How can government incentivise collaborative consumption?
“Put your X-ray glasses on” says John Manoochehri, making two circles with his thumb and first fingers and holding them up to his eyes. “Imagine you can see through buildings. What percentage of all the products in that direction [he points randomly] do you think are being used right now?”
“mmm, One percent?” someone proffers. “Exactly!” he says.
Manoochehri is an advocate of the switch from owning products to using services. Ultimately, he argues, most people don’t want a washing machine or even a car – we want clean clothes and a comfortable journey to work. And we can get these outcomes in a much more resource-efficient way through hiring a service when we need it (e.g. renting a car from Streetcar when we want one) rather than owning a product all the time, he says. That way lots more people can use one product, and the manufacturer has an incentive to make it last.
Manoochehri was speaking at the recent Future of sustainable lifestyles and entrepreneurship conference in Cologne, an international get-together of people interested in making sustainable living a reality. I went there to help answer this question, which we’ve been starting to think about lately:
How can businesses help their customers to live more sustainably, and what can government do to make this happen?
This question is pertinent for a number of reasons:
- Big businesses such as Unilever have recognised that much of the carbon footprint of their products comes from customer use, and that to reduce their impact they will need to get into behaviour change.
- Innovative companies are beginning to come up with new business models aimed at driving more sustainable consumption (such as the renting and sharing platform Ecomodo)
- Some businesses have begun helping their staff to live more sustainably – for example offering subsidised insulation or setting green living challenges
- But there are policy barriers, and most companies never try because there’s no real incentive for them to do so.
The role of policy
The framework that government sets for businesses can either unleash great potential in the private sector to help drive sustainable living, or constrain it. Landfill tax, for example, created a recycling industry and brought businesses like RecycleBank to the UK. In California, a reformed electricity market means that the company Opower can make money from helping people change their habits and use less energy. Without the underpinning policies, these businesses would not exist.
But sometimes policy can get in the way. For example a group of companies who wanted to offer subsidised insulation to their employees found that it counted as a taxable benefit and so was more expensive. Other perks, such as bike loans, are exempt from this.
Back at the conference, the shift from products to services seemed the most exciting behaviour change model being pursued by businesses. Rachel Botsman of Collaborative Consumption said that bike sharing schemes – like Boris bikes – are the fastest growing mode of transport in the world.
I like this idea because it doesn’t rely on waiting for someone to change their attitudes and then their actions – it just gives them an attractive alternative.
Botsman says that government can do four types of thing to help businesses that promote renting, sharing and swapping:
- Get out of the way (remove policy barriers)
- Introduce legislation to make change happen
- Form public-private partnerships
- Help import, amplify and scale new business models
What do you think?
What are some of the most exciting ways that businesses are helping people to reduce their environmental impact?
What barriers do companies face when trying to help their customers or employees go green? How could changes in the policy framework encourage other companies to get into this area?