Objectives

By the end of this chapter, students will be able to:

1. Define various types of energy and renewable energy
2. Measure consumption to comprehend overconsumption
3. Analyze the paradox of energy efficiency and consumption, economic growth, and uneconomic growth
4. Apply Hofstede’s cultural dimension of indulgence and restraint to ideas of consumption
5. Evaluate how businesses communicate about their use of various energy sources
6. Write about energy use professionally

Introduction

Since certain sectors contribute the most to global greenhouse gas, the rest of these chapters will focus on how businesses communicate their responsibility in using certain materials and mitigate these specific types of waste. This chapter will explore the largest greenhouse gas contributor, energy. Below is an image of global greenhouse gas emissions by sector with energy being 73.2%; agriculture, forestry, and land use 18.4%; industry 5.2%; and waste such as landfill and wastewater 3.2%.

Energy consumption has escalated significantly over the past generations, driven by advancements in technology, industrial growth, global transportation, and increased urbanization. This rise in energy use is attributed to the growing demand for electricity, heating, and a variety of electronics. Global energy demand increased by nearly 50% from 1990 to 2018, underscoring the persistent upward trend in energy usage. [1]

Effective communication can influence public perception and behavior, drive regulatory compliance, and promote sustainability initiatives. Businesses that transparently report their energy consumption and strategies for reducing their carbon footprint can build trust with consumers, investors, and regulators. This transparency is essential for fostering accountability and encouraging other organizations to adopt similar practices. Moreover, clear communication of energy use can highlight areas for improvement and innovation, ultimately contributing to more efficient energy management and reduced environmental impact. [2]

Types of Energy

To evaluate businesses’ communication of energy, it is essential to differentiate the main types of energy that contribute to GHG emissions: fossil fuels, bioenergy, industrial processes, electricity and heat, transportation, and artificial intelligence (AI).

Fossil Fuels includes coal, oil, and natural gas. When burned for electricity, heat, and transportation, these fuels release significant amounts of carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O), all potent greenhouse gases. Fossil fuel combustion is the largest source of anthropogenic GHG emissions globally. [3]

Bioenergy is derived from organic materials such as plant and animal waste, bioenergy can also contribute to GHG emissions. When biomass is burned, it releases CO2 and other pollutants. However, the net effect on GHG emissions depends on the lifecycle of the biomass, including how it is grown, harvested, and processed. [4]

Industrial Processes are certain industrial activities, such as cement production, chemical manufacturing, and steelmaking, that use energy-intensive processes that result in substantial GHG emissions. These processes often rely on fossil fuels and produce CO2 and other GHGs as byproducts. [5]

Electricity and Heat Production, also referred to as the energy sector, contributes significantly to GHG emissions. Power plants burning coal, oil, or natural gas are major sources of CO2 emissions. Even though some renewable energy sources like hydroelectric power are less carbon-intensive, they can still have indirect GHG emissions associated with construction and maintenance. [6]

Transportation is another major contributor to GHG emissions, primarily through the combustion of gasoline and diesel fuels in cars, trucks, airplanes, and ships. This sector primarily emits CO2, but also releases methane and nitrous oxide from vehicle exhausts. [7]

Artificial Intelligence (AI) is creating a new and significant demand for both electricity and water. Data centers, which house the large computing hardware required for AI, consume vast amounts of energy to operate and a great deal of water to cool the hardware. A generative AI training cluster, for instance, might consume seven or eight times more energy than a typical computing workload. For cooling purposes, it is estimated that for each kilowatt hour of energy a data center consumes, it would need two liters of water. [8] Another chapter will focus more on businesses’ communication of water while this one will focus on communicating one’s energy.

How are The Types of Energy Interrelated?

The energy sectors including gas, oil, electricity, and heating, ventilation, and air conditioning (HVAC) rely on burning fossil fuels, and our dependency on these industries has made them primary drivers of climate change.

