Download Global Economy Ola Persson Writing assignment 3: Problems and

Global Economy
Ola Persson
Writing assignment 3: Problems and solutions
Sweden has done it once again. The small country situated far up north leads the way in the
race towards a more sustainable world. According to the latest reports from the WFF, Sweden
has now the lowest ecological footprint1 among the OECD countries. If every human would
consume as your average Svensson or Andersson we would roughly need 1.8 planets to
sustain the same level of consumption. Of course the aim should be to have a level of
consumption that matches our planetary-boundaries, but Sweden has shown that is possible to
drastically reduce the ecological footprint and also maintain a high living standard. Sweden
should therefore be seen as a beacon of hope for other OECD countries to decrease their
impact on the planet we call home while still enjoying a high living standard.
Consumption and the ecological footprint
What we see above would perhaps fit in well with the overall perception of Sweden as being
one of the most progressive countries in the world when it comes to sustainability. Yes
Swedes has in general had good reasons for keeping their heads up high within the
sustainability discourse. However it is perhaps time to reassess the notion of Sweden being a
frontrunner within the field of sustainable development. Contrary to the scenario above
Sweden has actually increased its ecological footprint according to the WWF. If everyone in
the world would live in the same fashion as the average Swede, 3.4 planets would be needed
to match the demand according to figures from 2012. Two years later that number has gone
up to 3.7 planets. In terms of ecological footprint that puts Sweden in the top ten, amongst
countries such as USA, Kuwait and Belgium. The obvious question you are asking yourself is
why this is happening. There are a number of reasons for Sweden´s increasing ecological
footprint but one of the main contributors is the rate of consumption. Unlike many other
countries during the years of financial crisis, Sweden´s rate of consumption has continued to
increase, leading to a greater ecological footprint. Thus in the case of Sweden there seems to
be a correlation between material consumption and the impact we have on the planet (Living
planet Report 2014).
But this correlation between material consumption and the magnitude of the ecological
footprint seems to exist at a global scale as well. In fact, the biggest source of planetaryboundary stress today is excessive resource consumption by roughly the wealthiest ten per
1
Ecological footprint measure the area (in hectares) required to supply the ecological goods and services we
use (Living Planet Report 2014).
Global Economy
Ola Persson
cent, and the production patterns of the companies producing the goods and services that they
buy. Adding to the excessive resource use of the privileged are the aspirations of a growing
number of consumers seeking to emulate today´s high income lifestyles. Over the next 20
years, global population is expected to grow by 1.3 billion, while the global middle class is
expected to grow from under 2 billion consumers today to nearly 5 billion by 2030. To ensure
that humanity´s use of natural resources does not stress critical Earth system process-by
causing climate change or biodiversity loss- to the point that Earth is pushed out of the stable
state, actions needs to be taken. Efficiency improvements alone are not enough as they can
lead to lower prices, which may increase total resource use, also known as the rebound effect
(Raworth 2012, pp.4-20).
What is needed is a fundamental shift away from our current way of consuming to a new
consumption paradigm that doesn´t risk the stability of the Earth system. The consumption of
today creates an enormous amount of waste. The implication of waste is that consumption
takes a larger toll of resources or pollution then required. It is simply inefficient in relation to
the satisfaction derived (Sanne 2005, p. 316-317). Society needs to change.
Introducing collaborative consumption
So how do we get there? First of all we need to alter the way we perceive material goods.
Rather than the current focus on the production of goods, there should be a focus on the
production of the services by goods and how those services are distributed. We do not need
cars, we need transportation. We need entertainment and information, not televisions. Goods
are only a means to an end (Costanza, Robert et al 2012, p. 20). What could be the solution is
a society based on collaborative consumption. Such a society, where collaborative
consumption is at the center, is a society where people consume enough to meet their needs
and lead meaningful lives, without undermining the life-support systems of the planet. They
choose to consume energy and materials responsibly, conserving, economizing and recycling
whenever possible. Conspicuous consumptions becomes a thing of the past. People have
realized that the culture of materialism is a failing ideology and a poor path to happiness.
Long forgotten is the quest of acquiring ever-more stuff and the focus is now on more
worthwhile pursuits (Dietz & O´Neill 2013, p.199).
