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Chapter09-BusinessandEnvironmentalSustainability

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9-

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32

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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