Chap 011

Chapter 11 - Ecology and Sustainable Development in Global Business

CHAPTER 11

ECOLOGY AND SUSTAINABLE DEVELOPMENT IN GLOBAL BUSINESS

INTRODUCTION

The world community faces unprecedented ecological challenges in the 21st century. Many political and business leaders have embraced the idea of sustainable development, calling for economic growth without destroying the natural environment or depleting the resources on which future generations depend. Yet the concept has remained controversial, and implementation has been difficult. The task for government policy makers and corporate leaders will be to find ways to meet both economic and environmental goals in the coming decades, without sacrificing either.

PREVIEW CASE

World Summit on Sustainable Development

Could the world’s government’s, businesses, non-governmental organizations, and individuals, working together, meet the ecological challenges of the 21st and put the global economy on a more sustainable course?

Teaching Tip: Preview CaseThe preview case provides an assessment on the world’s progress in achieving the goals of the World Summit on Sustainable Development, an important international conference on development and the environment first held

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in 1992. This material introduces students to the global dimension of many current ecological issues, as well as to the challenge of balancing environmental and economic goals, a central theme of this chapter. Students may be asked: What were some of the central environmental problems considered by the delegates? In what respects had progress been made since the original conference? In what respects had progress faltered? Students may note that emissions of gases that cause global warming had increased, destruction of species-rich tropical forest had continued, and aid to developing nations had been make in efforts to restore the health of the ozone layer. The global business community had also become increasingly active in promoting environmentally sound management practices. New loan review processes for World Bank loans were in place. Thus, the world community had made progress on addressing some environmental issues, but not others.

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CHAPTER OUTLINE

I. ECOLOGICAL CHALLENGES

A. The Global Commons

Teaching Tip: The Blue PlanetThe video "The Blue Planet," originally produced in 1992 in IMAX (wide screen) format by Lockheed Corporation, uses NASA video footage shot from the space shuttle to show the earth as seen from space. The video contains a useful introduction to several of the ecological issues covered in Chapter 11 and helps students visualize "spaceship earth." "The Blue Planet" runs for 42 minutes and is available from Finley-Holiday Film Corp., Whittier, CA 90601, 1-800-345-6707. It may be used to begin a discussion of Chapter 11.

B. Sustainable Development

Teaching Tip: Sustainable Development

The definition of sustainable development is development “that meets the needs of the present without compromising the ability of future generations to meet their own needs.” This concept appears, on its face, to embody a contradiction. How can society meet its own pressing needs today, without damaging or depleting the ecosystem on which future generations will depend? Students may be asked to explore this question.

Teaching Tip: The Natural Step

Exhibit 11.A describes The Natural Step, a method for promoting sustainability. As a way to begin to think about what sustainable development might mean for business, students may be encouraged to identify companies that have adopted TNS methodology and to describe the action they have taken.

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C. Threats to the Earth’s Ecosystem

Teaching Tip: The Blue PlanetThe video, “Introduction to Our Global Environment” (World Resources Institute; 10 minutes) may be used to introduce this segment. The video gives a short survey of several of the major threats to the earth’s ecosystem, including air and water pollution, global warming, toxic pollution, and declining biodiversity. Students may be asked to consider the question: Based on your reading for today, the video, and any other information you may have, what do you personally think are some of the leading environmental problems or issues facing the business community and the world today?

*Water Resources

*Fossil Fuels

*Arable Land

D. Forces of Change

*The Population Explosion

*World Income Inequality

*Industrialization

E. The Limits to Growth

Teaching Tip: Ecological Footprint

Students may be asked to calculate their own ecological footprint (a concept explained in Exhibit 11.B). A calculator is available at http://www.myfootprint.org. The footprint calculation shows in a dramatic and personal way, how the resource use of most individuals in advanced societies greatly exceeds the earth’s carrying capacity, given present technology.

