Sustainable Consumption & Behavioural Change

In previous posts, it was argued that personal mobility remains unsustainable and that the regulator has an important role to play. In this post, we will explore some of the factors that continue to contribute to unsustainable consumption when considering personal mobility and why it is so difficult to change people’s consumption behaviour. We will look at it through the lens of disinformation (by companies), lack of fundamental understanding (by the consumer), and ineffective policies (by the regulator). We will use Tesla as an example where all three dimensions of unsustainable consumption are stimulated.

Disinformation by the company (Tesla). Tesla is the unquestionable master of being a spin-doctor, who tries to control the way something is described to the public in order to influence what people think about it. Most people now believe that Tesla’s products are based on disruptive innovation and that they are much more sustainable forms of personal mobility compared to the average sedan, minivan or SUV. While it is true that no CO2 emissions are coming out of the tailpipe of a Model S (there is no tailpipe to begin with), they forget to highlight the fact that electricity is not a primary energy form and that electricity needs to be generated and stored for future consumption. Most of the electricity around the world is generated from fossil fuels, and several of Tesla’s supercharger stations have diesel-powered backup generators, which are considered among the worst ways to generate electricity from an efficiency and environmental point of view. Recent articles in both the Harvard Business Review and MIT Technology Review conclude, based on Clayton Christensen’s theory of disruptive innovation, that Tesla’s cars are not really disruptive.

There are two additional fundamental sustainability challenges when considering any of the Tesla electric cars: 1) the use of lithium for the production of batteries. Lithium needs to be mined and processed for use in batteries. Lithium is flammable and highly reactive and has been linked by the Environmental Protection Agency (EPA) to cancer and neurological problems. In addition, according to the Guardian, the mining and production is an energy intensive and soil polluting activity, and 2) all Teslas have an aluminium body and chassis to reduce weight. Unfortunately, smelting aluminium requires almost 10 times the energy to smelt steel. A 2012 article in the Journal of Industrial Ecology concludes that when all these factors are incorporated, the environmental footprint – over the entire lifecycle of the Tesla Model S – is higher than that of most large American SUVs. Nobody at Tesla will ever tell you this. And ultimately, misinformation by companies of course affects the (mis)understanding of consumers and is reflected in consumer behaviour.

Porsche, on the other hand, is launching a full-electric sports car (which outperforms any Tesla on all dimensions), which has a carbon-fibre body (which has a significantly lower environmental footprint compared to aluminium) and is largely 3D printed (which is a more energy efficient production process and generates far less waste in the process) and uses a different type of battery (which is only 20% of the weight of the battery used in Tesla Model S). Not truly a surprise given that Porsche has the know-how and expertise to design and build remarkable sports cars.

Lack of fundamental understanding by the consumer. I have two very smart Ivy League educated friends who fundamentally believe that cold fusion will solve all our energy problems and that home battery packs will make consumers independent from being grid connected. Cold fusion, a nuclear reaction at room temperature, is theoretically not possible. Nuclear fusion is a nuclear reaction in which two or more atomic nuclei form a new nucleus, and is the same process that happens in stars, including the sun at a temperature of 14 million degrees Kelvin. This is the kind of thing that National Geographic suggests ‘not to try at home’. Also, home battery packs have not been designed to be off-grid. While theoretically feasible, it is practical nonsense. The objective of distributed power generation and storage is that everybody in the community becomes an energy producer and consumer and that the role of the grid is to balance loads.

The media tends to play a very misleading role when it pertains to potential new technologies because they are often overhyped and not fact tested. Even for the well-educated person, it is not easy to make the distinction between fact and fiction.

Ineffective policies by the regulator. In my previous blogs, I have highlighted some effective policies to stimulate more sustainable consumption and behaviour. At times, however, the regulator gets it completely wrong. Subsidies, whether these are grants or tax concessions, are very often poorly designed and lead to unsustainable behaviour. Germany and Belgium made excessive use of feed-in tariffs to stimulate the uptake of rooftop solar PV. These feed-in tariffs and the resulting short payback period, led to unsustainable consumption. The World Energy Council ranks Belgium 41st and Germany 44th out of 130 countries in terms of the environmental sustainability of energy systems. This makes Germany the least environmental sustainable country in the OECD, while also having one of the most expensive energy consumer prices in the world. There are several reasons for this: 1) both Belgium and Germany are bad locations for solar power because of low solar irradiation, 2) the supply variability of solar power, i.e., it is not possible to ramp alternative power plants as fast as solar swings up and down every, and 3) it displaces the wrong type of power, such as nuclear.

Regulators are now doing the same for electric vehicles – providing financial incentives for people to buy and drive environmentally-unfriendly cars. City- states, such as Singapore and Hong Kong, may improve local air quality by letting people purchase electric vehicles without tax, but they in fact dramatically negatively affect the environmental footprint in other parts of the world where the raw materials are mined and processed, and where the cars are decommissioned and parts are recycled. As a consumer, I would be inclined to benefit from the tax concessions provided by the regulator, but from a life-cycle perspective they are unsustainable. But regulations change and in California they are currently revisiting regulation and take into account some of the externalities.

