Consumers play a very big role in carbon emission, either by increasing or decreasing the emission. The consumption of products with high carbon content will definitely lead to a higher emission. Golding (2009) explained that consumers of the present generation are very much concerned on climate change and the effects that go along with it. The awareness of consumers affects their consumption pattern of products, especially products which contribute to increasing carbon emission. Consumers buy products which are familiar to them and this is referred to as branding. If a consumer buys a product that is familiar to him and with loyalty it is called branding. The consumer does not care about the price as long as the product satisfies the customer’s utility. Way back then, customer’s utility depends on quality, but as he becomes aware on the effects of climate, utility now includes product being earth friendly. Consumers patronize products which do not contribute in increasing in carbon emission may it be through its consumption or production. From this, companies are pushed to produce products which are able to satisfy the utility of consumers. Consumers are empowered when it comes to mitigating climate change because of their consumption patterns, while companies innovate their products adapting to the changing needs of consumers.
Like consumers, producers play the same amount of role on climate change. Producers can either worsen or improve the current state of the environment. Producers of developed countries cover a wide range of market share internationally, meaning these producers supply number of countries all-over the world. Because of this, it is important to make sure that products sold are earth friendly and has low-carbon emission. As discussed earlier, consumers push companies to produce innovated and earth friendly products, and in response, companies find a way to develop new products using newly developed methods.
Producers respond to consumer preferences by stimulating their products. Stimulation of products takes in the form of new technologies and innovations. Innovations are developments and improvements on products; such improvements are mainly on decreasing carbon emission. Producers restructure their products, which means they entail additional cost for research and development. But the cost of restructuring the product is outweighed by the benefits that the company receives due to larger market share than before.
The globalization of supply chains is often related to cross - borders transactions may it be by country or continent. The demand for product in one country pushes the demand for an increase in production, and thus, increasing the emission. Because of this, companies nowadays find solution on how to mitigate carbon emission especially when they are already incurring high carbon emission. These companies establish factories in developing countries which have low carbon emission. In this case, they are entering into carbon market economy, wherein low-carbon emitting countries accept transactions and manufactures products for high-emitting countries; in exchange, low-emitting countries get to provide jobs for its citizens. Job creation in return lowers unemployment and of course increases the number of households above the poverty line.
Producers also find ways to protect their businesses by establishing contingency plans, sustainable management practice, flood emergency plans and acquiring insurance. Through these security measures done by producers, they are able to maintain product quality when things come to worse. Also, they are able to protect their brands and while maintaining a good customer relationship.
Government agencies and organizations are regulatory bodies, these agencies and organizations have the authority to impose rules and measurements with justifications. Sustainable Consumption Institute (n.d.) suggested that the government can significantly affect climate change through subsidies and tax incentives. Subsidies and tax incentives will stimulate producers and manufacturers to follow system and material restrictions. Subsidies and tax incentives decrease the cost of production, and this will be beneficial for the producers if they want to maximize profit while minimizing costs. A fee would be charged for each unit of carbon dioxide emitted. This strategy will encourage producers and manufacturers to produce low-carbon products and improve their system of production. This in turn would also decrease their costs of production. Preferential tax system like accelerated depreciation and tax credits also works in promoting a greener environment.
Government can also influence the emission of carbon by regulating the activities of a business. Upon registration of a business entity certain pre-operating requirements are needed to be passed in order to be able to start its operations. Through this, the government is able to detect pre-operating problems that in the long run, may heavily affect the business, consumers and especially the environment.
The government may also significantly affect climate change by requiring companies to conduct corporate social responsibility activities. It is very important to protect the area where the business is located. Also, it is important to protect citizens so as they will also protect the environment.
Non-government organizations (NGOs) have played an influential role in international environmental policy-making as innovators, facilitators and advocates. The organizations are groups of people which have advocacies. These advocacies usually cover human rights, especially women and children, animal welfare and environmental protection. Because of this, increasing number of NGOs inclined in protecting the environment is being formed. They execute projects and conferences in line with their advocacies to increase the awareness of the society when it comes to the effects of climate change.
These NGOs also mobilizes private funding. In order to execute their projects they pool in funds. These funds are used to launch “eco-lending”, eco-lending is a form of financing an institution to produce eco-products, in this way more earth friendly products are produced. Many producers manufacture and distribute products which are not earth friendly since materials for this type of products are more accessible especially when it comes to price. The eco-lending project allows entrepreneurs to redesign their products to become eco-friendly and at the same time still competitive.
References:
________. (2008). G8 Action plan for climate change to enhance the engagement of private and public financial institutions. Retrieved from http://www.fin.gc.ca/activty/G7/g8140608_3-eng.asp.
Ellis, K., Lemma, A and Schramm, C. (2009). The private sector and climate change in developing countries. Retrieved fromhttp://businessfightspoverty.ning.com/profiles/blogs/the-private-sector-and-climate
Golding, R. (2009). Climate Change and Energy: A consumer Issue. Retrieved from http://consumersinternational.blogspot.com/2009/09/climate-change-and-energy-consumer.html.
Havas Media (2007). Largest global study of consumer response to climate change puts the onus on brands. Retrieved from http://www.wrr.icodat.com/resources/reports/consumer%20response%20to%20climate%20change.pdf.
Sustainable Consumption Institute (n.d.). Consumer, business and climate change. Retrieved from http://www.sci.manchester.ac.uk/medialibrary/copenhagenpaper.pdf.
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