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Does buying a product that costs less money (though being produced in the same way), really translate into better environmental sustainability, or does it just mean you have more money without changing your environmental impact?

If the latter, what typical factors would make it such that financial economy (for either a buyer or the producer of a product, indeed), is better for the environment?

Perhaps the two concepts are not necessarily correlative, shown by the example where if you make something yourself, despite it being more environmentally sustainable, it actually costs you more than if you bought a ready-made product made by someone else, where by economy of scale they were able to produce the same product for a lessor price (but it involved more pollution in the process, including that caused by distribution).

So what are examples and basic guidelines that one can use, to determine whether cost savings to the consumer / user of a given product, vs. another alternative, translate into environmental sustainability - and if so, how much, and why?

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I hope my rather savage edit is ok, feel free to revert it. I chopped about half your question out because it was long and full of sub-sub-clauses (and parentheses). –  Mσᶎ Jul 16 '14 at 2:37
Nah it was a good edit, thanks, much of it was apologising for bringing up a potentially problematic topic anyway, so thanks! I'll just grammatically improve one of the paragraphs though now, thanks! –  user487 Jul 16 '14 at 2:46
It is a very broad question, and I suspect you'll look at my answer and say "that's not what I wanted to know". –  Mσᶎ Jul 16 '14 at 3:12
Of course not, it was a helpful answer, and I appreciate your methodical reasoning and analysis! After all it is a kind of 'meta' question (albeit an important one) so I'm glad to start having it documented here. (without wanting it to be a discussion, mind you.) –  user487 Jul 16 '14 at 5:49

3 Answers 3

Broadly speaking the two are orthogonal. That is, financial sustainability isn't related directly or consistently to environmental sustainability. Specifically, there are examples that swing strongly in both directions.

At one extreme, you have subsistence farmers or hunter-gatherers who don't use value-based exchange at all, and different groups of those people have environmental impact ranging from barely perceptible to devastating (the widespread megafauna extinctions as humans arrived, for example, or the expansion of deserts through grazing and firewood gathering).

At a fully monetary level you have profitable companies who build nuclear weapons (one extreme of the "environmental impact" spectrum) and similarly profitable companies who revegetate artificial deserts.

If you're embedded in a market-based society (as most of us are), the theory behind that is that given a complex set of requirement, a market is the best way to find some optimum solutions (specifically, that there will probably be more than one depending on how people weight different factors). So for a single product or commodity, as long as the production mechanisms are equivalent price is an excellent way to select (that's the justification for a market economy).

Unfortunately it's extremely unlikely that "all things are equal". It's trivial to buy financially unsustainable things in most countries (made by slaves or prisoners, for example), but deciding that you won't buy slave products is effectively impossible. Either because there are no competing products (cellphones, for example) or because the manufacturers try very hard to conceal that problem (clothing).

Environmentally the problem is the same. Even if you just consider superficial impacts, the cost of biofuels varies dramatically depending on apparently trivial things. Consider corn-based ethanol, since that's common, and think about trying to buy it if you want to avoid, say, pesticide resistance. Some corn farmers will grow the required pest reservoirs and use pesticides as suggested, but others won't. Unfortunately there's no auditing of that, and definitely no labelling at a retail level. And that is only considering one tiny aspect of what makes a single biofuel sustainable. Realistically your "sustainability choice" becomes "does this seem less unsustainable than that?"


At a societal level the way that externalities are monetised is critical. Viz, pollution and other unsustainable activities must have a price attached to them, either through a tax, regulation, a counter-subsidy, or a ban. So we ban slavery, tax carbon emissions, regulate pesticide use and subsidise green electricity. All of those things work to a greater or lesser extent, and which option is chosen is often as much politics (political or social sustainability) as science (ecological sustainability).

At a personal level, you have to decide how much effort you're willing to put into discovery, and then again into minimisation. Economic theory tends to assume that everyone has perfect, complete knowledge of everything (with the exception of anything using terms like "discovery costs"). The simplest cases are where there's only one or two options. With cellphones it's often "my friends all have iPhones, I'll buy an iPhone. They're all using WobblyTel, I'll use them so I get the free Wobbly2Wobbly messaging". Your choice then is between a new iPhone and a second hand one. Environmentally that's an easy choice.

