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Environmental Economics Seminar Series
Department of the Environment, Sport and Territories, 1996
ISBN 0 642 24878 8
Dr Gul Izmir (EPA, NSW): I would like to open up this discussion by being just a little provocative. This is a quote from a theologian. I don't usually quote theologians but I thought this was a really good quote because it makes us all look at our lifestyles, our habits, our assumptions, our values and our dominant culture. The quote is:
All of us live as, in the past, people imagined only gods could live
I suppose that does not just apply to the past. I suspect that today there are a whole range of people in other countries of the world who look at people in developed countries and think that they do actually live like gods. That is not bad - who doesn't want to live like a god? Everybody does. But the problem is that the god-like lifestyle is getting beyond the means of the earth to sustain. It is getting close to the limits of the biosphere.
In his talk Stephen tried to emphasise that the reasons for change are fairly obvious - everybody realises that there are limits to the biosphere and there are very good reasons to change our consumption habits and the way we live. But our dominant culture is not really consistent with sustainability.
So where does that leave us? It probably means that we need to develop new concepts of sustainable development and prosperity, and probably we need to look more closely at the relationships between production, consumption, the environment, technical innovations, economic developments and democratic practice. We need to do all these assessments in a very careful manner.
Quality of life is not really that dependent on increased consumption of material goods. It is really dependent on the development of cultural and artistic expression, creativity, contemplation of nature and satisfying human relationships.
Again, one of the themes in Stephen's talk was that basically human biological needs can be satisfied with very low levels of consumption. But we are not just biological beings; we are also psychological beings and we do have a whole range of other needs, such as status, the feeling of belonging to a group, self expression and being individuals in our own right. That thought made me remember my reading years ago of a book by Scitovsky called The Joyless Economy: Psychology of Human Satisfaction . The major theme of that book was that people basically have two competing needs: comfort and stimulation. Comfort relates to all those sorts of things like having your washing machine, your dishwasher and not having to do a lot of chores manually; whereas stimulation refers to those sorts of things that really give spiritual and aesthetic satisfaction, and address your need for creativity and your need for knowledge about the world.
I think that the modern lifestyle is probably geared more towards achieving greater levels of comfort than greater levels of stimulation. So it seems that there is a good case for changing consumption patterns, but that is largely a behavioural issue. The most pervasive effects arise from social conditions and structural factors, such as the social values, norms, legislation and economic incentives that we have. These all endorse certain kinds of behaviour. In turn, this kind of behaviour influences the sorts of knowledge, skills and values that people acquire. This, of course, in turn, affects their behaviour. What do we have? We have a reinforcing feedback loop. If we really want to change our consumption habits, we need to find some mechanism for arresting that reinforcing feedback loop.
I thought the ecological footprint idea could go a long way in this regard. Listening to Barney Foran, I had visions of this vertically expanding universe. I thought: 'Hey! All these things require so many hectares of land. When we run out of land maybe we can add another layer!' These sorts of ideas make you think in those perhaps ridiculous ways, but in a sense that is good because it makes you go back and reinterpret your fundamental principles.
It is really important to encourage a sustainable lifestyle by giving people information to enable them to evaluate the consequences of their everyday decisions in the marketplace. Things such as life cycle analysis and environmental labelling will also go a long way in achieving that.
Another really important aspect is to make gradual, invisible changes visible to people. If you put a frog in a pot of cold water and you start heating the water, the frog will just sit there. Eventually it will boil to death because the change is so gradual that the frog does not feel it. To move away from that sort of disaster, we need to find ways of making gradual, invisible changes visible. Again the footprint idea is a tool that could be utilised in that respect.
Through better environmental information we need to empower the public to act out what they express in the various surveys undertaken. We need to make environmental information pervasive. In the Australian culture the sheer pervasiveness of sports information elevates sport. If you make more information available, the stature of the topic in which you are interested is really elevated.
