Commerce

21-03-18

Commerce often gets a bad name from environmentalists like myself, but it is important to understand how it functions. Its business is selling things and the more it sells the more income this generates. If what is being sold is fingernail painting, gardening services or book keeping, where there is little environmental impact, fine. If what is being sold are gas guzzling sports utility vehicles (SUVs), large power boats, tropical hardwoods, fossil fuels and holidays in the sun, increased sales are bad news for the planet. From the sales person’s point of view, more is better; from the planet’s perspective more is usually bad.

In the same way that you cannot remove the “wild” from a tiger, you cannot remove the “profit motive” from the entrepreneur.

Benefits from commerce and capitalism

Why we tolerate the destructiveness of capitalism is that it is a “natural” system that has been practiced by our ancestors for tens of thousands of years and is good at linking people’s “wants” with “providers”, via Adam Smith’s “invisible hand”. If someone needs an item, this need is usually supplied by someone often unknown to the potential buyer. Countries that tried to do away with this system ended up with massive inefficiencies coupled with severe corruption.

The challenge for environmentalists and governments is to have a capitalist system that provides what consumers want but without trashing the planet in the process. The capitalist system is very good at year on year improvement in technologies and innovating new and more efficient technologies. The more efficient our technologies the less CO₂ emissions there will be. This aspect is of benefit to us all; environmentalists, capitalists and the planet all stand to benefit.

Where the problem with capitalism arises is when commercial people are involved in deciding changes that impact on the environment. If the government is looking to minimise waste, this is counter to companies’ own aims for increased sales. The company representatives therefore propose policies that promote systems that re-manufacture rather than reuse. Such a policy is unlikely to have the lowest carbon footprint, but the pressure from industry and commerce is likely to rule out lower carbon footprint alternatives.

Life cycle analyses

In the 80’s and 90’s, life cycle analyses, where carbon footprints of a range of options were compared, seemed the answer to these debates. Having personally read many of these, one could anticipate the result before opening the report. With glass bottles for example, if written by the glass bottle industry, it came out in favour of recycling. If Greenpeace or FOE compiled the report, reuse was preferred. Even supposedly independent consultants could engineer the assumptions to meet their clients wishes for a favourable outcome. Since I was not party to the assumptions, I cannot categorically accuse people of acting in this way, but after 40 years of reading these reports I no longer trust any that are written or funded by commercial companies.

Who has the knowledge and is un-biased

Since government action is required to develop future strategies to save the planet, who do they bring to the discussion table? Civil servants, while undoubtedly clever, have little knowledge of commerce, industry and markets. Those in industry have the detailed knowledge but have their own agendas. They also have lobbyists and the money to pay for often considerable amounts of effort and time required to develop policy. Academics have an overview but may not have the detailed knowledge held by those in industry. Environmental representatives have little money and are usually too few in numbers to make an impact. So commerce ends up driving policies. This is the reason that this website does not allow commerce to contribute policy articles.

Recognition of these limitations

Once these limitations and biases have been recognised, the government should ensure that commerce is given less prominence in deciding strategy. There are many people who have been in industries who both know their business but recognise their bias. These people need to be searched for and put on strategy committees. Only then will policies to balance the practicalities of commerce align with the survival of the planet.