But what does collaborative consumption mean? At its fundamental level collaborative
consumption is about changing the conventional ownership of things and replace it through
schemes of sharing, bartering, lending, trading renting and gifting (Botman & Rogers 2010).
Global Economy
Ola Persson
Let´s take an example: Imagine a person who feels the need to drill a hole in the wall and
decides to purchase a power drill. Producing that power drill took some raw materials,
manufacturing efforts and transportation costs. For an hour or so the person is really satisfied
drilling one hole after another. But there are only so many holes in the wall you can drill.
Now it sits in the basement, a useless hulk slowly turning to rust, taking up space. The final
resting place for the power drill will most likely be at a landfill, or at best turned in for
recycling, wasting the resources and manufacturing efforts it took to produce it
(Csikszentmihalyl 2000, p.268). Sounds familiar? That is how the majority of the stuff ends
up in today´s conventional economy. Using collaborative consumption, that power drill would
increase its lifespan many times over and it would not only bring utility to one person, but to
many others. The need for buying a completely new power drill would be strongly reduced by
schemes of sharing, bartering, lending, trading renting or gifting, which would save precious
resources and energy. Owning a power drill that only is “used 12-13 minutes in its entire
lifetime” (Botsman, 2010), before it gets discarded makes little sense. To quote Rachel
Botsman: “What that person needs is a hole in the wall, not a power drill” (Ibid).
Collaborative consumption would allow people to share resources without sacrificing their
lifestyles and at the same time reducing the ecological footprint (Botsman, 2010). Research
has also shown that economies that are based on sharing and gift-giving lead to highly
cooperative and mutually supportive communities. In such systems the act of sharing will act
as a way of creating and maintaining social relationships (Boyle & Simms, 2009, p. 34).
Collaborative consumption is therefore not only about reducing our negative impact on planet
Earth, but also to create communities with strong social relationships between its members
(Botsman 2010).
A concrete way of encouraging collaborative consumption
Perhaps now you are thinking “Well this collaborative consumption sounds fascinating but I
want more concrete solutions in how to change our society in that direction”. Imagine that
you would want to read Adam Smith´s “The Wealth of Nations” but you don´t feel like
buying it since it´s pretty expensive and you are probably only going to read it twice.
Wouldn´t it be great if there was a place where you just could borrow a book and then return
it once you are done reading it? Or let´s say that you are not entirely sure about the
documentary “Inside job“ but for a small fee you can just rent it, which means that you don´t
have to risk buying it in case it turned out to be a complete disaster. The good news is that
Global Economy
Ola Persson
there is no need for imagination, these places have existed and still exist. What is to say that
this couldn´t work for other products as well? This way of renting or borrowing, for instance a
power drill, could be encouraged by both the private and public sector. Funding from the
public sector could be used to set up stores that would allow borrowing different products, in
a similar fashion to how libraries work today. There would also be opportunities for the
private sector to offer services, such as renting jeans for a monthly fee, in the same manner as
rental video stores used to work. Instead of just throwing away a product or let it sit in the
basement, you would return it once you are done with it. This would reduce to amount of
waste being produced because the need for owning most products would be obsolete. Our
homes would also suddenly feel very empty as the space that was once needed to store all the
stuff accumulated over the years, now has become vacant.
Potential obstacles and challenges
So is it feasible to set up these kinds of renting stores both within the public and private
sector? Several cities in the world, such as Vancouver and Malmö, are already engaged in
running test projects to promote collaborative consumption amongst its citizens. However,
few of these cities have directly funded stores with the possibility to lend or rent different
items. Within the private sector there are a plethora of different initiatives currently taking
place, both profit and non-profit driven. In Toronto, for example, a collaborative resource
sharing project is currently ongoing. As a member of the tool library you will have access to
over 2000 tools for yearly fee of $50 (collaborativeconsumption.com).
Perhaps one of the biggest challenges with this type of solution is to identify what resources
can be rented or borrowed. Is it feasible to rent or borrow a computer or a fridge? Or what
about clothes? Not every product out there can be accessed in this manner and preferences for
what could be consumed collaboratively would be highly individual.