One of the other things we need to do is move towards environmentally sound pricing. We need to make clear to producers and consumers the environmental cost of the products they use and the services they utilise. Again, in terms of reducing the footprint of our activities, we need to stop producing and consuming products with built-in obsolescence. We need to improve the durability and repairability of our products. We need to reduce generation of waste by encouraging recycling and reuse. We need to reduce wasteful packaging and reduce the amount of energy and materials used per unit of production. You are all familiar with all these things.
We also need to concentrate on stabilising populations and probably redirecting defence funds, and in general, promoting positive attitudes to sustainable consumption through education and public awareness programs. I suppose the bottom line is that we will all have to learn to live better with less. On that note I open up the matter for discussion.
Jim Falk (University of Wollongong): I think it is reasonably widely accepted that we are in an unsustainable situation. In the Illawarra region we have done studies for the EPA on environmental attitudes and we have found that people are concerned and that they are prepared to do something about it - even to the extent of surrendering, at least notionally, some amount of money each week out of their pay. That might not translate into reality if they were hit with a tax, but at least it indicates a genuine concern. One frequent response I hear is that what we need is a change in culture, a change in attitudes, a change in values. But one can also take the alternative approach that what we need is a change in economics, and a change in the systemic processes which bind people into a situation where they cannot express those values in day-to-day life. Those two things are connected. You need a change in values to change the organisational structure; you need a change in the organisational structure to allow values to change. That is clearly part of the dilemma.
If you look back over the historical development of the environmental issue, you find that the dynamo behind change has been conflict - a genuine attempt to raise the problems in often very stark ways. That raises a second issue. Obviously conflict is destructive in many ways, but it raises the question of what is necessary in terms of information or education or whatever, to enable people to begin to change their view of what is possible.
One view is that we can give them information - we can educate people. From what I have read of some of the psychological literature about behaviour change and from my own prejudices, my view is that people have to get the information. If you ask what is the sort of information that will change people's behaviour, that will make them believe that something is not only necessary but also possible, you come to the conclusion that they must, in some way, discover it themselves. I am interested in trying to find instruments for imparting information which can play a role in a discussion between opposing parties - that is, where it is possible to clarify issues of difference and, by using them, for people to increase their own understanding of what they need and to enhance their own goals and make themselves feel more powerful.
I like the footprints idea from two points of view. One is its lack of clarity - the fact that you can build those footprints in many ways from many different assumptions for many different messages, and there will be a great debate about what it all means. That debate would be terribly important in beginning to unravel what cities are all about. For instance, the emphasis on the area for fuelling vehicles. Why assume that you are going to use crops to produce the fuels? I suppose you could argue that you were trying to find some sustainable way of doing it. Another way would be the hydrogen economy. Another argument would be what would happen to the footprint if we were to increase the efficiency of cars, and so on. It is a very useful, simple picture which can be used broadly in a discourse about what is needed to change the future - a future which is accessible to people. By grasping on to it, they can open up new areas of investigation.
That is the sort of thing we need. Therefore, I am rather sceptical about the technocratic response of saying that all we need to do is produce new pricing signals. We have to ask the additional question of what sort of debate and what sort of mechanisms we need in society to allow what should be the pricing signals to be established and continue to change as the population becomes more aware and more empowered in relation to these issues.
Jim Donovan (Action for Public Transport): This afternoon I hope to hand around some documents about transport, but this morning I will stick to the issue of changing the public's perception of what is happening. I compare this with the issue of smoking. I noticed that during the break a couple of smokers had to go outside because we cannot smoke indoors anymore. In 1952 King George VI died, and later Humphrey Bogart, but until about 1960 nobody had any idea as to why this had happened and why lung cancer had become so prevalent. Then the British discovered why. It was denied vehemently on all sides and it took 30 years for the change in behaviour to take place. That is a very good example of the sort of thing we are after. We have a long campaign ahead of us to change public perception of the situation, and at the same time we have to turn up the pricing signals. Only then will we start to see a serious change in behaviour for the right reasons - a change that will not be overturned by some clown coming along and saying: 'Vote for me, I will fix it!'
