Charge It to My Green Credit Card
Last month, I came across a Reuters article on Mother Nature Network that discussed the benefits of a new “green credit card” in South Korea. I have to admit it sounds exciting, but the cynic in me also has to respond.
First, I like the idea of a green credit card, which in essence would give the user bonus points as he or she buys sustainable products and services, such as public transit tickets or eco-friendly laundry detergent. These points could then be redeemed for cash or, as the article suggests, credited to lower one’s utility bill. This design offers a small economic incentive to make the right choice—and more importantly, it offers a constant and subtle psychological reinforcement to make green choices. In other words, it is a great example of choice editing.
Subtly editing people’s choices can work very well. A year ago, Washington, D.C. added a 5-cent tax on plastic bags, and in the course of one year, it reduced bag usage from 270 million in 2009 to 55 million in 2010—an 80 percent reduction. Clearly this tax wasn’t enough to be an economic burden, but it was certainly enough to shift people’s behavior away from the unthinking habit of taking multiple disposable bags when at the check-out line.
But while this green credit card could be beneficial, it inevitably raises some significant questions:
- Will it stimulate additional consumption? This could happen either directly due to the feel-good effect of saving the world by buying green (and being encouraged to buy more by the inevitable connected marketing campaign), or indirectly through the rebound effect, where the money saved on green products gives a person new discretionary income to buy other things, such as a trip to New Zealand for vacation (and ironically produces more ecological damage than all these green purchases reduced). Worse is that taking one good action often creates the justification to rationalize away a bad one. For example, one study found that people who recycle a lot use that as justification for flying more. So will the use of this green credit card serve as an excuse for participating in other unsustainable activities?
- Will it stimulate more consumption than paying cash? Studies show that people spend more when using a credit card rather than cash, so even if a green credit card doesn’t stimulate more consumption than a "dirty" credit card, it might still stimulate more consumption altogether. So perhaps efforts by green innovators should instead focus on getting people to use ‘greenbacks’ (cash) rather than green credit. Or even better, get them to use local currencies that only the greenest local businesses use.
- What will be included in the green credit card incentive program? Will it just be products that are truly necessary and sustainable, or anything with a nice veneer of greenwash? Sure, it makes sense to include organic laundry detergent, but what about eco-friendly hair dye? Is that a necessity or is the trivial environmental improvement outweighed by the fact that a bad cultural and social message is reinforced and artificial demand is cultivated—namely that you cannot be happy with your natural hair color and that only by consuming products will you be able to be your happiest, most-fulfilled self. In the end, there is no such thing as a sustainable product when that product is completely unnecessary.
Ultimately, this is probably the first of many green credit cards, which is not necessarily a bad thing if not completely co-opted by marketers (yes, I know that’s the inevitable result). One really positive example mentioned in the article was credit card users getting credits for not consuming—for example, getting points for choosing the ceramic mug instead of the to-go cup, and for conserving water or electricity in their homes. If this can be effectively integrated so that the credit card works to reduce the least sustainable forms of consumption altogether (rather than just substituting these for less-bad forms) and not stimulate demand for more consumption, then this card might really be a good thing, being one more tool to help retrain us so that we no longer act primarily as consumers.