future

Sustainable ConsumptionW3

Learning Outcome

Conceptualization of Consumption • Neoclassical microeconomics • Consumption and Household Production • Sustainable Consumption • Consumption from religious perspectives

Traditional, Political and Development Economics • Traditional economics (classical and neoclassical) is concerned with the efficient, least cost allocation of scarce productive resources and with optimal growth of these resources over time so as to produce an ever-expanding range of goods and services. • It assumes economic rationality and a purely materialistic, individualistic, self-interested orientation toward economic decision making. • Michael Todaro

Traditional, Political and Development Economics • Political economy encompasses social and institutional processes where economic and political elites influence the allocation of scarce productive resources now and in the future for benefits ofthe larger population. • It is concerned with the relationship between politics and economics, with a special emphasis on the role of power in economic decision making.

Traditional, Political and Development Economics • Development economics, in addition to being concerned with the efficient allocation of existing scarce (or idle) productive resources and with their sustained growth over time, it also deals with the economic, social, political, and institutional mechanisms, both public and private, necessary to bring about rapid and large-scale improvements in levels of living for the masses. • Thus economic, cultural and political requirements are taken into consideration in bringing about economic progress for the entire societies.

Ecological economics • Early research on the interface between the economy and the environment focus on the environmental impact of production in relation to resource depletion and pollution and on the demand for environmental goods such as pleasing landscapes. • Importance of production methods and technologies was emphasized much more than living standards and consumption patterns. Ropke, 2005

Consumption and Environment Studies • Consumer behavior research was one of the first academic discipline to look at consumption from environmental perspective. • Initially developed in the field of marketing in U.S in 1950s, but gradually separated from it. • Leading scholars include Joerges (1982) and Uusilato (1983) on “ Consumer Behaviour and Environmenatal Quality”. • Early research focus on production because the type of environmental problems that politicians tried to deal with – toxic emission and acidification. The problems were conceived as local or regional and related to point sources. Ropke, 2005

Evolution of Sustainable Development • During 1980s, the focus of environmental policies changed to global problems such as global warming and other related problems with diffuse source (non-point). • The changing focus was reflected in Brundtland Report “ Our Common Future” in 1987, which popularized the concept of sustainable development. All stakeholders, government, industries and consumers are encouraged to adopt.

Environmental, Social equity and Moral concerns 1)Environmental damageThe extraction, production, use and disposal of many goods and services cause serious environmental problems such as resource depletion, energy wastage, pollution of the air, water and land, and growth in the levels of solid, toxic and hazardous wastes. 2)PovertyWhile many people around the world, especially in the North, live lives of abundance and affluence, over a billion people still lack access to supplies of safe water, adequate sanitation, energy and nutrition. 3)HealthThe production of many consumer goods cause extensive damage to human health through air and water pollution. While pollution is a major cause of premature death in the South, many diseases in the North are now considered 'lifestyle' diseases with people dying from the over-indulgence brought on by affluence. Source: Robins, N. and Roberts, S. (1998) Consumption in a Sustainable World, Workbook prepared for the OECD Workshop on Consumption in a Sustainable World, Kabelvaag, Norway, 2-4 June.

Environmental, Social equity and Moral concerns 4)Economic efficiency Conventional development models have sought to compensate for the above problems by attempting to incorporate more people into consumer economy through economic growth (the proverbial 'bigger cake'). This has often been at the expense of changes in the distribution and pattern of consumption, which can be more cost-effective and resource efficient. 5)Global environmental change Industrial, commercial and domestic energy use, especially in the transport sector, is the major source of greenhouse gases while air-conditioning and refrigeration are significant causes of ozone depletion. These global environmental threats can be addressed by changes in the design and construction of buildings and transport systems. 6)Quality of life Increasing material affluence does not necessarily lead to a better quality of life due to the degradation of the human environment and the erosion of social relationships that it can bring.

Sustainable consumption • SC has been defined in many ways such as: The definition proposed by the 1994 Oslo Symposium on Sustainable Consumption defines it as "the use of services and related products which respond to basic needs and bring a better quality of life while minimizing the use of natural resources and toxic materials as well as emissions of waste and pollutants over the life cycle of the service or product so as not to jeopardize the needs of future generations”.

UNECSO Definition of SC Sustainable consumption integrates a range of social, economic and political practices at the individual, household, community, business and government levels that support and encourage: • reducing the direct environmental burden of producing, using and disposing goods and services; • meeting basic needs for key consumption goods and services, such as food, water, health, education and shelter; • maximizing opportunities for sustainable livelihoods in the South; • consuming goods and services that contribute positively to the health and well-being of women and children; • increasing the development and adoption of energy and water efficient appliances, public transport and other demand-side measures the production and sale of new goods and services adapted to global environmental constraints; • and lifestyles that place greater value on social cohesion, local traditions and non-material values. UNESCO

Features of Sustainable consumption There are many definitions of sustainable consumption, but most share a number of common features, including an emphasis on: • Satisfying basic human needs (not the desire for 'wants' and luxuries); • Favouring quality of life over material standards of living; • Minimising resource use, waste and pollution; Taking a life-cycle perspective in consumer decision-making; • Acting with concern for future generations

Worldwatch Institute (2004) Percentage of Population vs Percentage of Consumption

Rio+20 I. WHAT IS NEW SINCE RIO 1992? II. WHAT IS THE SOCIAL, ECONOMIC AND ENVIRONMENTAL TREND AFTER RIO?

