Op-Ed: Trickle-Down Environmentalism
By Marcus Schmidt, UNA-NCA Advocacy Fellow
Trickle-down economics will remain a fallacy so long as there is greed.
This economic theory presents the idea that when the wealthiest profit, they will turn around and invest back into their businesses, thereby benefiting even the lowest-waged worker. The theory emerged under Reagan’s administration to surreptitiously justify economic benefits and relief for the wealthy — money that has gone on to inflate executive salaries and corporate bonuses rather than raising up the working class as promised.
Nearly half a century has passed since the emergence of this theory and the economic benefits — such as tax cuts — have only benefited the rich. The pandemic has been a clear example of the failure of trickle-down economics — since March 2020, the wealthiest Americans have become a trillion dollars richer while rates of housing, food, and income insecurity have skyrocketed. The last fifty years have shown time and time again that money will not “trickle-down” so long as greed persists at the top.
That said — while wealth does not trickle down, ideas do.
Executives of corporations have a great deal of power over consumer behavior.When shopping at the grocery store, you may not see every little decision that was put into the products on the shelf, but every detail has been strategically designed to encourage the consumer to buy targeted products. Consumer decisions have been calculated and constructed through a psychological tool called nudging. Through a decision as simple as where to place certain brands of cereal on a shelf or placing items next to the register where someone is checking out, companies can shape and encourage people to spend money in a certain way and prefer certain products over others.
However, with so much power, companies are facing calls from consumers to address and engage with environmental issues. A majority of consumers around the world want companies to adopt programs to make actionable progress on environmental issues; however, businesses have not been as committed to mitigating climate change as their consumers want them to be and, in some cases, actively worked against initiatives and legislation to reduce various forms of pollution and waste.
Concentration of Polluters
The year 2020 will be historically remembered for its infamy, from the global coronavirus outreach to political turmoil all across the world. Coming into the new year, scientists offer little comfort in their assessment of our collective future, as 2020 tied with 2016 for the hottest years on record.
In early March 2020, at the beginning of the pandemic outbreak, the world saw minor glimpses of what it could look like to have clean air with the decline of localized pollution as a result of people staying home. These lapses of “low” pollution offered a sense of hope that this would be the beginning of reducing global emissions and waste, but the United Nations Environment Programme (UNEP) still found that global emissions were on the rise.
The Emissions Gap Report of 2020 by the UNEP noted that global emissions are continuing to rise at the same rate as previous years. The public was hopeful that there could be a shift towards climate change mitigation during the pandemic as populations were staying at home to combat the spread of the virus, but national governments did not enact fiscal policy in line with these ideals.
Instead, governments with COVID-19 fiscal relief targeted the status quo and reinforced the existing high-emission economy rather than taking the opportunity to pivot towards climate conscientious policies. Ninety-two percent of the fiscal COVID relief packages from governments were found to maintain the status quo, in addition to the four percent of packages that increased GHG emissions. While it is important for governments to support their citizens in times of crisis, companies need to be held accountable for their mass emissions and waste, as many exploit crises to avoid investing into sustainability.
In 2017, CDP — a non-profit that analyzes the environmental impacts of global economic activity — found that approximately seventy percent of global greenhouse gases since 1988 can be traced back to just 100 fossil fuel companies. Additionally, in recent audits of plastic pollution on land and in the ocean, corporations like Coca-Cola, Pepsico, and Nestle were found to have a high number of identifiable plastics, which does not include the sixty percent of plastics that do not have a product label. The current economy will produce twelve billion metric tons of plastic waste in landfills by 2050 and dump eight million tons of plastic into the ocean every year. The world’s waste and recycling infrastructure cannot meet current need as less than ten percent of recyclable waste is recycled. Even with this high level of waste consistently polluting the environment and the lack of sufficient resources to adequately dispose of plastics, producers aim to quadruple their plastic production by 2050.
The plastic problem has worsened through 2020 as shoppers are stuck ordering online and forced to receive their products in wasteful packaging. Amazon, for example, has seen a fourteen percent increase in plastic pollution in the last year as a consequence of increased online shopping during the pandemic. Large multinational corporations like Amazon who have a large market of consumers have used false promises to mitigate negative public perception through the use of voluntary commitments to reduce plastics or the use of non-recyclable paper products.
This level of waste and concentration of emissions is unsustainable to preserve the environment and the climate. For temperature increases to be under the 1.5°C goal, emissions would have to decrease 7.6% every year between 2020 and 2030. Reinforcing the status quo does not encourage this behaviour.