There is also some concern that regulatory policies (and thus, Tesla) are helping fuel inequality. Tax credits for electric vehicles fuel inequality because the benefits are only available to the upper middle class. In the US, a Tesla Model S can earn the buyer a $7,500 tax credit depending on the battery pack size. Given the high purchase price, only wealthier Americans benefit from this tax credit, while the average American, who cannot afford a $75,000+ car, does not benefit from a tax credit. The same applies in other countries where feed-in tariffs only apply to expensive and not very sustainable electric vehicles.

If we could improve these three dimensions – disinformation by companies, lack of understanding by the consumer, and effective policies by the regulator – consumption would become substantially more sustainable because it would change consumer behaviour.

7 thoughts on “Sustainable Consumption & Behavioural Change

  1. Again a superbly researched and written blog. I was always to some degree suspicious about the Tesla business model. Your post triggered me to look into it more:
    1. Richard Quest refers to Tesla as the Tesla phenomenon. What phenomenon? The electric car was invented by Thomas Davenport in 1834 and electric cars were popular in the late 19th and early 20th century, until the internal combustion engine took over. Tesla is configuring its battery packs out of laptop computer batteries. How disruptive is this? The Model S uses about 7,000 Panasonic lithium-ion laptop battery cells in its battery pack. Not the ultimate battery. The Porsche battery does not seem to be dissimilar in terms of performance to the the ultimate battery technology that Cambridge University scientists are working on: 20% of the weight of Tesla battery, 90% efficiency, 2,000 times recharging. That’s disruptive. It seems that Tesla with its laptop reconfigured laptop batteries is also betting on the wrong technology for its stationary storage technology. There are much more interesting, sustainable, and proven stationary energy technologies out there, for example LightSail Energy – lightsail.com
    2. You referred to counter productive and unsustainable government regulation in the form of a maximal $7,500 tax credit. Unfortunately, there is more. Musk’s empire has received a total of $4.9 billion in government supports (grants, tax breaks, factory construction, discounted loans and environmental credits).
    3. Renault Nissan, GM, BMW, and a wide range of urban electric car producers. are all selling much more affordable electric cars. The price of these cars are not thus not fuelling inequality. Are these cars also more sustainable from the environmental dimension? Would like to have your views on this.

    Liked by 1 person

  2. Thank you for your comment emergingmarktssustainability. Indeed other manufacturers have developed more sustainable concepts and products. Take for example, Renault. A few years ago, Renault released a full range of affordable electric cars. 4 cars in total, ranging from a 2 seater to a family sedan and a delivery van. Not only are these cars affordable, these are also more environmentally friendly products. Instead of aluminium, carbon fibres are used which are even lighter than aluminium, much better for the environment and they also tend to absorb shocks better in case of collision.

    While these cars also use Lithium batteries, they tend to be more environmentally friendly because the cars are lighter and the battery packs are smaller. Lithium is unfortunately a very nasty product which does not occur naturally on our planet. The following statement is taken from Friends of the Earth:

    “The extraction of lithium has significant environmental and social impacts, especially due to water pollution and depletion. In addition, toxic chemicals are needed to process lithium. The release of such chemicals through leaching, spills or air emissions can harm communities, ecosystems and food production. Moreover, lithium extraction inevitably harms the soil and also causes air contamination”

    While one can argue that for mobile applications – laptops, smartphones, and cars – there is no alternative to lithium batteries, think twice. This year, Toyota launched the first fuel cell vehicle. Here the hydrogen fuel cell generates electricity on demand to power the electric engine. As a result NO lithium batteries are required. Hydrogen can be generated more sustainably from renewable sources and refuelling can be done more effectively using modified existing refuelling infrastructure. Recharging a Tesla is time consuming, especially given the 400 Volt battery pack it uses. Porsche uses an 800 Volt battery pack, dramatically reducing the recharging time, while improving longevity of the battery pack. Watt = Voltage * Amperes or in other words, the higher the voltage, the lower the amperes required to have the same wattage. A more sustainable transportation future would include, small to medium-sized electric family sedans, which are used for relatively small distances (200 km or less per day) and are charged overnight when we don’t consume much electricity because most people are sleeping. Hydrogen fuel cell cars, provide the practicality and sustainability needed for longer trips.

    For stationary applications, lithium battery is a definite ‘NO’. I visited LightSail and also met Vinod Khosla, one of the backers of this technology. LightSail and similar technologies are indeed much better alternatives for stationary energy storage.

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  3. Below is a slightly edited version of my previous reply – watch the back to the future video 🙂

    Thank you for your comment emergingmarktssustainability. Indeed other manufacturers have developed more sustainable concepts and products. Take for example, Renault. A few years ago, Renault released a full range of affordable electric cars. 4 cars in total, ranging from a 2 seater to a family sedan and a delivery van (https://www.renault.co.uk/vehicles/new-vehicles/kangoo-ze.html). Not only are these cars affordable, these are also more environmentally friendly products. Instead of aluminium, carbon fibres are used which are even lighter than aluminium, much better for the environment and they also tend to absorb shocks better in case of collision.