What is new since RIO 1992 Information and Communication Technology • Internet • Mobile phones • Social media- face book 2004 • Space based satellite –GPS • Economic power and production is shifting to the East and South

What is new since RIO 1992 • Natural resources are being depleted or degraded— sometimes before we realize it—and certain metals seem to become “rare” all of a sudden. • The ever-increasing demand for resources such as water, energy, food, minerals and land is driven by growing populations with rising incomes, while in parallel these resources are increasingly constrained by ecosystem changes, inherent variability of weather conditions and resource productivity, and the impacts of climate change.

What is new since RIO 1992 New environmental instrument developed to tackle the issues and phenomena have arisen since 1992: • New Multilateral Environmental Agreements and Conventions- United Nations Framework Convention on Climate Change (UNFCCC), the Convention on Biological Diversity (CBD), agreements related to chemicals (Basel, Rotterdam and Stockholm Conventions), and the United Nations Convention to Combat Desertification (UNCCD). • Awareness of Climate Change

What is new since RIO 1992 • The Green Economy-shifting economic development to become more low-carbon, climate resilient, resource efficient, and socially inclusive, as well as for valuing ecosystem services, are now being proposed widely and increasingly pursued. • Carbon Trading and other Environmental Market Tools -Placing a monetary value on greenhouse gas emissions and creating a market for trade in carbon is a new and increasingly utilized concept to address climate change.

What is new since RIO 1992 • Markets for Organic Products and Eco-labeling • Genetically Modified Organisms- for GM food production • Recycling – becoming mainstream policy and practices • Commercialization of Biofuels, Solar and Wind Energy • Chemicals Management- improved and many toxic chemicals banned • Nano Materials –significant opportunities and benefits but has potential human and environmental hazards

Social Trend • World population increased from 5.500 b in 1992 to 7 b in 2011, 26% increase • In 2011, over 3 500 million people—more than half the world’s population—are living in urban areas • The number of “megacities” (>10m) has more than doubled since 1990 • A total number of those who live in slums has risen to 827 m • The population aged over 65 is growing at a faster rate than other age groups in most regions of the world • The average global citizen consumes 43 kg of meat per year, up from 34 kg in 1992 • Women’s influence, as measured by seats in national parliaments, is steadily rising

Economic and consumption Trend • GDP has continued to climb at a steady rate...but huge differences in economic development persist • The absolute value of trade among countries, a major aspect of globalisation, has tripled • As societies grow and become wealthier, demand for basic materials ( fuel, minerals, construction materials etc) further increasing • More energy and natural resources are being consumed, but the amounts needed per product are declining

Environmental Trend • Global CO2 emissions continue to rise, with 80% emitted by only 19 countries • Over 60% of Greenhouse Gases are emitted by three economic sectors – energy , industry and mining • Global mean temperature increased by 0.4°C between 1992 and 2010

Environmental Trend • The average amount of CO2 in the Earth’s atmosphere shows a steady rise over the last two decades • Oceans are also warming, while sea-level rise continues unabated • Oceans are becoming more acidic, with negative implications for corals and other marine life • Most mountain glaciers around the world are diminishing rapidly

Environmental Trend • Primary forest area decreased by 300 million ha since 1990, or an area larger than Argentina • Only about 10% of global forests are under certified sustainable management • Drinking water coverage increased to 87%, but the world is far from meeting the sanitation target of 75% • The Living Planet Index has declined by 12% at the global level and by 30% in the tropics • Plastics decompose very slowly, creating a major long-term environmental impact

Environmental trend • Both human losses and economic damage from natural disasters show an upward trend • More people living in hazard-prone areas • Food production has continued to rise steadily at a pace exceeding population growth • The depletion of fish stocks is one of the most pressing environmental issues • Energy consumption in developed countries is nearly 12 times higher than that of developing countries

Conclusion • Al components of the environment—land, water, biodiversity, oceans and atmosphere continue to degrade. • The negative impacts are experienced by the poorest and most vulnerable parts of society

Implication • A new commitment to deal with persistent environmental problems and emerging issues calls for cooperation, flexibility and innovative solutions. • Natural resource consumption must be decoupled from economic growth, that consumption should conform to, or be led by, the principles of sustainability, and that new paradigms and solutions should be applied for progress towards a Green Economy.

Green economy • A green economy is one whose growth in income and employment is driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services.

Sustainable Consumption and Economic Concerns for a Better Future