The New Consumers

The Influence Of Affluence On The Environment

Norman Myers, Jennifer Kent

• Publisher: Island Press
• Year: 2013
• Print ISBN: 9781559639972
• eBook ISBN: 9781597267861
• Topic: Business
• Subtopic: Business General
• Index: Business

While overconsumption by the developed world's roughly one billion inhabitants is an abiding problem, another one billion increasingly affluent "new consumers" in developing countries will place additional strains on the earth's resources, argue authors Norman Myers and Jennifer Kent in this important new book.

The New Consumers examines the environmental impacts of this increased consumption, with particular focus on two commodities -- cars and meat -- that stand to have the most far-reaching effects. It analyzes consumption patterns in a number of different countries, with special emphasis on China and India (whose surging economies, as well as their large populations, are likely to account for exceptional growth in humanity's ecological footprint), and surveys big-picture issues such as the globalization of economies, consumer goods, and lifestyles. Ultimately, according to the orman Myers and Jennifer Kent, the challenge will be for all of humanity to transition to sustainable levels of consumption, for it is unrealistic to expect "new" consumers not to aspire to be like the "old" ones.

Cogent in its analysis, The New Consumers issues a timely warning of a major and developing environmental trend, and suggests valuable strategies for ameliorating its effects.

CHAPTER I

Who Are the New Consumers?

WE ARE WITNESSING one of the biggest revolutions in history. Something hugely important is afoot in the world, yet many people seem little aware of it. It makes few headlines on television or in newspapers. It does not advertise its arrival, even though it will markedly affect all our lives in both economic and environmental senses.

It is the biggest consumer boom ever known in such a short time. It is not occurring, as might be supposed, in the long-rich countries, but in certain developing and transition countries where over 1 billion people now possess the financial muscle to enjoy a consumerist lifestyle. This is not to overlook that there are also 2.8 billion people in the world who subsist on less than $2 a day, 1.2 billion of them on less than $1 a day. Poverty remains the lot of almost half of humankind. But now, and for the first time, there is a sizeable community of people outside the long-rich countries who have clambered up the ladder into the middle classes and are enjoying a measure of affluence.

Consumption: it’s what we want, all of us. We follow a deep-seated tradition that began 10,000 years ago when people moved on from a hunter-gatherer existence and settled in villages where they began to find ways to expand their lifestyles. It has been a realistic tradition. Until a century or two back, virtually all people have been preoccupied from dawn till dusk and from birth till death in keeping body and soul together. Since they have found it hard to meet even the most basic needs, their credo has been that more of anything must, by definition, be a good thing. Result: a seeking after ever-greater consumption, indeed limitless consumption. To cite the economics guru Adam Smith, “Consumption is the sole end and purpose of all production.”¹

Today’s new consumers no doubt feel they are participating in that same age-old tradition, especially since it reflects the holy grail to which all the new consumers aspire, a Western lifestyle. Also without doubt is that they are consuming as fast and as variously as they can, although most still have a very long way to go before catching up with North American and Western European lifestyles. All the new consumers have reached a level of affluence where they can satisfy not only every basic need but some luxuries as well. Many of them have reached a still higher level of affluence where they can indulge in a lifestyle of outright prosperity. All such consumers enjoy decent diets. They have moved beyond functional clothing to fashionable attire. They purchase throw-away products rather than unpackaged goods. Many of them eschew public transport in favor of the car. The wealthier ones live in air-conditioned and single-family homes rather than in modest and naturally ventilated homes, and in the company of extended or multiple families.² And of course they are wholly entitled to follow their proclivities, provided their consumption does not levy environmental costs that could undercut their prospects for still greater consumption, or the prospects of those fellow citizens who are still trying to set foot on the affluence ladder.

All too often, however, today’s headlong consumption—whether in new consumer countries or, more pertinently, in the long-rich countries—means environmental problems such as grandscale pollution, waste mountains, energy shortages, land degradation, water deficits, even climate upheavals.³ All of us contribute to these problems. A visit to the shopping mall often means more “stuff” with excess piled on excess in the hunt for a life that is better off though not always better. All of us want to put our car on the road, thus adding to traffic congestion and pollution. Even saints produce their share of rubbish. Of course such environmental troubles have arisen chiefly in the so-called developed countries, the ones that have enjoyed fattest-cat lifestyles for decades. The new consumers are doing no more than follow a well-beaten path.

Recall how far our present consumption patterns are unsustainable, and by a long and lengthening way. We already consume over half of all available freshwater. By 2020 we shall have another 1.3 billion people on top of today’s 6.3 billion, all looking for their “fair share” of limited water supplies—and many of them will likely be making still greater demands on every last precious drop. So tough is this prospect that certain policy leaders—not eco-alarmists—anticipate there could be water wars ahead.⁴ We are also consuming or otherwise co-opting so much of Earth’s net plant growth that we leave less than half for the millions of other species. We have degraded 20 million square kilometers of land, an expanse equivalent to more than twice the United States. We are even dislocating our climate systems.

