Pollution, emissions and climate change are externalities resulting largely from consumers’ overconsumption of a good at a given price level. The lack of private responsibility associated with these external effects leads many to believe the only way for consumption to fall is through heavy handed government intervention, detrimentally impacting individual liberty and freedom.

Yet with the rise of environmentally conscious consumers, it would appear that people are internalising the externalities created by overconsumption.

Rising awareness may come from an increase in media attention and discussion of environmental issues on the world stage such as the increase in articles on climate issues, concern from leaders at the UN and the popularity of Greta Thurnberg. This creates a narrative which can have tangible impacts on the real economy, as evidenced by work done by Robert Schiller.

How does this change in narrative link to consumer markets? Whilst the environment may in many cases be ownerless, the choices made by consumers on how to treat it are made with individual agency and carry personal responsibility. In the same way that those who litter are shunned, developing environmental consciousness may lead to ecological consumption becoming a ‘social act’ providing people with an intrinsic motivation to make ecologically sound choices.

This idea builds upon Conspicuous Consumption proposed by Thorstein Veblen where the motive for consumption is based on exerting economic power to gain social influence and respect. Despite differing motives, both theories provide an external pressure for consumers to consider environmental effects of their consumption.

So, with society, firms and the media already moving in this direction, what policy can ensure this environmental consumption is effective as well as ethical?

Currently the ecological impact of a good is often poorly communicated, with no clear indication of what goes into the production of a given good. Creating a simple metric of environmental impact of consumption (e.g. through total CO2 resulting from production) would signal ecological effects to consumers allowing for more informed consumption choices.

In a way, this policy borrows aspects of behavioural economics and creates an additional factor for consumers to consider, which from societal pressure, they are likely to take seriously.

Thus by pioneering this metric, the UK seeks to take a more rational perspective in this increasingly environmentally conscious world.

Tim Edwards is the winner of the 18-21 category in our Young Writer on Liberty 2020 competition.