8.4.2 Acting in the face of ignorance

Integrated Product Policy

In spite of many attempts to analyse the interactions between the economy and the environment (so far undertaken mostly within ecological economics and industrial ecology), these are still full of unknowns and we keep being surprised by some of them. Obviously, we now know more than we used to know 30 years ago, but still we do not know enough to make accurate predictions regarding the overall impacts that the economy might have on the environment. Thus, ‘the acceptance of our ignorance is a first step in creating a more rational approach to environmental policy’, as Faber et at. (1992b: 93) put it.

The difference between ignorance, and risk and uncertainty, is that in the former case neither the potential outcomes nor the probabilities of their occur­rence are known. Although other variations are possible, there are three main ways to deal with the problem of ignorance:

  1. neglecting it and making an assumption that we know enough to make a decision;
  2. trying to find out as much as possible about the system under consideration, in an attempt to make a more informed decision, while adopting a precau­tionary approach towards those activities that have to be carried out; and
  3. adopting a strict precautionary approach and denying almost any action, as its outcomes are not foreseeable.

The first is not acceptable from the point of view of ecological economics and industrial ecology, while the third is not acceptable from the general point of view of economic development (both of the above areas included). Thus, the second strategy seems to constitute the best option and, as our knowledge pro­gresses, some of the areas previously clouded by ignorance may become subject to uncertainty and ultimately quantifiable risk. Pursuing the second of the above strategies would require the following issues to be incorporated into the IPP.

Adopting an integrated, interdisciplinary and holistic approach to analysing and shaping economy-environment interactions emerges as the most important issue. As the examples of ecological economics and industrial ecology demon­strate, to obtain a comprehensive picture of these interactions, any divisions into disciplines have to be foregone. Primarily, as noted in the previous subsection, one has always to analyse products and the economic processes related to them with reference to the ecosystem in which the economy is embedded. Thus, the decoupling of economic growth from its environmental consequences is neces­sary. As all phenomena should be related to the broader systems within which they occur, the IPP should also be explicitly tied to the thematic strategy on the sustainable use of natural resources (subsection 2.3.4), to afford decision makers a complete picture of the environmental impacts of consumption choices made by consumers.

This holistic approach further suggests that one should focus on absolute, rather than relative, impacts that the economic system exerts on the environ­ment, the issue which became clear during the discussion of eco-efficiency and the related rebound effect (subsection 3.3.2). Consequently, aggregate consump­tion levels should be addressed by relevant policies and not just incremental improvements of single consumption acts. Indeed, a systems perspective of the cumulative effects of small decisions – referred to as the ‘tyranny of small decisions’ -lies at the origin of product-oriented environmental policies (section 2.2). Otherwise, as in the case of tools such as eco-efficiency, but also LCA in its current form, the overall, absolute environmental impacts of a given product risk being neglected (considered as a total of the products consumed indepen­dently by various consumers).

Seeking to understand as much as possible can, to some extent, reduce our ignorance. Thus, studying economy-environment interactions, following the holistic and interdisciplinary approach described above with the use of tools such as material flow accounting (MFA) and input-output analysis in particular, can help to put the IPP in perspective with those interactions. Furthermore, when purely objective quantitative methods of analysis are not available, one should resort to qualitative analysis. For example, for this reason, the Laws of Thermo­dynamics serve to supply a conceptual framework for discussions within ecolo­gical economics and industrial ecology, regarding resource use and pollution generation. Similarly, qualitative analysis could be invoked to amend the quanti­tative approach of an LCA and provide broader information on the described systems.

Learning and information sharing can lead to ‘reasonable’ consumption. Our dependence on the well-being of ecosystems has to be factored into consumer decisions. Once consumers become aware of the link between their consumption patterns and the environmental problems in the news, their consumption is likely to become more ‘reasonable’. Thus, reducing the ignorance of consumers emerges as a particularly important component of the IPP. Among other things, consumers should be aware that products appearing in the market only constitute about 6 per cent of resources extracted from the environment, but they require another 94 per cent which are not reflected in the system of market transactions. Information based on an integrated, interdisciplinary and holistic approach should also be employed wherever possible to justify the use of other instru­ments, such as ecological fiscal reform.

Where information is not enough, other incentives should be offered. In the case that consumers’ ignorance of economy-environment interactions persists, or that they are unwilling to act in an environmentally ‘reasonable’ way, economic rea­soning has to follow. If prices on ‘environmentally unfriendly’ consumption options are increased, people seek alternative means of satisfying their needs. Making users pay for the damage they cause, or internalizing externalities related to their consumption patterns, is in line with the ‘polluter pays’ principle, which often turns into the ‘user pays’ principle when, based on an LCA, a user can be classified as a polluter.

Our ignorance should be acknowledged and precautionary measures adopted. The precautionary approach is theoretically justified (in particular, with refer­ence to the concept of joint production (subsection 3.3.5) and it should become one of the foundations of any environmental policy. If we do not know some­thing, the reasonable approach is to take precautions. Otherwise, we run an incalculable risk of committing a mistake, with possibly crucial consequences for the existence of our system. The precautionary principle can provide a justi­fication for the use of product or process standards, when the environmental or health impacts of a given product or process have not been recognized.

Indeed, as a way to address the precautionary approach, attempts should be made to reduce material consumption. As some authors have already noted (see, for example, Jackson 1999; Mont 2004), the main disadvantage of the IPP is that it fails to curb consumption. Instead, it transfers the policy makers’ attention from limiting consumption to more environmentally friendly consumption that is probably going to increase once markets are created for more environmentally friendly products. This fails to meet the ecological economics and industrial ecology recommendations related to the scale of the economic activity versus the scale of the surrounding ecosystem and thus, obeying the Earth’s carrying capacity. However trivial this conclusion may seem, it is a principal drawback of the IPP, negating its claim to be integrated.