For energy companies, particularly utilities, communicating sustainability necessitates transparency regarding their generation mix and the full lifecycle emissions of the energy they provide. For businesses and consumers, it implies a need to understand that energy choices have indirect but significant environmental impacts. This inherent complexity must be clearly articulated in sustainability reports and public messaging to avoid misleading stakeholders and to foster a more holistic understanding of energy consumption. Communicating about how a business uses energy requires a nuanced, honest, and strategic narrative that builds understanding and trust, rather than oversimplifying or overcomplicating.

To better understand whether efficiency gains truly lead to environmental sustainability, it is important to examine how resource productivity is calculated and applied.

How to Measure Resource Productivity

Resource Q/R usage efficiency, often referred to as “resource productivity” or “eco-efficiency,” is the opposite of resource intensity; it is a technique that aims to reduce environmental effects by optimizing the use of materials and energy in manufacturing. As a result, we may state:

Equation: R=Q*[1/eco-efficiency]

The number of resources used is equal to the product of provided products and services and eco-efficiency. Depending on how much a certain good or service is used by society over time, eco-efficiency improvements may or may not result in real resource savings and reduced environmental effects. It is also important to highlight that consumption gains are always far higher than population growth. In addition to supporting a healthy economy, our consumption of goods and services also reflects societal demands. The core of sustainable problem-solving is whether or not we must “overconsume” in order to reap societal advantages. [9] While resource productivity aims to make economic activity more efficient, it does not address the broader question of whether continued economic growth is ecologically sustainable in the long run.

Economic and Uneconomic Growth: When to Cut Back?

Ecological economists believe the world has reached a tipping point when expansion is expensive and we should safeguard natural areas. [10] World Bank economist Herman Daly popularized uneconomic growth and the steady state economy in the late 1990s.

Environmentalists like David Suzuki say that the global economy is too big to pretend it runs in a boundless environment. When a country raises productivity by destroying the environment, it costs the globe ecosystem services. The same logic applies to cities, companies, and homes.

 

Economic Growth refers to an increase in the output of goods and services within an economy, usually measured by GDP (gross domestic product, or the price of finished goods and services within a country in a specific period). Because GDP is a monetary valuation, it does not distinguish between market transactions that contribute positively to sustainable well-being (such as buying solar panels, bicycles, or biodegradable products) and those that diminish it (such as buying high-end cars, cigarettes, or guns). In terms of energy consumption, economic growth is often associated with increased efficiency, higher productivity, and sustainable development. For example, new technologies might enable industries to produce more goods using less energy. Economic growth often results in higher productivity and better resource management, which can include more efficient energy use.

 

Uneconomic Growth occurs when economic growth leads to an increase in costs or negative consequences that outweigh the benefits. In terms of energy consumption, uneconomic growth is characterized by diminishing returns, resource depletion, and environmental costs. Uneconomic growth can lead to overexploitation of energy resources, contributing to depletion and environmental damage without corresponding benefits in terms of improved living standards or economic welfare. Increased energy consumption from non-renewable sources can result in significant environmental costs, such as higher greenhouse gas emissions and pollution, which might offset any perceived economic benefits.

As output (real GDP) rises, marginal utility decreases because a specific area prioritizes its needs. This raises marginal disutility because we give up our least essential ecological services first (to the degree we recognize them) when the economy extends into the ecosphere. The diagram below shows three growth restrictions.

The “futility limit” arises when the production marginal utility is zero. Limits exist on how many items we can consume at once, whether it’s our stomachs or our neurological systems. In a society with significant poverty and where the poor see the affluent enjoying their money, this futility limit seems far away for everyone.

The marginal cost curve abruptly rises to the vertical at the “ecological catastrophe limit”. Human activity or a unique mix of activities may cause a chain reaction or tipping point, destroying our biological niche. Runaway climate change caused by greenhouse gas emissions for economic expansion is the current catastrophic limit contender, but where on the horizontal axis is unknown.

The marginal cost (disutility) curve assumption of continuous and smooth increase is optimistic. We may unknowingly forgo a key ecological function for a minor one to allow expansion. Thus, the marginal cost curve may zig-zag discontinuously, making it impossible to distinguish the catastrophic limit from the third and most significant limit, the economic limit.The “economic limit” is marginal cost equal to marginal benefit and net benefit maximization. The economic limit seems to be the first limit, which is excellent. It happens before the futility limit and presumably before the catastrophe limit, but that is questionable. At worst, the disaster limit may overlap with and intermittently dictate the economic limit. As far as practical, the disutility curve should reflect catastrophic risks as costs.

