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The Conundrum: Our real problem is consumption
Book review
The Conundrum: how scientific innovation, increased efficiency, and good intentions can make our energy and climate problems worse.
By David Owen
Rating 4/5
Scribe Publications Pty Ltd, Victoria
Year: 2012
ISBN: 9781 921 844 829
The Conundrum by David Owen points out a number of key failures regarding the reigning philosophy of policy and economics of energy and consumption. His ideas are very relevant to Australia.
The book concludes with some excellent points about the current failures of our economic system regarding efficiency and consumption. I found the book waffled on for the majority of its 261 pages, but its conclusions are very pertinent and therefore worth a read.
To jump to the chase, David’s key points can are as follows:
- The energy / climate problem is a whole world tragedy of the commons problem. In that while every benefits in the long term if everyone makes a sacrifice, individuals benefit if in the short term, they act greedily. Individual freedom allows for selfish action, which then leads to everyone loosing, including the individual in the long term. Hence, The Conundrum.
- Improving energy efficiency of electricity grids and electric devices simply enables more room for consumption to grow. This is because efficient leads to cheaper prices, which leads to increased consumption. Thereby any saving made by increasing efficiency and productivity is quickly swallowed by more consumption which then increases the problems. Hence, The Conundrum.
- Likewise, improving productivity, also leads to increased consumption in time. Increasing productivity makes stuff cheaper. Consumption increases as does waste. Food is a good example of this. David makes the case that we should be seeking to decrease productivity in our economy. This will decrease consumption and waste. However, this is obviously counter productive for our economic cycles. Hence, The Conundrum.
- Government programs that subsidize for energy efficiency are doomed to fail, because the gains achieved are taken up by increased consumption. Producing more energy, with less environmental impact will achieve nothing if which simple use the saving up by using more energy. Therefore, increases in energy efficiency must be coupled with decreases in energy use if the worlds energy, pollution and climate issues are to be resolved. Decreasing use, decreases economic activity leading to recession, unemployment etc. Hence, The Conundrum.
- The mobility of people is a big problem. The fact that cars (and aeroplanes and boats) enable people to pretty much go wherever they want, when ever they want, places massive pressure on local environments and greatly increases consumption across the economy. Human mobility is a key driver behind human induced environmental destruction. An obvious intervention is therefore to place disincentives on the amount the people can and have to travel. This causes obvious debate especially regarding issues of individual liberty. Often such debate results in accusations that lefties and Greenies want to take away our freedom, and that Conservatives what to trash the world without fear or favour (both views are ridiculous and ignorant). Hence, The Conundrum.
- Our consumerist culture, places huge pressure on the environment both in manufacturing (use of resources) and in waste generation (landfill and recycling – yes recycling actually uses a lot of energy). But our economic prosperity relies on people constantly buying stuff and therefore keeping the money cycling around. However, this requires more resources and produces more waste. Hence, The Conundrum.
- The increasing income disparity encouraged by capitalistic economies (like ours) speeds up consumption due to a common human behavior often referred to as “Keeping up with the Jones’”. Our neighbors, friends and family, work more and more to buy bigger and newer stuff (house, car, TV). People see this and want it too. And so work harder, take more risks and buy more stuff. We get rewarded for this behavior though admiration and self satisfaction and increasing consumption results. Hence, The Conundrum.
- Programs that genuinely reduce consumption – like increasing energy prices, interest rates and taxes, are excellent for the environment, but immensely unpopular. Such programs increase the cost of energy use across the entire economy and as a result consumption reduces. Such programs, because they reduce consumption, also reduce economic activity and ultimately cost individuals a level of freedom. This makes such programs very unpopular – especially so in democratic societies. The Gillard Government’s Carbon Tax is a prime example, so is the Eurozone’s austerity measures on Greece. Hence, The Conundrum.
- Technological improvement on the scale required to address issues of energy supply (food, electricity and resources), require substantial changes to the way we apply and use these technologies. It is not simply a matter of the techno-geeks, coming up with a new whiz bang, safe and secure form of electricity generation. And then just installing it to replace the new one. Such solutions will cost billions on billions of dollars and will require at least some level of cultural change that will not be welcome. Example of this are currently seen in community concerns regarding wind-farms (visual and sound pollution), nuclear-power stations (nuclear waste disposal) and coal-seam-gas extraction (water table contamination). Any real change regarding energy use and consumption is going to require real cultural change too. Hence, The Conundrum.
So the Conundrum, at its heart is about, the reliance of western capitalist societies on the consumption of goods and services. So long as our economic prosperity relies on the consumption of goods and services and the growth thereof, our problems of energy, pollution and environment can only increase. Production efficiency and clean energy will only enable an increased consumption, leading to greater need for more efficiency and productivity. The pressures on manufacturing and waste processes will continue to mount. Eventually the system will collapse as such businesses will no longer be profitable. The manufacturing sector in Victoria is experiencing exactly these pressures right now. Thousands are loosing their jobs and the economy is suffering which is leading to more loss of jobs.
The Australian farming sector has been experiencing these exact pressures for the past twenty or so years. Mass exit of business and and capability has resulted. Farming today is far more efficient and productive that in past times yet, the volatility and risks incurred on those who remain are greater and more consequential than ever.
The Conundrum is that increasing productivity and efficiency in our economy, only begets a greater need to increase productivity and efficiency. Its the Tragedy of the Commons on a global scale.
Therefore, any solution to the big problems of pollution, environment and prosperity, must address the need to reduce our consumption of energy, products and services. It is clear that any such change is going to have far reaching ramifications for the Western (Australian) way of life.
The Conundrum makes clear, our path forward as individuals, communities and nations is going to be difficult. Hard choice must be made and the livelihoods of most people (in Australia) will suffer (in some way). It is clear that the longer we wait to enact such change across our economy and culture, the more difficult and painful it will be.
The Global Financial Crisis has been great for for the environment, because it has enforced less disposal income, less confidence and therefore less consumption. The problem is that is reduction has only opened more space for growth. Without major intervention regarding societies consumption, any financial crisis will occur. It is just a question of when and where.
In the short term at least, any influence that increases economy wide cost of energy, or decreases economy wide consumption, the better off the environment is. Tony Abbott (Federal Government Opposition Leader) is therefore a great environmentalist because of the uncertainty and fear he and is Liberal colleagues create about the Government and the economy. The impact of Tony Abbot is reduced consumption and therefore less environmental impact.
The question now becomes this: Given that we have recently reduced our consumption (due to the Global Financial Crisis and perceived Government instability), how can we prevent any future economic growth from absorbing the gains made from these seemingly unrelated forces?
Ah, The Conundrum! The political and economic instability of our time is sure to continue!
