Download Sustainable Consumption: The need for a strong consumer

13 October 2005
Sustainable Consumption: The need for a strong consumer policy
Paper prepared for presentation at the Sixth Open Meeting of the Human
Dimensions of Global Environmental Change Research Community
University of Bonn
Prof. Dr. Edda Müller
Executive Director, Verbraucherzentrale Bundesverband e.V.
Berlin
Verbraucherzentrale Bundesverband e.V.
Markgrafenstraße 66
10969 Berlin
[email protected]
www.vzbv.de
1. Introduction
For sustainable consumption to become reality there is a vital need for a strong consumer
policy. Traditionally, environmental and social policy have been in the focus of sustainability
advocates. Environmental policy instruments such as emission limit values or eco-taxes have
been developed to offset negative effects of economic growth while social standards have
been established in order to prevent wage dumping and working conditions which pose
serious health risks.
Yet with globalization gaining ground, this strategy is approaching its limits. Higher wages
and stricter social and environmental standards are being contested by international
competitors, who profit from lower prices. In this situation, consumer policy can provide an
alternative to a ruinous “race to the bottom”: Consumers´ increased willingness to
actively contribute to sustainability could help to reconcile sustainability with competitiveness
on the global market.
This will, however, not happen by itself. A political commitment to actively shape
consumer demand is necessary. Consumer policy has to be strengthened by institutional
reforms and by introducing effective instruments to protect consumer interests and direct
consumer demands towards sustainable choices. Above all, a strengthening of consumer
research is needed. This entails the following measures:
•
A new understanding of consumer policies which have the potential of being an
engine to sustainable development.
•
Efficient demand side oriented institutional structures in the social, governmental and
international trade fields need to be set up.
•
Programs and instruments are needed to change the dynamics which are currently
solely responsive to supply-side economic factors, to include the demand side and
thus develop sustainability. In particular, this requires legislation granting the
consumer a “right to know”about the sustainability of products and services –
especially with regard to the production process.
•
Consumer research has to provide support and legitimacy for such a consumer
policy. It has to provide an independent theoretical framework for the demand-side
function of the market, thus supplementing supply-side economic theories.
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2. The weakness of consumer research is the weakness of consumer policy
At present consumer research comprises what Reisch calls a “point cloud”of numerous
sectoral research approaches. What these have in common is a primary focus on the
consumer as individual. In this context, consumer policy has the function of providing
protection for the consumer in terms of health and material well-being, of ensuring his fitness
as a “sovereign, responsible economic citizen“and of limiting economic power by
establishing a general framework for “fair competition”between enterprises on the market.
For business and a supply-orientated economic policy, consumer and economic policy thus
represent a zero sum game in the sense that increasing consumer protection is equated with
increasing disadvantage for business It is thus hardly surprising that, despite the threat of a
worldwide shortage of resources and increasing ecological destabilization, the EU
commissioner for Industrial Policy characterizes consumer and environmental policy as
fundamental barriers to the recovery of the economy of the European Union and wants to
see his strategy of de-bureaucratization and deregulation applied above all in these areas of
policy. The political debate within Germany is equally symptomatic of the prevailing
interpretation of consumer policy. Proposals for a rejuvenation of the economy and the
creation of jobs focus exclusively on the supply side of the market. In spite of stagnating
national economy, such proposals propagate passing costs to consumers and thus further
limiting their purchasing power.
In my view this short-sightedness can be explained not least by the fact that as yet
consumer research has not developed an independent theory of the function of
collective consumer demand for goods and services. Instead it has relied on theories of
economic competition and subordinated itself to them. Supply-orientated competition theory
continues to suffer from an incapacity to counter the failure of the market through the
externalization of ecological, cultural and social costs of production and consumption. In the
global market, a complete internalization would only be possible on the basis of a framework
agreed between political actors at the nation-state level. Given the widely differing levels of
economic development of the individual states, such a hope seems utopian. The task of an
independent theory of consumer research should therefore be to establish the function of
collective consumer demand with regard to the achievement of general economic and social
goals such as the guarantee of growth and employment, employee security, the protection of
nature and the environment and the quality of life of present and future generations under the
actual conditions of the world economy. Following Scherhorn, what we are concerned with
here is the functional capacity of the market as a community asset. What is needed is a
steering and governance model that incorporates the shaping of the demand side of the
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market as a political (and not necessarily state-based) task. In principle, we are thus
concerned with a theory for an eco-social market economy on a global scale.
