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8/14/2019 A Less Consumptive Economy
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State of the World 2004
Moving Toward aLess Consumptive
EconomyMichael Renner
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Moving Toward a LessConsumptive Economy
Overview:1. Consumption as a Way of Life
2. Government Toolbox
3. Lean and Clean
4. Take It Back!
5. Rethinking Products andServices
6. Public Consumption andSustainable Credit
7. Escaping the Work-and-SpendTrap
8. New Dynamics and Values
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Consumption as a Way of Life
Our enormously productive economy
demands that we make consumption a
way of life We need things consumed,
burned up, worn out, replaced, and
discarded at an ever-increasing rate
- U.S. marketing analystVictor Lebow, in 1950
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Consumption as a Way of Life
Modern economies can produce huge quantities ofgoods at very low cost, BUT
- cheap raw materials do not reflect true cost of
extracting resources (fuels, minerals, timber, etc.)
- workers in developing world are paid extremelylow wages that have fallen below subsistence
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Consumption as a Way of Life
Global consumer class consists of1.7 billion
people and growing
Planet cannot bear the burden ofeveryone in the
developing world owning as many consumer
goods as Americans, Europeans or Japanese
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Consumption as a Way of Life
Current model ofendless economicgrowth driven by unbridled consumption
not sustainable
Mass-production, mass-consumption, andmass-disposal inevitably lead to
- depletion of resources
- spreading of dangerous
pollutants
- undermining ofecosystems
- disruption of planets climaticbalance
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Governments Toolbox
Governments can make use of a number of tools tofacilitate the transition
To achieve sustainability, environmentalprotection, and social equity, we must movetoward a less consumptive economy
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Governments Toolbox
1) Subsidy phaseouts- Government subsidies allow the prices of resources
to be far lower than they would otherwise be,encouraging greater consumption
Estimates of Global Environmentally Harmful Subsidies
0 100 200 300 400 500
Road transportation
Agriculture
Fossil fuels, Nuclear energyWater
Fisheries
Forestry
Billion Dollars
260
10050
25
14
Source: Myers and Kent (2001)
Total: $849 billion
400
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Governments Toolbox
Destructive subsidies should be phased outand a portion of these funds should be shifted to
- renewable energy
- efficiency technologies
- clean-production methods
- public transit
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Governments Toolbox
2) Environmental tax shifting
- By taxing carbon emissions, nonrenewableenergy, virgin materials, landfills, and other forms
ofwaste and pollution, market prices wouldreflect the full environmental costs ofeconomic activities
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Governments Toolbox
Revenues from green taxes could lighten the taxburden now falling on labour, encouraging job creation
0
100
200
300
1980 1990 2001
% of all taxes
and social
contributions
Environmental Tax Revenue, EU
Billion
Euros
237.7
Year
130.4
54.6
6.5 %
6.2 %
5.8 %
Source: OECD
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Governments Toolbox
3) Procurement
- From the federal to the local level,governments in industrial countriesspend trillions of dollars on
public purchases every year
- By buying environmentally preferableproducts, governments can influence
- how products are designed
- how efficiently they function
- how long they last
- whether they are handled responsibly at the
end of their useful lives
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Governments Toolbox
4) Product Standards
- Governments can impose national standards tosave energy and water, such as household
appliance efficiency programs
- These regulations requiremanufacturers to meet
minimum requirements
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Governments Toolbox
5) Ecolabeling Programs
- Ecolabels provide consumers with the requisiteinformation to make responsible purchasingdecisions
- Labeling schemes have been developed for manyproducts, including appliances, electricity, wood,and agricultural products
- Ecolabels encourage manufacturers to design andmarket more eco-friendly products
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Lean and Clean
Industrial economies mobilize enormousquantities of fuels, metals, minerals, constructionmaterials, and forestry and agricultural rawmaterials
Most material flows never actually pass throughthe hands of any consumer and serve no purposewhatsoever
These hidden flows include
- waste materials from mining andother industries
- dredging materials
- carbon dioxide and other emissions
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Lean and Clean
Given broadly comparable living standards betweenthe U.S., Germany, and Japan, the U.S. economy
could stand to be leaner
United States Germany Japan
Tons
Material Requirements Per Person (1996)
62
30
10
86
43
21
Domestic output
for consumption
Hidden Flows
Source: Matthews et al. (2000)
0
20
40
60
80
100
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Lean and Clean
To shrink hidden flows, destructive activities need tobe downsized by
- improving energy and materials efficiency
- boosting recycling and reuse
- lengthening the useful lifetime of products
Another approach is to reduce the environmentalimpact of goods and services delivered to
consumers
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Reducing the EnvironmentalImpact of Products
Dematerialization- Reducing the amount of rawmaterials needed to createproducts (i.e., lighter cars, thinner
paper) and cutting the amount ofenergy needed to operate them
- Reducing the reliance on toxicmaterials in manufacturing,preventing air and water pollution, aavoiding hazardous waste
generation
Clean Production
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Reducing the EnvironmentalImpact of Products
Zero-waste closed-loop systems- Conventional system is cradle-to-grave: after
raw materials are extracted and processed, leftoversubstances become unwanted waste
- Alternative system is cradle-to-cradle: thebyproducts and waste from one factory become the
feedstock of another
- Modeled after the regenerative cycles of nature,
cradle-to-cradle materials circulate in closed-loopcycles, providing nutrients for nature or industry
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Take It Back!