For anything more complex the question is how much work you're willing to put in researching every aspect of everything you consume. To some extent you can rely on secondary sources (other people's research) and tertiary sources (summaries and guides assembled by non-researchers), which is where things like the Greenpeace shopping guides come in. But to have any confidence in those you need to do more research... it gets ugly.

Then when it comes to buying things, you need to decide whether you're willing to (say) travel across town to buy a better product rather than just buying whatever is closest. In other words, even the "cost" of an item is more than just the money you hand over to the retailer.

One common solution that's fairly effective is to shop at a local co-op, commonly a food co-op. That way someone else does the research, and you go to one place for most of your food shopping. Simple and direct. Often you can do similar things with other purchases, or rely on certifications, but usually within a fairly narrow range. There's no "fair trade smartphone", for example.

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Nice answer! But just one thing; a fair trade smartphone does exist (sort of). Check out the FairPhone initiative who strive to create smartphones built with what they call 'conflict-free materials'. They released their first phone about a year ago. Although, in that phone not all materials are 100% conflict-free, that is the goal they are aiming for. –  THelper Jul 16 '14 at 7:34
@THelper I'd forgotten the fairphone, I recall reading about it and thinking "hopefully they will eventually get there". Thanks for the reminder... They're also Europe-only right now, not that that would stop me re-shipping one if I really wanted it. –  Mσᶎ Jul 16 '14 at 7:52

Many free-market advocates would say that the two should be equivalent. One can reasonably argue that they would be equivalent if every consequence of a given action were reflected fairly in its financial cost. An example of this is that producing electricity from coal is currently cheaper than producing electricity from wind farms, but this might not be true if there were a financial cost to putting carbon dioxide into the atmosphere. This is what economists call an "externality" - in that the carbon dump is external to the system, and has no effect on the cost - and the various proposals for carbon taxes or carbon cap-and-trade schemes are attempts to rectify this.

Of course, such attempts to define everything in terms of economic value will never be perfect. In the example above, we could define a cost for emitting CO2 and other pollutants, and we could perhaps even define a cost to a national economy from the public health issues surrounding poor air quality... but will we be able to agree on the monetary value of the lives lost in coal mining? On the other side, can we agree on a price for the visual impact of a wind farm? And even if we did have a method for doing this, we can never know exactly what all the future effects of an action will be.

Since we can never get all the externalities reflected correctly in the economic reality, economic sustainability can never match environmental sustainability.

There is another way of looking at it, if one takes a sufficiently long-term perspective: that is that the financial costs of an environmental collapse are vast, and that therefore something that is not environmentally sustainable cannot be economically sustainable in the long term. I'm not sure that many economists would subscribe to this view :-/

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That's a great answer too. What I'm still kind of not hearing much though, is what I ask in the title - not whether, but 'how much' does the former translate into the latter? I.e., what examples, or guidelines can be documented to show when and how the two can be correlated? It may require basic examples or tenets, but I feel it is important as the goal of the question is to try to equip oneself with working out when and where financial impacts do (but also don't), translate into ecological sustainability. Hmm. –  user487 Jul 16 '14 at 21:29

It varies greatly, depending on where and what you are looking at.

Example: In most developed countries, petrol/gasoline are taxed very heavily, so economic sustainability ≈ environmental sustainability in this case. So in these countries, when it comes to filling up your car, you just need to worry about saving money, and you'll be doing your part in saving the planet. (The big exception being of course as usual the US.)

The goal of economists is to equate the two (or in Econspeak: equate marginal private costs with marginal social costs). This can be done (albeit imperfectly) by e.g. imposing taxes on pollutants. This has a clear advantage: when making any decision, consumers, firms, and governments need not worry about BOTH their wallets and the environment; instead, they need only worry about their wallets and the environment will automatically be taken care of. E.g. when buying a plane ticket, instead of taking into consideration BOTH the airfare and the carbon emissions, you can just worry about the airfare, if and when airfares fully account for the damage done to the environment.

But politically this has usually not proven feasible, and hence, for the most part economic sustainability ≠ environmental sustainability.

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