Overconsumption Results in Uneconomic Growth Worldwide

Overconsumption of material goods contributes directly to uneconomic growth because the social and environmental costs of production outweigh the benefits to society. In a business context, the pressure to produce, store, sell, and dispose of an ever-growing volume of goods leads not only to resource depletion but also to rising energy demands. To accommodate this accumulation of items, whether in warehouses, retail spaces, or homes, electricity is required for lighting, climate control, and refrigeration, especially for perishable or sensitive goods. HVAC systems and storage infrastructure consume significant amounts of energy, often derived from nonrenewable sources; therefore, overconsumption results in accelerating our already quickly degrading environment. Moreover, overconsumption is not just a matter of physical waste but an ongoing, energy-intensive cycle that undermines sustainability efforts. Businesses that promote continuous consumption without addressing these hidden costs may appear economically successful in the short term but ultimately contribute to the long-term failures of uneconomic growth.

 

Over the last 50 years, an expanding human population and per capita resource use in a limited world have made sustainability a more pressing concern. Note that the global population rose from 2.5 billion in 1950 to 8.2 billion in 2024. Additionally, global consumer expenditures increased from 171 billion in 1960 to 47 trillion in 2020 (U.S. dollars). Consumption is not always evil, but there are so many people using so many resources that the world environment and human consumption will need much more care and sensitivity than in the past. [12]

 

Most people associate population increase with environmental degradation in developing nations, where most people reside and population growth is higher. However, all nations have environmental issues, regardless of their development. High consumption patterns in industrialized countries, where only 20% of the world’s population lives, cause environmental degradation. Each industrialized country resident exerts more environmental pressure than 20 to 30 people in the less developed world. For instance, U.S. consumption patterns show the industrialized world’s excessive usage of global resources. The U.S. has 5% of the world’s population yet utilizes almost 24% of its resources. In The Population Bomb, Paul Ehrlich claims that the ordinary American consumes as much energy as two Japanese, six Mexicans, 13 Chinese, 31 Indians, 128 Bangladeshis, 307 Tanzanians, and 370 Ethiopians. [13]

Cultural Views of Consumption

Audience segmentation in sustainability discussions may be influenced by responses to information about climate change risks. [14] This could help explain the significant ideological divide on the subject, despite the robust scientific agreement on the core aspects of human-caused climate change. [15] [16] Diverse audiences resonate with different frameworks, objectives, messages, and messengers, and they have varying preferences for communication channels. [17] Consequently, understanding cultural differences, such as indulgence versus restraint, is crucial when addressing energy consumption.

Hofstede developed a framework over time that includes six dimensions: power distance, individualism-collectivism, uncertainty avoidance, masculinity-femininity, long-term orientation, and indulgence-restraint. [18] Cultural diversity within each country is influenced by factors such as immigration, global media, international trade and finance, tourism, and technological exchanges. [19] Numerous studies have confirmed that Hofstede’s cultural dimensions framework is the most influential, comprehensive, and widely utilized model for examining the role of culture in various research fields, including marketing, management, and psychology.

Hofstede’s sixth cultural dimension, indulgence versus restraint, helps understand cultures’ consumer behavior. This dimension revolves around people’s attitudes toward happiness, pleasure, and the pursuit of happiness, emphasizing the importance of fun, leisure, and entertainment in life [20], which substantially affects their desires, wants, and decision-making processes. [21]

An indulgent society values the fulfillment of human needs and desires, while a restrained society emphasizes curbing desires and withholding pleasures to adhere to societal norms. “Indulgent cultures will tend to focus more on individual happiness and well-being, leisure time is more important, and there is greater freedom and personal control. This is in contrast with restrained cultures where positive emotions are less freely expressed and happiness, freedom, and leisure are not given the same importance.” [22]

Below is a chart differentiating indulgent society from restrained society. The United States is at the end of the “indulgent” spectrum and Russia is at the end of the “restrained society.”

