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Chapter09-BusinessandEnvironmentalSustainability
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Copyright?McGraw-HillEducation.Allrightsreserved.NoreproductionordistributionwithoutthepriorwrittenconsentofMcGraw-HillEducation.
IMChapter9:
BusinessandEnvironmentalSustainability
ChapterObjectives
Afterreadingthischapter,youwillbeableto:
Explainhowenvironmentalchallengescancreatebusinessopportunities.
Describearangeofvaluesthatplayaroleinenvironmentaldecisionmaking.
Explainthedifferencebetweenmarket-basedandregulatory-basedenvironmentalpolicies.
Describebusiness’senvironmentalresponsibilitiesthatflowfromeachapproach.
Identifytheinadequaciesofsolerelianceonamarket-basedapproach.
Identifytheinadequaciesofregulatory-basedenvironmentalpolicies.
Defineanddescribesustainabledevelopmentandsustainablebusiness.
Highlightthebusinessopportunitiesassociatedwithamovetowardssustainability.
Describethesustainableprinciplesofeco-efficiency,biomimicry,andservice.
OpeningDecisionPoint
TheBusinessofFood
Foodisatopicthatcanintroduceawiderangeofethicalissuesinbusiness,frommarketingtoproductsafety,andfromworkersafetytotheenvironmentandglobalresponsibilities.Weusefoodastheentrytoarangeofenvironmentalresponsibilitiesforbusiness.
Inparticular,weusethisOpeningDecisionPointtoaskstudentstoreflectonhowtheirownchoicesmadeeverydayareinfluencedby,andinturninfluence,businessdecision-making.Whatweeat,howweeat,whenweeat,andwhyweeatallareinfluencedbybusiness,andinmostcases,everyoneofthesechoiceshaveanenvironmentalimpact.
Foodproductionanddistributionalsohasaprofoundimpactonissuesrelatedtoenvironmentalsustainability.FacultymightconsiderusingtheDecisionPoint,“MarketingctotheBaseofthePyramid”asatransitionreadingtomoveformmarketingconcernstoenvironmentalconcernsbyconsideringhowglobalfoodchoicesimpactthenaturalenvironment.
.
Introduction
Thereisatendencytobelievethatenvironmentalchallengesalwayscreateaburdenonbusinessandthatenvironmentalandbusinessinterestsarealwaysinconflict.
Whileitcertainlycanbethecasethatenvironmentalregulationcanaddcoststobusinessoperationsandrestrictbusinesschoice,theycanalsoprovideopportunitiesforbusiness.
WhereoneautomobilemanufacturerseesgovernmentmandatedfuelefficiencystandardsasaburdenonitsabilitytoselllargeSUVs,anothercompanyseesitasanopportunitytomarketfuel-efficienthybrids.
Manyobserversbelievewehaveenteredthesustainabilityrevolution,anageinwhichtheracetocreateenvironmentallyandeconomicallysustainableproductsandservicesiscreatingunlimitedbusinessopportunities.
Ashappenedintheindustrialrevolution,therewillbewinnersandlosersinthissustainabilityrevolutionand,accordingtosupporters,theeconomicwinnerswillbethefirmsandindustriesthatdothemostenvironmentalgood.
Environmentalism&EnvironmentalDegradation:AsdescribedbygeographerJaradDiamondinhisinthebest-sellingbook,Collapse,humanhistoryprovidesmanyexamplesofsocietiesthathaverunupagainsttheenvironmentallimitsoftheirlifestyles.
TheIndustrialRevolutionofthe18thand19thcenturiesbroughtwithittheabilitytodegradethenaturalenvironmenttoagreaterextentandatafasterratethaneverbefore.
Theindustrialmodelofgrowthandproductiveefficiencyandseeminglyunlimitedenergysupplycontinuedalongalmostuncheckedbyenvironmentalregulationuntilthelatterhalfofthetwentiethcentury.
Bythestartofthe21stcentury,theearthwasexperiencinghegreatestperiodofspeciesextinctionsincetheendofthedinosaurs65millionyearsago.