3.Consumer policy as a motor of sustainable development
In view of the current state of global trade and competition, sustainable production and
sustainable consumption constitute more than a survival strategy for our planet and the
precondition for sustainable future development in the Third World. They also constitute the
precondition for maintaining social peace and democratic systems in the established
industrial countries. Current world economic mechanisms, which are characterized by the
boundless mobility of capital and a philosophy of free trade that provides an almost unlimited
capacity for social and environmental dumping, can only be kept in check by demand, i.e. by
affluent consumers in the developed nations. The social market economy that, at least in
Germany, ensured a broad level of affluence, stabile systems of social security and a high
level of acceptance of the democratic polity during the post-war period on the basis of an
equilibrium between two social partners – the representatives of capital and labor – today
requires the power of the consumer as a third social partner. However, this power does
not emerge from the isolation of and fixation on the individual consumer but can only unfold
as a collective power. It follows that this collective force requires a political entity which not
only upholds consumer concerns in a defensive sense as a corrective to supply-orientated
economic policy but also understands itself in offensive terms as a motor for a socially
and environmentally compatible economy on a national, European and worldwide
scale.
Shifting responsibility in this context to the business sector and scientific research does not
bring us any further. Both have done their homework. Sustainable consumption is possible.
The insufficient market penetration of products that are efficient in terms of energy and raw
materials, of renewable energies, of textiles and toys produced under humane conditions and
of foodstuffs produced in an environmentally friendly way and within animal-welfare
guidelines, to name only a few examples, is not the fault of producers but the result of
inadequate demand. However, blame cannot be exclusively placed on the consumer.
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There are many reasons for this state of affairs including:
•
The lack of plausible and reliable consumer information on the “process quality”of
goods and services, i.e. of information on the social and ecological conditions of
production.
•
An extensive lack of transparency regarding the running and additional costs of
energy-dependent devices, vehicles, buildings and housing.
•
Insufficient information on the origin of products and the social and ecological
consequences of their manufacture in the supply contracts of producers who are
supplying the end-user market.
•
The reduction of consumer access and consumers’choice due to the
concentration in the retail sector and the increasing lack of retail outlets and
infrastructure in rural areas.
Even given adequate information and a corresponding range of purchasing options, not all
consumers will lend their support to sustainable development. However, examples show that
the potential for such consumer reorientation can be significantly increased and thereby
create a “pull-effect.”Research into consumer behavior attributes a conformist orientation to
the majority of consumers, i.e. the product that is purchased is not necessarily the cheapest
but the one that conforms with the behavior of the group in the society with particularly high
spending power.
It is above all important that businesses adopting sustainable production are able to realize
their advantage in competitive terms. The prevailing policy framework hinders rather
than helps pioneering enterprises. It does not reward them. Consumer policy must
change this state of affairs and, in this sense, define itself as a demand-orientated economic
policy.
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4. An empowerment and reorientation of consumer research is needed
Consumer research must become more political. It needs to examine critically large-scale
trends in the world economy and provide reasons why a free-trade concept that – as is the
case in the WTO regime – relies exclusively on unimpeded trade between producers is no
longer in keeping with the times. The market and therefore also trade have two sides: supply
and demand. Demand cannot exclusively be understood even in theoretical terms as the
automatic result of competition between suppliers.
Consumer research should see itself as an independent partner of primarily supplyorientated economic research and confront the latter with the specific mechanisms
and conditions characterizing market demand.
The IHD program offers an ideal platform from which to provide support for a new branch
of consumer research, a focus for the various institutions involved in consumer research and
a means of incorporating their efforts in the political process. Initially it is important that a
consistent, common research program is elaborated. In my view, the central focus of such a
program should not be on the refinement of analytical instruments relating to sustainable
consumption such as life-cycle assessment, material-flow accounting and labeling. What is
most needed at present is an investigation of the current destabilization of the national
economies of the industrial countries along with the development of the newly industrialized
and developing countries from the point of view of consumer demand.
I have confidence in the capacity of science and research in this regard and I am therefore
devoting my efforts to increasing the profile of consumer research within public research
programs. However, the content and viability of such research programs must come
from the research community itself. Large-scale, consistent and well coordinated research
themes are far more viable than a collection of individual, sectoral projects. The continuation
of the IHD program offers a great opportunity not only to map out the future themes of
consumer research but also to increase the status of consumer research in the context of
research into global environmental change.
Let us make use of this opportunity.
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