    While these cars also use Lithium batteries, they tend to be more environmentally friendly because the cars are lighter and the battery packs are smaller. Lithium is unfortunately a very nasty product which does not occur naturally on our planet. The following statement is taken from Friends of the Earth:

    “The extraction of lithium has significant environmental and social impacts, especially due to water pollution and depletion. In addition, toxic chemicals are needed to process lithium. The release of such chemicals through leaching, spills or air emissions can harm communities, ecosystems and food production. Moreover, lithium extraction inevitably harms the soil and also causes air contamination”

    While one can argue that for mobile applications – laptops, smartphones, and cars – there is no alternative to lithium batteries, think twice. This year, Toyota launched the first fuel cell vehicle (https://ssl.toyota.com/mirai/fcv.html). Here the hydrogen fuel cell generates electricity on demand to power the electric engine. As a result NO lithium batteries are required. Hydrogen can be generated more sustainably from renewable sources and refuelling can be done more effectively using modified existing refuelling infrastructure. Recharging a Tesla is time consuming, especially given the 400 Volt battery pack it uses. Porsche uses an 800 Volt battery pack, dramatically reducing the recharging time, while improving longevity of the battery pack. Watt = Voltage * Amperes or in other words, the higher the voltage, the lower the amperes required to have the same wattage. A more sustainable transportation future would include, small to medium-sized electric family sedans, which are used for relatively small distances (200 km or less per day) and are charged overnight when we don’t consume much electricity because most people are sleeping. Hydrogen fuel cell cars, provide the practicality and sustainability needed for longer trips (https://www.youtube.com/watch?v=xFyY7_hc-14).

    For stationary applications, lithium battery is a definite ‘NO’. I visited LightSail (www.lightsail.com) and also met Vinod Khosla (www.khoslaventures.com), one of the backers of this technology. LightSail and similar technologies are indeed much better alternatives for stationary energy storage.

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  4. This comes to prove the power of marketing! The amount of research found (and posted on this blog) around the “phenomenon” of Tesla seems to be pushed to the hidden closets due to very efficient marketing. A close friend of mine went through a full year of analysis and budget reviews to finally justify his purchase of a Tesla….and the shock (mostly) everyone around him had with such a heft price tag purchase was always justified with 3 comments – it’s eco friendly, I save on gas money, and I receive a tax cut. With that said, and given the above detailed background on the Tesla and other electric vehicles, it doesn’t seem he has done his homework very well (or he was simply blinded by the marketing of Tesla) because if we were to follow his 3 criteria response we can criticize the fact that he could reduce gas money and receive a tax refund on any other electric model car – which would actually be be Eco-friendly!! The power of marketing and media is so grand that I believe that for sustainable consumption to be achieved there needs to be truthfulness in marketing (among a few other factors)! If someone was courteous enough to more visibly lay out the truth about Tesla for all to see… They might initially face push back, but if persistent enough, a change wave could begin to form….and who knows what repercussions that can lead to (positive or negative) ….

    Thanks for sharing such amazing data!

    Liked by 1 person

  5. Dear ProfSasha

    A great prost thank you!

    I am a little saddened by your post as I have always been very proud of Elon Musk, as a fellow South-African, but this post clearly shows some serious misunderstanding of the true picture around Tesla cars. I am shocked by the information as well as disinformation of both governments and business in your example. I am also shocked by my own ignorance, as even I thought that if I ever returned to a country where I could own and drive a car again, I would buy a Tesla ( to my husband’s amusement as I have never bought a car, and am completely car phobic ). After reading your post I will not !

    Where I live in China there are Tesla’s everywhere as the China government provides significant tax cuts and free number plates in the over populated Chinese cities where no one can get personal number plates anymore to Tesla drivers.

    The challenge for me is that there are so many sides to every product, good or bad. It is so difficult as a consumer to get access to information or researching products. There is so much conflicting information. Even at extremely high price tags products are still sold without information about component traceability, or the true picture. The luxury goods industry is notoriously bad for this.

    I completely agree with you that if better information by companies were available, and there was an understanding by the consumer of what they were buying, that everyone would make different purchasing decisions. I myself, as a consumer am horrified by many of my own past purchasing decisions, made without researching what I was buying in advance. Ignorantly buying unethically sourced or manufactured consumer goods or food without taking the time to research my purchase.

    Due to the inability to get access to good information about products, how they are made, the traceability of the components as well as the materials used, I now just don’t buy products and I have considerably reduced my consumption.

    Caring for my possessions and only making distressed purchases if I need to, is what my personal goal is. Governments should force business to provide the real picture so that everyone can make better buying decisions and change.

    Thank you for a great post , I look forward to the next one !

    Liked by 1 person

  6. Thank you for your comments Deeper Luxury. If companies would start adopting Integrated Reporting across the entire value chain and about all stakeholders – direct and indirect, we would be better informed about what sustainability and sustainable innovation really means.

    Thanks again.

    Like

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