DEMANDING CHANGE
BY CHANGING DEMAND

Contents
Foreword
Natasha Parker

3Part one: A turning point in globalisation
Andrew Pendleton

4Part two: Let them drive Teslas
Larissa Lockwood and Andrew Pendleton

9Part three: Wellbeing and the psychology of consuming less
Natasha Parker

14Part four: Global justice - shifting the scale of consumption
Jo Michell

22

Part five: The point of turning
Andrew Pendleton

27

Authors32

Foreword

An economic turning point
Humanity is facing a perfect storm of events that are contributing to a decline in living
standards and higher inequality at a time of acute, urgent ecological crisis. We need torestructure the economy to ensure our use of resources is within the earth’s limits, reduce
inequality and improve living standards for those who face intolerable choices.
With so many inter-related ways that large groups of people in the post-industrial anddeveloping world are being negatively impacted by the current economic system, thismoment could provide a once-in-a lifetime opportunity to challenge the status quo andrethink demand.
The diverse and burgeoning
New Economics movement has
provided a plethora of policy
options to drive change. Many ofthese are focussed on production
rather than consumption, but
policy and narratives must focus
on both. Because unless wechallenge and shift the cultural
norms and values ingrained in ourcollective psyche, policymakers
are likely always to be cowed bywhat they will perceive as a lack ofpublic consent for change.
Such a complex task requires a myriad of skills and expertise. Global Action Plan is readyto play its part and calls on the campaigning community to join forces to create real,systemic change that could benefit so many and sustain our living world.
In part one of a short series, Andrew Pendleton, Global Action Plan’s Deputy CEO and
Director of Strategy, looks at the nature of the crises we are facing and how they promisea shift in demand across the economy.

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A turning point inglobalisation
The cost-of-living crisis is a moment of reckoning for the model of economic globalisationthat has dominated since finance and trade were liberalised in the 1980s and 90s.
The pandemic and Putin’s brutal invasion of Ukraine are twin spotlights, illuminating andexposing the fragility of what Harvard economist Dani Rodrik calls hyper-globalisation– the phenomenon in which the imperative to globalise conflicts with democracy, social
inclusion and local and national desires for self-determination. This moment of reckoning
comes at a time of planetary emergency.
In truth, commodity, labour, energy and transport costs were never going to be cheap,
and interest rates never low, forever, for all the reasons Rodrik and others cite. Also
because of our failure to factor in the full ecological costs of globalisation, including thedamages our actions hitherto have baked in, the costs have always in truth been muchhigher.

Common to all the causes of the cost-of-living crisis – which should caution anyone
who yearns after a return to normal – is that none of them are going to be fixed quickly
or perhaps ever. Arundhati Roy’s brilliant portal metaphor for the pandemic holds eventhough it was conceived of in the early days of 2020. The hyper-global phenomenon of
the long, international supply chain – with products criss-crossing borders and regionsthat often humans are forbidden or lack the economic resources to cross – now appears
especially fragile.
The result is high and rising inflation, already at 9% and expected to go higher still, to
11% by October 2022. This may subsequently level off, but the gap between prices andwages will almost certainly remain, leaving most households permanently worse off.
That’s no cause for celebration in consumption and ecological resource use terms.
4What it will do is push excess-consumption further up the income distribution and leave
more and more households under-consuming essentials. Unless government respondswith fiscal and strategic policy, it will also reduce investment for structural changes thatpermanently shift consumption away from high ecological impact and carbon emissions.
Similarly, the hammer of interest rate increases with which national policymakers haveequipped themselves, means all inflation still looks like a single nail, when it’s currently
more like a house of cards. Central bankers are faced with a paradox in which the levelof increases in interest rates that may be needed to make a meaningful dent in inflation
are likely to intensify the pressures faced by households and business and, of course,
increase pressure on government budgets at the same time, stifling an urgently-needed
debate about fiscal policy.
And yet, if it is the beginning of the end of economic hyper-globalisation as it was forgedin the era of the Washington Consensus, the questions this moment begs – in the context
of heightening ecological emergency in which a return to normal is neither possible nor
desirable – are what comes next and how can that help us reduce inequality and pressure on the planet’s resources?
The answers are for us to shape, but left as it is – or after a few more blows of thehammer – our economic path dependency will produce an answer that exacerbates
inequality and drives us deeper into the climate crisis. There is no one – not even thehyper-global super-rich – for whom that is the right answer.

5

A crisis of inequality
The pandemic and its aftermath have not proven levellers; inequality has increased.
The poorer half the country was £110 a year worse off in 2021 than in 2019 while thedisposable incomes of the richest 5% grew by £3,300. This, on top of already gross prepandemic inequality – in which average household disposable incomes in many parts of
the UK were already chronically low – means the UK is entering the cost-of-living crisis
with vast numbers of households hugely vulnerable to price increases.
Energy costs are driving up prices across the economy much faster than wages. But
even before the increase in the energy price cap, around one-third of adults living in
England’s most deprived areas reported that it was difficult or very difficult to pay all theirbills. Families – households with two, working-aged adults and dependent children –now need to earn at least £33,325 to make ends meet.
What this means is that, as the Resolution Foundation has pointed out, real incomes will
be lower by the end of this current Office for Budget Responsibility forecasting window(in 2026-27) than in 2021-22. That’s half-a-decade of lost living standards; intolerable ineconomic terms and almost certainly politically.

