Appendix 3 – The lack of a consumer-centric approach conflicts with modern political science, and excludes emissions and consumption reduction opportunities.
Intro
The next best thing to do is to reduce consumption.[1] While that is likely to impact GDP, looking at climate change through a consumer lens unlocks a world of recommendations and opportunities.
The CCC…
- Structures the whole report from the perspective of reducing emissions from producing sectors of the economy, then provides a tiny impact assessment on cost of living and access to transport and jobs as a result of changes made in producing sectors.
Discussion
- Climate change and sustainability is about living within our means.[2] From an individual perspective, a personal ecological footprint is a good tool to understand what that means for each of us, e.g.: www.footprintcalculator.org. At a global level, the sum of everyone’s ecological footprint is 1.6 earth’s worth of resources each year (and climbing) instead of 1.[3]
- We know from Appendix 1 that one proven way to reduce emissions according to the lack of empirical evidence for absolute decoupling is to reduce consumption (which is correlated to production).[4] Waste science also says that preventing waste by way of reducing consumption is the best thing to do according to the waste hierarchy.[5]
- This consumer-centric perspective supports concepts such as degrowth (a different growth in a society with a smaller metabolism),[6] doughnut economics (living within our means),[7] and politics of care (which adopts a relational worldview[8] with similarities to Te Ao Māori).
- But hold on – the ETS and international climate change agreements are built around producers, [9] [10] not consumers. Ah, yes – but ignoring consumers is problematic because the higher GDP and incomes get, the more emissions are imported into New Zealand (and added to the producing country’s accounts, putting upwards pressure on global emissions) due to increases in consumption.[11] Consumers are also unlikely to abate towards an EV when an estimated $140/NZU adds $0.30/litre to the cost of petrol.[12]
- The proven way to reduce consumption in New Zealand is the smoking excise tax which increased “by CPI+10% annually, [resulting in] smoking rates [that] have decreased across all demographic groups [nine years into the policy] including age groups, ethnicities, genders and deprivation quintiles.”[13] An alternative would be the consumption tax, GST. [14] Targeted consumption taxes change consumer behaviour, a point recognised by the Parliamentary Commissioner of the Environment.[15] Even Bill Gates proposes something similar (i.e. a “green premium”).[16]
- There are other softer ways of changing consumer behaviour according to science, e.g. empathy, systems, identity and values.[17] However, if people have the option to ignore those things and still consume, then no emissions reductions will result from those policy options.
- More intervention? That’s what the report implies and it is backed up with science. Further intervention is at odds with neoliberalism, but current and former Prime Ministers of Aotearoa consider that neoliberalism has failed the country.[18] This also aligns with political and sustainability science which concludes that the so-called ‘Washington Consensus’ has not worked.[19] This means that a minimal targeted interventionist approach should be considered to prevent or mitigate people or outcomes from falling through the cracks, but without picking winners (as that picks losers) and without directly telling people what they can and can’t do in life (as that annoys people).
- Communication about sustainability and climate change is a big part of the challenge.[20] Key to understanding this difficult content should be how it fits with the United Nations SDGs.[21]
- Reducing consumption may also have co-benefits for happiness and wellbeing.[22]
Conclusions
- Reduction in consumption is also critical to living sustainably on the planet and to achieve decarbonisation goals.
- The CCC has only looked at one of two perspectives, i.e. adaptation required to production and flow-on effects on consumers. It has not considered the other perspective, i.e. adaptation required to consumption and flow-on effects on producers. Looking at climate change through a consumer lens allows for much more debate about further solutions.
- The producer-centric ETS does not reflect the true cost of the negative externality of emissions on all consumers that is sufficient to change behaviour.[23] The ETS should be coupled with targeted levels of GST in order to best influence consumer behaviour to reduce emissions. In turn, that will incentivise producers to change their product mix.
- Flipping the whole producing sectors on its head leads to the conclusion that New Zealand should pursue a services and/or digital economy. There is nothing about either of these in the report. It is only evident by putting the consumer at the heart of the debate.
- Caution is required for intervention which should be about steering towards outcomes, not about choosing winners or losers or how to get there. People should not be deprived of choice – but if they choose something that has socialised costs or is sub-optimal for climate change or sustainability reasons, there should be a high price to pay for that consumption.
- Consumer policies should be pursued including education about sustainability.
Recommendations
- Change the narrative to recognise the need for new systems and approaches.
- Change the vision to add that adults, elderly, nature and other animals should all thrive, not just children – as all are consumers of life.
- Add discussion in the report about New Zealand’s multiculturalism which would recognise one of Aotearoa’s key strengths.
- Add sub-sections to the report to explain to consumers a) how the Act (and NDC) fits into the UN’s SDGs, b) how the suite of climate change legislation in New Zealand fits together, and c) how the report fits in a timeline of other reports and legislative changes made.
