Happiness, Income and Consumption

In an attempt to carry out some real analysis (verging on numerical but not quite) I’ve decided to go completely off topic for this blog and think about the wider concept of consumption and economic growth. I do get frustrated when David Cameron starts spouting off about the UK becoming an ‘aspiration nation’. I would like to take him up on what he and his party means by this but as far as I can tell he means earning more, spending more and having more things. Having said this I fully support the introduction of the new happiness/satisfaction indicators collated by the ONS which the Government was supportive of.

But there is a big energy/climate question around consumption of goods and it is widely agreed (but very few dare say it) that even current levels of consumption are not compatible with the UK’s greenhouse gas target and the global aim of limiting warming to 2 degrees Celsius by 2100. If UK domestic consumption emissions weren’t unsustainable enough, even Government data shows the wider emissions which we have effectively exported make a significant proportion of the UK households emissions from a consumption perspective:
Ref: http://www.carbonbrief.org/blog/2012/03/defra-the-uk-outsources-emissions
So this says to me that if we are consuming too much we should probably consume less as clearly we in the UK can afford to consume unsustainably. If we were to have lower levels of disposable income, emissions would be reduced as would consumption as would emissions. Clearly this would not be politically attractive but it could be for the greater good from a climate perspective. It also makes me think that maybe policy makers shouldn’t be too worried about making consumer bills higher as it’s better to spend on low carbon energy than say for example on unnecessary £400 tabletop food mixers which are all the rage like this (my hand mixer which was £8 makes an unbeatable sponge):
Clearly people get very concerned when you start talking about reducing income and increasing bills but this needs to be taken in perspective. The UK is a very rich country and has relatively high levels of disposable income depsite the impacts of the financial crisis. I also want to stress here that the majority of people could afford to increase their energy bills but some of the most fuel poor will not be able to and there are distributional impacts.
Also at the much bigger scale, it’s important to remember what we want as a nation. Is it to be richer? Or is it to be healthier and happier? The New Economics Foundation do some really interesting analysis in terms of their Happy Planet Index which ranks countries on their satisfaction levels, length of life and ecological impacts. Clearly how countries are ranked though does depend on the weighting of the various parts of their indicator.
But what I find interesting living in Cornwall by the sea is that people are much happier than they are in London, where I moved down from. This is despite Cornwall have some of the UK’s most deprived areas and low income levels and London having the highest income. So even at a UK level, happiness doesn’t correlate with income. The following graphs from the ONS show this in map form.
This one shows happiness:
This one shows household disposable income:
And you should be able to see that in some of the areas where happiness levels are highest i.e. the North of Scotland, Northern Ireland and the South West and Coastal areas, in a lot of these areas, disposable income is low. I’m not saying this is the same everyhwhere and further analysis may be useful. What I am saying however is that being rich is not a requirement of being happy.
The conclusion of this really is that if we are already consuming too much, there must be an argument for consuming less and surely if you are rich enough, you can afford to pay more for sustainable energy. The political reality of all of this is that pushing for policies which increase energy bills will be incredibly unpopular particularly within the current discourse around costs and fuel poverty which is a key political battlegorund. It may then be the case that increased public support may be a prerequisite for all bill increasing policies.

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