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What role for profits and luxury consumption in the ecological transition?

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  • Cappelli, Federica
  • Di Bucchianico, Stefano

Abstract

Given the empirical evidence showing the crucial role of income distribution and excessive consumption of richer households in determining greenhouse gas emissions, understanding their connection becomes especially important. Building on the distinction between subsistence and luxury emissions, we study where to intervene in reducing non-essential emissions. In doing so, we are able to connect the double role of luxury goods. Together with surplus production of other wage-goods, they are the reason why profits exist, but they are also the major constituent of wasteful luxury consumption and, hence, major drivers of consumer-generated greenhouse gas emissions. Among the three different scenarios ('greener consumption', 'reformist', and 'just transition') we depict, only the just transition is a viable option to respect both social and environmental boundaries.

Suggested Citation

  • Cappelli, Federica & Di Bucchianico, Stefano, 2024. "What role for profits and luxury consumption in the ecological transition?," IPE Working Papers 245/2024, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    • Handle: RePEc:zbw:ipewps:306820
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    More about this item

    Keywords

    rate of profit; luxury goods; GHG emissions; just transition; climate change;
    All these keywords.

    JEL classification:

    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • B24 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Socialist; Marxist; Scraffian

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