Finding the right mix to spur greener consumption
SPECIAL REPORT / World leaders attending the recent Rio+20 conference agreed to promote sustainable consumption and production, but analysts say getting businesses and buyers to do just that will require far more than words on paper.
To the immense disappointment of environmental groups and even some multinational corporations, Rio+20 failed to produce binding commitments or a plan on how to strike a balance between consumer demand and the availability of natural resource.
“The current deal on the Rio table is really scraping the barrel – with woolly definitions, old ideas and missing deadlines,” said Craig Bennett, Friends of the Earth’s director of policy and campaigns. “It doesn’t come close to solving the planetary emergency we’re facing.”
The stakes are high without some action. Consumers International, a London-based group, says humans are already consuming 50% more than the planet can replenish.
The most sober projections from the United Nations suggest there could be shortages of freshwater, food and essential industrial minerals within two generations as the world population lurches towards 9 billion or more from 7 billion today, and as people in today’s emerging markets become wealthier and more eager consumers.
Dutch MEP Bas Ecikhout (Greens) says firm actions are needed to address the challenges ahead. “We really have to think about pricing, how we deal with our taxation, what kind of products maybe [should not be] allowed anymore,” he told EurActiv.
“We really have to have that discussion, and we need to go further than just labelling.”
At the UN Conference on Sustainable Development in Rio, there was no commitment to remove fossil fuel subsidies – which environmentalists see as one of the world’s most glaring impediments to sustainable consumption. The Rio concluding documents signed by more than 100 global leaders promoted sustainable use of natural resources without setting any binding commitments.
Talk vs. action
The EU is among the global leaders in pushing sustainable consumption through its policies on waste-reduction and resource management, subsidies for alternative energy and an energy efficiency labelling scheme for appliances. The European delegation at Rio also fought hard – though unsuccessfully – for similar action on a global scale.
Yet the EU has also waffled on energy efficiency, cutting greenhouse gas emissions and has preferred public awareness and market mechanisms – such as the emissions trading system – over taxation to compel businesses and people to become more efficient.
The Commission has also shot down national initiatives aimed at encouraging consumers to buy greener products, as it did recently with Britain, which cut its valued-added tax on certain ‘energy-saving materials’. The EU executive determined this violated EU laws, as changes to the VAT regime requires a unanimous decision by the 27-country bloc.
The European Parliament, meanwhile, recently urged the Commission to reconsider plans to erase tax benefits for diesel, saying a period of high fuel costs was not a time to reduce such consumer subsidies.
A phase-out of fossil fuel subsidies and a mix of other policies can be effective in shaping consumer behaviour, says one study by the Organisation for Economic Cooperation and Development (OECD).
Ysé Serret, of the OECD’s environment directorate in Paris, said what produces the best results is working at both the supply and demand levels – for example, governments that provide recycling services or good public transport will spur people to use them.
Policies that create awareness about the environmental impact of consumer goods or practices – through labeling – can help influence buying decisions. Product bans or phase-outs – as the EU is doing with energy-hungry incandescent light bulbs – are another way to force market changes.
“Some of the environmentally friendly decisions – like consuming organic food or willingness to pay for green energy – are only weakly driven by household demand, and you cannot only rely on household demand if you want to reach very challenging objectives,” Serret told EurActiv in a telephone interview.
“It’s really by using this combination of economic instruments to provide the right incentives, soft-policy measures – labelling, information, education – together with also providing … the supply side with related services,” she said, adding that a mix of policy instruction “is really central and really matters when it comes to spurring behavioural change.”
Businesses and sustainability
Businesses also play an evolving role. Despite criticism that government leaders were asleep at Rio, executives of major multinational corporations were busy committing to greener business practices. On the sidelines of Rio meetings, industry bosses were building on the World Economic Forum’s call for corporations to adopt sustainable purchasing and production practices and to be more transparent about their environmental actions to build consumer confidence.
German MEP Jo Leinen (Socialists and Democrats) told EurActiv on 22 June, as Rio+20 was ending, that corporate executives were beginning to recognise the importance of sustainability.
“I never saw so many businesses than at this Rio+20,” he said. “Intelligent business leaders have well understood that sustainability is fundamental for doing business and an unsustainable world will distort and destroy business.”
The mainstay of current EU efforts to reduce the environmental impact of consumer goods is the 2005 eco-design requirements for energy-using products (EuP) directive, which sets requirements on energy use for popular products that consume energy, such as hairdryers, computers, fridges or office equipment (EurActiv LinksDossier).
In addition, a range of existing instruments and policy areas address the broader issue of sustainable consumption and production, including 'thematic strategies' on use of natural resources and waste as well as the Integrated Product Policy (IPP).
Environmental groups have criticised this policy framework for being too fragmented and lacking sufficiently stringent regulations.
The World Economic Forums’ “Consumption Dilemma” report calls for corporation to incorporate sustainable purchasing and production throughout the lifecycle of their business plans, and to being transparent about their efforts to build consumer confidence.
“Building trust with consumers and engaging them as citizens in the context of sustainable values is one important step in this process. There are also myriad opportunities for individual firms and industry associations to take steps to shift mindsets and embed life cycle thinking in the ‘DNA’ of organizations and entire industries,” the report says.
Ysé Serret, of the OECD environment directorate, said: “What comes out clearly from the work we’ve been carrying out is that definitely economic incentives do have a key role in influencing behaviour. … Soft policy measures, for instance labelling, public information campaigns and education – they can definitely play a significant and complementary role.”
- By end of 2012: The EU executive is expected to release by the end of 2012 its own package of legislative and non-legislative proposals on water – “Safeguarding Europe’s Water Resources” – as a part of its Roadmap to a Resource Efficient Europe.