Humansarealsothreatenedbyglobalclimatechange.
Eachofthesemonumentalenvironmentaleventsislargelyduetohumanactivity,andspecificallytoourpresentarrangementsofmodernindustrialsociety.
Thewaywehavedonebusinessoverthelasttwocenturieshasbroughtusupagainstthebiophysicallimitsoftheearth’scapacitytosupportallhumanlife.Ithasalreadycrossedthoselimitsinthecaseofcountlessotherformsofnow-extinctlife.
Thus,themajorethicalquestionofthischapteriswhatresponsibilitiescontemporarybusinesseshaveregardingthenaturalenvironment.
*Reference:“RealityCheck–InsuranceIndustryandClimateChange
*TeachingNote:Ahelpfulexercisetoexplorewhatbusinessesthinkaboutthecurrentstateoftheenvironmentwouldbetohavestudentsresearchtheinsuranceindustry’sresponsetoclimatechange.ConsideraswellhowsuchinvestmentcompaniesasBlackRockandGoldmanSachsviewlong-rangeinvestmentsurroundingfossilfuelsandclimatechange.Howdoesthefinanceindustryingeneralviewfossilfuelscompanies?
TripleBottomLineApproach:Thesustainablebusinessandsustainableeconomicdevelopmentseektocreatenewwaysofdoingbusinessinwhichbusinesssuccessismeasuredintermsofeconomic,ethicalandenvironmentalsustainability,oftencalledtheTripleBottomLineapproach.
Thesustainabilityparadigmseesenvironmentalresponsibilitiesasafundamentalpartofbasicbusinesspractice.
Sustainablebusinessventuresmayfindthatenvironmentalconsiderationsoffercreativeandentrepreneurialbusinessesenormousopportunities.
SeeRealityCheck:IstheTripleBottomLineaTrojanHorse?”foracriticalperspectiveonthetriplebottomline.
*ChapterObjective1AddressedBelow*
Opportunitiesavailableintheageofsustainability:TheenvironmentalresearchandconsultinggroupTheNaturalStepusesanimageofafunnel,withtwoconverginglines,tohelpbusinessunderstandtheopportunitiesavailableintheageofsustainability.
Thefunnelshowsthattheresourcesnecessarytosustainlifeareonadownwardslope.
Whilethereisdisagreementabouttheangleoftheslope,thereiswidespreadagreementthatavailableresourcesareindecline.
Thesecondlinerepresentsaggregateworldwidedemand,accountingforbothpopulationgrowthandtheincreasingdemandofconsumeristlifestyles.
Barringanenvironmentalcatastrophe,manybutnotallindustrieswillemergethroughthenarrowingfunnelintoaneraofsustainableliving.
Businessesunabletoenvisionthatsustainablefuturewillhitthenarrowingwall.Innovativeandentrepreneurialbusinesswillfindtheirwaythrough.
*ReferenceFigure9.1–TheNaturalStep’sFunnel*
WehaveusedFigure9.1tointroducestudentsinterestedinentrepreneurshiptoethicalissuesandsustainability.Studentscanbechallengedto“backcast”fromtheprojectedfuturestatetotheproductsandservicesthatmighttransformthepresenteconomytoamoresustainableone.Theentrepreneurisexactlythatpersonwhoknowsthefutureandcreatesthemeansforarrivingthere.
TheNaturalStepchallengesbusinessto“backcast”apathtowardssustainability.
“Backcasting”examineswhatthefuturewillbewhenweemergethroughthefunnel.
Knowingwhatthefuturemustbe,creativebusinessesthenlookbackwardstothepresentanddeterminewhatmustbedonetoarriveatthatfuture.
Sustainablebusinessmustuseresourcesandproducewastesatratesthatdonotjeopardizehumanwell-beingbyexceedingtheearth’scapacitytorenewtheresourcesandabsorbthewastes.
Businessesthatdosowillsucceedinmovingthroughthefunnelandemergeassuccessfulintheageofsustainability.