There are many other signs that our consumption is depleting the environmental resource base that underpins all our economies, our societies, our futures. A recent overview analysis shows that in 1960 we were exploiting 70% of our planet’s resources, a figure that by 1999 had risen to 120%.⁵ We are bumping our heads against the ceiling with ever-greater vigor. The Rio Earth Summit in 1992 issued a wake-up call to alert us to the imperative of environmental safeguards, yet by the time of the World Summit on Sustainable Development in 2002 the number of people lacking safe drinking water had risen from 1.1 billion to 1.2 billion, tropical forests were being destroyed faster than ever, deserts were expanding faster than ever, and carbon dioxide (CO₂) emissions had increased by 12%. Plus, the number of people enduring absolute poverty had risen from 1.1 billion to 1.3 billion. True, the annual increase in human numbers had declined from 90 million to around 80 million, but that still leaves a long way to go before we achieve zero population growth.

Of course there is nothing intrinsically wrong with affluent communities consuming a large share of natural resources if those resources remain plentiful and can be recycled. For iron and steel, 85% is consumed by the top 20% of people worldwide, 55% being recycled—and the top 20% do not thereby crucially limit the consumption of poor people. Indeed, the affluent communities’ conversion of natural resources into human capital often enhances human welfare all round. It would be of scant consequence that the average American consumes 80 times as much paper as the average Indian, were the American to recycle most of the paper (at present, only 45%). Much more significant is that the average American consumes 240 times as much gasoline as the average Indian, and thus contributes far more to CO₂ emissions and global warming processes.⁶ The key question is whether consumption uses resources or uses them up.

Overall, then, there is a strong environmental significance to the arrival of the new consumers. To repeat: they are as entitled as anyone to enjoy their newfound affluence. That is a given from the start, and a given to be surrounded with neon flashing lights. At the same time, the new consumers should restrain the environmental injury they inflict on their own countries and those farther afield. Just their cars, one-fifth of the global fleet in 2000 and likely to total almost one-third as soon as 2010, make a sizeable contribution to the atmospheric buildup of CO₂, which accounts for half of global warming. Thus the new consumers have an impact not only on their own societies but on the worldwide community. For sure, the biggest car contribution to global warming still lies with the long-rich countries, and during the 1990s the 43 million additional rich-world people polluted the planet more than the 760 million additional people in developing countries. But the new consumers could heed the many other downside lessons of the car culture in Los Angeles, London, Rome, and other congested cities of the so-called developed countries.

There are further economic costs of consumerism’s spread, even though the new consumers are major drivers of their countries’ economies. Water shortages limit agriculture and industry. Pollution levies its tolls through health problems. There are many other examples, all too familiar. In Thailand’s capital, Bangkok, traffic gridlock with drivers’ lost time and wasted gasoline costs the city’s economy $4 billion per year (though only one-quarter as much as in Los Angeles). There are large costs from road congestion and traffic pollution in many other new-consumer cities such as Seoul, Hong Kong, Jakarta and Sao Paulo.⁷ As the reader will find in this book, the economic downside of runaway consumption is sizeable already, and it is growing bigger fast.

In short, the phenomenon of the new consumers should alert us all to what could well prove to be the biggest challenge ahead: how to achieve ever-greater consumption—or, better consumption of alternative sorts—without grossly depleting the environmental underpinnings of our economies? Fortunately, and as this book demonstrates with examples aplenty, there are a lot of ways we can measure up to the challenge—and we shall surely find it will lead to lifestyles more streamlined and fulfilling than anything we have known to date (plus, a more discerning approach will often put money into our pockets). If we can all—each and every one of us—contain and eventually reduce the adverse impacts of consumption, that could well rank as the finest environmental success story to date.

Definition of the New Consumers

Before we consider the degree of affluence that defines the new consumers, we shall look at a couple of economic factors that are crucial to the entire reckoning. First is the historical yardstick of Gross National Product (GNP), reflecting the economic value of all goods and services produced in a country, and thus serving as a very rough indicator of how all the country’s citizens are faring. In recent years the GNP label has been widely replaced as an economic measure by Gross National Income (GNI).

Secondly, GNP and GNI have traditionally been expressed in conventional or international-exchange dollars, which have failed to reveal true purchasing power. An alternative and more realistic measurement is “purchasing power parity” (PPP) dollars,⁸ which in 20 select countries (see table I.1) are between 1.4 and 5.2 times greater than conventional dollars. In India, for example, per-capita GNI in 2002 was a low $480, but in PPP terms it was $2570, a reflection of the lower cost of goods and services in India relative to the United States. In other words, $480 in India would buy purchases worth almost $2600 in the United States. At a New York supermarket a banana may well cost 25 cents, but on a New Delhi street the same sum would purchase half a dozen bananas. A New York taxi ride for $5 would take you only a fraction as far as its New Delhi counterpart.