6

A crisis of ecology
The crisis of rapidly rising prices comes at a time of acute environmental crisis, which is
caused by humanity’s overuse of ecological resources. The best-known dimension of thiscrisis is climate change.
Ironically, the cost-of-living crisis is being driven
by the rising price of oil and gas and yet thewindfall profits in the sector, and the emerging
geo-politics, are also providing an incentive
for oil and gas firms and governments to dig
deeper into reserves of fossil fuels precisely
when we need to be extricating ourselves fromtheir use altogether.
Hot on the heels of the climate crisis are those of
the overuse of natural resources, pollution andnature depletion, which are all interconnected.
Calculating humanity’s total ecological footprint
is an imprecise science, but the data compiled annually from national level accounting
by the Global Footprint Network is perhaps a useful rule of thumb.
It suggests that globally we are using more than 1.5 planets’ worth of natural resources
each year. Some think this is an underestimation because it’s based on available areasof land and sea to support the human population, but may not properly account for the
space that nature needs to flourish in order to reverse biodiversity loss.
Assuming global estimates of humanity’s footprint are broadly correct – or that things
may be even worse than we think – then the need to reduce our use of resources acrossthe board is urgent. For this reason, the fragility of the low economic (but high ecological)
cost supply chains and complex logistics of hyper-globalisation – their inability to passthrough Roy’s pandemic portal – offer us a point of inflection.
The underlying, ecological truth is that we need to restructure the economy around theprinciples of low resource use, low pollution and in a way that allows nature the space
to flourish. But we also need to re-structure the economy around the ‘foundational’ or
everyday goods and services that will improve our economic security and our mental
and physical wellbeing. These include health, care, mobility, better food, secure housing,clean energy, information and technological access.
7

At a time when we need to rethink demand – because too many people will be sufferinga mismatch between covering their basic expenditure and their incomes – there is aonce-in-a-generation opportunity to align the interests of the economy, people and theplanet. But this can only be done by responding to the inequality and ecological crises
concurrently.

Three Pillars of Change
Change will not come about on
its own. In fact, with divisive social
media platforms turbo-charging
consumption and tearing open oursocietal and cultural differences,the chances are that left to the‘invisible hand of the market’ orwhatever other unseen entity wehope will save us, the structureof the economy around us will
merely follow the pathway of highecological harm upon which it has become dependent.
An economy in which demand meets the needs of human wellbeing within ecologicallimits can only be brought about if we build three pillars of change concurrently.
1. An active state: Unless states take an active role, using fiscal policy and industrial
strategy to reshape demand and building a transitional structure of welfare and support
to help households and communities through, there is little chance of creating theconditions for the shift that is needed.
2. Corporate Leadership: Businesses alone and together must build and deliver newmodels of enterprise that not only dramatically reduce the use of ecological resources
but also offer households and communities a fairer share of the proceeds of adding
value, through boosting wages, paying full taxes and enhancing rather than denuding
the places in which they operate.
3. Normalising Change: We need to lead with solutions, tell stories and build a narrativeof change, harnessing the power of influencers and championing wellbeing-rich,sustainable models of demand.
Ultimately, though policy and practice are key, underlying it all is a philosophical shift; aliberation from the drudgery and relative powerlessness of the role of consumer to one inwhich we are active citizens, shaping the economic system to enhance the health of ourplanet and ourselves.
8Part two: Let them drive
TeslasFossil fuels – cheap for decades, and a cornerstone of globalisation – have become
expensive, taking a disproportionate bite out of wallets directly and pushing up prices
across the economy.
With Putin pushing ever harder into Ukraine, there is no immediate prospect of oil andgas becoming cheaper and while the full impact of fuel poverty is due to hit in autumn/
winter when we turn our heating back on, the impact of mobility poverty is already beingfelt.
It now costs £100 to fill up the fuel tank of an average car. Consequently one in fivepeople are now driving less, which should have benefits for air quality and climatechange, but is also likely to be coupled with people not being able to access the jobs,
education or services that they need. No mobility is no replacement for ecologically costly
mobility.
This is because we are locked into a system whereby our way of life is dependent not
only on fossil fuels to get us around, but on the use of private vehicles. In a carbon
constrained world where more people die from air pollution than malaria, HIV/AIDS andmalnutrition combined, we need to free ourselves from oil as the main transport fuel, butalso use the technologies that replace it with much greater efficiency.
Part of the answer is electricvehicles, which certainly have avery important role to play. They
offer substantial benefits for local
air quality as well as being crucial
in the fight against climate change,
especially if we are successful indecarbonising the electricity grid.
But swapping private petrol anddiesel vehicles for EVs is only part of
the answer. Because we also haveto decarbonise domestic heating,largely by fitting electric-powered
heat pumps, and electrify industrial
processes.