Environmentalissuesarenolongerattheperipheryofbusinessdecisions,asburdenstobemanaged,ifnotavoidedaltogether;noraretheyregulatoryconstraintsinmanagerialdecisionmaking.
Environmentalsustainabilitymustaccompanyfinancialsustainabilityforbusinesstosurviveinthetwenty-firstcentury.
Forreasonsofrightsandduties,aswellasfortheoverallsocialgood,sustainablebusinessisthewaveofthefuture.
BusinessEthicsandEnvironmentalValues
*ChapterObjective2AddressedBelow*
ProtectionoftheNaturalEnvironment:Whichvaluesanddecisionsaresupportedbyaconcernwiththenaturalenvironment?Whyshouldweactinwaysthatprotectthenaturalenvironmentfromdegradation?Whyshouldbusinessbeconcernedwith,andvalue,thenaturalworld?
Themostobviousanswertothesequestionsishumanself-interest.
Environmentalconcernsarerelevanttobusinessbecausehumanbeings,bothpresentlylivingandfuturegenerationsofhumans,dependonthenaturalenvironmentinordertosurvive.
Humanneedcleanwatertodrink,healthyairtobreathe,fertilesoilandoceanstoproducefood,anozonelayertoscreenoutsolarradiation,andabiospherethatmaintainsthedelicatebalanceofclimateinwhichhumanlifecanexist.
Twoaspectsofcontemporaryenvironmentalrealitiesunderscoretheimportanceofself-interestedreasoning.
AsdocumentedinCollapse,pasthumansocietieshaveoftenrunupagainstthelimitsofthelocalenvironment’sabilitytosustainhumanlife.
Historically,environmentaldegradationhasbeenlocalizedtoaparticularregionandhasseldomaffectedmorethanageneration.
Incontrast,somecontemporaryenvironmentalissueshavethepotentialtoadverselyaffecttheentireglobeandchangehumanlifeforever.
Globalclimatechange,speciesextinction,soilerosionanddesertification,andnuclearwasteswillthreatenhumanlifeintotheindefinitefuture.
Second,thescienceofecologyanditsunderstandingoftheinterrelatednessofnaturalsystemshavehelpedustounderstandthewiderangeofhumandependenceonecosystems.
Whereweoncemighthavethoughtthatburiedwastesweregoneforever,wenowunderstandhowtoxinscanseepintogroundwaterandcontaminatedrinkingwateracrossgreattimeanddistances.
Wenowunderstandhowpesticidesaccumulatethroughoutthefoodchainandposegreatestdangersnotonlytotoppredatorssuchasbaldeagles,buttohumanbeingsaswell.
Whereweoncethoughttheatmospheretoobigtobechangedbyhumans,wenowunderstandtheprecisebalancenecessarytomaintainlife-supportingsystems.
TheConservationMovement:Theconservationmovement,thefirstphaseofmodernenvironmentalism,advocatedforamorerestrainedandprudentapproachtothenaturalworld.
Fromthisperspective,thenaturalworldwasstillvaluedasaresource,providinghumanswithbothdirectbenefits(air,water,food),andindirectbenefits(thegoodsandservicesproducedbybusiness).
Conservationistsarguedagainsttheexploitationofnaturalresourcesasiftheycouldprovideaninexhaustiblesupplyofmaterialandmadethecasethatbusinesshadgoodreasonsforconservingnaturalresources.
Thenaturalworld,likecapital,hadtheproductivecapacitytoproducelong-termincome,butonlyifitismanagedandusedprudently.
ValueoftheNaturalEnvironment:Besidesthesereasonstoprotecthumanlifeandhealth,thenaturalenvironmentisessentialandvaluabletouseformanyotherreasons.
Thebeautyandgrandeurofthenaturalworldprovidesgreataestheticandinspirationalvalue;Manypeoplevaluethenaturalworldasamanifestationofreligiousandspiritualvalue;Partsofthenaturalworldarevaluedfortheirsymbolicvalue,theirhistoricalvalue,andforsuchdiversepsychologicalvaluesasserenityandexhilaration.
