Cover image credit: “Sustainable Landscaping” by Jeremy Levine Design is licensed under CC BY 2.0.

The global climate crisis is arguably the single most pressing challenge confronting us today, yet most of us feel helpless in solving this issue directly.

But what if it turns out that the most effective way you can tackle this challenge is by means of how you manage your personal finances?

Myths

Before understanding how something so seemingly far-fetched as personal finance can be brought to bear on the problem of climate change, let’s examine some common myths.

Myth #1

Today, there are many websites where you can find eco-friendly products and services (henceforth, we’ll refer to “products and services” together as “utilities” for brevity). However, it is universally assumed that such eco-friendly utilities are only for the rich and elite as they’re almost always more expensive than the conventional ones that are most readily available and commonly-consumed. While there is some merit to this belief, the price difference between the regular and eco-friendly versions of a utility are not necessarily as great as most people imagine.

In some cases, eco-friendly versions of utilities are about the same price or even cheaper than the regular versions – especially if you consider the long-term cost of ownership.

For example, while the initial cost of LED bulbs may be higher than traditional incandescent bulbs, since the former last much longer and use much less energy than the latter – leading to savings in electricity bills – they can be cheaper (not to mention more eco-friendly) in the long run than the latter.

However, if we always assume that eco-friendly utilities are necessarily more expensive than the alternatives, then we may not even seek such options out!

Myth #2

It is well-known that buying good quality utilities that last a long time not only helps you save money in the long run, but also helps our environment by avoiding contributing to our ever increasing trash piles in landfills.¹

However, another common myth when it comes to eco-friendly utilities is that since they’re usually produced by newer businesses – that tend to be smaller than their more entrenched competition which produce the commonly-consumed utilities – they may be of an inferior quality than the latter ones. However, there are well-known instances of quality-control issues in the utilities of even big-name brands.

Thus, a big-name brand is not a guarantee of good quality utility.

In other words, it makes no sense to dismiss eco-friendly utilities from newer businesses on quality control grounds before you’ve actually verified that their quality is indeed worse than the alternatives.

Myth #3

The most common myth when it comes to tackling the climate crisis is the pervasive belief that ultimately, this is an issue that needs to be tackled by means of government policies, and therefore we naturally turn to political action to try to solve the issue, e.g., by voting for progressive candidates in elections – whenever such an option is available².

However, it is an open secret that in today’s capitalism-dominated society, big corporations get favorable policies passed by the government that allow them to boost their profitability– often at the cost of the environment – through corporate lobbying, and other such mechanisms, thus preventing meaningful action through our chosen political representatives – no matter how progressive they may be.

Therefore, it is clear that political action alone is not sufficient to address this pressing issue. Even if you decide to run for political office yourself, and swear never to let your political agenda be swayed by big money, unless you can convince the vast majority of your fellow politicians to do the same (an impossibly difficult task in today’s culture in most places), you’d be left fighting many losing battles in the political arena.

So what else can we do?

Choose sustainability

Lifeblood of consumer capitalism

The solution to this complex problem lies in recognizing the key role played by the lifeblood of the consumer capitalist society we live in today, viz., capital, a.k.a., money.

The directions in which capital flows in this system determines which businesses flourish and which ones falter. It is axiomatic in this system that businesses that produce utilities that no one wants to buy will ultimately go out of business. On the other hand, if a lot of people buy a particular utility – thereby directing their money towards a particular business – the resulting increased profits would allow that business to scale their operations³. Ultimately, by harnessing economies of scale, the business would be able to lower prices for that utility, making it more affordable over time.

Thus, if you truly believe in wanting to be a part of the solution to the climate crisis (rather than being a part of the problem), the most powerful action you can take on an individual level is to vote with your money, i.e., choose eco-friendly utilities over the alternatives.

Every time you buy a utility that’s not eco-friendly, you’re unknowingly voting for unsustainable businesses to stay in business – often at the cost of sustainable businesses!

Even if it costs a bit more

Even if an eco-friendly utility costs slightly more than its alternative, you should strongly consider buying it over the latter if you can afford it⁴ – so as to help make that utility more affordable for yourself and others due to economies of scale as explained above.

There is another reason why voting with your money is more effective than political voting. In places where democracies exist, you get to elect your favored political representatives – who then succumb to corporate lobbying anyway, as discussed above –usually only once every four or five years.

However when you vote with your money, you’re voting every single day through your purchasing decisions.

Voting with your money is the clearest signal you can send in this consumer capitalist society about your preference to support eco-friendly utilities, which would compel more businesses to prioritize sustainable practices.