Just as the solution with renting shops, collaborative consumption as a concept also needs to
be critically assessed. As mentioned not every product is applicable to schemes of
collaborative consumption. Another aspect to be considered is how current legal frameworks
and policies can act as boundaries to engage in schemes of collaborative consumption. In the
states of California, Oregon and Washington laws have passed relating to car-sharing, placing
liability directly on the shoulders of the car sharing service and its own insures, just as if it
owned the car during the rental period (The Economist, 2014). Naturally this will have an
impact on the willingness to share your car with another (Ibid).Collaborative consumption
Global Economy
Ola Persson
also implies that we need to reassess our view of private property, both in terms of legal
frameworks but also in terms of social status. As long as some cultures perceive high
accumulation and ownership of material goods as desirable in terms of social status,
collaborative consumption will not be the mainstream way of conducting economic activities.
In the beginning of this text it was mentioned how efficiency improvements actually may
increase total resource use, an irony known as the rebound effect. But the rebound effect can
also be applicable in the case of collaborative consumption. Going back to the case of Sweden
and its increasing ecological footprint, the WWF attributed this to a higher consumption rate.
It is important here not to only look at the consumption rate but also what kind of goods and
service that are being consumed. According to the Swedish Environmental Protection
Agency, the Swedish consumptions categories with the highest impacts on the climate are
food, travelling and accommodation (Naturvårdsverket, 2008) The rebound effect here is that
collaboration consumption will lead to less accumulation of materials goods, but the money
saved from this might instead be used for food or travelling. Thus the overall ecological
footprint might not actually decrease despite a reduction of purchased material goods.
In relation to this, it is also important to note that collaborative consumption might not fully
capture these consumptions categories, perhaps in particular food consumption. Food, unlike
the majority of material goods, is something essential to life and the key issue is not to reduce
the total amount of food we eat, but rather what we eat (e.g. red meat). That is not to say that
collaborative consumption, in my view, will not reduce our negative impact on the Earth
system. Collaborative consumption has huge potential but it also need to go hand in hand with
a greater transition, not only in how much we consume, but also what we consume.
References
Literature
Botsman, Rachel. and Rogers, Roo, (2010).What’s Mine is Yours: The Rise of Collaborative
Consumption (New York: Harper Business).
Boyle, D. & Simms, A, 2009. The New Economics: A Bigger Picture.
Costanza, Robert et al, (2012). What would a sustainable and desirable economy-in-societyin-nature look like? in Building a Sustainable and Desirable Economy-in-Society-in-Nature.
Global Economy
Ola Persson
Csikszentmihalyl, Mihaly, (2000). The cost and benefits of consuming, Journal of Consumer
Research, Vol. 27
Dietz, Rob & O’Neill, Dan, (2013). Chapter 15 - Enough Waiting: Taking Action to Start the
Transition, in Enough is Enough: Building a Sustainable Economy in a World of Finite
Resources.
Raworth, Kate, (2012). A Safe and Just Space for Humanity: Can we live within the
doughnut? Oxfam Discussion Papers.
Sanne, Christer, (2005). The Consumption of our Discontent, Business Strategy and the
Environment, vol. 14.
Reports
WWF, (2014). Living planet report [pdf]. Available at:
<http://www.wwf.se/source.php?id=1579930> [Accessed 6 December 2014]
Naturvårdsverket (Swedish EPA), (2008). Konsumtionens klimatpåverkan [pdf]. Available at:
< http://cemusstudent.se/wp-content/uploads/2013/11/konsumtion-klimat-nvv.pdf> [Accessed
7 December 2014].
Articles
The Economist, (2013). All eyes on the sharing economy. [Online]. Available at:
<http://www.economist.com/news/technology-quarterly/21572914-collaborativeconsumption-technology-makes-it-easier-people-rent-items.> [Accessed 7 December 2014].
Internet
Collaborative consumption. Available at:
<http://www.collaborativeconsumption.com>.[Accessed 8 December 2014].
Video
Botsman, Rachel, (2010). The case for collaborative consumption. Available at
<http://www.ted.com/talks/rachel_botsman_the_case_for_collaborative_consumption?langua
ge=en.>. [Accessed 5 December 2014].