It’s not (just) what you spend, it’s the way that you spend it
2 January 2020
Until we have global carbon pricing we must take responsibility for our consumption choices
In previous posts I’ve run through some of the biggest contributors to our footprint: air travel, cars, food, and home energy. But these only account for a little over half of our emissions, leaving a broader bucket of ‘other consumption’. Some of this we have no control over – public services. But some we do, including items such as clothes, furniture, appliances, restaurants, hotels and so on. With the consumer binge that is modern Christmas still a recent memory, it seemed a good time to tackle this topic.
The carbon impact of consumption
It is almost impossible to separate consumption from carbon. As a very rough rule of thumb, on average £2,000 of consumption gives rise to 1 Tonne CO2e of emissions. Put another way, the average carbon intensity of consumption is around 0.5, meaning that each £1,000 of consumption gives rise to 500kg (0.5T) of emissions. You can get to these figures from macro analysis comparing UK GDP (c. £2trn) to total carbon emissions (c. 800bn CO2e) or from bottom up analysis of individual consumption baskets.
But these are just averages and the variation is enormous. A very accessible book for those wanting to understand the variety of impacts is How bad are bananas by Mike Berners-Lee. Based on models developed by his company Small World Consulting and Lancaster University, Mike analyses the carbon output of a huge range of individual items and industries. He admits himself that the analysis can at times be approximate, but the broad conclusions are similar to other sources I’ve come across, so to keep things simple, most of what is in this post is derived from Mike’s figures (with some of my own approximations and assumptions overlaid).
The table below groups common areas of discretionary consumption by level of carbon intensity (defined as T CO2e per £1,000 of consumption).
*Based on fully loaded cost of owning and running a car
As a cross check I applied these factors to our annual consumption levels in each category and reproduced our overall carbon footprint to within 10%, suggesting that these simple factors are a useful way to estimate and understand our footprint.
The range of carbon intensities is more than 25x between the extremes and more than 4x across a reasonable range of alternatives. Note that the factors relate carbon output to the level of consumption in money terms. Some items are relatively low carbon intensity but typically have a large £ value (e.g. construction) so the absolute carbon impact may be high even if the per £ intensity is low. Conversely, people tend to spend relatively small amounts on wooden furniture so even though it’s above average intensity it’s likely to be a small part of someone’s overall footprint.
How would you spend £30,000?
To bring this to life, imagine your aunt dies and you receive a £30,000 inheritance. Here are some different ways you could spend it.
Now let’s look at the approximate carbon impact of each of these using our carbon intensity factors (and some sensible assumptions!).
Unsurprisingly the impact of the four business class long-haul return flights makes the luxury holiday option extremely costly from a carbon perspective, equating to around 6 or 7 average UK person-years of total carbon impact. By contrast, travelling on France’s Nuclear-powered TGV network both enables the total holiday length to double from four weeks to eight, but cuts the carbon impact by nearly 90%. Upgrading your conservatory is less than one-third of the carbon impact of the new car, and potentially has more enduring benefits. The house makeover comes in between the two.
But the clear winner from a carbon perspective is buying time to enable you to spend more time on low-carbon-impact activities such as yoga, art, reading, and going out. Interestingly, research on happiness strongly suggests wellbeing is maximised by: buying experiences over things; creating a sense of having spare time; and activities involving social contact. So the lowest carbon option may also be the one most conducive to wellbeing. (Giving to others is another major source of happiness, so well-being could be increased further by giving some of the inheritance to charity, which would also be a low carbon option.)
What this does bring to light is the importance of bringing the carbon impact as one factor into our decision making on consumption. As a rule of thumb, paying for experiences and time, with a strong service and intangibles component, and low manufactured goods component, guides us towards the lower carbon options.
Sustainable options within each category
This post has focussed on categories of spending, and how the carbon impact of each varies. But within each category we have many choices. Some clothing providers have better sustainability records than others, as do some hotel chains and some manufacturers of consumer goods. There are many websites that help you make good choices. This is very important as we cannot expect companies to act sustainably, sometimes at a cost, if we aren’t prepared to reward them with our custom. Sending market signals in favour of sustainability is vital as I’ve discussed previously in relation to cars and energy supply.
But at the same time there are only so many issues we can take on. I think a reasonable approach is to identify our biggest categories of spending and then focus on getting a good understanding of different providers to make that as sustainable as possible. Don’t sweat the small stuff – as shown above changing the categories of consumption will have a bigger carbon impact than how we spend within each category.
There seem to me to be two main ways to think about this issue.
One is to choose small local suppliers where we can have high confidence in the supply chain and sustainability credentials. For example, we now buy most of our detergents and some food items from a local shop called the Refill Pantry that enables us to take existing containers for refill. I’ve also talked previously about local and seasonal food sourcing.
But big brands also have an important role to play and can be judged at the corporate level. For example, having worked with Unilever as an advisor over a number of years I’ve seen up close their genuine commitment to sustainability. This is also reflected in their Unilever Sustainable Living Plan (progress against which forms 25% of the long-term incentive for their senior managers). They may not get everything right but they are asking the right questions. To make progress on issues like sustainable palm oil production we need the big corporates engaged and we need to reward them for engaging. By buying Unilever brands I can at least be confident that I’m making an above-average choice even if not the best one. (Note I am using Unilever as an illustration - I have not done comprehensive analysis to prove it’s the best option for all consumer goods categories). It is certainly possible to get an understanding of which big consumer goods, clothing, or hotels companies, for example, are most committed to sustainability and to direct custom towards them, by looking at their reporting and third-party sustainability rankings.
Whichever approach you take, a proportionate attitude is required. If you hardly ever buy beer then spending hours finding the most sustainable brewer is probably time wasted.
Sustainability requires us to reflect on our lifestyle
It is impossible to separate our consumption habits from our carbon footprint. Perhaps, one day, all manufacturing processes will be sufficiently sustainable, or carbon pricing will be sufficiently ubiquitous, for us to treat consumption as a purely financial decision. But we’re not there now and so, inescapably, consumption has a moral dimension: our choices can have more than a factor 10 impact on the carbon impact of each pound spent. Everyone needs to make their own choices in this sphere based on a holistic view of their impact on the planet. But we should do so intentionally and with awareness.
The good news is that the more sustainable choices may also be the ones that bring us greater happiness. Something worth reflecting on as we take down the Christmas Tree.
This blog if part of a series sharing our learning and experiences as we adopt a Middle Class Approach to Decarbonisation
By aiming for less asset owners can achieve more as universal owners.