Overconsumption (economics)

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Overconsumption describes a situation where consumers overuse their available goods and services to where they can't, or don't want to, replenish or reuse them.^[1] In microeconomics, this is the point where the marginal cost of a consumer is greater than their marginal utility. The term overconsumption is quite controversial and does not necessarily have a single unifying definition.^[2] When used to refer to natural resources to the point where the environment is negatively affected, it is synonymous with the term overexploitation. However, when used in the broader economic sense, overconsumption can refer to all types of goods and services, including artificial ones, e.g., "the overconsumption of alcohol can lead to alcohol poisoning."^[3][4] Overconsumption is driven by several factors of the current global economy, including forces like consumerism, planned obsolescence, economic materialism, and other unsustainable business models, and can be contrasted with sustainable consumption.

Defining the amount of a natural resource required to be consumed for it to count as "overconsumption" is challenging because defining a sustainable capacity of the system requires accounting for many variables. A system's total capacity occurs at regional and worldwide levels, which means that specific regions may have higher consumption levels of certain resources than others due to greater resources without overconsuming a resource. A long-term pattern of overconsumption in any region or ecological system can cause a reduction in natural resources, often resulting in environmental degradation. However, this is only when applying the word to environmental impacts. When used in an economic sense, this point is defined as when the marginal cost of a consumer is equal to their marginal utility. Gossen's law of diminishing utility states that at this point, the consumer realizes the cost of consuming/purchasing another item/good is not worth the amount of utility (also known as happiness or satisfaction from the good) they'd receive, and therefore is not conducive to the consumer's wellbeing.^[5]

When used in the environmental sense, the discussion of overconsumption often parallels population size, growth, and human development: more people demanding a higher quality of living requires greater extraction of resources, which causes subsequent environmental degradation, such as climate change and biodiversity loss.^{[6][7][8][9][10]} Currently, the inhabitants of high-wealth, "developed" nations consume resources at a rate almost 32 times greater than those of the developing world, making up most of the human population (7.9 billion people).^[11] However, the developing world is a growing consumer market. These nations are quickly gaining more purchasing power. The Global South, which includes cities in Asia, America, and Africa, is expected to account for 56% of consumption growth by 2030,^[12] meaning that if current trends continue, relative consumption rates will shift more into these developing countries, whereas developed countries would start to plateau. Sustainable Development Goal 12, "responsible consumption and production," is the main international policy tool with goals to abate the impact of overconsumption.