Environmental Ethics & Sustainability Notes

Environmental Ethics in Business

UN Sustainable Development Goals (SDGs)

  • Sustainability is living with nature and respecting our impact.
  • SDGs are international goals for sustainable, peaceful, and prosperous communities.
  • Aims to counter the exploitation of the natural world.
  • There are 17 SDGs covering environmental and social issues.
  • Holistic approach to developing sustainable communities.

Business Impacts on the Environment

  • Industry has damaged natural resources used for food, clothing, and shelter.
  • Rivers, lakes, and air are polluted.
  • Forests are disappearing along with species.
  • The Earth's capacity to provide goods is threatened.
  • Wetlands, grasslands, and drylands are degraded.
Agriculture
  • Chemicals pollute land, waterways, and food.
  • Chemical residue in food causes health concerns, especially for children.
  • Large-scale corporate farming exacerbates soil degradation and loss of diversity.
  • Energy and resources are consumed in shipping, processing, and packaging.
Water
  • Increased demand and drought conditions pressure water systems.
  • Intensive irrigation causes salination and ecological damage.
  • 70% of world’s water is used for irrigation.
  • 1 billion lack access to clean water; 2.4 billion lack sanitation.
  • Water is used to grow crops unsuitable for the climate.
  • High levels of contaminants in water ecosystems due to industrial and agricultural practices.
Air
  • Air pollution causes deaths and illnesses.
  • Contributes to asthma, lung cancer, and heart disease.
  • Indonesia is a major greenhouse gas emitter due to forest burning.
Global Warming and Climate Change
  • Human activity is heating the planet.
  • Recent decades have been the hottest on record.
  • Weather patterns are erratic.
  • Arctic ice and glaciers are melting.
  • Warmer temperatures correlate with coral disease.
Nuclear Waste
  • Significant risks from nuclear energy use.
  • Concerns about future effects and safe disposal of nuclear waste.
  • Research explores generating electricity from radioactive carbon-14 waste using diamond batteries.

Business and the Ecology

  • Businesses operate within ecosystems.
  • Ecosystems are structured by webs of interdependency.
  • Commercial activities can have unpredictable consequences, damaging ecosystem stability.

Business’s Traditional Attitudes Towards the Environment

  • The environment has been viewed as a free and unlimited good.
  • This perspective does not consider externalities or spill-overs.
  • Ignores the difference between private and social costs.
  • Related to "The Commons" problem, where self-interest leads to destruction of public goods.
Externalities and Spill-Overs
  • Businesses overlook spillovers, focusing on private costs.
  • Water usage for industries like car manufacturing strains water-tables and ecosystems.
The Commons
  • Individual use seems negligible, but cumulative effect destroys the public domain.
  • Reverse of Adam Smith’s invisible hand: self-interest harms everyone.
Stewardship
  • McCuddy and Pirie: Stewardship should be integral to financial decision making.
  • Balances self-interest with concern for the common good.
  • Four types of stewardship:
    • Personal: Utilize own ability to help society.
    • Social: Nurture relationships for respect.
    • Economic: Utilize economic resources.
    • Environmental: Utilize natural resources sustainably.

The Ethics of Environmental Protection

  • Free Rider Problem: Individuals rationalize that their pollution doesn't matter.
  • Failure to internalize externalities is unfair.
  • Companies should pay environmental costs.
  • CSR emphasizes a social contract between business and society.
  • Companies violating this contract by being free riders.
Costs of Pollution Control
  • Who should pay for pollution control? (Those responsible? Those who benefit?)
  • William Blackstone: Right to a liveable environment is a fundamental human right.
Cost-Benefit Analysis
  • Involves value judgments and factual uncertainties.
  • Difficult to measure human well-being and other costs/benefits.
  • Benefits are often aesthetic and value-driven.
  • Ecological economics evaluates direct and indirect costs and benefits.
  • Example: Stringent air-pollution standards impact economy and society.

Delving Deeper into Environmental Ethics

  • Western world's high resource consumption raises moral issues.
  • Political and economic domination of other countries.
  • Disproportionate use of world’s finite resources.
  • The USA uses 30% of the world’s refined oil with only 4.6% of the population.
Ecological Footprint
  • Use of Earth’s resources to support lifestyle.
  • High consumption levels and dependence on foreign resources raise moral and political issues.
  • Securing foreign resources may lead to domination of other nations.
  • Human demand for natural resources exceeds the biosphere’s capacity to regenerate.
Obligations to Future Generations
  • Obligation to leave a habitable world.
  • Debate on rights of future, non-existent people.
  • Balancing current sacrifices with future inheritance.
The Value of Nature
  • Challenges the human-centered approach.
  • Anthropocentricism: Nature only has value because humans value it.
  • Nature has intrinsic value (aesthetic beauty, part of the ecosystem).
Our Treatment of Animals
  • Utilitarians stress animals' sentience (ability to feel pain).
  • Exclude animal pain/pleasure from utilitarian calculus.
  • Bentham: "Can they suffer?"
  • Sacrifice of animals may be justified if overall results warrant it.
  • Business affects animal welfare (experimentation, testing).
  • Questions: Do animals have rights? Can they suffer? Is it moral to use/eat them?

Achieving Our Environmental Goals

Regulations
  • Set environmental standards and pollution-control technology.
  • Difficult to create equitable governance.
  • Displacement costs due to industrial relocation can be high.
Incentives
  • Government investment, subsidy, and economic incentives.
  • Tax breaks for pollution-control equipment.
  • Slow approach, may pay polluters not to pollute.
Pricing Mechanisms
  • Financial charge for pollution.
  • Firms pay more for polluting more.
  • Places cost of pollution control on polluters.
  • Encourages firms to exceed minimum requirements.
Pollution Permits
  • Government permission for agreed level of pollution.
  • Companies can be charged or auction off permits.
  • Firms with low pollution can sell rights.
  • Government can lower permitted amount over time.
  • Global market for trading carbon-emissions credits.
Drawbacks to Pricing Mechanisms
  • Economists favor its use, but environmentalists are wary.
  • Setting charges or permit prices seems arbitrary.
  • Underlying principle may seem like a "license to pollute."
  • Implies companies have a right to pollute.
  • Michael Sandel: It's immoral to buy the right to pollute because it removes the moral stigma
Combination of Methods
  • No single ideal approach.
  • Combination of regulation, incentives, charges, and permits.
  • Must consider effectiveness and fairness.
  • Pollution is evidence of economic waste.
  • Environmental regulations can force efficient production.

Environmental Responsibility

  • Values center on future generations and the environment.
  • Neither utilitarianism nor deontological ethics may fully apply to sustainability.

Day 6 Summary

  • UN SDGs guide sustainable development.
  • Businesses impact the natural world negatively; ethical leaders commit to sustainability.
  • Business functions within a global ecological system.
  • Methods for protecting the environment include regulations, incentives, and pricing mechanisms.
  • Business traditionally views nature as a free good.
  • Pollution and resource depletion illustrate the tragedy of the commons.
  • Business must consider externalities.