10And while it’s true that, connected to a smart grid, EVs can also be viewed as a large,
distributed, depository for storing renewably generated electricity, we have to think very
seriously about efficiency; more efficient vehicles and the electrification of buses to carry
more people for less per capita energy use. And yet almost half of all new vehicles andmore than half of all EVs sold in 2021 were SUVs, which use around 20% more energy
than ordinary cars.
From a climate change point of view, even if all new vehicles sold by the end of thedecade are EVs, we would still need to cut overall car mileage by one-fifth to stay withinclimate targets.
Technology is therefore not the only – or even the most important – change. And during
this cost of living crisis, even more efficient electric cars won’t help as being asked toswitch to an EV is akin to being told to eat cake by Marie Antoinette. So while technology
and efficiency are important, the crisis offers an opportunity not just to replace one
vehicle for another but to transform the whole system of mobility, replacing car journeys
with rail, bus, walking and cycling.
Thankfully this paradigm shift requires doing things that are already commonplace inother countries and that also offer a better quality of life: one with cleaner air, fitter andhealthier bodies and minds and a greater sense of community.
These include:• Walking and cycling: We all know they are good for us. But to make this the default
option for every journey under 5 miles, we need safe pavements, road crossings andcycle paths.
• Integrated public transport: One reason why car ownership is lowest in Nottingham,
London and Manchester is because these cities offer decent public transport.
• Hybrid working: after years of workplaces telling us “oh, we could never dovideoconferences and working from home, it just wouldn’t work,” in May 2020 wefound that over 40% of people were now working from home and that the vast
majority wanted to continue to do so in some form.
• 15-minute cities: a fantastic framework to develop communities where access towork, services, shops and leisure facilities are accessible within a 15 minute walk or
cycle.

11

Where is this already happening?

Berlin - Integrated public
transport
UK Wide - Hybrid working.
Over 40% of people working
from home in May 2020
Paris - 15 minute cities
Work and leisure accessible
within a 15-minute walk or
cycle

Bogota - Walking and cycling
Safe pavements, roadcrossings and cycle paths.

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These approaches may sound obvious and common-sensical, but beyond large city
centres where public transport is often more comprehensive and many services arewithin easy reach, the past few decades have seen us locked into car dependency. So
we need a system-wide change; as individuals, while some can choose walking andcycling, this may be unfeasible for many and so we need to find solutions first.
When one-in-five people may already be driving less – almost certainly because ofaffordability – now is the time to shift demand for mobility from private, fossil-poweredcars to excellent public transport and much easier and safer walking and cycling. This
is not only good for our own health and that of the planet, it will also help keep people
mobile during the cost of living crisis or, in the case of supporting more home working,able to work without being mobile.
We shouldn’t need to own a car to live a fulfilling life. We should be enabled to access
what we need closer to home and to get there under our own steam rather than buying
and burning fossil fuels. Walking, cycling, working from home and affordable public
transport should allow everyone to make savings on their cost of living, and investment
in infrastructure to facilitate this should stimulate the economy. While for some it might
be desirable – and eminently affordable - to drive a Tesla, for the majority the priority is tolive in places where mobility is easy and cheap and the air is clean.
With the burning of fossil fuels in urban areas, we cannot safeguard people fromthe significant health risks of air pollution, let alone tackle climate change. A policy
framework for systems change that not only hastens the shift to electric vehicles, but also
drives vehicle efficiency and provides easy and cheap public and active travel options
for people as a priority, is essential. But as we’ve seen in recent months with Low Traffic
Neighbourhoods, if policy moves too quickly and in advance of public attitudes andpeople’s consent, then there can be a backlash. Avoiding this, by engaging with people
in solving air pollution and on its public health risks and normalising change, is a must.

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Part three: Wellbeing
and the psychology of
consuming less

The current structure of the economy has delivered a decline in living standards for many
and a concentration of wealth and resources for a minority. While in this cost-of-living
crisis an increasing number of families are suffering the indignity of under-consumption,
the economic model upon which globalisation is based, which is reliant on very highvolumes of consumer goods, is destroying the living world.
The wellbeing of everyone is threatened by our climate and ecological crisis so as wellas improving the quality of life for those who don’t currently consume enough, we alsoneed to shift the nature of demand across the economy in ways that collectively fewer
resources are consumed and, as Global Action Plan’s vision states, we can live happy
and healthy lives within the available resources of the planet; living in any other way is
an illusion.
Currently no country on earth meets the wellbeing needs of its population without
breaching planetary boundaries. Globally we have already overshot 6 of the 9 planetary
boundaries. As Kate Raworth’s Doughnut Economics model highlights, there is atheoretical safe space for humanity where we can meet the wellbeing needs of all
without overshooting planetary boundaries but this will require some serious shifts to theway in which demand is shared out across the human population.