Deni Greene (Deni Greene Consulting Services): I suppose converts are the strongest missionaries. Having moved from the United States to Australia, I became very conscious of materialism in the US, and on a visit back I was standing in a department store - that monument to materialism in the US! - and I looked up at the wall where there was a display of 104 toilet seat models. I thought: 'What society really needs a choice of 104 toilet seats? Would we be really worse off if there were only two or three, or even one?' But the question that occurs to me is that when we are concerned about consumption, we are talking about incrementally improving our efficiency of consumption or reducing our consumption by discussing things like packaging, or the switch from private to public transport.
Although we have talked about reducing packaging, we have not talked about reducing the number of things that come in packages. While moving incrementally can be beneficial, sometimes it might be better to look at where things are going ultimately and considering that we might not be on the right path at all. We might get very good at eliminating packaging or making our washing machines more efficient, but we might have to do something quite dramatically different - particularly in view of the huge explosion of growth in consumption in developing countries. Many of us are assuming that the best path is the same path, trodden in a more efficient manner. But it might be quite a different path.
Freya Marsden (Department of Premier and Cabinet, Victoria): I wish to make a comment about the type of information we use and the importance of getting that information strictly correct. If we have information which is proven wrong at a later stage, that can be extremely damaging. I know that the environment and related issues can be very emotional at times, but if we use information that is not accurate and it is later proved to be inaccurate, this totally undermines the cause.
Stephen Boyden: I wish to respond quickly to some points relating specifically to my presentation. Had I been able to choose my subject I would have talked about the type of matter you have just raised - the process of reform and change - because that is the real challenge. But I was asked to talk about the need for change and I did.
Some important points have been raised. One was the relationship between values and that aspect of culture on the one hand and the economic system of which we are a part on the other. That relationship is very interesting and important. We are, in a sense, locked into a system which has grown up over the years, and I can't help feeling that had people like Adam Smith and maybe Karl Marx had a better grasp of the interest not just in production and consumption, but also the other aspects of the system, including the sensitivities of the living systems on which we depend, a significantly different strategy might have emerged and we would not be having these problems. Nevertheless, my impression still is that there is a need for a greatly improved understanding in the dominant culture of the nature of the situation. Again, many of the assumptions of that culture, relating to growth and so on, are simply not consistent with ecological realities.
I strongly support the comments that have been made about information and learning. It is not just a question of telling people that their values are wrong - that never works. Also it is certainly not just a matter of informing them - that does not work either. In Canberra we have a community organisation involving a lot of academics, called Nature and Society Forum - with emphasis on the word 'forum' - which aims to provide a framework for people who want to learn - we call them CIPs, concerned interested persons - to come and get the information they want and then to debate and discuss its meaning for themselves and for society as a whole. It also aims to bring together people with different viewpoints. We have done this in a magazine. We had one issue on the greenhouse effect, which had some scientific input and contributions from the Right, the Left, environmentalists and others on the implications of all this. If anyone is interested in this organisation they should let me know. It is aiming to do all the things we have been talking about.
Jeanette Haycocks (Australian Bureau of Statistics): The point has been raised about the sorts of information we need. One information tool that I have come across that I think would be very valuable as a basis of the sort of analysis that people want to do is the use of satellite accounts linked to the national accounts. There are different types of satellite accounts that one can link in - for example, social accounts. Instead of the economy just sitting there as an end in itself, it becomes accountable to the kind of social needs that the economy is meeting. One can then also link in environmental accounts, preferably through a set of physical accounts which show the flow of resources through the economy and the emissions at the other end, to understand what the economy is using in resources and the type of pollutants that are resulting. One can then look at the efficiency of the economy in terms of the delivery of social objectives, and of costs and one can look at matters such as pricing, tax, subsidies and even regulations and see the impact that they will have on the economy, the environment and socially. It is a system that will not necessarily give one the answers, but it will give the information base so that one can go ahead and ask the questions that will give the answers.
