at the 6th International Symposium for Future Earth in Asia: Sustainable Consumption in Asia 15 January 2018, Kyoto

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A commentary on
consumption
Rich Indians vs. Rich (poor)
Americans
CHANDRA BHUSHAN
CENTRE FOR SCIENCE AND ENVIRONMENT, INDIA

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ASSESSING CLIMATE POLICY &
PERFORMANCE OF THE UNITED STATES

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EFFICIENCY IS NOT SUFFICIENCY
Transport – More miles travelled

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EFFICIENCY IS NOT SUFFICIENCY
Housing – Gargantuan electricity consumption

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EFFICIENCY IS NOT SUFFICIENCY
Housing– Bigger houses

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EFFICIENCY IS NOT SUFFICIENCY
Housing– Size increasing

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EFFICIENCY IS NOT SUFFICIENCY
Housing – More appliances

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EMISSIONS LINKED WITH CONSUMPTION
Changes reflecting the trend in GDP

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ULTIMATE WIN-WIN
ØPolicies in the US directed towards efficiency.
Consumption is non-negotiable.
ØUS wants the ultimate win-win — consume but not
pollute.
ØThis is not possible.
ØThe US will require policy to moderate consumption if
it wants to reduce emissions significantly.

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FAIT-ACCOMPLI?
ØMixed response to our report. Agreement, shock, anger and
advice.
ØMany Americans believed that technology will solve the problem
of climate change
ØMany wrote to us about the the burgeoning consumption by the
rich in the developing countries.
ØMessage: Consumption in the developed countries is a fait-
accompli. We need to control consumption in the developing
countries.
ØDecided to study consumption of the ‘Rich’ in India.

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DISCLAIMER
ØI do not support obscene consumption either in the North
or the South
ØI do support and propagate the view that there is a level of
consumption that is required to meet the basic
development needs of everyone in the world. We need to
broadly define this ‘basic consumption’.
ØThe theme of the current report is to judge how obscene is
the rising consumption of the rich in the developing
countries compared to the rich in the developed country.

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DATA SET
ØAll comparison for the year 2011-12.
ØConsumer expenditure survey: The US Bureau of Labour Statistics conducts annual consumer
expenditure survey. In India, National Sample Survey Organisation (NSSO) conducts decadal
consumer expenditure survey. The last survey was done in 2011-12.
ØPrivate consumption expenditure published as part of National Accounts each year. Bureau of
Economic Analysis (BEA) in the US and the Ministry of Statistics and Programme Implementation
(MOSPI) in India publish annual data on total private consumption in a country under different
categories of goods and services.
ØFor comparison, Indian Rupees converted US dollar both in terms of Market Exchange Rate
(MER) and Purchasing power parity (PPP)
ØClassification of goods and services was harmonised. Some category eliminated if identical
data was not available. For instance, expenditure under personal insurance and pensions, cash
contribution, personal tax and gifts of goods and services have been excluded. This is because
the Indian consumption data do not capture these.

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AVERAGE CONSUMPTION
Based on annual private consumption expenditure published as
part of National Accounts

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THE RICHEST INDIANS vs. THE RICH (POOR) AMERICANS
Based on consumer expenditure survey
ØNSSO classifies households under different fractile class. The top 5
per cent of urban households or the Urban 12th fractile class, is the
richest class in India.
ØConsumer expenditure survey in the US divides the households into
five quintiles of income before taxes -- lowest 20 per cent, second 20
per cent, third 20 per cent, fourth 20 per cent and the highest 20 per
cent.
ØWe compare the Urban 12th fractile class of India with average
American expenditure, with expenditure of lowest 20 per cent
quintile and the highest 20 per cent quintile.

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CITATION THE RICHEST INDIANS vs. THE RICH (POOR) AMERICANS
Average annual per capita expenditures on major goods and
services (in $US-MER)

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CITATION THE RICHEST INDIANS vs. THE RICH (POOR) AMERICANS
Average annual per capita expenditures on major goods and
services (in $US-PPP)

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THE RICHEST INDIANS vs. THE RICH (POOR) AMERICANS
Per capita expenditure on energy goods and services (in $US-MER)
ØIn 2014, the average
pump price for gasoline in
India was US$ 1.10
compared to US$ 0.76 in
the US.
ØResidential electricity
prices in India for high-
end consumers
(households consuming
more than 300-400 kWh/
month) is comparable and
in some cities even higher
than the the US

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THE RICHEST INDIANS vs. THE RICH (POOR) AMERICANS
Per capita CO2 emissions (MT/annum)
ØMethodology by Eric
Kemp-Benedict and
colleagues at the
Stockholm Environment
Institute in preparing the
Greenhouse
Development Rights
Framework
ØData on national
income distributions
published by the World
Bank as part of its World
Development Indicators
(WDI) database

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CONCLUSION
ØThe consumption and emissions of the developed countries is far higher
than those of the ‘rich’ in the developing countries.
ØThis is not an argument in support of increasing the consumption of the
‘rich’ in the developing countries. Rather the argument is to:
vSeriously reduce consumption in the developed countries
vPut policies in place to moderate the growing consumption in the
developing countries
vStart serious debate ‘how much consumption is enough’!

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CONCLUSION
ØGoal 12 of SDGs: Ensure sustainable consumption and production
patterns
ØDefinition: “Sustainable consumption and production is about
promoting resource and energy efficiency, sustainable infrastructure, and
providing access to basic services, green and decent jobs and a better
quality of life for all”.
ØNowhere is this definition, the issue of ‘sufficiency’ and ‘limits to
consumption’ has been addressed
ØThe learning of Capitan America is clear: We cannot have an ultimate
win-win. Efficiency is not sufficiency.