The Doughnut of social and planetary boundaries.
Credit: Kate Raworth and Christian Guthier. CC-BY-SA 4.0
Citation: Raworth, K. (2017), Doughnut Economics: seven ways to think like a 21st century economist. London: Penguin Random
House.

15

There is a strong link between levels of household wealth and consumption, healthand happiness, but only up to a point. So the prize of ensuring everyone can consume
enough to experience better health, longer life expectancy, better security and greater
dignity is great. But equalising consumption within planetary boundaries also requires
some serious structural changes in patterns of demand across the economy, which will
require some households to consume less and be willing to make this shift. It is easy tomake the case to “level up” but how on earth do we convince anyone they need to “leveldown”?

Who needs to consume less?
The so called polluter-elite (the wealthiest1%) are responsible for more emissions
than the poorest 50% of the world’s
population. This group will have to be
encouraged, persuaded, incentivised andforced to make the biggest reductions totheir consumption (by a factor of 30 to stayin line with a 1.5 degree world by some
reports).
But, according to the recent 1.5 degrees lifestyle report, developed countries need toreduce lifestyle carbon emissions by 60-80% by 2030 and 80-90% by 2050. Income andwealth are the primary drivers of how much we consume and the best predictors of ourecological footprint. However, to many policymakers, persuading better off households toearn or retain less and consume less sounds like a probable career death sentence. But
it need not be.

Does less consumption actually lead to more wellbeing?
The Easterlin paradox demonstrates that over the long term, at a national level, increases
in a country’s wealth are accompanied by a sharp rise in wellbeing up to a certain point.
But once the basic needs of a population are largely met (food, water, sanitation, housingetc) additional rises in GDP have diminishing wellbeing returns. Wealthier nations arehappier than poor nations, but subjective wellbeing has increased very little over the lastfew decades in richer nations despite substantial economic growth.
Psychological research demonstrates that, beyond a certain level, economic factors area less reliable predictor of individual wellbeing. An increase in income from £20,000
per year to £40,000 per year will have a significant impact on wellbeing as basic
physiological and security needs are more comfortably met, while an increase from£100,000 to £120,000 would have minimal impact on wellbeing, if any.
Being able to meet our basic needs is foundational to wellbeing. If we are hungry, cold,
16

insecure and worried about paying our rent it is hard to think of much else. Our anxiety
levels rise and these deficits cause psychological and sometimes physiological harm –not to mention the raft of social harms exacerbated by poverty. When these deficit needs
are initially met this causes immense relief and a sustained rise in wellbeing. But once
these needs are consistently met we barely think of them and more of them doesn’t
increase our happiness.
To improve our happiness, research shows that an improvement in our material
circumstances does surprisingly little. There are a number of reasons why consuming
more (once basic needs are met) has minimal impact on our wellbeing.
1. Hedonic adaptation - We humans are just very good at getting used to things. We
save up to get a new car and hope that it will add some much needed excitement toour lives. And it does for a few weeks but soon it just becomes “the car”. It needs aclean, the tax needs renewing and the kids have left sticky sweets in the back again.
Its shiny newness has worn off. This psychological process is a dream for advertisers.
To help us along the road to hedonic adaptation to our iPhone 10 all they need to do
is show us the shiny new iPhone 11 and the hedonic treadmill continues. Now thatphone really will make me happy.

2. Status anxiety – we all want other people to view us positively and to feel a sense of
self-worth and that we’re doing “ok”. We can’t help but compare ourselves to others
but as our lot improves, we move to the bigger house in the better neighbourhoodand our social comparators change. In the age of social media, we are no longer justkeeping up with the Joneses on our street, we are keeping up with the likes of the
Kardashians. We find ourselves engaged in a psychological arms race to make sure
we’re on trend, looking fierce, up with the latest tech and not getting left behind. But
it’s never enough. We can never relax.
3. Many goods sold do nothing to meet our real needs. Economist Manfred Max-Neef
describes how advertising preys on our real needs – e.g., for connection, identity,
freedom – but the goods do little to actually meet those needs. He describes themas pseudo-satisfiers. McDonald’s adverts promise us joy and connection but that Big
Mac just doesn’t deliver, SUV adverts promise us adventure and freedom but we end
up stuck in traffic jams, polluting our own neighbourhoods, and wasting time as we
struggle to find somewhere big enough to park.
17

2. Crowding out real needs – Far from meeting our psychological needs, psychologist
Tim Kasser points out that focusing our time and energy on earning and consuming
more actually hinders wellbeing, as the time we spend pursuing materialistic goals
distracts us from pursuing the types of goals that genuinely meet our psychologicalneeds. For example, spending a Saturday afternoon in a shopping centre won’t havethe same wellbeing benefits as spending a Saturday afternoon playing football withfriends. Working overtime to afford that SUV means less time with family and being
home to read a bedtime story to your kids.

