A tax on advertising could be the key to more sustainable consumption

Advertising is a multi-billion-dollar industry promoting constant consumption. Could it be harnessed to promote sustainability?

The single most contested topic in the heated debate about sustainable business is how to promote sustainable consumption.

One viewpoint – taken by the “fundi” faction – argues the concept has no meaning. Talking about promoting consumption and sustainability in the same breath is a contradiction, as more consumption inevitably means less sustainability.

In the opposing corner, the realists (and that includes me) say that in a world of rising populations and increasing expectations, people will continue to consume. Whether it’s food to live, clothes to keep warm, travel to work or to meet friends, and energy to power it all, the question is how to influence consumption on to a sustainable path.

Realist or not, there is one fact that the fundis can use to score a game-winning home run: the sheer scale of advertising today that promotes conventional notions of consumption.

According to Nielsen’s recently published Global AdView Pulse report, 2012 “closed out on a positive note for the ad industry”: worldwide, advertising is now a $557bn business.

In the largest market, the United States, the average person watches nearly three hours of TV a day, according to Bureau of Labor Statistics, and thereby absorbs hundreds of marketing messages a day. That’s a lot of exposure and a huge sum of money being deployed to influence behaviour, for good or ill.

So here’s a modest suggestion – thanks to the United Nations – for how to turn the tide. Back in 1998, the UN human development report on global consumption patterns suggested that companies should set aside 3% of tax-deductible advertising budgets to fund “non-profit, certified, qualified, public interest TV and radio producers” to pay for “counter-advertising”.

In arguments still familiar today, the report cited consumers’ own interest in a cleaner environment as a significant factor that firms seeking competitive advantage can harness. It said advertising can serve positive purposes and has powerful potential to shape and channel consumer awareness and so promote sustainable consumption patterns for the 21st century.

It contrasted the power to use advertising techniques for civil action and public campaigns “to put across information, opinions and values not in the mainstream of commerce or politics” with the billions of dollars spent by the private sector.

Actually, the ideas in the United Nations report were not new. Activists in America, including ethical media expert, Hazel Henderson, had already developed proposals for a “truth in advertising assurance set-aside” scheme.

Whatever the origin, little attention was paid at the time, as the focus moved to global warming and the need to combat climate change. It is only now, 15 years later, that the fundamental issue of underlying consumption patterns is back on the table.

Is the idea at all feasible?

One parallel is the tobacco industry, where, for example, the California Tobacco Control programme levies a surcharge on sales to fund public education campaigns in that state.

Another is in the UK, where the Advertising Standards Authority (which regulates advertising in all forms of media) is funded through a 0.1% levy on the cost of buying advertising space and 0.2% levy on some direct mail. This allows the ASA to respond to complaints and to vet adverts for compliance with its code of conduct, essentially about misleading, harmful or offensive advertisements.

The idea for a positive advertising fund has recently been picked up among other proposals in The Green Book, which I co-edited. A levy of 0.1% in the UK would yield an estimated £16m a year, with adverts that meet green marketing codes exempt.

This is just one of a number of initiatives seeking to influence public policy making as the political parties start to formulate manifestos for next election (now only 20 months away). For example, the UK’s main environmental thinktank, the Green Alliance, is running a Green Roots programme, exploring the philosophical traditions of conservatism, liberalism and social democracy.

As Adam Smith long ago recognised, markets need good information to function well, for the benefit of both buyers and sellers. Without it, his “invisible hand” won’t guide competitive transactions and efficient resource allocation. For those of us seeking market solutions to sustainable consumption, more of a level playing field in marketing is fast becoming essential.

This article first appeared in The Guardian Sustainability hub

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