Business, Government and Society MidTerm
devil07
BUS_166_slides_week_9.pdf
1. Global environmental issues
2. How can government protect the environment?
3. How can business protect the environment?
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Global environmental issues
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Global environmental issues
Commons = “a shared resource, such as land, air, or water that a group of people use collectively” (p. 196)
• Paradox/tragedy of the commons — if all individuals attempt to maximize their own private advantage in the short term, the commons may be destroyed, and all users, present and future, lose.
• The only solution is restraint, either voluntary or through mutual agreement.
• Example: fisheries.
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Five global problems
1. Climate change = “changes in the Earth’s climate caused by increasing concentrations of carbon dioxide and other pollutants produced by human activity” (p. 196)
Causes include: • Burning of fossil fuels • Increased emissions of nitrous oxides • Black carbon • Deforestation • Beef production
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Five global problems
2. Ozone depletion • Ozone is a bluish gas that floats in a thin layer in the stratosphere 9 to 28 miles above the planet.
• It is critical to life on Earth by absorbing dangerous ultraviolet light from the sun.
• Caused by chlorofluorocarbons (CFCs): manufactured chemicals formerly widely used as refrigerants, insulation, solvents, and propellants in spray cans.
• This problem is slowly getting better: https: //www.nbcnews.com/mach/science/good-news-about -ozone-hole-even-better-you-think-ncna835971
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Five global problems 3. Resource scarcity
• Fresh water • Only about one-tenth of 1 percent of the Earth’s water is in lakes, rivers, and accessible underground supplies, and thus available for human use.
• By the early 2010s, water shortages had already caused the decline of local economies and in some cases had contributed to regional conflicts.
• Water use in California: http://www.ppic.org/pub lication/water-use-in-california/
• Arable land • World’s arable land is threatened with decline from soil erosion, loss of nutrients, water scarcity, salinization, and poor drainage.
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Five global problems 4. Decline of biodiversity
• Biodiversity refers to the number and variety of species and the range of their genetic makeup.
• Genetic diversity is vital to each species’ ability to adapt and survive and has many benefits for human society as well.
• Scientists estimate that species extinction is occurring at 100 to 1,000 times the normal, background rate due to pollution and habitat destruction.
• A leading cause: Deforestation for commercial logging, cattle ranching, and agriculture.
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Five global problems
5. Threats to marine ecosystems
• Marine ecosystems = “oceans, salt marshes, lagoons, and tidal zones that border them, as well as diverse communities of life they support” (p. 202)
• Salt water covers 70 percent of the earth’s surface and supports many species.
• Key threats to these ecosystems: • Exploitation of fish populations • Decline of coral reefs • Coastal development in ecologically fragile areas • Ocean acidification
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How can government protect the environment?
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Role of government
In many nations government regulates business activity in order to protect the environment.
By setting common standards, governments can take cost of pollution control out of competition.
Governments can also provide economic incentives and offer systems for resolving disputes.
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Major areas of environmental regulation
The Environmental Protection Agency (EPA), the main agency charged with pollution control, was established in 1970.
In the United States, the federal government regulates in three major areas of environmental protection:
• Air pollution • Water pollution • Land pollution (including solid and hazardous waste)
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Major areas of environmental regulation 1. Air pollution
• Occurs when more pollutants are emitted into the atmosphere than can safely be absorbed and diluted by natural processes.
• The Clean Air Act (1970) established national air quality standards and timetables.
• Subsequent amendments (1) revised these standards, (2) required cuts in urban smog, acid rain, and greenhouse gas emissions, and (3) promoted alternative fuels.
• Example: air pollution from California’s forest fires https: //www.nytimes.com/2018/08/09/us/califor nia-today-wildfires-air-conditions.html
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Major areas of environmental regulation
2. Water pollution
• Occurs when more wastes are dumped into waterways than can be naturally diluted and carried away.
• The Water Pollution Control Act (1972), or Clean Water Act, established national goals and timetables for clean waterways.