“People don’t need enormous cars, they need admiration and respect. They
don’t need a constant stream of new clothes; they need to feel that others
consider them attractive, and they need excitement, variety and beauty… A
society that allows itself to admit and articulate its nonmaterial human needs,
and to find nonmaterial ways to satisfy them, would require much lower
material and energy throughputs and would provide much higher levels ofhuman fulfilment”.
- Donella Meadows

So what does make us happier?
For those who have their basic needs comfortably met – and for those making policy toshift patterns of consumption – the evidence from psychology and wellbeing literatureshows that there are ways we can continue to increase wellbeing without excess
consumption.
Wellbeing researchers suggest that for sustained improvements to our wellbeing weare much better off working on our attitudes and daily activities than on improving
our material circumstances. A useful summary is provided by the New Economic
Foundation’s 5 ways to wellbeing, grounded in psychological research into what has thebiggest impact on our wellbeing (again, once basic needs are met).

18

Connect – having good quality relationships and frequent social interaction is essential
for psychological health. Whether it’s a deep and meaningful chat with your bestfriend, or a friendly chat with the local shop assistant. We are deeply social beings andconnections with others nourish our health and wellbeing.
Take notice – this can mean paying attention mindfully to what is really important to us– and it can also mean paying attention to, and feeling grateful for what we have, rather
than focusing on what we don’t have. This can be the ultimate antidote to advertisingwhich cleverly stokes up new desires and offers to satiate them with the latest product.
Wanting what one has rather than having what one wants turns out to be a much better
recipe for subjective wellbeing. Taking control of our attention is also an essential skill
in today’s world. Companies pay billions to get our attention through advertising which
can have a negative impact on our wellbeing as we’re reminded of all the things wedon’t have and compare our lives to unrealistic images of people living perfect lives.
Keep learning - Continued learning through life enhances our self-esteem andencourages us to meet new people. Activities like learning a new sport, listening to an
informative podcast or learning how to cook can all boost our mood.
Give - Participation in social and community life has attracted a lot of attention in thefield of wellbeing research. Individuals who report a greater interest in helping others
are more likely to rate themselves as happy. When we do things that benefit otherpeople and the planet, this has a big impact on our own wellbeing. Giving to something
beyond ourselves helps give us a sense of meaning and fulfilment in our lives as well as
boosting happiness.
Be active – exercise is great for our physical and mental health. It reduces the risk ofa raft of illnesses but also releases endorphins that boost our mood and can improve
our self-esteem as we feel fitter and stronger. The NHS recommends we do at least
150 minutes of moderate intensity exercise per week. Swapping car journeys to walk,run or cycle can be a great way to fit exercise into busy lives, while also reducing ouremissions.

19This body of evidence tells us that, for those of us lucky enough to have our basic
needs met, our wellbeing can be largely improved without much need for excessive
consumption (despite what Lululemon tell us, it is actually possible to do yoga without£118 leggings).
Yet our current economic system relies on households maintaining high levels of
consumer spending in order to drive economic growth. In recent decades in countries
such as the UK and US where economies are particularly reliant on household spending
for growth, borrowing has become an ever-more-important part of the picture, withlower income households often spending more than they earn, just to keep the
economy going.
A key driver of consumer
spending is advertising which
for the past 50 years has beenleft to create the narrative ofwhat a good life entails withfalse promises of happiness andsuccess from the latest product.
Our top creative talent devise
ever more persuasive cultural
messages to convince us to
consume more and in today’s
world online advertising targets
us in increasingly invasive and manipulative ways. Our personal data is tracked withevery online interaction so we can be served ads to tempt us with just the thing wemight want. This is great for business, but not so great for a liveable planet. A recent
report by Purpose Disruptors estimates that advertising is adding an extra 28% to theannual carbon footprint of every single person in UK. While, as discussed, the goods webuy are not adding to our happiness but then, they are not designed to. In the wordsof mental health campaigner and author Matt Haig “Happiness isn’t very good for the
economy. If we were happy with what we had, why would we need more?”.
Once again, it is important to re-iterate the importance of goods and services indelivering foundational wellbeing to all. Improvements in material circumstances
provide immense wellbeing benefits to those in deficit of life’s necessities. But we needa new cultural story of what it means to live well. One that is compatible with the earth’s
limits.
The case for economic change is clear. Our current economic system is delivering the
opposite of what we need for wellbeing for everyone. The cost of living crisis is showingthat the system isn’t working to improve the quality of life for many households who20are finding themselves choosing between heating and eating. The high prevalenceof mental ill health and the lack of progress on wellbeing indicators in much of thedeveloped world show it is not meeting our psychological needs either. Perversely,
the things we actually need for healthy, happy, decent lives are becoming ever more
expensive and out of reach – energy, healthy food, secure housing, good quality carefor the young and the elderly - while we can much more readily afford things we don’t
really need (like fast fashion) for next to nothing.
The failure of our current economic system to deliver wellbeing has not gone unnoticed
by the public. 74% of people in G20 countries agree that they want the economic
system to prioritise the wellbeing of people and ecological protection above profit andincreasing wealth. This suggests a recognition that this is not what the current systemdelivers and at least the start of a mandate for economic change.
There is no shortage of new economic policy ideas and, as economist Jo Michell points
out in this series, a simple logic to the next phase of our economic system, which is lessincome and wealth inequality and less inequality between those consuming too little
and those consuming too much.
The challenge is to make this new economic system seem feasible, desirable andpolitically viable. While increasing living standards for those with the least must be
a top priority for any new system, the physical limits of our living world must also
be recognised. Measures to reduce consumption of resources will be necessary fora liveable planet and must target those who emit the most. To make this remotely
palatable, cultural norms will need to start making living within a different, wellbeingdriven system seem attractive to those with the most as well as to those with the least.
Global Action Plan is leading research, campaigns and collective action to tackle theharms caused by the consumerism upon which our economy relies while working withpeople to build positive narratives of a brighter future, in which nature and wellbeing
are the things we can enjoy in abundance.
For a raft of indicators to measure wellbeing, see “what works for wellbeing”, the UK’s
independent body for wellbeing evidence, policy and practice.