Thesevaluescanclearlyconflictwiththeuseoftheearthitselfasaresourcetophysically,asopposedtospiritually,sustainthosewholiveonit.
Aestheticandinspirationalvaluesoftenplayoutinpublicdebatesabouteconomicdevelopment.The1970’ssong“BigYellowTaxi”capturedthissentimentwiththewell-knownlyric,“theypavedparadiseandputupaparkinglot.”
Manycriticsfaultbusinessfordestroyingnaturalbeautyandreplacingitwithstripmalls,neonsigns,fast-foodrestaurantsandparkinglots.ConsiderthesedebatesasyoureviewtheDecisionPoint,“CommercializeanHistoricCivilWarSite?”
DecisionPoint“PromotingFoodSafetyorFightingFoodWaste?”
Thiscasecanhelpstudentsreflectonthemanytrade-offsthattheycanfaceinallissues,butperhapsespeciallyinissuesinvolvingfoodsecurity/accesstofood,andsafetyfactors.Atthemostgenerallevel,thistopiccanincludequestionsaboutproductivity(theuseofpesticides,industrialagriculture)andhumanandenvironmentalsafety.
1.Ifconsumershaveevolvedapracticeoftreatingprinted“bestbefore”datesas“unsafeafter”dates,shouldthefoodindustryinsteadbeencouragedtoprintdatesthatmorecloselycorrespondtothatevolvedexpectation?
2.ShouldtheFSIS,whosenamesuggestsconsumersafetyasitsmission,beamechanismforachievingenvironmentalsustainability-focusedgoals?
3.Consumer-readablesell-bydatingreplacedanoldersystemofsymbolsornumberswhosemeaningwasunderstoodonlybytheretailer.Itwasreplacedbyconsumer-readabledatelabelsinanattempttoachieveincreasedconsumertransparency.Howshouldconflictsbetweendemandsforconsumertransparencyandthepolicyobjectiveofreducingfoodwastebedecided?
StatusofAnimals:Themoralstatusofanimalshasbeentheenvironmentalvaluethat,arguably,hasraisedthegreatestchallengetobusiness.
Variouslyreferredtoastheanimalrights,animalliberation,oranimalwelfaremovement,thisapproachattributesamoralstandingtoanimals.
Suchastatuswouldcreateawidevarietyofdistinctiveethicalresponsibilitiesconcerninghowwetreatanimalsandwouldhavesignificantimplicationsformanybusinesses.Twoversionsofthisperspectiveareworthmentioning.
Thefirstapproach:emphasizesthefactthatmanyanimals,presumablyallthathaveacentralnervoussystem,havethecapacitytofeelpain.
Reminiscentoftheutilitariantradition,hisviewassertsanethicalresponsibilitytominimizepain.
Inflictingunnecessarypainistakentobeanethicalwrong,therefore,actsthatinflictunnecessarypainonanimalsisethicallywrong.
Raisingandslaughteringanimalsforfood,particularlyinthewayitisdonewithpoultry,hog,andcattleinindustrialfarmingenterprises,wouldbeanobviouscaseinwhichbusinesswouldviolatethisethicalresponsibility.ThisisarguedinthefollowingRealityCheck–TreatmentofAnimalsinAgriculture.
*Reference:“RealityCheck-TreatmentofAnimalsinAgriculture”*
Thesecondapproach:arguesthatatleastsomeanimalshavethecognitivecapacitytopossesaconsciouslifeoftheirown.
ReminiscentoftheKantianethicaltradition,hisviewassertsthatwehaveadutynottotreatanimalsasmereobjectsandmeanstoourownends.
Businessesthatuseanimalsforfood,entertainment,orpetswouldviolatetheethicalrightsoftheseanimals.
Business’EnvironmentalResponsibility:TheMarketApproach
**TeachingNote:ThisissuecanbeconnectedbacktothediscussionofmarketsandethicsfromChapter3.
ProtectingtheEnvironment:Whiledebatecontinuestosurroundsomeenvironmentalvalues,anoverwhelmingconsensusexistsabouttheself-interestedandprudentialreasonsforprotectingthenaturalenvironment:humanshavearighttobeprotectedfromundueharm.
