Sunday Jan 06, 2008

Are Living Standards Coupled to Consumption Rates?

The New York Times ran an Ope-Ed piece by Jared Diamond last week entitled "What's Your Consumption Factor?" In it, Diamond posits that living standards are not tightly coupled with consumption rates.  To support his thesis he cites the relative living standards of Western Europeans, who consume only about half as much oil per capita as Americans, yet by many reasonable measures live better than Americans - they have longer life expectancy, fewer diseases, lower infant mortality, more vacation time, better financial security after retirement, better public schools, and greater support for the arts.

Mr. Diamond's essay suggests that consumers can stave off resource depletion and environmental degradation while enjoying stable or improving living standards. How?  By reducing waste and consuming less.

While I agree with his claim as it relates to today's socioeconomic conditions, I take a different position for the long view: ultimately, living standards are tightly coupled to the rate of consumption of natural resources, but they are inversely related.  Affluent definitionA higher rate of consumption will accelerate the depletion and degradation until a global scale tragedy of the commons is experienced.  Living standards will eventually suffer if patterns of consumption continue unchecked.  Some environmentalists would say we're already seeing evidence of this inverse relationship, citing trends like rising cancer rates, increased traffic related deaths, and species loss.

I don't think Diamond's point is to deny this relationship between living standards and consumption; his is focused at the consumer level, which is where he says action should be taken to avert tragedy.

What concerns me about Diamond's call to action is two fold :

First, the path to higher living standards is not obvious in the context of shrinking rates of consumption.  We can't look to Western Europe's economy for the answer.  Modeling after them is merely a postponement strategy.  Western Europe is among the population of one billion in the developed world that consumes at 32 times the rate of the rest of the world.  By most predictions, that gap will narrow as the developing world plays catch up.  The other 5.5 billion people on Earth are racing to use more oil and metal and timber and plastics, and they'll produce more GHG's and pollutants and landfill along the way.   Add to the mix a predicted 2.5 billion additional people before global population levels off at nine billion by mid-century.  These growth trends are playing out in a closed loop system made of finite resources, so consumption as we know it will inevitably slow down.  But this slow down will not be voluntary.  Natural limits will dictate this ultimatum.  Can we rely on consumers to make choices that steer clear of these natural limits?  Maybe, but we don't have any evidence they will do so within current market structures and under current modes of commerce.

Second, consumers do not have the tools to be successful in their new mission to save us from diminishing living standards. 

Diamond's conclusions conform nicely to the IPAT equation, but only in one dimension.  IPAT is a model developed in 1970 to better understand forces affecting the environment, where (I)mpact is a function of (P)opulation, (A)ffluence, and (T)echnology (I = P x A x T).   IPAT does not purport to quantify environmental impact, only to describe relationships between wealth, population and the environment.  Technology, in IPAT's modern interpretation, is the dampening force against the negative effects of Population and Affluence.  Technology can be used to prevent pollutants from entering the environment.  McDonough's Cradle to Cradle model for sustainability uses Technology to isolate technical nutrient cycles into closed loops thereby preventing them from mixing with (contaminating) natural nutrient cycles.  The field of Industrial Ecology is based on this mitigating potential of Technology.  Government and industry can apply Technology in myriad designs for a sustainable economy.  But the consumer does not have an active role in these designs.  Consumers appear to be left with just one method: "Stop shopping".  This focus on the A in IPAT is a version of what Paul Ehrlich called "environmental roulette".  It leaves an awful lot riding on the chance that consumers will alter their self-interested behavior.  Diamond does not incorporate Technology into his prescription for consumers.  Yet, without better tools for making smart choices, consumers will have difficulty tapping their enormous potential to influence the Impact equation.

So, how can Technology be applied to this seemingly intractable consumer dilemma?   My resolution for 2008 is to write substantively about this here on downstream.  In particular, I hope to propose uses of Information Technology to better address the consumers' sustainability dilemma.

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