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Part four: Global justice- shifting the scale ofconsumption

For much of the last thirty years or so, progressive economists have argued thatmacroeconomic policy is too tight. In simpler terms, this means that some combination ofhigher government spending, lower taxation, and lower interest rates will lead to morejobs and higher incomes.
Such arguments are sometimes presented as part of advocacy for initiatives responding
to the environmental crisis, such as the Green New Deal. For the most part, however, theenvironmental implications of higher near-term economic activity in rich countries do not
attract much attention – it is taken as given that higher economic activity, as measured
by gross domestic product (GDP), is unequivocally positive.
The current situation of high inflation, driven by energy shortages, war and climatechange, serves as a sharp reminder that there is something missing in analysis whichsees higher growth as an entirely free lunch. Almost all economic activity depletes scarcephysical resources and generates carbon emissions. Higher employment usually comesat the cost of higher emissions. Furthermore, it is possible that we are now also reaching
the end of the historic period in which physical resources were usually immediately
available – so that economic activity could quickly rise in response to higher overall
spending. The era of the Keynesian free lunch may be ending, replaced by a regime
characterised by recurring inflationary episodes.
This puts progressive economists like me, who believe that the economies of richcountries are predominantly demand driven – meaning that higher overall spendingmeans more jobs and higher incomes – in an uncomfortable position.

23

The prevailing progressive economic view relies partly on the idea of the “multiplier”.
This is the claim, which is well supported by empirical evidence, that every pound of new
spending in the economy will generate additional income and spending over and above
the initial pound spent.
The mechanism works, to a large extent, by stimulating consumption spending: if a
new government investment project is initiated – to provide additional green energy, forexample – the money spent on the project – on wages, transport and materials – will bereceived by individuals and businesses as income. Some of this additional income willbe spent on consumption, generating a second round of additional new incomes.
Similarly, the argument that redistribution from those on higher incomes to those on
lower incomes is good for growth relies on the fact that those on lower incomes spend
a greater proportion of their incomes on consumption goods – redistribution from rich topoor thus raises total consumption expenditure and economic activity.
How are progressive economists to respond to the now inescapable fact that current
resource use greatly exceeds planetary limits, and “decoupling” – the trend for energy
and resource use per dollar of spending to fall as GDP rises – will not be sufficient to staywithin planetary boundaries if steady GDP growth continues?
There is no single answer to this question– the appropriate response will require
action on many fronts simultaneously.
However, economists are beginning toconsider whether we need to introduce
constraints on consumption, at least
for those on higher incomes in richcountries, as part of the solution. Rather
than relying only on voluntary consumer
choice and natural shifts in consumption
patterns – such as the trend towards
lower consumption of meat in some richcountries – it may be that state intervention
is required to influence both overall levelsof consumption and its distribution.