Whatisthebestmeansforachievingthisgoal?Historically,thisdebatehasfocusedonwhetherefficientmarketsorgovernmentregulationisthemostappropriatemeansformeetingtheenvironmentalresponsibilitiesofbusiness.
*ChapterObjective3AddressedBelow*
Eachofthesetwoapproacheshassignificantimplicationsforbusiness.
Fromoneperspective,ifthebestapproachtoenvironmentalconcernsistotrustthemtoefficientmarkets,thentheresponsiblebusinessmanagersimplyoughttoseekprofitsandallowthemarkettoallocateresourcesefficiently.
Bydoingthis,businessfillsitsrolewithinamarketsystemwhich,inturn,servesthegreateroverall(utilitarian)good.
Ontheotherhand,ifgovernmentregulationisamoreadequateapproach,thenbusinessoughttodevelopacompliancestructureinordertoinsurethatitconformstothoseregulatoryrequirements.
Amarket-basedapproachtoresolvingenvironmentalchallengesisreminiscentofthenarrow,economicviewofCSRdescribedinchapter5.
Defendersofthemarketapproachcontendthatenvironmentalproblemsareeconomicproblemsthatdeserveeconomicsolutions.
Fundamentally,environmentalproblemsinvolvetheallocationanddistributionoflimitedresources.
Whetherweareconcernedwiththeallocationofscarenon-renewableresourcessuchasgasandoil,ortheearth’scapacitytoabsorbindustrialby-productssuchasCO2orPCB,environmentalchallengescanbeaddressedthroughefficientmarkets.
*ChapterObjective4AddressedBelow*
ImplicationsofPollutionandResourceConservation:
Inhiswell-knownbook,PeopleorPenguins:TheCaseforOptimalPollution,WilliamBaxterarguedthatthereisanoptimallevelofpollutionthatwouldbestservesociety’sinterests.
Thisoptimallevelisbestattained,accordingtoBaxter,byleavingittoacompetitivemarket.
Denyingthatthereisany“natural”orobjectivestandardforcleanairorwater,Baxterbeginswithagoalof“safe”airandwaterquality,andtranslatesthisgoaltoamatterofbalancingrisksandbenefits.
Societycouldstriveforpureairandwater,butthecoststhatthiswouldentailwouldbetoohigh.
Amorereasonableapproachistoaimforairandwaterqualitythatissafeenoughtobreatheanddrinkwithoutcostingtoomuch.
Thisbalance,the“optimallevelofpollution”canbeachievedthroughcompetitivemarkets.Society,throughtheactivitiesofindividuals,willbewillingtopayforpollutionreductionaslongastheperceivedbenefitsoutweighthecosts.
*TeachingNote:Challengestudentstodevelopaparallelargumentforissuesofworkplacesafetyandconsumerproductssafety.Istherean“optimallevel”ofworkplacesafetyandproductssafety?
Thefreemarketalsoprovidesananswerforresourceconservation.Fromastrictmarketeconomicperspective,resourcesare“infinite.”
Historyhasshownthathumaningenuityandincentivehasalwaysfoundsubstitutesforanyshortages.
Asthesupplyofanyresourcesdecreases,thepriceincreases,therebyprovidingastrongincentivetosupplymore,orprovidealesscostlysubstitute.
Ineconomicterms,allresourcesare“fungible,”meaning,theycanbereplacedbysubstitutesandinthissenseresourcesareinfinite.Resourcesthatarenotbeingusedtosatisfyconsumerdemandarebeingwasted.
Asimilarcasecanbemadeforthepreservationofenvironmentallysensitiveareas.
Preservationforpreservation’ssakewouldbewastefulsinceitwoulduseresourcesininefficiently.
*ChapterObjective5AddressedBelow*
Challengestothisnarroweconomicviewofcorporatesocialresponsibilityarefamiliartobotheconomistsandethicists.
Avarietyofmarketfailures,manyofthebest-knownofwhichinvolveenvironmentalissues,pointtotheinadequacyofmarketsolutions.
