What Money Can’t Buy and Technology Can’t Tackle

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Unless one is living under a rock, chances are my readers have heard about United Nations’ Millennium Development Goals which were conceived to raise millions out of poverty in the developing world. According to the Nobel Peace Prize laureate Mohan Munasinghe, “throwing money” on the developing countries is not enough to make the world’s development path more sustainable. At the World Resources Forum in Beijing, he talked about why the rich need to focus not only on development aid and technological inventions but also on curbing their own consumption.

First of all, why shift our attention to consumption? “Focusing on sustainable production is not a sufficient condition for sustainability. As the Jevons paradox demonstrates, efficiency gains actually result in an increase in demand as the relative prices of resources fall”. Dr Munasinghe’s words were echoed by a number of interesting findings from engineers and chemists on how supply and production can become resource efficient and sustainable with all of them having the same bottleneck: consumers need to embrace them and use them by changing their habits profoundly.

The Sri Lankan physicist-turned-sustainable development economist, Dr Munasinghe went a lot further than calling for green taxation and incentives when he talked about the conundrum of transforming consumption patterns. “We need people to understand that there is more to well-being than consumption and that material goods are not that important,” he says. “We need to change our minds and social values.

What he proposes is the creation of the Millennium Consumption Goals (MCGs) as a practical approach to inspiring consumer change. Introduced at the 2011 preparatory meeting for the UN Rio+20 Earth Summit, MCGs are a set of voluntary targets to reduce  resource-intensive consumption. Besides some orthodox targets set for the world’s rich population to reduce their footprints (such as CO2 emissions, water and energy consumption), Dr Munasinghe also proposed more experimental ones to improve lifestyle i.e., reduce obesity and the amount of work time plus improve work conditions on a local/community/individual level. The MCGs could contribute to a faster transformation towards sustainable consumption (SC) according to him by encouraging voluntary commitments. On the other hand, he thinks they would prevent that “the overconsumption of the rich crowds out the consumption of those whose most basic needs are not met.”

Setting MCGs could most certainly raise the profile of SC. But is it realistic to think that voluntary engagements to cut consumption will lead to more sustainable consumption patterns in a global culture where shopping is more than just consuming? Actually, research shows that material consumption buys us less happiness than we would think. As a paper published in the Journal of Consumer Psychology highlights: “Money is an opportunity for happiness, but it is an opportunity that people routinely squander because the things they think will make them happy often don’t.” In the end, it is social norms, values and omnipresent advertisements hammering our sub-conscious that define what and how we consume. Through the creation of the MCGs, Dr Munasinghe is hoping to set new social standards for consumption which could be reinforced by adequate policy measures.

In the same train of thought, he talked about his work on the Gross National Happiness index.  “Consumption is not the only way to happiness. I have been working on the development of the Gross National Happiness (GNH) indicator together with the Bhutanese government for some time. Joseph Stiglitz, among others, has also contributed to the development of the GNH,” he said, stressing that economics itself needs to reflect a different set of values if we want to inspire change.

Even though the methodological development of the GNH indices is still in the works, it seems to be more than just “hippie economics”. It has been on the agenda of the UN General Assembly and has been embraced by the French government, according to the New York Times. This shows that it has the potential to grasp the attention of people and reflect on a different set of social values than the present one.

When it came to the happiness-consumption nexus,  Heinz Schandl from the Commonwealth Scientific and Research Organization (CSRO) pointed out at the same panel discussion that consumers with little free time and high salaries are the most resource-intensive consumers. “Do we compensate for the small amount of free time by high consumption?”  he asked, adding that it is essential to look at our work-life balance when we talk about change in values and consumption. His comment also explains why the MCGs could potentially include targets to reduce working hours.

To sum up, the “I shop, therefore I am” paradigm cannot stay in place in the long term; however, changing our mindset seems to be a lot more difficult than re-engineering  production. If we believe Dr Munasinghe’s rather optimistic conclusion, individual consumers not following this paradigm will be the ones who will be the change he wants to see in the world, and eventually break institutional boundaries as a spill-over effect.

3 thoughts on “What Money Can’t Buy and Technology Can’t Tackle

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