Sharon Beder (University of Wollongong): We must recognise that any information that is given in terms of aiding the environment is up against a massive source of information and that is the marketing and advertising that people are bombarded with every day from birth. All this education and information we are talking about is really so insignificant compared with this huge onslaught that everyone is subjected to throughout life to buy and buy and buy. We must recognise that and deal with it; otherwise we will never get anywhere.
The other side of that is the readiness of people in our society to judge each other in terms of their material possessions and their ability to buy these things. We are addicted to these goods. This reminds me of a chocolate addict who might realise that chocolate is making him fat and that it is not particularly nutritious for his body. He knows that the best thing to do is not to eat it. But if you put a bowl of chocolate under his nose, it will be very hard for him to say no. I am surprised that there is not someone at this conference from the marketing and advertising sector because I think that is the essence of our problem.
Brian O'Neill (EPA, Commonwealth): I wish to comment on Freya's statement about emotionalism. Anyone who is in this business and who is concerned about the emotion is underestimating the importance of the issues that are being debated. They are felt very deeply, and certainly those of us who are trying to implement change at a broader level have to be prepared to accept some very emotional responses from people. We have to recognise that these value systems are very important and we must try to find some way of resolving the problems. We must accept the fact that emotional approaches to environmental issues are important. I remember that, when Rachel Carson's book was first published, the American pesticide industry got a guy who had a PhD and an MSc to review it. He criticised the book on the basis that she was a woman and she only had a BSc and that was in oceanography! That debate went on for a long time. We just need to accept the fact that emotions are very much a part of this debate and of resolving the issues.
Gul Izmir: The only point I want to make about providing information to the public is the concentration on giving the public the information they need. I do not think that is the right path to take. The needs of the public for information are determined by the levels of knowledge and skills they have. That is one of the stark results of a survey undertaken by the New South Wales EPA on community attitudes to the environment. The sort of information you seek depends on the sort of person you are and the sort of values that you hold. If you are going to concentrate on giving people only the sort of information they want, you will find that it will be a much slower process. A whole lot more thought needs to go into these matters to determine the pieces of information that will be helpful in increasing people's knowledge of environmental issues.
Ted Floyd (Friends of the Earth): Since its inception nearly 20 years ago, Friends of the Earth has had a basic philosophy of low end consumption. Where has that got us? In Sydney we have about 200 members and perhaps a couple of thousand in Melbourne - we do a bit better down south. But there are many millions of others out there. The hippy movement took up the idea of reduced consumption. A group of people moved up to Nimbin, where they tried to reduce consumption. They made a great effort - they had a few failures, but a lot of successes as well. But whichever way you look at it, that is a very small proportion of the population.
Let us be realistic. I do not think we are going to persuade most of the people out there to reduce their consumption. It is the basic nature of a human being to want more. Jesus Christ taught very strongly that materialism was an evil, yet some people claim Christianity for the growth of capitalism. During the war the government was forced to introduce rationing because it was faced with a major catastrophe then and there. Let's face it: in present circumstances we are not going to be able to go out there and persuade people to do without things. We have a business world that wants to produce more and more so that it can make greater profits; we have a political system in which politicians promise us more and more; we have an economic system which specifically studies how more can be produced; and we have an advertising world which tries to fool us completely into believing we want more, when we probably don't want it at all.
A factor that worries some of us is that the government and the business world are more or less saying: 'All you little people out there, you are the problem. It is not really our fault, we are trying to do the right thing.' We need leadership. The environmentalists have pretty well won their argument - the majority of people out there now know that there is an environmental problem. A couple of definitive surveys have shown that. The ABS survey showed that most people acknowledge that the environment presents a major problem. The EPA in New South Wales also conducted a survey which produced similar results. People out there know that there is a major problem, but at this stage they are a bit lost - they do not really know how to cope with it. They know how to recycle, but many are under the impression that if they recycle they have saved the environment. The trouble is that we have to go a great deal further than that. It is now up to the leaders of this society - be it politicians, businessmen or academics - to not just show people how to do things, but to actually bring in mechanisms to help save the environment.
