COMM 300: Business of sustainability

From BluWiki

Business and the environment

Use of natural resources

• Global demand for resources increase, global supply decreases

Market failure

• Markets often fail to allocate scarce environmental resources for two reasons:
  • Externalities, for example society bears a cost over and above private costs (a negative externality)
  • Public goods
    • Excludable, rivalrous - goods like big macs, etc.
    • Excludable, non-rivalrous - goods like swimming pools
    • Non-excludable, rivalrous - fiisheries, ground water, etc
    • Non-excludable, non-rivalrous - national defense, climate, clean air, etc

Economic assumptions

Assumptions in neoclassical assumptions

• Anthropocentric - only humans count
• Maximizes utility of wealth - only wealth counts
• Well defined & stable preferences - can't market to create wants
• Risk aversion & time preference
• Non-satiation - no concept of enough

Ecological Economics

• Full world - there's no "other" palace to throw stuff
• Sustainable scale - what can everyone have?
• Just distribution - who gets it?
• Efficient allocation

Business as an agent of change

Business can change

Millennium Ecosystem Assessment

• We get our wealth from the earth in three areas:
  • Provisioning
    • Food
    • Fresh water
    • Wood & fiber
    • Fuel
  • Regulating
    • Climate regulation
    • Flood regulation
    • Water purification
  • Cultural
    • Aesthetic
    • Spiritual
    • Educational
    • Recreational