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There are two main arguments in favour of constraining consumption. The first is
straightforward: all consumption, whether of food, transport, clothing or shelter, involves
carbon emissions and resource depletion. Reduced consumption growth should
translate directly into lower emissions growth.
The other relates to the need to reallocate current resources, including labour, towards
the investment needed to fundamentally reshape our economic systems. Lower
consumption means fewer people working in industries which provide for consumption
spending, and fewer raw materials devoted to the production of consumption goods.
This frees up resources for green investment: people and materials can be re-deployed
towards the investment projects which are urgently needed.
This raises some thorny questions: what policy tools can be used to shift the compositionand scale of consumption? Which groups should face incentives – or compulsion – toreduce consumption and what form should these measures take? How will voluntary
shifts in consumption interact with more direct measures to reduce consumption? And
crucially, how can jobs and incomes be protected without relying on consumption as a
key driver?
Much of this comes down to issues of distribution. Statistics on poverty make clearthat large numbers of people in rich nations are unable to consume sufficient basic
necessities. Basic justice dictates that the average incomes and consumption of those inlower income countries be allowed to catch up with those of richer countries. The needfor redistribution of income within countries, and income catch-up across countries isundeniable – yet such redistribution, if it were to occur without other changes, will lead toincreased overall consumption and emissions.
It is therefore hard to avoid the conclusion that
taxation and regulation will be required to limit
some part of the energy-intensive consumptionof those on higher incomes in rich countries,
particularly consumption which can be considered“luxury” consumption.
One plausible response to such suggestions is toclaim that voluntary shifts in the kinds of things
produced and consumed will naturally lead to
reduced emissions, even while “consumption”, asmeasured by the national accounts, continues togrow. This kind of voluntary behavioural and consumption change – buying fewer cheap
clothes, holidaying by rail rather than plane, switching to electric cars – will have a partto play in the transition to a low carbon economy, alongside reorientation from goods
consumption to a more services-driven “foundational” economy. It is unlikely, however,that such changes will be sufficient.
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The politics of consumption constraints are daunting. Managing competing distributional
claims in the face of opposition from increasingly concentrated wealth and power ishard enough when the overall pie is growing. As we move towards a world of potential
genuine scarcity, the politics of redistribution will become even more malign. This only
emphasises the importance of getting the economics right.
Any successful response to the climate and wider ecological crisis will inevitably
involve action and change at all levels – from local organising and “organic” shifts in
consumption to reform of financial systems and action to tame corporate power andconcentrated wealth. Constraints on the consumption of the relatively well-off should bepart of such a response. A debate about the economics and politics of these constraints
is overdue.

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Part five: The point ofturningThis short series of essays is intended to open-up a conversation.
Progressive economists and thinkers have relied hitherto on the assumption that
economies can just produce more of the same and boost people’s incomes to solve
problems of weak demand and create stimulus in times of economic recession. But theparticular global, supply-side and geopolitical features of the current crisis, intolerable
inequality and the pressing ecological emergency are combining to force a rethink.

The problems and solutions are by no means exclusively economic. Economists therefore
are only one voice in the process of defining change. Other disciplines, including
psychology and natural sciences, and social, cultural and environmental movements
must have a voice; economies exist to serve people and not the other way around; theeconomy is literally and etymologically encased within the earth’s natural systems.
But, as Natasha Parker argues, the way in which humanity has been shaped as aconsumer is now deeply ingrained. It will take time and more than economic theory tochange this.
Global Action Plan UK was established in 1993, in the aftermath of the Rio Earth Summit,
with the aim of involving people in creating solutions to environmental problems. Thisvision, which has evolved to focus on action that improves the health of both people andplanet, with priority placed on actions that change whole systems, remains.
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Our part in change is to engage people and build public consent for action. It would beeasy for the environment to pale as an issue in the face of the current, overwhelming
pressure on household budgets, and yet the cost-of-living crisis is rooted in the samepolluted ground as the ecological crises. We cannot tackle one without tackling the other.

Economist Jo Michell proposes a framework in which we aim for greater equality inconsumption as well as income, using taxes and regulation to press down on the
consumption of wealthier households and to help push up that of lower income
households. Larissa Lockwood, Global Action Plan’s Director of Clean Air, argues that
as well as targeting technological change, we should also aim to use policies to shift
behaviour, for instance making it easier and cheaper for people to use public transport
and walk or cycle or not travel at all.
All of these shifts are easier said than done. Grappling with the politics of change andwith shifting public attitudes and normalising new choices is as important as the policies
that will create the economic and regulatory frameworks within which those choices
make sense. The current crisis might signal the beginning of the end of the era of hyperglobalisation; the era of cheap everything may be over. But public backlash – sometimes
whipped-up by politicians, influencers and commentators, but often also organic – torising prices and shifting economics is almost certain to be ferocious.
There is of course a dynamic relationship between policy and public attitudes. As Eric
Lonergan and Corrine Sawers point out in their book Supercharge Me, simply taxing
environmental ‘bads’ like carbon emissions is a very imprecise science, is often unfair
and opens policymakers up to backlash. They argue that policy needs primarily to deal
with what economists call demand inelasticity, which in lay person’s terms means that alack of affordable alternatives forces people to pay the rising prices.
Lonergan and Sawers argue for what they call ‘extreme positive incentives for change’ or
EPICs, that rapidly establish cheaper, green alternatives and collapse demand for29