Shifting Focus: Individuals vs Corporations
In 1980, President Reagan came into office and gutted departments his predecessors had erected to study the impact of fossil fuels and greenhouse gasses on the atmosphere. As the White House was tearing down protections, Congress was working to learn more of the climate crisis. In their research, representatives were provided definitive details from scientists at NASA and the EPA, learning of the short five to ten year policy window before mankind would start seeing the impacts of human-induced climate change. If there was political will, issue urgency, and public support, why was no climate change policy enacted?
In its comprehensive depiction on how these events unfolded, the New York Times’ piece “Losing Earth: The Decade We Almost Stopped Climate Change” shows the strong Congressional and public support to take action against the use of fossil fuels only to face a pertinacious president under the influence of corporations and their deceptive studies. Once these policies were tabled with the Executive branch, corporations released their studies and began influencing public opinion to retract from supporting these once popular pro-climate policies. Businesses, including fossil fuel companies, influence policy creation and implementation to absolve themselves of the consequences for promoting and encouraging the use of fossil fuels by blaming individuals for using the products they sell.
Three decades later, a new narrative exists: individuals are responsible and must change their behavior in order to save the environment. This individualized narrative has been another concoction of corporations unwilling to change their practices, and unfortunately it has become the primary narrative around climate change. Pressure is placed on the actions of individuals to change their small portion of consumption and naively politicians enact legislation that enforces this narrative. Policies, like plastic bag taxes, punish individuals — usually garnering a larger impact on low-income communities — for their choices rather than punishing companies for offering unsustainable choices. These policies tend to see mixed results, as higher-income communities can afford to pay extra cents on their purchases and so their behaviors are unaffected by these policy initiatives. While individual behaviors should support being environmentally conscious, climate change can not and will not be mitigated solely by individual action — nor should it be.
By making their decisions seem environmentally conscious, businesses use performative actions as another way to pass blame onto the individual. On November 2, 2020, Shell received a great deal of blowback for a Tweet asking the public what they are willing to change about their habits in order to reduce emissions, while the fossil fuel giant has its own substantial contributions to total GHG emissions and is not making adequate goals to change their emissions. This act of corporate “greenwashing” is a dangerous tactic used by businesses to appear environmentally conscious without following through on any commitments. This can cause consumers to purchase goods with the expectation that the products they are purchasing have a smaller carbon footprint or are more environmentally friendly. This creates an even greater issue as the practice of greenwashing crowds the market with businesses selling faux-sustainability and pushes out competitors that offer genuine sustainable products or practices. Through greenwashing, companies portray themselves as “doing their part” in fighting climate change and leave the rest of the effort up to individuals who are limited by the options presented in the current market.
Companies have largely abdicated their roles in working towards sustainability as their undue influence leverages climate policy so they can continue to exploit the environment for profit. Policy is hindered both at its creation (legislators not going far enough) and implementation (agencies not appropriately regulating) to subvert corporate accountability. The oil and gas industries further leverage their capital and power to continue receiving vast subsidies even though they spend one percent of their budgets on “green” energy. Industries create and work every possible loophole to avoid having to make substantial changes necessary to combat climate change — why should policies only target individual action when businesses are making the most consequential decisions that affect the greatest concentration of waste and emissions?
Real Corporate Action on Climate Change
Companies have a great deal of power in shaping the future of this planet. From production to distribution to sales, each component is an opportunity to move towards sustainability. Consumers also have the responsibility to take the appropriate action in their lives, but sustainability quickly becomes difficult when stores make it unclear how a product was shipped, where and how it was produced, and what a company determines to be an “eco-friendly” product. It is up to the producers, distributors, and sellers to make conscionable decisions towards mitigating climate change as they already manipulate the policies surrounding it.
There are a vast number of tools and resources already available for corporations to make the switch to environmentalism. Nudging can work as an effective tool to convince or incentivize consumers to make decisions that have less impact on the environment. The United Nations Environmental Programme provides suggestions for improving supply chains and organizational structures in order to reduce emissions such as improving shipping fuel efficiency and storage capacity through technological improvements of ships and planes and the use of alternative fuels. Fossil fuel industries need to heavily invest in alternative fuels and commit to undoing the disinformation they have used to plague the world. As alternative fuels grow, other markets will complement this growth and move away from the detriment of nonrenewable fuels. Finally, money needs to be removed from policy. Corporations need to focus on their own capabilities to promote “green” technologies and products and take leadership in climate action.
Making consciously sustainable decisions is not always a luxury that every individual can afford, as it may require additional time and resources that may already be scarce. By offering a greater range of sustainable products in the stores, the individual will not need to dedicate extra effort or resources towards finding and determining what is the best choice for the planet. When the market provides adequate choices to take action, working towards saving the planet is within reach.
Companies must actively work towards providing sustainable choices so that the rest of society can make actionable progress on climate change.
