Towards Sustainable Consumption: Economics and Ethical Concerns for the Environment in Consumer Choices

Article excerpt

Abstract The article examines individual action informed by ethical concerns for the environment as a strategy for moving toward more sustainable consumption. The article first employs a model of rational choice to analyze independent consumer choices among the usually assumed self- and welfare-centered con sumers and then expands the model to analyze the implications of other than self and welfare-centered motivations for consumer choice. The article next analyzes interdependent consumer choices informed by self- and welfare-centered values with the help of a simple game-theoretic model and then moves on to examine the implications of nonutilitarian environmental concerns for interdependent consumer choice in the same game-theoretic framework. The article concludes that although a strategy based on individual action may have limited promise when environmental concerns are widely shared, the case for collective action remains strong because of both efficiency and equity reasons.

Keywords: consumer choice, environment, rationality, preferences, values, sustainability

INTRODUCTION

The values of life are not, in the main, reducible to satisfactions obtained from the consumption of exchangeable goods and services. Such desires as people have for goods and services are not their own in any original sense, but are the product of social influence ... largely manufactured by the competitive system itself.

(Knight 1924: 605)

Environmental literature often emphasizes a change of values as a necessary step in solving environmental problems (see e.g. Naess 1989, Merchant 1992).While environmentalists usually consider that change in values is needed to arrive at environmentally sounder social choices, there are also those who hold that individual action informed by new ethical concerns for the environment-- engagement in green consumerism, the adoption of ecological lifestyles, or voluntary simplicity, for example--could alone remedy environmental problems (see e.g. Elgin 1993). Equally some economists believe that individual action in the market place can remedy environmental problems (see Anderson and Leal 1997). Although they typically focus on entrepreneurial activities, their implicit assumption is that consumers with environmental concerns are around to make mutually beneficial exchange possible.

This article examines the implications of environmental concerns for consumer choice. Its main aim is to accommodate a wider range of motivations for environmental protection in economic analysis of consumer choice than has been customary, including motivations that are not directly related to the welfare of the choosing agents. This task is interesting and challenging in its own right. The focus on consumption is warranted for several reasons. Consumer choices are often an element in proposals suggesting reliance on individual action to resolve environmental problems. Moreover, consumer choices do have a significant effect on the environment and, therefore, at least a potential to remedy environmental problems. Finally, the attention in both scholarship and international policy arenas is currently moving from production towards consumption, as it is felt that the potential of regulation of production is either not sufficient to remedy environmental problems or is already largely exhausted (see e.g. OECD 1997a, b, 1998, Crocker and Linden 1998, Cogoy 1999, Georg 1999, Jackson and Marks 1999, Ropke 1999).

In this article, I mean by more sustainable consumption simply consumption that entails reduced adverse environmental impacts. In referring to individual action I mean that individuals may, because of their ethical beliefs, voluntarily and on their own initiative modify their consumption so as not to harm the environment. I understand that an individual's concerns for the environment can be based on formally different ethical foundations, such as utilitarianism, nonutilitarian consequentialism, or deontology. …