When communicating about energy in business for global audiences, it is important to consider the cultural context of indulgent and restrained societies. In indulgent cultures, where individual happiness and well-being are prioritized, businesses might emphasize the personal and immediate benefits of using clean energy, such as improved health and leisure through a cleaner environment. Highlighting the freedom and personal control that comes with sustainable energy choices can resonate well with these audiences.

Conversely, in restrained cultures, where societal norms and the collective good are more significant, communication should focus on the long-term benefits of energy conservation, such as environmental preservation and social responsibility. Emphasizing how sustainable energy practices align with societal values and the broader impact on community well-being can be more effective in these contexts. Understanding these cultural differences is crucial for businesses to effectively communicate their sustainability efforts and engage diverse global audiences in meaningful ways.

Renewable Energy Sources

Renewable energy is always available, never-ending, and not detrimental to our environment. We call them clean energy sources because they create heat without burning. Types of clean energy include:

• Solar panels convert solar energy into electricity. Solar heat is renewable since it’s always accessible .
• Wind power uses wind turbines for energy. We can even install wind generators on the open ocean where there is always wind. Below is an example of a company boasting about using wind power saying “join us at AWEA Windpower 2015 and explore our latest innovation”:

• Hydropower uses the power of moving water to generate electricity. Tidal power uses the gravitational pull of the moon on ocean tides to generate electricity and wave energy captures the energy from surface waves. These are technically forms of hydropower, but they are often listed separately due to their unique potential and challenges.
• Biomass is any organic matter that can be used as an energy source, such as animal wastes, wood, crops, and seaweed. Its supplies are unlimited; waste will always exist, and we can always grow trees and crops, which makes it a renewable energy source. Algae-based fuels are being researched because algae can grow rapidly and produce oils that can be converted to biodiesel. It’s promising for aviation and shipping industries.
• Geothermal energy is heat within the earth. People use geothermal heat to heat buildings, for bathing, and to generate electricity. Geothermal energy is a renewable energy source because heat is continuously produced inside the earth. [26]

Challenges with Switching to Renewable Energy

With so much potential for energy sources that conserve the planet more sustainably, it is likely to wonder: why don’t all businesses transition their resources to renewable ones? While the benefits for the environment are clear, the shift toward renewable energy comes with challenges. High upfront costs, limited infrastructure, long timelines, and resource constraints often delay or deter adoption. [27] Beliefs about climate change and companies greenwashing their efforts can also slow down adoption of renewable energy.

Hesitation due to Climate Change Communication

Businesses may face public skepticism or political resistance from anti-climate movements, whether internally or externally. In the past, research on the climate change counter-movement (CCCM) has mostly concentrated on providing false or misleading information related to climate science. Although deception has slowed down effective climate policies from taking effect, the fossil fuel industry and the wider climate change counter-movement have also often used economic justifications to support their inactivity. For example, many fossil fuel businesses have made significant financial contributions to powerful climate economics programs around the United States. [28] Additional focus is required on the involvement of economists and certain economic paradigms, ideologies, and models in climate politics and the continuation of fossil fuels. Below is a photo of a billboard that reads “Wind Energy is NOT the Answer” with the intention of preserving farms the way they are.

Mistrust in a Company’s Communication on Energy

In some cases, companies may exaggerate or misrepresent their sustainability efforts (i.e., greenwash) further complicating public trust and slowing meaningful progress. One example of greenwashing about renewable energy would be if a company claims something like “made with wind power” but buys wind energy for 50% of the energy it uses to make the product. The claim is deceptive because readers would likely interpret the claim to mean that all the power was composed of renewable energy. It would be more effective to state, “We purchase wind energy for half of our manufacturing facilities.” Another effective example of transparent communication on renewable energy would be if a company uses 100% non-renewable energy to manufacturer all of the parts of its product, but powers the assembly process entirely with renewable energy, then advertised its product as “assembled using renewable energy.’ [30]