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http://www.myfootprint.org/


II. GLOBAL ENVIRONMENTAL ISSUES

A. Ozone Depletion

B. Global WarmingTeaching Tip: Global Warming

The Kyoto Protocol went into effect in 2005, after countries representing 55 percent of the world’s carbon emissions had ratified it. Students may check the current status of ratification at http://unfccc.int. Although the United States had not ratified the agreement as of 2006, several U.S. states, including California, had taken initiative to curb greenhouse gases. Students may be asked to research these efforts.

Teaching Tip: Global Warming VideoPaul Solman reports on voluntary business participation in an emerging market in greenhouse gas “credits.” The segment includes interviews with a dairy farmer who captures methane from manure to power electrical generators, the chair of the President's Council on Environmental Quality, the founder of the Chicago Climate Exchange, and the former Administrator of the EPA. The segment may be used with the discussion of global warming in Ch. 11. * The video segment is from the Public Broadcasting Services’s “News Hour with Jim Lehrer” and is available on the Instructor’s Resource Manual DVD that accompanies the textbook, available upon request from the publisher.

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http://unfccc.int/


C. Decline of Biodiversity

D. Threats to Marine Ecosystems

Teaching Tip: Marine Ecosystems“Fish Banks, Ltd.” is an excellent simulation that may be used to help students understand the impact of unsustainable fishing practices on marine ecosystems. It may be ordered from www.sustainer.org.

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http://www.sustainer.org/


III. RESPONSE OF THE INTERNATIONAL BUSINESS COMMUNITY

A. World Business Council for Sustainable Development

B. Voluntary Business Initiatives

Teaching Tip: Sustainable DevelopmentStudents may be challenged to think about what the principle of sustainable development would mean when practiced at the level of an individual business. One way to do this is to ask students to select a business with which they are familiar and to determine what kinds of changes that business would need to make in order to operate sustainably. Is it possible for a single business to operate sustainably, or does sustainable management require a coordinated effort by many companies, governments, and international agencies?

GETTING STARTED

KEY LEARNING OBJECTIVES

1. Defining sustainable development.

Many world leaders have supported the idea of sustainable development – economic growth without depleting the resources on which future generations will depend.

2. Understanding the obstacles to developing the world’s economy to meet the needs of the present without hurting future generations.

Achieving sustainable development remains a challenge, and the community of nations has not yet worked out who will pay.

3. Assessing the major threats to the earth’s ecosystem.

Major threats to the earth’s ecosystem include depletion of nonrenewable resources such as oil and coal, air and water pollution, and the degradation of arable land.

4. Recognizing the ways in which population growth, inequality, and industrialization have accelerated the world’s ecological crisis.

Population growth, income inequality, and rapid industrialization in many parts of the world have contributed to these ecological problems. The limits to growth hypothesis maintains that if human society continues to exceed the carrying capacity of the earth’s ecosystem, dire consequences will follow.

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5. Examining common environmental issues that are shared by all nations.

Four environmental issues – ozone depletion, global warming, declining biodiversity, and threats to the marine ecosystem – are shared by all nations. International agreements addressing these issues, although more remains to be done.

6. Analyzing the steps the world business community can take to reduce ecological damage and promote sustainable development.

Global businesses have begun to put the principles of sustainable development into action through such innovative actions as life-cycle analysis, industrial ecology, design for disassembly, and technology cooperation.KEY TERMS AND CONCEPTS USED IN THE CHAPTERbiodiversity, 242

carrying capacity, 238

commons, 232

ecology, 232

eco-efficiency, 245

ecological footprint, 238

global warming, 241

industrial ecology, 247

Kyoto Protocol, 242

life-cycle analysis, 246

limits to growth hypothesis, 239

marine ecosystems, 244

Montreal Protocol, 240

ozone, 240

sustainable development, 233

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INTERNET RESOURCES

www.ipcc.ch Intergovernmental Panel on Climate Changewww.epa.gov/docs/ozone Environmental Protection Agency ozone site