Extended Producer Responsibility (EPR) Laws
- Require companies to take back productsafter their useful life
- The goal is to induce manufacturers to
eliminate unnecessary parts
forgo unneeded packaging
design products that can easilybe disassembled, recycled,
remanufactured, or reused
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Take It Back!
Several countries in Europe, Asia, and Latin Americahave implemented EPR legislation for a wide rangeof products, including
- packaging
- electric and electronic equipment
- vehicles
- tires
- batteries
- office machinery
hi ki d
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Rethinking Productsand Services
Many consumer products are intended to bethrowaways repair and replacement of parts isoften impossible
Merchandise should be designed and manufactured
to be durable, repairable, and upgradeable
By working to extend usefulproduct life, companies cansqueeze better performance out of
the resources embedded in theirgoods
R hi ki P d
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Rethinking Productsand Services
Recycling and remanufacturingkeep materials outof landfills and incinerators, and save energy
Energy Savings Gained by Switching from
Primary Production to Secondary Materials
Aluminum
Copper
Plastics
Steel
Lead
Paper
Source: Bureau of International RecyclingPercent Savings
0 20 40 60 80 100
95%
85%
80%
74%
65%
64%
R thi ki P d t
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Rethinking Productsand Services
A new business model: quality retail
Instead of merely selling goods, manufacturerswould retain ownership, and lease or rentproducts
Manufacturers would remain responsible for theirproducts and provide service to their customersby advising them on
- upkeep of products- how to extend usefulness with the least amountof energy and materials use
- upgrades and other changes
P bli C ti d
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Public Consumption andSustainable Credit
Improving consumption patterns is not enough,moderation in overall consumption is required
Several measures can be taken to discourageexcessive consumption
R d i E i
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Reducing ExcessiveConsumption
Overcoming Infrastructure of Consumption
- current infrastructure makesenvironmental choices difficult, ifnot impossible (e.g., sprawling,car-oriented settlement patterns
discourage walking or biking)
Public vs Private Consumption- organized sharing reducesmultiplication of goods on a grandscale (i.e., car-sharing programs,
community tool-sharingarrangements)
R d i E i
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Reducing ExcessiveConsumption
Tackling Consumer Credit- advertising and the easy availability
of credit cards compel people tomake purchases beyond their means
- U.S. consumers debts are nowgrowing twice as fast as their incomes
Feebates
- governments could offer taxrebates for environmentally- benignproducts, while taxing those thatfall below standards$
E i th
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Escaping theWork-and-Spend Trap
Greater disposable income translates into greaterconsumer purchases
Benefits associated with reducing work hours,and trading income for time:
- increase in quality of life
- creation of more jobs
Americans are working increasingly longer hours,while Europeans enjoy more leisure time, due to
time credit systems, paid leaves, and jobrotation schemes
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New Dynamics and Values
To move toward a less consumptive economy,
we must abandon the outdated assumption that
quantitative growth is unconditionally desirable,
and instead embrace the notion ofqualitative
growth
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New Dynamics and Values
In a sustainable economy, corporate revenuesand profits would be associated with deriving the
most service and best performance out of a
product, minimizing energy and materialsconsumption, and maximizing quality
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About the Author
Michael Renner is a Senior Researcherat the Worldwatch Institute andDirector of the Institutes Global
Security Project
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More information onState of the World 2004
at www.worldwatch.org