Hello Reader,
For this week's assignment I will be addressing the question: "What do you think needs to be done to encourage people to consume more sustainably?"
Well, Reader, I think a lot needs to be done to encourage people to start consuming more sustainably. I have purposefully put an emphasis on the word start, because I believe that is where the biggest hurdle lies... in the beginning. This week, I am going to stray a little from academia, and I'm going to rely a little bit on intuition and personal experience. I hope you don't mind too much. If you do, feel free to check back next week for a more comfortable approach.
----------
In the beginning...
I believe that the only real way to start getting people to consume more sustainably is to begin doing it yourself. That's right. Stop looking around, waiting for everyone else, trying to see who's going to make the first move. Just go! Jump in and give it a try. Now, understand that you might need to do a little bit of homework to make it work, and you are definitely going to have to try somethings that might make people look at you funny. In fact you might even have to go out of your way and put in more effort than normal into everyday tasks. However, if you never tried it before, it is hard to make a convincing argument.
To paraphrase of a speaker at a sustainability conference that I attended this past spring (forgive me, I don't remember which speaker expressed the idea, but it was either Steve Schmidt or Paul Marin at the Sustainable Campuses Conference hosted by the Lehigh Valley Association of Independent Colleges). The speaker first asked how many of the audience members had ridden on the local bus service. As I recall, there might have been 3 out of a group of about 30. Then, he suggested that everyone go out and try it at least once. He said something to the effect of, "Try it once. Even if it doesn't go where you need to go, just get on when you have some free time. Take notice of where it does go. Observe what the good points and bad points are. Then ask what can be done to fix these problems."
He then listed a bunch of possible things that a rider might notice, such as: Did the bus arrive when it was supposed to? Are the routes useful? Were the seats comfortable? Was the driver rude or kind? I'm sure there were other examples, but those are the ones that I remember.
His point was generally that nothing about the bus service was going to change if people didn't start using it. And that this is especially true if only the people that have no other options are the only patrons. Whether it is fair or not, it is unlikely that people using the bus out of necessity will formally request a change, and even if they do, it is unlikely to be taken seriously. More over, it is even less likely that the complaints of a non-rider will be taken seriously. Thus, the best way to improve the system is to use it.
While this is one specific example, I expect that this will hold true for most issues of sustainable consumption, especially those that require a specific infrastructure and/or public funding to work realistically.
Spread it on thick...
In most cases, you will probably want to try to be sustainable more than once before yelling from the rooftops about how green you are. Depending on what you are trying, perhaps go for a week or a month, and consciously focus on building up a new habit. Really, it is probably best if you wait until you find yourself doing your sustainable action without thinking about it. Then move onto another action.
Now that you have greened your consumption a little bit, and you've noted the weak points and the benefits of your new way of living, the next step is to talk about it. But how do you talk about it? Well, tip number one is don't brag about it! You're just going to sound like a crazy hippy to anyone that doesn't already agree with you. Otherwise, your approach is going to have to vary with your audience.
If you don't happen to be the Sustainability Coordinator at a college or university, I would recommend practicing on some of your closer friends or family. Maybe even pick some that are already environmentally conscious. Bring it up at an appropriate time, and ask them if they've tried it. If so, compare notes. If not, explain to them what the benefits are (to you and to the environment). Then, vent some of your frustrations if you have any. See where the conversation leads. At the end, if it's not too awkward, ask your friend to try it to, and see what they think. (Feel free to adapt this approach to fit your own personal style. In fact, I recommend it.)
Luke -coo cah- I am your father!
After you've tried the first approach and you are feeling comfortable approaching people about sustainability issues, it is time to try talking to somebody else. Pick someone that is perhaps not as environmentally conscious, or perhaps someone who is even environmentally "unfriendly"...a worthy adversary if you will. Then, to use an Omaba-ism, it is time to have a frank and open discussion.
For me, this person has consistently been my father. Through discussions with him and others, I have found very consistently, that no one is really "anti-environment". They simply have different priorities. Thus, the best way to connect with this person is to figure out what those priorities are. Explain what your point of view is, and try to find a common ground. It might be that the idea that conserving resources and energy also tends to save money. It might be their daily commute is longer and more aggravating than they would like, and they would use the option of public transportation if it were more easily accessible. Or it just might be that they believe that environmental problems ought to be addressed, but that it is somebody else's responsibility.
In any case, try not to take it personally, and try not to be accusatory. Chances are that you don't actually know everything, and you may be wrong on a few points. (To reduce the chance of this, try not to make claims about "facts" that you aren't entirely sure about...or at least be direct about the limits of your knowledge.)
In the end, it may take more than one discussion with the person, and to be perfectly honest, they probably won't agree with everything you say. However, chances are they will think about it again at some point, and hopefully they'll be a little bit more open about the idea next time you or someone else bring it up. Also, you may learn some legitimate reasons why your way of thinking is not quite right. In that case, try to make some adjustments to your habits and start over again.
