Green happiness?

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A recent paper by Cohen and Vandenbergh explores the relationship between climate change and consumption by building on emerging work on the determinants of subjective well being. According to an increasing body of 'happiness research',  wealth has decreasing marginal returns, which  means that above certain levels of income, people are willing to trade some of their monetary compensation for more “leisure” and time for themselves. The implications are that public policy should aim at cutting working hours and increase public funding to culture, entertainment and “well being” activities. This would help increase public welfare without increasing consumption, thus helping reduce emissions. In the authors' own words:

“Note that this is not a radical idea that is incongruent with economic theory. Economists have never argued that money and economic wealth are all that matters. Instead, their starting point has always been “utility maximization” which includes individual leisure activities, health, family situation, and other components. ... Suppose happiness measures are adopted as a valid indicator of a society’s well-being and economic progress. Currently, if average real weekly earnings are stagnant from one year to the next, this is a sign of economic weakness. Politicians’ success is judged in part on growth rates of Gross Domestic Product, per-capita income and similar measures, and they likely respond by adopting policies that stimulate greater economic activity. Yet, if a “low growth” economy was accompanied by a reduction in the average number of hours worked—with a resulting increase in leisure hours—the economy might be viewed as being strong as people were able to maintain their monetary standard of living while enjoying more leisure time.

What does this have to do with climate change? If these measures were widely available, reported, and accepted by the public, the implications for climate change could be dramatic. Politicians would not be pressured to stimulate the economy to increase production. We would care less about industrial output than public well-being. Although we are not arguing that to measure happiness will result in immediate reduction in carbon emissions, our point is that shifting the public’s and politician’s focus to what really matters will reduce pressures to stimulate further economic growth. It also will complement other independent efforts to change social norms towards a lower carbon-footprint economy."

Considered outlandish until just a few years ago, well-being approaches to public welfare are gradually getting into the mainstream. Will they make a difference to the climate debate? Although the paper's conclusions sound more like a weird oxymoron than sellable policy recommendations, they do have the merit of looking at the debate on the sustainability of consumption from another angle - one which argues for a step change in public attitudes built on the recognition that reducing our climate footprint would not necessarily make us worse off. "Make people happier to stop global warming" - could this statement possibly inform public policy one day? And how would the response to it differ in developed and developing countries?


Andrea Liverani

Lead Specialist in the Europe and Central Asia Region's Environment, Natural Resources and Blue Economy Global Practice

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