Derek Newberry

The Paradox of Market Solutions: How Individual Consumerism Could Shatter the Future of the BOP

MarsalaI know it’s considered rude to discuss political issues over meals, but I recently saw An Inconvenient Truth, and I’ve been on an environmental kick ever since. And so it was that last night in my apartment over a dinner of wine and chicken marsala a heated discussion ensued that resulted in more than one?mild insult?traded by the time the bottle of Chardonnay was emptied.

The debate centered around the effects of global warming, the United States’ hand in it (with 25% of the global consumption of energy and emitting 25% of the world’s greenhouse gases) and what we could or should do about it. I brought up a recently released paper by Deloitte (a mainstream consulting firm, not an environmental group) that outlined much of the argument for taking immediate steps to reverse climate change both from an environmental standpoint and a security standpoint. I liked it so much, I’ll quote the main gist of it here:

“If this opportunity [to move to renewable energy] slips away the consequences could be dire. In the 1970s, the Arab oil embargo subverted price stability and sunk economic growth. That was bad enough. Now, however, by not heeding the hidden messages of $60+ oil, we place in jeopardy far more than economic growth: Global political harmony, the environment, the possibility of catastrophic climate change, and the promise of sustainable development all lie in the balance together?at the same time. And our collective ability to meet the basic needs of all the world’s people is at stake… The US, and indeed the world, cannot afford to wait another 30 years.”

My only issue with this piece is that it spends too little time on the severe affects global warming will have on the world’s poor, briefly mentioning that “Scientists believe that droughts, floods, changing rainfall patterns, and rising sea levels undermine development in the world’s poorest countries.”? We know that as severe weather becomes a more frequent phenomenon, agriculture in emerging economies will be hard hit and as low-lying countries like Bangladesh and parts of India are submerged by rising tides, millions of refugees will be made of the people who can least afford it.

These arguments met fairly standard responses from my friends- that it won’t happen in our lifetime, that it is unfair for the US to have to make larger cuts in its emissions, etc, etc.? And as I looked around the table, I realized my compatriots represented all different parts of the American political? spectrum from Left to Moderate to Right, but that they all shared the same “head-in-the-sand” view toward global warming.?

At WRI we try to educate as many people as possible on the benefits to corporations who cut energy costs stay ahead of environmental regulations and profit from innovative new clean technology, but many consumers see the personal benefit as unclear.? Herein lies the paradox of our reliance on consumerism to make changes.? On the one hand their demand drives economic growth in the BOP who provide valuable services for consumption in developed countries.? On the other hand, as long as so many indivdividual consumers (particularly in the US) see a tradeoff between comfort and consumption and the environment, as my friends do, the longer global warming will continue without real intervention, and the more likely it is that refugees in the poorest parts of the world will flood neighboring countries.

So how do we help shape the demand that will lead to positive change?

1. Admit and accept that there will be some amount of sacrifice.? There is no sugar-coating that any transition is going to be slightly painful, and as Deloittte points out, we have $60 per barrell oil to wean ourselves off of.

?2. Educate.? Show by example that in many cases there need not be a tradeoff between maintaining the comforts of a consumer lifestyle and preserving our environmental integrity.? Organizations like New Ventures?must continue their leadership role in promoting companies like STC and Aires de Campo that have been highly successful in marketing quality goods that minimize their eco-footprint.? In general we have to draw attention to the fact that the environmental market is spreading into all areas including food, energy, fashion and financial services, and that this trend will continue to?grow.

My new resolution is to keep discussing these issues, and more importantly some of the solutions, until I change the dinner conversation.? Or maybe I should have just minded my manners.