Outside of the Personal:
Of course, if you are the only one pushing for sustainable consumption, the task would truly be in surmountable. Thus, a little help from the government (or at least your local Parent-Teacher Association) would be useful. Overcoming a culture of unsustainable consumption will likely need to be fulfilled by including the topic in school curricula.
As pointed out in a journal article entitled Human nature, eco-footprints and environmental injustice by William Rees (2008), people have a genetic tendency to become less open to ideas outside of their personal concept of the world as they get older. Therefore, the best way to instill sustainable consumption principles across society is to present it to children as they are learning. I'm not saying that children need to be preached to. In fact, I'm not even saying that they need to have the information presented as the only option (or even the correct option). Instead, children just need to know that it is a legitimate, respectable option.
In this approach, children will be less likely to be resistant to sustainable consumption practices when they are older. There is also an increased chance that the children will have a discussion similar to the one that I prescribed in the previous section, which will get parents thinking. Overall, this is not the most direct or quickest method, but in the long term, I believe that it will prove to be the most valuable.
----------
It looks like, I did end up referring to one academic article, so apologize to any readers that were hoping to avoid such academic entanglements. I also apologize for the inordinate number of ellipses that have cropped up in this post. However, I hope that you have found this post inspiring, insightful, and/or instructional.
Sincerely,
Sean Diamond
Tuesday, October 20, 2009
Friday, October 16, 2009
The Book I Am Reviewing
I have chosen to review the book Powerdown: options and actions for a post-carbon world by Richard Heinberg (2004). I chose this book after reading a few pages of the introduction on Google Books. It appears that it will have a strong focus on solutions and possible outcomes with regard to the world transitioning to a low-carbon economy. Also, as a physicist of sorts, I enjoy the focus on energy use as a key component of the author's arguments. My review will highlight whether these expectations are met.
Wednesday, October 14, 2009
The Burden of the Consumer
Hello Reader,
I have loads of other work to attend to, but I could not pass up writing about this topic: the burden of the consumer. This is based loosely around one of the underlying principles of Adam Smith's invisible hand concept from the Wealth of Nations, and it has just recently been brought to my attention a few times in the past couple of weeks.
The Invisible Hand
I must admit up front that I am not a trained economist, and I have not read the Wealth of Nations. However, the general concept is all that I'm after right now, and it has been brought up in a variety of my courses recently. To summarize, even though no individual person is necessarily acting to promote the best interests of society, each individual will do so by pursuing their own perceived best interests (as though they are being guided by an invisible hand). It is my understanding that this has been construed to apply primarily in an economic system of consumers and producers, and it that it works on the following principles (along with a few others) that: 1) producers will always attempt to maximize their profits within the constraints of their production process, and 2) consumers will always attempt to maximize the utility they receive within the constraints of their budget.
The Slap in the Face
My curiosity lies in the second principle above. That is, the system is built around the expectation that consumers will always demand as much as possible, and not settle for less (or if they do settle for less, they can be persuaded by sufficient marketing). While my guess is that this was not the original intent of Adam Smith, the burden of the consumer to demand more has become common place. In fact it has been so deeply woven into the fabric of economic institutions that it has become an expectation. Two cases in point:
The first case arose during a lecture in my sustainable consumption course. The lecturer was explaining the concept of communities or groups transitioning to sharing common spaces and items. In particular, rather than every house (or family) in England owning a hammer, which may be used a few times per year, it would be beneficial for several families to store tools in a common storage area and only have to buy one hammer total. The example was also extended to other items such as the potential for sharing kitchen space and/or washing machines. However, one of the students raised the point that if every family in England started sharing tools rather than buying new ones, what would happen to the people in the developing countries who were making the tools? The student seemed indignant about the fact that these jobs would no longer be available, as though it were the burden of the consumer to continue consuming for the sake of the producer regardless of whether or not it was to the consumer's benefit.
I can see some limited merit in the fact that some populations in developing countries may have been institutionalized (perhaps forcibly or unwittingly) into relying upon these jobs. As such it would seem cruel and/or immoral to simply abandon them suddenly, leaving them with no job and a likely degraded environment. Yet I have a hard time believing that this could truly be a mainstream view in developing nations. Is it?
This brings me to my second case in point, a recent New York Times article entitled "Saudis Seek Payments for Any Drop in Oil Revenues". The article explains that Saudi Arabia is encouraging other OPEC nations to demand compensation for any planned cuts in greenhouse gas emissions agreed upon at the upcoming UN Climate Change Conference in Copenhagen, as those cuts will certainly impact oil revenues. Essentially, the article points out, that large cuts in greenhouse gas emissions could impact the Saudi Arabian government's budget, which is largely based on revenues raised from selling oil, by 16% over the next couple of decades. The article also offers expert opinions explaining that this is primarily a stalling and disrupting tactic that Saudi Arabia has been using since the 1992 summit in Rio de Janiero.
