Keeping Consumers and Voters Happy While Dealing with Climate Change

Keeping Consumers and Voters Happy While Dealing with Climate Change

Meaningful responses to global climate change require social change, but can we take the measures needed and still keep voters happy? during this blog, Charles Seaford is introducing some numbers to assist to explore the size of politically feasible sustainability.

There is an absolutely central question about sustainability which is usually avoided: can we take the measures needed and still keep voters happy, a minimum of to the purpose where they’re going to vote for the party introducing the measures?

One way of watching this is often to think about the impact on consumption. If the impact is just too severe for too many of us the solution is perhaps no, if it’s not too severe the solution is perhaps yes. this is often a touch crude, but a minimum of it means we will introduce some numbers, and it does reduce the scope for illusion. I used this approach in some work I did a few years ago on the impacts of global climate change policy, and present here the most conclusions.

First of all, I assumed that spending on public services had to be maintained which any redistribution had to be more or less within peacetime limits. I then assumed that if private consumption grew a minimum of slightly for rock bottom 70% of the income distribution, the associated measures were feasible. The analysis was a touch rough and prepared, but if refined could suggest some clear policy directions.

Relevant impacts on consumption are of two kinds. First, there’s the value of an investment in mitigation and adaptation. While this might boost the economy and make jobs, it reduces consumption: resources invested can’t be consumed. Second, there’s the selection to supply and consume less, probably by working fewer hours. the selection could also be made individually or imposed collectively, but it’s not a price as there’s a compensating gain in leisure.

Everyone agrees that there’ll be a price as just defined – although they’ll disagree about its extent, and lots of public life think it useful to deny or hide it (they could also be right about this, sometimes the reality makes things harder, but that’s another issue).

Some people disagree, however, about whether we will also get to make an option to consume less, largely because they disagree about the potential to decouple productivity growth from increases in greenhouse emission emissions. So in my analysis, I presented four scenarios:

  • A relatively low investment cost and no option to consume less needed
  • A relatively high investment cost and no option to consume less needed
  • A relatively high investment cost and choices that cause zero growth needed
  • A relatively high investment cost and choices that cause 25% de-growth needed.

The costs were supported by modeling work by the Potsdam Institute for Climate Impact Research. The low-cost scenario was that consumption would still grow between 2020 and 2040 as per business as was common but at 2.25% below what it otherwise would are.

The higher cost scenario was that it might be at 4.5% below what it otherwise would are . an inexpensive estimate of real GDP growth per capita supported European Commission numbers is 1.45% a year.

Given this, the zero-growth scenario equates to a 25% cut in current working hours over the amount (ie a brief four day week) while the 25% de-growth scenario equates to a 44% cut.

If we assume spending on public services is a minimum of maintained (and actually rises in scenario 1 in line with growth overall) what are the implications of every scenario for personal consumption and thus political feasibility?

My approach says the solution depends on the extent to which government policy can ensure a more equal income distribution since voters all have an equivalent one vote. Redistribution is usually said to be very difficult (and I didn’t consider the policies needed) but some facts about the past are extremely useful at now.

Between 1951 and 1956 the highest 1% suffered an absolute fall in its income of just about 12% and a fall in its share of over 20%. Between 1973 and 1978 it suffered an absolute fall of 14.5% and a fall in its share of 18.5%. If we applying my test that 70% of the population must enjoy rising incomes to the primary five years of the implementation of the required measures, the question then becomes: is that the required level of redistribution feasible?

It seems that the redistribution needed for scenario 1 is well within the peacetime boundary, a minimum of for the half of, which the redistribution needed for scenario 2 is slightly but not significantly beyond it. This doesn’t definitively answer the question in fact but it does suggest that a positive answer might be possible.

Scenarios 3 and 4 aren’t feasible on this timescale, but the story is different if we glance over 20 years. Most of the pain of the prices are suffered within the first five years – even under scenario 2, we are back to face 1 with steady but slow private consumption growth by this stage.

At now, a shift to a special trade-off between work and leisure becomes possible for much of the population and a minimum of scenario 3 could also be feasible. It seems that under this scenario rock bottom 70% of the distribution could still enjoy rising incomes if the highest 1% suffered a 36% fall in its consumption (over the entire 20 year period), half which might be the result of reduced hours worked. However, scenario 4 doesn’t look feasible, as significant falls in consumption are required for about rock bottom 20%.

Imposing a shorter working week French style is nearly never politically feasible. So this suggests scenario 3 faces an extra test of feasibility: will people prefer to work and consume less? this is often not impossible. The Netherland’s average working year is 15% less than the British one, supported voluntary measures, and with the general public sector leading the way ever since the 1980s.

In addition, there are good reasons for thinking that the redistributive measures needed also will reduce incentives to figure longer hours. there’s a direct correlation between the Gini coefficient and a mean number of hours worked during a year within the 20 OECD countries with GDP per capita of quite $30,000 year (r-squared = 0.3904) – and further analysis shows this is often not because both are driven by GDP levels. The association could also be explained by the reduced got to buy positional goods during a more equal society.

More is perhaps needed though. At the foremost basic level, various market barriers to a shorter working week would need to be removed. More fundamentally, there remains a nagging worry on whether people will find enough to try to to in their overtime in ways in which don’t involve more spending, so sending them back to figure.

At least some people could also be deterred from working and consuming less for fear of boredom and lack of meaning in their leisure. this means the necessity for brand spanking new institutions, new social forms, which will provide alternatives to the meaning that employment and consumption currently provide – a task that institutions like the Church, the freemasons, guilds, and political parties have consistently played historically.

This successively implies the necessity for a politics of flourishing: a politics consciously designed to make the conditions for flourishing, not just the institutions but also the adult and child education which equips people to flourish also on pursuing a career.

Naturally, these conditions also include the safety, material conditions, and health without which life may be a matter of surviving not flourishing. Perhaps we’ll even need restrictions on advertising and other business activities that make consumption appear more attractive than other potential sources of satisfaction.

So what can we conclude?

First, if decoupling is so successful that business, as was common growth, is often maintained, we still need radical policies for redistribution so as to buy an investment in sustainability during a politically feasible manner.

Second, if decoupling isn’t as successful as this, then additionally to redistribution we’d like a politics of flourishing as just described. Of course, many folks believe that might be an honest thing anyway.

Third, we’d like to figure on decoupling as hard as we will, because significant de-growth is perhaps not feasible.

Author: Amreza Bagas
An Extraordinary businessman who loves to share business experience in some words.