Let us take the example of cars. We Friends of the Earth have problems in this regard. Whenever we have to transport heavy things, we can never find a member who owns a car! In the national greenhouse strategy it was proposed that the government and industry together would formulate a policy whereby the car manufacturers would produce vehicles that use less fuel. From my own experience, both here and overseas, I would say that that approach hardly ever works. In America for a while they had a policy whereby it was compulsory to manufacture cars with reduced fuel consumption. I don't know whether the data is up to date, but apparently at one stage the average fuel consumption of new cars in America was less than that of new cars in Australia. We will not get any results in Australia if we try to work by nice little agreements. Market forces may work sometimes, but often the signals come out incorrectly. We try to fiddle the market and we end up getting the wrong results. I sum up by saying the vast majority of people do want to save the environment and they now need some hard leadership and real legislation, not just nice cosy little agreements. We don't have to be draconian; a lot of difference can be made by efficiencies. Real policies will achieve real results.
Scott Lyall (World Wide Fund for Nature, Australia): I want to address the concerns of some of the previous speakers who have talked about the use of advertising and marketing as an overwhelming force against us. However, it is a tool that can be utilised by both sides. The methodology of marketing has changed over time from a product-based to a production-based to a sales and marketing role. The latest thing in marketing technology is societal marketing. This acknowledges that it is more than just flogging a product; it is actually helping to fulfil the more general needs of the market. That methodology is being adopted by the charity or social profit sector. There is potential for us to use this tool for our side of the argument as well. I am interested in the distinction between economic growth and material growth. Do our main speakers feel that we have that distinction? Are they encouraged by the apparent shift from an energy-based economy to an information-based economy? Do they think that has potential to achieve economic growth without necessarily having material growth?
Stephen Boyden: I am not an economist, I do not understand economics, so I cannot really answer that question. Whenever I write about economic growth in this context, I say economic growth which depends upon increased industrial production. That is the kind of economic growth that is unsustainable. Whether or not there are other kinds of economic growth which are not energy, resource and pollution costly, I am not qualified to say. Perhaps someone else would like to comment on that.
However, I would like to comment on the importance of government. I feel quite strongly about that too. I think government has an enormously responsible role in the whole of this area. Individuals can play their part by recycling materials and so on, and if we all did everything that was possible - walked instead of taking the car - it would have some impact, but nothing like enough. It would really only scratch the surface of the problem. There is a principle which we call the HI principle - HI is a friend of mine; those are his initials. He is very concerned and very knowledgeable about ecological issues and the greenhouse effect. He works at the university and lives within walking distance of it, yet he brings his car to work every day! I asked him about this. He knows that it is ecologically undesirable to do so, but there are various reasons for it - he is always running late, for example. I asked him whether he would vote for a government which made it impossible for him to take his car to work. He replied: 'Yes, certainly.' In other words, he has the understanding and he would vote for a government that stopped him and everyone else from driving their cars to work every day. That is a very important factor. Government does have this role; it has played it in the past. I think I referred earlier to the public health movement in Britain in the last century. The reformers drew attention to the need for reform; that got things going and appropriate legislation was then introduced. That sort of thing has happened in many other instances. Unless government plays that role, I do not think we will make a great deal of progress. As citizens, we have a big role to play - first, as voters; and secondly, as informers. We must convey information to other members of the electorate. We can then empower government to play that kind of role.
Hazel Suchard (Australian Catholic University): I am one of those marketing people! Within the United States there is a large body of knowledge in a new subject - environmental marketing. It has been my privilege to speak at the American Marketing Association on environmental marketing for the last few years. Unfortunately, in Australia there are very few academics who are working in the environmental marketing area. The people who are in this area are concerned environmentalists and they are producing some good work.
