Minimizing CO2-emissions per unit of happiness

Transcription

1 Minimizing CO2-emissions per unit of happiness Patrick Hofstetter, BAO, Zürich Toshisuke Ozawa, AIST, Tsukuba The 2nd International Workshop on Sustainable Consumption, Tokyo, organized by SNTT and AIST in cooperation with METI and UNEP December, 2003

2 Alternative A Alternative B Environmental impacts per functional unit 10 points 5 points Spent time per functional unit Total 24h/day 3h 1h Costs per functional unit Disposable Income 5% 10% Number of functional units consumed per household?? Time effect? Income Effect

3 Review of Studies on Direct Rebound Effects due to energy savings Private Consumers Space heating 10-30% Space cooling 0-50% Water heating <10-40% Lighting 5-12% Appliances 0% Automative transport 10-30% Firms Process uses (short-run) 0-20% Lighting (short-run) 0-2% Long-run aggregate impacts 0-<100% (Greening et al. 2000)

4 Rebound effects (back fire, take-back, offsetting behavior): Direct Rebound Effect (substitution effect, pure price effect): Greater efficiency may lead to a lower price of the service (or product or technology) which in turn may induce an increased use of this cheaper service. Indirect Rebound Effect (income effect, secondary effect): If prices of other commodities and income are constant, the reduction of costs for one commodity due to a particular efficiency increase implies that consumers have more money to spend on other goods. General Equilibrium Effect (economy-wide effects): The direct and indirect rebound effect lead to changed prices and consumption throughout the economy, which may increase or decrease production in distant sectors and changes the production functions. Transformational Effect: This includes changes in consumer preferences, alteration of social institutions, and the rearrangement of the organization of production. (Greening et al. 2000, Binswanger 2001)

5 Limiting factors that explain rebound effects Price Time use Space use Required skill level Need for information Other direct resource use

6 Figure 5-3: Energy intensities of selected household activities of two-person households in Finland in (excluding attributable travel and heating). (Jalas 2002a)

7 Two hypothetical examples to explain time rebound effects Jalas 2002

8 "..men are continually in competition for honour and dignity". Our truly final demands are "striving for power, prestige, and respect, the maintenance of old friendships and associations and the cultivation of new ones, participation in public affairs, and - why not?- the pursuit of achievement, truth, creativity, and salvation. Thomas Hobbes ( ) cited in Hirschmann (1973)

9 The struggle of means and goals Major question in sustainable consumption: How to achieve our goals and increase ultimate utility in a world of limited personal and environmental resources?

10 Addressed shortcomings of available assessment methods: 1. Changes in consumption do not come ONE by ONE. Changes come in patterns => Analyze change in consumption patterns due to new activity. 2. If a consumed service/product does not satisfy this may stimulate additional unsustainable consumption. Increasing ultimate utility of individuals: - improves Quality of Life (QoL) - may make people adopting new acivities more easily (acceptability) - may reduce compensative consumption - may serve as new functional unit

11 Are people happier during activities with high energy consumption? Main happiness level male total female 0.8 Activities: daydreaming sozializing hobbies playing sport sexual activities Activities: going to a movie reading a book listening to music playing a musical instrument entertaining guests at home attending a sporting event, concert etc. Activities: TV watching reading a newspaper shopping (pleasure) going to a restaurant disco etc. Low BTU (0-5) Medium BTU (6-40) High BTU (41-200) Energy consumption (as measured by the estimated BTU consumption per year (Graef et al 1981)

12 The whole economy of human society is based on one general and simple principle: I want to be happy. French Encyclopedist Denis Diderot ( ) cited in Elchardus (1991)

13 Candidates to serve as measure of ultimate utility: Quality of life The good life Flow state Satisfaction Subjective well-being Happiness Happiness is among the well-studied concepts that can directly be used for our purposes.

14 Two hypothetical examples to explain time rebound effects Jalas 2002

15 Predicting shifts in consumption patterns Move from attributional to consequential analysis Question: What is the net sustainability effect if an individual adopts a new (recommended) consumption activity? What we need to know: - Substituted consumption activities - Triggered additional consumption activities - Consequences on the economic system - Resulting sustainability impacts

16 Partial equilibrium model on the micro level (1) What we need: - Elasticities on the level of consumption activities - Computable general equilibrium model of the economy including environmental, societal, and social impacts - Prediction on changes in net happiness/life satisfaction

17 Partial equilibrium model on the micro level (2) What we use: - Longitudinal panel data in order to derive elasticities (=quantify expected shifts in consumption patterns) - I/O-Analysis and process analysis to assess attributional environmental impacts (=hybrid analysis) - Longitudinal panel data and literature survey on observed changes in happiness/life satisfaction

18 Time elasticities: Time elasticity A->B = time use of activity A time use of activity B Longitudinal panel data allows to -calculate time elasticities, and -control for reverse causation

19 Computer use not know n Doing nothing Reading new spapers, books, magazines Radio, TV, video etc. hobbies, games etc. Telephone calls computer other computer www computer games Playing sports, w alks, outings Visits to friends houses, being visited Social life, 'going out' Sleep and personal care Time units (e.g., minutes) Gershuny 2002

20 Internet use not know n Doing nothing Reading new spapers, books, magazines Radio, TV, video etc. hobbies, games etc. Women Women&Men Telephone calls Playing sports, w alks, outings Visits to friends houses, being visited Social life, 'going out' Sleep and personal care Time units (e.g. minutes) Time budget changes due to the increase in Internet usage for women versus women & men (Gershuny 2002)

21 The Japanese Panel Survey of Consumers (JPSC) data from the Institute for Research on Household Economics (IRHE) of Japan. Table. Characteristics of data dealt for this study. Panel Number Survey Year Number of Samples Married Single Total Actual Sample Number dealt for this study Age range at the time of survey Panel 5 A Panel 5B Panel 6A Panel 6B Panel 7A Panel 7B

22 Four Examples of Adopting New Technologies and Products (1) Automatic Dishwasher (2) Cloths Dryer (3) Personal Computer (4) Mobile Phone

23 The Approach Computer user NN NY YY YN 1998 no no yes yes 1999 no yes yes no Table. Example of items for statistical analysis NN NY YY YN N = 900 N = 177 N = 295 N = Consumption Patterns Household Spending Time-use Possession of Goods Happiness Life Satisfaction

24 Could sustainable consumption make happy? -Materialistic persons are often less happy than non-materialistic persons. => There are no inherent barriers to maximize happiness and minimize environmental resource consumption -Active participation is in most of the cases related to the involvement of psychic energy and a predictor of happiness. =>Identifying activities where (psychic) requirements are high and energy consumption is low may serve as models for sustainable consumption. BUT Most studies refer to correlation. Causality may go in both ways!

25 Concluding remarks Maximizing ultimate utility per unit of net CO2-emission - avoids sub-optimization, and - offers insights into win-win strategies Suggested approach depends on good longitudinal panel data Japanese project is unique opportunity to develop approach and explore its feasibility For further information: patrick_hofstetter@yahoo.com