• Subsequent amendments authorized funds for sewage treatment plants and waterways cleanup.
• The Safe Drinking Water Act (1974 and 1996) established national standards for drinking water.
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Major areas of environmental regulation 3. Land pollution
• The contamination of land by both solid and hazardous waste.
• Environmental justice – The effort to prevent inequitable exposure to risk, such as from hazardous waste, in disadvantaged communities. Where does your waste go? http: //www.sanjoseca.gov/index.aspx?NID=1525
• The Pesticide Control Act (1972) required registration of and restrictions on pesticide use.
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Major areas of environmental regulation
• Superfund, or CERCLA, legislation passed in 1980 established a fund to clean up the most dangerous toxic waste sites in the U.S. https://www.epa.gov/superfund/search-s uperfund-sites-where-you-live
• The Pollution Prevention Act (1990) provided guidelines, training, and incentives to prevent or reduce pollution at the source.
• The Oil Pollution Act (1990) strengthened the EPA’s ability to prevent and respond to catastrophic oil spills.
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How should governments reduce pollution?
The kind of environmental standards first passed in the 1970s are referred to as command and control regulations.
• The government commands business to comply with certain standards and o ten controls their choice of technology.
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How should governments reduce pollution?
More recently, regulators have been favoring the use of market-based mechanisms. Examples include:
• Cap-and-trade — tradable permits for emissions.
• Emission fees and taxes — “the more you pollute, the more you pay.”
• Government incentives — reward good behavior.
Question: What explains the recent popularity of market-based mechanisms?
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How should governments reduce pollution?
Other alternatives to command and control regulation include:
Information disclosure — also called as regulation by publicity or regulation by embarrassment.
• The government encourages companies to pollute less by publishing information about the amount of pollutants individual companies emit each year.
Civil and criminal enforcement — threats of fines or imprisonment can be an effective deterrent.
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How should governments reduce pollution?
It is important to consider the trade-offs (i.e., advantages and disadvantages) between different policy approaches:
• Command and control regulation makes compliance mandatory, but it is expensive and may not improve companies’ performance once compliance is achieved.
• Market-based mechanisms are less expensive and give companies more flexibility, but enforcement is difficult and companies may feel they have a license to pollute.
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How should governments reduce pollution?
Trade-offs (continued):
• Information disclosure is also less expensive, but not all companies will be motivated by the fear of embarrassment.
• Civil and criminal enforcement is not an effective deterrent if the penalties are too weak.
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How can business protect the environment?
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Sustainability management as a competitive advantage
What incentives do companies have to improve their environmental performance beyond what is legally required?
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Response of the international business community
Numerous voluntary initiatives are being undertaken by companies around the world to put the principle of sustainable development into practice.
Question: What have you seen businesses do recently to address environmental concerns?
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Voluntary business initiatives
• Life cycle analysis • Involves collecting information on the lifelong environmental impact of a product, from extraction of raw material to manufacturing to its distribution, use, and ultimate disposal. Example: Tide detergent.
• Industrial ecology • Refers to designing factories and distribution systems as if they were self-contained ecosystems. Minimize waste.
• Extended product responsibility • Occurs when companies take continuing responsibility for the environmental impact of the products and services, even a ter they are sold. Example: Volkswagen.
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Voluntary business initiatives
• Carbon neutrality • An organization or individual produces net zero emission of greenhouse gases; this is usually accomplished by a combination of energy efficiencies and carbon offsets. Example: JetBlue https://carbonfund.org/partners/jetblue/.
• Technology cooperation • Sustainable development through long-term partnerships between companies in developed and developing countries to transfer environmental technologies. Example: Schneider Electric partners with French NGO to provide villagers in rural Vietnam with solar power.
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Sustainability management as a competitive advantage
Moving beyond compliance:
• Cost savings.
• Brand differentiation.
• Technological innovation.
• Reduction of regulatory and liability risk — avoiding expensive fines and lawsuits.
• Strategic planning.
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- Global environmental issues
- How can government protect the environment?
- How can business protect the environment?