Oneexampleofmarketfailureistheexistenceofexternalities,thetextbookexampleofwhichisenvironmentalpollution.
Becausethe“costs”ofsuchthingsasairpollution,groundwatercontaminationanddepletion,soilerosion,andnuclearwastedisposalaretypicallybornebyparties“external”totheeconomicexchange(e.g.,peopledownwind,neighbors,andfuturegenerations),freemarketexchangescannotguaranteeoptimalresults.
Asecondtypeofmarketfailureoccurswhennomarketsexisttocreateapriceforimportantsocialgoods.
Endangeredspecies,scenicvistas,rareplantsandanimals,andbiodiversityarejustsomeenvironmentalgoodsthattypicallyarenottradedonopenmarkets.
Publicgoodssuchascleanairandoceanfisheriesalsohavenoestablishedmarketprice.
Withnoestablishedexchangevalue,themarketapproachcannotevenpretendtoachieveitsowngoalsofefficientlymeetingconsumerdemand.
Marketsalonefailtoguaranteethatsuchimportantpublicgoodsarepreservedandprotected.
*TeachingNote:Again,youcanchallengestudentstoapplytheseobjectionstoanyofthemarket-basedpolicesmentionedabove:workplacehealthandsafetyandconsumerproductssafety.
Athirdwayinwhichmarketfailurescanleadtoseriousenvironmentalharminvolvesadistinctionbetweenindividualdecisionsandgroupconsequences.
ConsequencesofIndividualDecisions:Importantethicalandpolicyquestionscanbemissedifweleavepolicydecisionssolelytotheoutcomeofindividualdecisions.
ConsiderthecalculationsthatanindividualconsumermightmakeregardingthepurchaseofanSUVandtheconsequencesofthatdecisiononglobalwarming.
TheadditionalCO2thatwouldbeemittedbyasingleSUVisminisculeenoughthatanindividualwouldlikelyconcludethatherdecisionwillmakenodifference.
However,ifeveryconsumermadeexactlythesamedecision,theconsequenceswouldbesignificantlydifferent.
Theoverallsocialresultofindividualcalculationsmightbesignificantincreasesinpollutionandsuchpollution-relateddiseasesasasthmaandallergies.
Anumberofalternativepolicies(e.g.,restrictingSUVsales,increasingtaxesongasoline,treatingSUVsascarsinsteadoflighttrucksincalculatingCorporateAutomotiveFuelEfficiency(CAFE)Standards)thatcouldaddresspollutionandpollution-relateddiseasewouldneverbeconsideredifwereliedonlyonmarketsolutions.
Theseareimportantethicalquestionswhichremainunaskedfromwithinmarkettransactions,sowemustconcludethatmarketsareincomplete(atbest)intheirapproachtotheoverallsocialgood.
Inotherwords,whatisgoodandrationalforacollectionofindividualsisnotnecessarilywhatisgoodandrationalforasociety.
EnvironmentalPolicy:Suchmarketfailuresraiseseriousconcernsfortheabilityofeconomicmarketstoachieveasoundenvironmentalpolicy.
Defendersofanarroweconomicviewofcorporatesocialresponsibilityandhaveresponsestothesechallenges.
Internalizingexternalcostsandassigningpropertyrightstoun-ownedgoods,suchaswildspecies,aretworesponsestomarketfailures.
Therearegoodreasonsforthinkingthatsuchadhocattemptstorepairmarketfailuresareenvironmentallyinadequate.
Oneimportantreasoniswhathasbeencalledthefirst-generationproblem.
Marketscanworktopreventharmonlythroughinformationsuppliedbytheexistenceofmarketsfailures.
Forexample:OnlywhenfishpopulationsintheNorthAtlanticcollapseddidwelearnthatfreeandopencompetitionamongtheworld’sfishingindustryforun-ownedpublicgoodsfailedtopreventthedecimationofcod,swordfish,Atlanticsalmon,andlobsterpopulations.
