Is Your Sustainable Contribution Simply Substituted Away?

Why your switch to Hydropower, Sustainable Palm Oil, or better Fish may be futile, but Solar PV and Organic Chicken have an effect— A Tale of Good Intentions, Economic Market Effects, and Greenwashing Labels.

I speculate you at times aim to make a social contribution by purchasing the right variety of a product. Frequently, unexpected economic effects may play a bad trick, and dramatically reduce the net effect your choice has on the world — except for your wallet and maybe a happy marketing firm. This happens when economic substitution effects mean your choice indirectly leads to a third, uninterested party to consume more of the ‘bad’ variant you chose to avoid. This substitution effect can dominate, leaving zero net environmental effect from your choice. I illustrate this for three cases: hydroelectricity, products with Sustainable Palm Oil, and the choice between wild-caught and farmed fish. You’ll find further examples if you consider the mechanism driving the results here.

In many other situations, your consumption decision likely has a clear net effect on the market outcome, such as buying high-welfare animal food products or solar power — so let this not be a discouragement, but an invitation to choose carefully where to act.

Read the full post on Medium.com