Thus the PPP adjustment provides an indicator of people’s well-being that is comparable across countries, free of the exchange rate and price distortions that arise when GNI is converted through conventional international-exchange rates. In China the 2002 figures were $940 and PPP$4390, in Brazil $2850 and PPP$7250, and in Russia $2140 and PPP$7820. Conversely, in many countries of Western Europe, also Japan, with their higher costs of living relative to the United States, GNI/PPP can be lower than GNI converted at conventional-dollar rates. In Switzerland the figures were $37,930 and PPP$31,250, and in Japan $33,550 and PPP$26,070. A conventional-dollar assessment shows that in 2002 an average Japanese was 36 times richer than an average Chinese, but PPP-based figures show that he or she was less than 6 times richer.⁹ Whether in conventional dollars or PPP dollars, the United States remains the world’s biggest economy, but the PPP reckoning means that China jumps from sixth to second and India from eleventh to fourth. Whereas Indonesia and Turkey do not make the top 20 economies in conventional dollars, in PPP dollars they are fifteenth and nineteenth (see table I.1).

Now to define the new consumers. They are people within an average of four-member households who possess purchasing power of at least PPP$10,000 per year, or at least PPP$2500 per person. These cut-off figures may seem a trifle arbitrary, but they are no more so than a parallel categorization in developed countries. These countries’ governments have long divided their citizens into socioeconomic classes known as A, B, C through to F classes that roughly correspond to rich, upper-middle, middle, lower-middle, low and lowest classes. While such classifications may seem to some eyes as if they have been plucked out of the air, there is much sound analysis behind them, and in any case they are necessary for all manner of national planning purposes.

There are other considerations in support of the figures defining new consumers. While they are a tad too technical to be dealt with here, they are available to the interested reader in appendix A.

The PPP$10,000 household level is a minimum estimate, and most new consumers possess purchasing power way higher, often several times more. The basic figures are used here because they mark the rough stage when people start to engage in a distinctly middle-class lifestyle. As people climb the income ladder, they buy televisions, refrigerators, washing machines, air conditioners, and electronics such as hi-fi equipment and personal computers, among other perquisites of an affluent lifestyle. They shift to a diet strongly based on meat, especially grain-fed meat. They consume large amounts of water, not only in their homes but via grainland irrigation. As they clamber still farther up the income ladder, they buy cars, often the fancier models.¹⁰ Many of these purchases carry only moderate environmental impacts, but it is electricity-driven household appliances, meat, and cars and that spell the biggest environmental trouble.

TABLE I.1: The World’s 20 Largest Economies in 2002

Note the particular impact of cars. As mentioned, the 1.1 billion new consumers in 2000 possessed one-fifth of the global fleet, or 125 million cars. The recent growth rate has been so high that by 2010 they could have 250 million cars, or almost one-third of the global fleet. Between 1990 and 1997, CO₂ emissions from the world’s motor vehicles, of which cars made up three-quarters, increased by one-quarter, four times faster than CO₂ emissions from all sources. Cars are expected to make up the fastest growing sector of energy use as far ahead as 2025.¹¹ They also cause much local pollution and severe road congestion among other problems.

For sure, the pattern of consumption varies from country to country, just as the amount of consumption varies according to the amount of income and spending power. But the picture above serves to reflect the situation in new-consumer countries as a whole. On the basis of the first author’s travel and work in dozens of countries around the world during the past four decades, the picture can be taken to be simplified without being simplistic. A more accurate cut-off level could turn out to be rather more, whether for households or individuals. But the estimates of PPP$10,000 and PPP$2500 are supported by much on-the-ground evidence, and they seem acceptable for present purposes. Moreover—and to reiterate a crucial point—the cut-off levels cited are minimum levels, and most new consumers receive incomes a good deal higher, some enjoying incomes several times higher.

This latter factor...

Table of contents

• About Island Press
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• Table of Figures
• Preface
• CHAPTER I - Who Are the New Consumers?
• CHAPTER II - Cars: Driving Us Backwards
• CHAPTER III - Meat: Juicy Steaks and Hidden Costs
• CHAPTER IV - Further Resource Linkages: Household Electricity, Eco-Footprints, and Human Numbers
• CHAPTER V - China: A Giant Awake and Roaring
• CHAPTER VI - India: The Second “Biggie”
• CHAPTER VII - The Big Picture of 20 Countries
• CHAPTER VIII - Sustainable Consumption: Where Do We Find It?
• CHAPTER IX - Sustainable Consumption: How to Get from Here to There
• APPENDIX A: - GNI and Its Shortcomings
• APPENDIX B: - Four Outlier Countries
• Notes
• Index
• Island Press Board of Directors