climate-polluting goods and services. As Larissa Lockwood says, this will not and cannot
only be for technological substitutes alone, but for a wide range of different ways ofachieving the same goals (or by changing our goals).
This argument builds on work by Schumpeterians, such as French economist Phillipe
Aghion, who argue that economies are stronger when the creative destruction process
is more rapid (i.e. when the innovation process is more rapid, causing firms to enter andexit markets at a higher rate). In effect, Lonergan and Sawers are arguing for forcing thepace of creative destruction more rapidly.
The combination of changes in the dynamics of globalisation and geopolitics, sociallyand politically intolerable levels of inequality and the jeopardy of ecological emergency
should lead to a period of rapid creative destruction, but incumbency – especially thedominance of fossil fuel firms in the real economy and as a mainstay of capital markets –is proving hard to shift.
Thus policy must achieve a triple trick. It must reduce inequality by boosting lower
incomes and reducing wealth accumulation, help rapidly establish new EPICs and also
forcibly collapse demand for ecologically unsustainable products and services. In effect,
policy must simultaneously make the new system cheaper and more attractive while
reducing the operating space and economic viability of the old one.
There are three areas of policy that need particular attention:
1. A Renewal of the Social Contract: Even anti-state right wingers in the current
government have been arguing for more state support for households. This isbecause, in the current crisis, the raw
electoral politics of not supporting
households to a greater extent are beyond
contemplation. But rather than offer
payments on an ad hoc basis, while the
new system takes shape, government
should systematically support households
by renewing the safety nets and steppingin to provide more public services as anincreased ‘social wage’.
2. Caring and Green Economy Investment: Government-led green and caring/foundational investment is needed to direct the shift in patterns of consumption fromthe UK’s high reliance on ecologically costly manufactured goods with complex,
global supply chains, towards a greater reliance on foundational and caring services
as well as green infrastructure and production. Investment is needed upfront toensure that alternatives to the norm are available to people before they become
locked out of the status quo.
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3. Fiscal, Regulatory, and other Policy measures: The risk that rebound effects will
undermine investment-led approaches and that higher income earners will be able
to retain unsustainable patterns of consumption needs to be mitigated with a rangeof taxes and regulatory measures, including higher levels of wealth taxation and newrules to ensure economy-wide efficiency of resource use and to force the phase-out of
polluting activities more quickly.
Broadly, 1 and 2 will help enable the new system and 3 will help ‘collapse demand’ in theold system.

The normalisation of post-consumerist values
Policymakers will struggle for political space to make the required level of changes
without an equal and parallel effort to change the way consumerism has beennormalised. This must include a shift in education towards global citizen and planetarystewardship values, so that not only do we have new norms emerging as the next cohort
moves into civic and political life, but also in the meantime they become a powerful voicefor change within households and communities.
We need creative professions and artists to imagine a world in which consumerism
is less of a cultural driving force, changes in the way advertising is regulated and themodelling of caring economy approaches by critical influencers. The environment andnew economy movements have hitherto mainly been policy focussed, but we won’t get
the policy we need without a simultaneous normative shift and without this the policy we
get won’t be successful.

Building the movement for change
The cost of living crisis threatens the economic security of millions of households in the
UK and across the world. It is doubtful whether a return to ‘normal,’ in which economies
are reliant on very high levels of material consumption, is now possible. But for the healthof people and planet, it is certainly not desirable.
We must seize this moment of change and work towards a more sustainable, equal, andcaring economy, in which our collective welfare and the protection of our planet’s naturalabundance is the primary purpose of economics.

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Authors
Andrew Pendleton, Deputy CEO and Director ofStrategy and Advocacy
Andrew was a radio producer for ten years before
moving into press work in the international development
sector and then into policy and campaigns. He has
worked for 2 think tanks and been head of campaigns
at Friends of the Earth. Most recently, Andrew was at
the New Economics Foundation as Director of Policy and
Deputy CEO.

Larissa Lockwood, Director of Clean Air
Larissa’s purpose and passion has always been about
advancing sustainability, and inspiring others to join
her in making a difference. From enthusiastic student
campaigner to government policy advisor, she helped
establish the sustainable development unit and carbon
reduction strategy for the NHS, and leveraged her
behavioural science degree knowledge at the Carbon
Trust to influence the public sector. Larissa’s inspiration
for change is the foundation of her role in directing
the clean air portfolio for Global Action Plan. As an effective leader at GAP, she iscompletely focused on mobilising individuals and organisations to take action that isgood for people and the planet.
Natasha Parker, Head of Post-consumerism
Natasha has had a varied career, spending 5 years asa Human Resources professional, 5 years managing
drug and alcohol recovery services, a couple of years in
wellbeing charities and now 6 years in the environmental
sector.
Natasha has a Masters in Applied Positive Psychology
and is currently studying for her PhD in Environmental
Psychology. She has had 3 academic journal papers
published with research into materialistic values, wellbeing and pro-environmental
behaviour.

Jo Michell, Associate Professor in Economics, UWE
Bristol
Jo Michell is Associate Professor in Economics at UWEBristol. His research interests include macroeconomics,
banking and finance and political economy. He has
published widely in academic journals and for nonacademic audiences. He has worked with internationalorganisations including the United Nations Conference
on Trade and Development (UNCTAD) and theInternational Labour Organisation (ILO). He regularly
collaborates with progressive UK thinktanks such as NEF and IPPR. He is Secretary of the
Post Keynesian Economics Society.

About Global Action Plan
Global Action Plan is an environmental charity working towards a green and thriving
planet where everyone can enjoy happy and healthy lives within the Earth’s limits
We tackle the root causes of our climate and nature crises through research, campaigns
and collective action that reconnect human and planetary health.
We take a two part approach which challenges the destructive forces and reveals thebrighter alternatives.
Find out more about Global Action Plan

globalactionplan.org.uk
Global Action Plan 2022