Green consumer markets in the fight against climate change

Abstract

Climate change has become one of the greatest threats to environmental security, as attested by the growing frequency of severe flooding and storms, extreme temperatures and droughts. Accordingly, the European Union’s (EU) 6th Environment Action Programme (2010) lists tackling climate change as its first priority. A key aim of the EU has been to cut CO2 emissions, a major factor in climate change, by 8% until 2012 and 20% until 2020. The European Commission has proposed the encouragement of private consumer market for green products and services as one of several solutions to this problem. However, existing research suggests that the market share of these products has been only 3%, although 30% of individuals favour environmental and ethical goods. This article uses Public Goods Theory to explain why the contribution of the green consumer market to fighting climate change has been and possibly may remain limited without further public intervention.