Will Shrinking Our Wealth Shrink Our Footprint

While on a recent trip to Mumbai, I found myself stuck in a traffic jam. Nothing unusual about the traffic jam, but unusual was to find my compact taxi surrounded by three luxury cars. This strange congregation of cars was a reflection of the change India has seen in the last decade by generating immense amount of new wealth. This prompted the driver to break into a conversation. He sighed with a little frustration on not being able to move and remarked,” Saheb (for Mister), you know these rich guys sitting in these big cars, they must have spent millions to buy large apartments in high rise towers, and their homes must be stuffed with all kinds of expensive items, but still unsatisfied, they come down in their big cars and jam the roads. Why don’t they enjoy their large air conditioned apartments and leave the roads for the taxis.” (This sentence has been edited for a few abusive words which show his level of frustration).


It took me a while to understand the real meaning of what he meant. This uneducated (this I found in further conversations along my trip) driver had understood the crux of our problem, which is our ‘consumption footprint’. And as the world economies are generating more wealth, lead by the Asian economies, their environmental footprint is swelling tremendously. In 2007, China overtook USA to become the leading emitter of carbon-di-oxide in the world, much faster and earlier than anyone had predicted.

The relationship between increased wealth and consumerism is a no brainer. When we have more money, we will spend more. A report published in Women of China magazine shows that Chinese women (in 10 Chinese Cities) spent 63% of their income on shopping last year as opposed to spending only 26% of their incomes in 2007. I left India for higher education almost 7 years ago. And in this short time, most middle class urban families now have homes that are air conditioned, equipped with flat screen televisions, dvd players and music systems, have multiple cellphones, own a car or two and travel on vacations more often. Even though the cars have become more fuel efficient with stricter emission norms, but their numbers have risen phenomenally keeping the city air quality still at dangerous levels. I on the other hand have moved across three countries in this period of time and have tried to keep my consumption similar as before. However, my footprint has still increased substantially on a per capita basis by living in consumption oriented economies. My ecological footprint increased by 11 times when I moved from India to the United States and is currently 5 times that of India when I am in Singapore.


The point is that as consumption increases, production follows to fulfil the demand. Environmental degradation is an externality of this process of consumption and production. The most visible of this externality is the increased deforestation and industrial pollution. According to a study by Norwegian University of Technology, a 100% increase in per capita expenditure, increases the CO2 footprint by 81%. In a world where a mere 2% of individuals hold more than 50% of the global wealth ( 2006 study by the World Institute for Development Economics Research of the United Nations University), imagine their environmental footprints and the impact of which is borne most by the poorest 50% who own only 1% of the global wealth.

Now, the other side to this is the book titled Hard Green: Saving the Environment from the Environmentalist: A Conservative Manifesto. Published in 1999, Peter Huber’s hypothesis is that wealth leads to environmental conservation. According to him, this is primarily achieved because wealthy nations and wealthy individuals spend their money on environmental conservation. There can be some degree of truth here, but the fact remains that the spending on environmental conservation comes only after one has amassed the wealth through production processes which are environmentally damaging. A recent list by CNN on top 10 green corporate giants has Honda, Continental Airlines and Suncor on top. CNN defines these as firms that have gone beyond law and reulation to operate in an environmentally responsible way. The irony is that all these firms for decades have either produced energy in a harmful manner or have given us options to consume the same by causing environmental damage. Taking similar analogy forward, the United States has for decades enjoyed a lifestyle of extreme consumerism and has been the biggest contributor to environmental harm in the world. At the same time, it has come to establish a system of environmental laws which are amongst the most stringent in the world and has institutional bodies that are leading global research on eco-friendly technologies. India, China and other growing economies are going through a similar cycle of generating wealth and increased consumerism. As per Huber’s hypothesis, they may someday in future start to spend a fraction of their wealth towards environmental conservation and mending the damage to the planet. A recent study by the National University of Singapore rates Singapore as the worst environmental offender amongst 179 countries. According to the study, in past 30 years of economic growth in Singapore, it has lost 90 percent of its original forest cover, 67 percent of its bird species, about 40 percent of its mammals and 5 percent of its amphibians and reptiles. At the same time, Singapore is also a model for other global cities for sustainable development with its affordable public housing, greenery, cleanliness, efficient public transportation system and high quality of life.


Can the entire world afford to take the same path to development which the countries in the past have done? In 2008, 1.2 billion people resided in regions defined as more developed by the United Nations. We know what has it cost the planet earth to give these people their current lifestyle. Can the remaining 5.5 billion people go through the same cycle of consumption, production and environmental damage? Many like me fear the consequences of our aspirations. Should we then stop generating new wealth and let the world be in a status quo of rich being rich and poor being poor? Or should we all start to get poorer and arrive at the threshold of sustainability? None of these are correct answers and possibly there isn’t one. There may be a way out if we can redistribute our wealth and overcome our desires to consume.

Credits: Mumbai Traffic image by tr!ckster. http://www.flickr.com/photos/patrick_tully/277283831/sizes/o/in/photostream/