The case for labels 🏷

For most of our history, we have thought of nature as much more powerful than we are. “No matter what the world preaches,” writes the poet Mary Oliver, “spring unfolds at its appointed time.” The seasons change and the tides move according to laws we abide by but had no hand in writing. “Throughout history,” writes Mike Berners-Lee, “the dominant cultures have treated the planet as a big robust place, compared to everything we could throw at it.”

In 1712 Thomas Newcomen invented the steam pump, and that balance of power shifted tectonically. The pump burnt coal to heat water into steam which moved a piston, moving water out of mines. Superficially, this was a tool like any other, improving the productivity of the people operating the mine. Same people as before, or fewer, but much more output.

But in fact the steam pump was completely different: its power wasn’t constrained by human labour. As James Lovelock writes, “Prior to this the energy available to our species was, basically, the sunlight that fell on the surface of the Earth. This included the energy locked up in the trees and plants.” Unlike animals and plants, Newcomen’s machine accessed concentrated solar energy captured over hundreds of millions of years.

Just as importantly, the steam pump was the first tool with significant externalities. An externality is the name economists give the impact of buying or selling something to anyone who isn’t a voluntary participant in that exchange. If you own a home and I buy the house next door, for example, you might be on the receiving end of an externality. If I renovate my house and front garden beautifully, the value of your home might increase. If I trash the place and hold all night raves, it might decrease.

What system was the steam pump entering into? The presence of life on our planet is self-fulfilling – a virtuous circle. The Sun is a main sequence star, and has been slowly getting hotter for billions of years. Life evolved during a cooler period, 3.7 billion years ago, and its presence has kept the Earth cool enough to sustain it. If one were to remove all the vegetation from the Earth’s surface today there would be a runaway greenhouse effect, and life would cease.

The temperature of the Earth is controlled by the amount of carbon in the atmosphere. That level is like a bank account which every year we deposit to and withdraw from. Through photosynthesis, respiration and gas exchange, the surface and the atmosphere exchange carbon in roughly equal parts each year. The budget has generally been balanced. If you chart the carbon in the atmosphere over decades, the line has a zigzag for every year, because carbon absorption varies with the seasons. It is almost as if the Earth is breathing.

An unexpected (at the time) output of the steam pump’s exchange of fossil fuels for energy was carbon, most of which ended up in the atmosphere. Unbeknown to Thomas Newcomen, the huge popularity of burning fossil fuels would come to break the virtuous circle that sustains the temperature of the planet.

If that balance remains broken for a short time, we will have a warmer planet. That would mean ice melting, sea rising, island and coastal areas underwater, deserts expanding, more extreme droughts and storms, etc. If the balance remains broken for a longer time, a runaway greenhouse effect will turn the surface of Earth into something like Venus’s, which is 400°C.

Of course, none of this is any longer unexpected. “Nearly everything we understand about global warming was understood in 1979,” writes Nathaniel Rich. Despite that, no action so far taken has stemmed our carbon output, which continues to grow. Human beings are not logic machines, and are very adept at living with dichotomies. The critical question is now “How do we act?”

On one level, the answer is obvious: we must act politically. Carbon-intensive options are often attractive ones. Foreign travel, gas central heating, year-round asparagus. Collective action to change the rules of the game is the fairest and most realistic way to create such change. It’s a familiar playbook for governments: ban the worst offenses, tax the rest and subsidize choices that benefit society.

Setting aside politics for a moment though, we can also consider our market interactions as individuals. Typically in such exchanges we pay something, and gain some utility in return. A naive view of humanity would hold that that utility is only about personal benefit. But the reality is that in societies with surplus, the amount of and nature of that utility depends on our values.

We are more proud to buy some things than others. We may even be proud not to buy things at all. It depends on our personal, familial, communal, societal and cultural context. What do the people around us care about? People don’t buy sports cars only to drive sports cars, they buy them to be seen driving them. If we as a society choose to value our climate, then we will represent that value in our market exchanges. The question is: does our environment provide the information needed to make those assessments?

Do you think that if you care about child labour, you would be more likely to try and find out if the products you buy involved child labour? Studies have shown the reverse to be true: participants were less likely to seek out that information. Again, humans are not machines. We have no trouble at all inconsistently applying value systems, or not applying them at all if it is inconvenient to do so. We need help!

Humans are far more susceptible to our environments than we generally suppose. Consider one of the most serious choices at all, suicide. You would think if one were suicidal the available means would make little difference. In fact the reverse is true. In the UK, towns used to use a form of gas that when inhaled was very deadly. The poet Sylvia Plath killed herself that way. After the discovery of natural gas in the north sea, which is not deadly, the supply was switched. Suicide rates fell subsantially. Rather than find another method, people simply didn’t bother. Another study showed people talked down from jumping off Golden Gate Bridge almost all never tried again. “Overwhelmingly,” writes Malcolm Gladwell, “the people who want to jump off Golden Gate Bridge at any given moment want to jump off the Golden Gate Bridge only at that given moment.”

If you agree with me that our exchanges are driven by our values as well as by monetary concerns, and that our behaviour is very dependent on our environment, you may already know what revolutionary technology we should deploy to address climate change. The answer is labels.

For markets to work effectively, they need good means of sharing pricing information. In a German prisoner of war camp in World War II, French and British soldiers used to trade coffee for tea from their regular Red Cross care packages. Eventually, cigarettes were settled on as a defacto currency. “The stabilization of exchange values, or relative prices,” writes Yanis Varoufakis, “was helped along by the presence of noticeboards around the camp.”

Without market information, the prisoners would not have been able to make good exchange decisions. They could well have short-changed themselves. By the same token, how can we make decisions about climate externalities if we do not know what they are?

They are not simple to calculate. Even for the most trivial example, say a vegetable in a store, we have to know if that vegetable is in season (if it is not it has either been hot housed or transported) and its shelf life (a longer shelf life may mean it has come by boat rather than air freight). These factors can make 10x differences to the climate externalities of the exchange.

Labelling has solved similar problems. In the UK, smoking causes a serious externality problem for the state-funded healthcare system, which has to pick up the bill for treating the consequent diseases. In 2008, the UK labelled all cigarettes with vivid health warnings. Even when dealing with a highly addictive substance like nicotine, far harder to give up than Peruvian asparagus, the labels have helped drive smoking rates to historic lows. A meta-study of nutrition labels found substantial impact there, too, where customers who used nutrition information consumed fewer calories and less saturated fat.

We have sought to make smokers health aware and eaters nutrition aware. Now we must make all exchanges climate aware. We can do this digitally and physically. Through legislation, entrepreneurship, altruism and corporate responsibility. There are many challenges, but they amount to logistics. They are surmountable.

If all market exchanges were climate-aware, then we would be left only with a test of our values. That is a test I strongly believe we are equal to.