- Recommend establishing a government unit or ministry that focuses on sustainability, and that an appropriate Minister is given the role of educating the public about that. The mandate should be wide in remit including biodiversity and consumption challenges.[24]
- Recommend that more politicians receive formal academic / practical education about sustainability and climate change to ensure informed and accurate debate in the house and to diversify the number of informed politicians on these critical long-term topics.
- Recommend adoption of a simplified targeted GST which is added to all goods and services with the % designed to reduce consumption and emissions. E.g. 0% GST on life’s essentials including non-bottled water, non-imported healthy food, non-designer clothing, and non-flight public transport,[25] 15% GST on services and goods certified as sustainable or climate friendly, 50% GST on petrol, 100% GST on unhealthy food and drink[26] and everything else.[27] [28]
- Recommend implementation of a scheme that certifies goods (upon application and government approval for a finite period) as sustainable or climate friendly for the purposes of achieving a 15% GST designation. The criteria would include the degree to which the good is circular (including waste processes) and the impact on resources and emissions.
- Recommend imposition of an import levy or something similar that is allowable under trade agreements that has the same effect as a consumption tax on imported goods, and dis-incentivises consumption associated with carbon offsetting.
- Recommend consideration of further changes to the tax system that aligns tax with the carbon / ecological footprint of consumers and companies.
- Recommend an education campaign for accountants and businesses to upskill them on GST and levy changes. It will be extra work and difficult, but what’s more important today: the degree of difficulty of an accountant’s job, or the climate?
- Recommend that New Zealand’s primary and secondary education system is changed[29] (e.g. see here)[30] to educate current and future citizens (and consumers) about the science, ambition and trade-offs associated with sustainability and solving climate change.
- Recommend that New Zealand’s tertiary education system requires at least one paper on sustainability and solving climate change as that is the overarching context and framework that all future citizens will be working in, regardless of their job or role in society.
- Recommend that Aotearoa pivots its economy towards a services and digital economy which would help maximise production (while minimising emissions) even if consumption of goods is reduced. A comprehensive brainstorming session should be had and the government should then put in place policies that support those industries. Everything should be “as a service” as much as possible to maximise utility of produced goods.
- Recommend that New Zealand participate in, and lead, the creation of an international treaty about the reduction of consumption and degrowth.
[1] https://www.sciencedirect.com/science/article/pii/S0959378020307512
[2] www.iisd.org/about-iisd/sustainable-development
[3] www.footprintnetwork.org/our-work/ecological-footprint/
[4] www.un.org/sustainabledevelopment/sustainable-consumption-production/
[5] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/69403/pb13530-waste-hierarchy-guidance.pdf
[6] https://ddd.uab.cat/pub/artpub/2017/181043/thiworqua_a2017v38n2a1350821postprint.pdf
[7] www.ted.com/talks/kate_raworth_a_healthy_economy_should_be_designed_to_thrive_not_grow
[8] https://link.springer.com/article/10.1007/s41055-017-0014-4
[9] www.newsroom.co.nz/select-committee-told-to-scrap-ets-for-carbon-tax
[10] www.resourcesmag.org/archives/learning-thirty-years-cap-trade/
[11] Page 9 of www.theccc.org.uk/wp-content/uploads/2013/04/CF-C-Summary-Rep-web1.pdf
[12] Page 84 of the draft report.
[13] https://www.health.govt.nz/system/files/documents/pages/evaluation-tobacco-excise-increases-final-27-nov2018.pdf
[14] https://www.oecd.org/tax/consumption/consumption-tax-trends-new-zealand.pdf
[15] www.stuff.co.nz/environment/climate-news/124271390/tourism-report-add-6155-tax-to-longhaul-flights-to-pay-for-climate-fixes
[16] www.stuff.co.nz/business/world/300238133/what-is-the-cheapest-way-to-cut-carbon
[17] https://uxplanet.org/how-can-psychology-save-the-planet-bringing-behavior-change-science-to-conservation-ce0219e10ebd
[18] www.stuff.co.nz/national/politics/96739673/jacinda-ardern-says-neoliberalism-has-failed
[19] https://journals.sagepub.com/doi/10.1191/030913201682689002
[20] www.researchgate.net/publication/315466760_The_Importance_of_Communication_in_Sustainability_Sustainable_Strategies
[21] https://sdgs.un.org/goals
[22] https://www.sciencedirect.com/science/article/pii/S0959378020307512
[23] www.khanacademy.org/economics-finance-domain/microeconomics/market-failure-and-the-role-of-government/environmental-regulation/a/the-economics-of-pollution-cnx
[24] www.stuff.co.nz/environment/climate-news/300238083/there-is-too-much-emphasis-on-climate-change
[25] That will have co-benefits for reducing inequality and poverty.
[26] That will have co-benefits for health.
[27] That does not jeopardise consumer choice, but places a more equitable price on goods that currently fail to adequately price in the cost to nature of emissions and resource extraction.
[28] There is no science to these %s – they are chosen to illustrate the point.
[29] Necessary action 1b. on page 103 of the draft report is sub-standard.
[30] https://chrisboxall.com/2018/08/16/students-kia-angitu-ki-a-koe/
Chris Boxall 