Many of the people who have spoken today have assumed that when people have knowledge there will automatically be a change in attitude. There is a relationship, admittedly; but there is a problem as well. While a consumer might be environmentally concerned, that does not mean that he or she is necessarily environmentally active. He has to be environmentally concerned in order to become active, but that is not necessarily the result. The question has to be: how do we make the consumer - and even more so, businesses - environmentally active?
I do not think one can do this in punitive terms. It has been shown in the United States that all the legislation in the world has not to any great extent changed actions. The idea should be that becoming environmentally active is profitable - and you can define profit in any way you like - for both business and the consumer. Dr Boyden made the statement that governments should seek to reduce industrial production and retail consumption, but I wonder what his reaction is to the idea that the nature of the change should be brought about with profit, not punishment, in mind.
Stephen Boyden: I agree, yes, as long as the changes are appropriate.
Hazel Suchard: When we speak about reduction, I think we have to take account of the fact that businesses may well go out of business and there will be massive unemployment. You will have to force people to choose between the environment and their jobs. As we saw in the last recession, concern for the environment went down. It goes up again when the country comes out of recession.
Stephen Boyden: This is a very big subject, which we have just touched upon; we could talk about it for many hours. You are talking about this matter in the light of the existing system and the particular occupational structure of the society in which we live. I think that a proper transition to an ecologically sustainable society must involve major changes in the structure of society. In that new society, if it ever comes about, the kind of changes we are talking about - even reduced production - will not necessarily lead to unemployment. It certainly would do so in the existing society, which is one of the impediments to reform in this area.
Rinke Schoneveld (Conservation and Land Management, NSW): I pretty much agree with what everyone around the table has said. It is a conundrum in that people want environmental change and improvement, but somehow we are not achieving it. Two aspects I want to talk about are utility and people's happiness. I was reading an article in the magazine, Psychology Today , which talked about this very subject. Basically the article said that one of the common threads in people achieving happiness is in achieving small goals that they set for themselves. I think the way we do this in our society is largely by proving through the market that we are able to earn more money, consume more and so on. One of the major changes we need to bring about is to change the way in which people achieve happiness. To do that we must bring about a major cultural change. I am not sure how we do it, but I think that major shift is the necessary first step. Perhaps it could be started through more community involvement and that sort of thing.
Patrick Thompson (Colong Foundation): My comment to my friend Ted Floyd is that the meek will inherit the earth. I think what we are worried about is what state the earth will be in when we inherit it! I think the problems of today will be resolved by the very subject we have not talked a lot about - economics. We look at the next 60 years and, if our politicians get what they want, we will have more than four per cent growth. They may settle for four per cent growth and the earth will have 16 times its present production. We can quibble around the edges and say that some of this could be information technology and therefore have little environmental impact, but I think we all know that the average person on the earth is not all that turned on to that. For a start, the average person in China, for example, wants all the things that we have at present - a house and a motor car - so anyone who thinks we have a future with lower, sustainable consumption patterns is fooling himself. I am talking about people generally, not individuals. Individuals may achieve their goals.
So where do we go from here? It is an absurdity to think that this earth can produce 16 times its present production. There are limits to growth, although this is the very subject we avoid. So we go to the laws of economics which will, indeed, be the solution. The simple laws of supply and demand will, of themselves, dictate the changes that we will undergo. What will these changes be? Well, I am not all that good at gazing into a crystal ball, but the dynamics will be quite radical.
I want to return to a message of hope, because these things are largely outside our individual control. We do have salvation in returning, perhaps, to the simple slogan of the Friends of the Earth: 'Learning to live simply so that others may simply live.' There is a great deal of satisfaction individually in achieving a simple lifestyle, of reducing the material side of one's life, and in being a 21st century person. That is the only way we will survive into the 21st century on this planet.
Chris Mobbs (Chair): Thank you all for your contributions. This afternoon we will look at issues in a much more specific sense, and I ask you to bear in mind that we will be looking to what advice we can give to DEST in terms of actionable outcomes from this meeting.