Do ‘green’ household choices really make a difference? This is a question I couldn’t quite give a straight answer to, and which provided the motivation to begin research in this area.
The main problem in determining the net environmental impact of consumption choices is the rebound effect. When households reduce their driving or electricity consumption in order to reduce their greenhouse emissions, they save money that ends up being spent elsewhere in the household budget. These other expenses also have environmental impacts. Expressing these offsetting environmental impacts as a fraction of the potential environmental benefits without ‘respending’ gives a measure of the rebound effect.
In order to understand the likely size of the rebound effect I gathered data on the embodied greenhouse gas emissions of consumption goods, and data on household expenditure patterns, matched them up, and estimated a model of the size of the rebound effect for some widely promoted ‘green’ household choices. One was reducing driving, the other was reducing home electricity consumption.
The main results are
- The net environmental benefit of reduced driving is about 25% less once rebound effects are considered. About 7% less for home electricity.
- Higher income households have the lowest rebound effects, and the greatest scope to change consumption patterns.
- There is a trade-off between the the cost-saving benefits to the household and environmental benefits. There are no easy win-win outcomes.
- More efficient use of energy, via more energy-efficient vehicles and appliances, is less effective than a conservation strategy of reduced use.
- Reducing household income is an effective conservation strategy.
- A better strategy for reducing emissions is a direct approach of capping emissions, and/or facilitating cleaner energy generation technology through subsidies or other measures.
Point 5 is often forgotten in the debate. But it provides a useful way to think about the impact of individual choices, and was even the topic of a whole book. Basically, we consume all that we produce as a society. So if we spend all day producing, we have to balance that by consuming. And if production involves environmental externalities, then we must cut back on both sides of the ledger for our personal decisions to really make a difference.
However, the important thing is to correct environmental externalities at their source. Simple, understandable and easily enforced regulations have brought us a long way in the past few decades in this area – our waterways, streets, city air, have been improved through direct environmental regulations. Improved technology helps, but usually goes hand-in-hand with regulation.
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