www.unep.org United National Environmental Program

www.unfccc.int United Nations Framework Convention on Climate Change

www.wbcsd.ch World Business Council on Sustainable Development

DISCUSSION CASE

DAMMING THE YANGTZE RIVER

Discussion Questions

1. What stakeholders will be helped by the Three Gorges Dam? What stakeholders will be hurt by it?

The Three Gorges Dam will arguably help many stakeholders. Construction of a dam on the Yangtze River will aid the economic development of China by providing vast amounts of hydroelectric power. The dam will permit the electrification of rural areas of the country that currently do not have power, aiding farmers who live there, and will supply power to industry. The project will provide jobs, both directly in its construction phase and indirectly in businesses that draw electric power from the dam after its construction. The reservoir and locks created behind the dam would open markets in central China to ocean-going ships. The government also hoped that the dam would end the disastrous floods that had inundated the region in the past, saving potentially hundreds of thousands of lives. The dam could result in lower air pollution, thereby saving lives lost to lung disease.

On the other hand, many other stakeholders will be hurt. Many Chinese living in rural towns along the river, will have to re resettled. Fertile farmland and archaeological sites would be flooded. The project will also inundate a scenic area. And the environment will be harmed, as discussed in the answer to the following question.

Teaching TipThis case provides an opportunity to discuss the question: is the environment itself a stakeholder? The stakeholder model presented in Chapter 1 does not include the environment as a stakeholder. For a counter argument (that the environment should have stakeholder “standing”), see Mark Starik, Business and Society Review, v. 33, #1, April 1994, “Reflections on Stakeholder Theory,” pp.89-95.

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http://www.wbcsd.ch/

http://www.unfccc.int/

http://www.unep.org/

http://www.epa.gov/docs/ozone

http://www.ipcc.ch/


2. How does construction of a dam on the Yangtze River relate to the issues of global warming, biodiversity, and water pollution discussed in this chapter?

Most of China's energy is now supplied by coal-fired power plants. The Three Gorges Dam will provide hydro-electric power, a form of energy that is less polluting than burning coal. The dam will thus have the effect of reducing, or at least slowing the growth of, carbon dioxide, sulfur dioxide, and nitrous oxide emissions. This will reduce global warming.

However, the dam project will also flood the Three Gorges, radically transforming the ecology of the Yangtze River. Many plants and animals adapted to the river habitat would die out, reducing biodiversity. The project will also worsen water pollution, since no provisions have been made to treat industrial and municipal sewage expected to flow into the reservoir or to relocate existing landfills and dumps.

Thus, the dam project can be said to have mixed environmental effects. In some respects it helps solve environmental problems discussed in Chapter 10, and in other ways it helps make them worse.3. Do you agree with the decision of the Chinese government to construct the Three Gorges Dam? Why of why not?

Students may argue either for or against the decision of the Chinese government. Arguments for the dam will emphasize the stakeholders that will benefit from the project, as discussed in the answer to question 1, and the potential for reducing global warming and acid rain. Arguments against the dam will emphasize the stakeholders that will be hurt and the negative effects of the project on biodiversity and water pollution.

4. What strategies do you believe would best promote economic development in China without destroying the environmental resources on which future generation depend?

Students should be encouraged to think creatively about strategies for promoting sustainable economic development. In particular, the class may wish to focus on the problem of supplying energy to developing economies. In the case of China, would it be possible to promote the use of cleaner sources if energy (such as hydroelectric power) without incurring the potentially very serious negative consequences of the Three Gorges Dam? Some observers, for example, have called for construction of a series of smaller dams at various points along the Yangtze that would produce hydroelectric power without such vast disruption. Other students may wish to argue for greater reliance on solar, wind and nuclear power. Another approach would be to advocate the transfer of sophisticated technologies to reduce emissions from coal-fired power plants advanced nations to China, as a form of foreign aid.

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Teaching TipStudents should be encouraged to use the Internet to learn how the Three Gorges Dam project has evolved since publication of the text. This project has generated many web sites, expressing conflicting views. Of particular interest to students will be opinions expressed by Chinese observers.

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Chap 011

Documents

Transcript of Chap 011