Welearnaboutmarketsfailuresandtherebypreventharmsinthefutureonlybysacrificingthe“first-generation”asameansforgainingthisinformation.
Whenpublicpolicyinvolvesirreplaceablepublicgoodssuchasendangeredspecies,rarewildernessareas,andpublichealthandsafety,suchareactionarystrategyisill-advised.
*Reference:“RealityCheck–CapandTrade:AMixedApproach?
Thisrealitycheckasksstudentstoconsider“capandTrade”asawaytobalancemarketvalueswithregulatorygoals.
Business’EnvironmentalResponsibility:TheRegulatoryApproach
*ChapterObjective3AddressedBelow*
GovernmentalRegulations:AbroadconsensusemergedwithintheUnitedStatesinthe1970sthatunregulatedmarketsareaninadequateapproachtoenvironmentalchallenges.Instead,governmentalregulationswereseenasthebetterwaytorespondtoenvironmentalproblems.
MuchofthemostsignificantenvironmentallegislationintheUnitedStateswasenactedduringthe1970s:
TheCleanAirActof1970(amendedandrenewedin1977)
FederalWaterPollutionActof1972(amendedandrenewedastheCleanWaterActof1977)
EndangeredSpeciesActof1973
EachlawwasoriginallyenactedbyaDemocraticCongressandsignedintolawbyaRepublicanpresident.
Theselawsshareacommonapproachtoenvironmentalissues.
Beforethislegislationwasenacted,theprimarylegalavenueopenforaddressingenvironmentalconcernswastortlaw.
Onlyindividualswhocouldprovethattheyhadbeenharmedbypollutioncouldraiselegalchallengestoairandwaterpollution.
Thatlegalapproachplacedtheburdenonthepersonwhowasharmedand,atbest,offeredcompensationfortheharmonlyafterthefact.
Exceptfortheincentiveprovidedbythethreatofcompensation,U.S.policydidlittletopreventthepollutioninthefirstplace.
Absentanyproofofnegligence,publicpolicywascontenttoletthemarketdecideenvironmentalpolicy.
Becauseendangeredspeciesthemselveshadnolegalstanding,directharmtoplantananimallifewasofnolegalconcernandpreviouspoliciesdidlittletopreventharmtoplantandanimallife.
Lawsenactedduringthe1970sestablishedstandardsthateffectivelyshiftedtheburdenfromthosethreatenedwithharmtothosewhowouldcausetheharm.
Governmentestablishedregulatorystandardstrytopreventtheoccurrenceofpollutionorspeciesextinctionratherthancompensationafterthefact.
Wecanthinkoftheselawsasestablishingminimumstandardstoensureairandwaterqualityandspeciespreservation.
Businesswasfreetopursueitowngoalsaslongasitcompliedwiththesideconstraintsestablishedbytheseminimumstandards.
Asconsumers,individualscoulddemandenvironmentallyfriendlyproductsinthemarketplace.Ascitizens,individualscouldsupportenvironmentallegislation.
Aslongasbusinessrespondedtothemarketandobeyedthelaw,theirenvironmentalresponsibilitieswerebeingmet.
Ifenvironmentally-suspectproducts,suchaslargegas-guzzlingSUVs,weredemandedbyconsumersandallowedbylaw,thenonecannotexpectbusinesstoforegothefinancialopportunitiesofmarketingsuchproducts.
*ChapterObjective6AddressedBelow*
DoesBusinessHaveNoResponsibility?Severalproblemssuggestthatthisapproachwillproveinadequateoverthelongterm.
Thisapproachunderestimatestheinfluencethatbusinesscanhaveinestablishingthelaw.
TheCAFEStandardsmentionedpreviouslyprovideagoodexampleofhowthiscanoccur.
Areasonableaccountofthislawsuggeststhatthepublicveryclearlyexpressedapoliticalgoalofimprovingairqualitybyimprovingautomobilefuelefficiencygoals,andtherebyreducingautomobileemissions.
TheautomobileindustrywasabletouseitslobbyinginfluencetoexemptlighttrucksandSUVsfromthesestandards.Ofcou
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