While at this scale it seems somewhat ludicrous (considering the $23 trillion Saudi Arabia is expected to make in oil revenues over the coming decades regardless of any progress at Copenhagen), it boils down to the same concept as the first case. That is, any reduction in consumption on the part of the consumer will damage the producer. Therefore, it should be considered morally reprehensible and/or require compensation. This premise, of course, flies directly in the face of the invisible hand concept and would not be likely to be accepted by those practicing sustainable consumption.
The Conclusion
Insofar as I have found some agreement between two such oppositional concepts as allowing the invisible hand to guide the markets and the tenants of sustainable consumption, I am confident in asserting that the premise of consumer burden is faulty! However, I must concede that countries (and corporations) who have worked diligently to institutionalize a cheap workforce in developing countries do have some moral obligation to at least ease the burden of transition away from ingrained practices. Lest the developing countries suffer the fate similar to (though much more abruptly than) the residents of Pittsburgh following the decline of the steel industry.
I am extremely curious about this point of view, which I have stumbled upon. Is this a typical reaction despite the expectation that continued or accelerated consumption will have the greatest impact upon developing nations?
Also if you are looking for the article, search for:
Saudis Seek Payments for Any Drop in Oil Revenues
Sincerely,
Sean Diamond
I have loads of other work to attend to, but I could not pass up writing about this topic: the burden of the consumer. This is based loosely around one of the underlying principles of Adam Smith's invisible hand concept from the Wealth of Nations, and it has just recently been brought to my attention a few times in the past couple of weeks.
The Invisible Hand
I must admit up front that I am not a trained economist, and I have not read the Wealth of Nations. However, the general concept is all that I'm after right now, and it has been brought up in a variety of my courses recently. To summarize, even though no individual person is necessarily acting to promote the best interests of society, each individual will do so by pursuing their own perceived best interests (as though they are being guided by an invisible hand). It is my understanding that this has been construed to apply primarily in an economic system of consumers and producers, and it that it works on the following principles (along with a few others) that: 1) producers will always attempt to maximize their profits within the constraints of their production process, and 2) consumers will always attempt to maximize the utility they receive within the constraints of their budget.
The Slap in the Face
My curiosity lies in the second principle above. That is, the system is built around the expectation that consumers will always demand as much as possible, and not settle for less (or if they do settle for less, they can be persuaded by sufficient marketing). While my guess is that this was not the original intent of Adam Smith, the burden of the consumer to demand more has become common place. In fact it has been so deeply woven into the fabric of economic institutions that it has become an expectation. Two cases in point:
The first case arose during a lecture in my sustainable consumption course. The lecturer was explaining the concept of communities or groups transitioning to sharing common spaces and items. In particular, rather than every house (or family) in England owning a hammer, which may be used a few times per year, it would be beneficial for several families to store tools in a common storage area and only have to buy one hammer total. The example was also extended to other items such as the potential for sharing kitchen space and/or washing machines. However, one of the students raised the point that if every family in England started sharing tools rather than buying new ones, what would happen to the people in the developing countries who were making the tools? The student seemed indignant about the fact that these jobs would no longer be available, as though it were the burden of the consumer to continue consuming for the sake of the producer regardless of whether or not it was to the consumer's benefit.
I can see some limited merit in the fact that some populations in developing countries may have been institutionalized (perhaps forcibly or unwittingly) into relying upon these jobs. As such it would seem cruel and/or immoral to simply abandon them suddenly, leaving them with no job and a likely degraded environment. Yet I have a hard time believing that this could truly be a mainstream view in developing nations. Is it?
This brings me to my second case in point, a recent New York Times article entitled "Saudis Seek Payments for Any Drop in Oil Revenues". The article explains that Saudi Arabia is encouraging other OPEC nations to demand compensation for any planned cuts in greenhouse gas emissions agreed upon at the upcoming UN Climate Change Conference in Copenhagen, as those cuts will certainly impact oil revenues. Essentially, the article points out, that large cuts in greenhouse gas emissions could impact the Saudi Arabian government's budget, which is largely based on revenues raised from selling oil, by 16% over the next couple of decades. The article also offers expert opinions explaining that this is primarily a stalling and disrupting tactic that Saudi Arabia has been using since the 1992 summit in Rio de Janiero.
While at this scale it seems somewhat ludicrous (considering the $23 trillion Saudi Arabia is expected to make in oil revenues over the coming decades regardless of any progress at Copenhagen), it boils down to the same concept as the first case. That is, any reduction in consumption on the part of the consumer will damage the producer. Therefore, it should be considered morally reprehensible and/or require compensation. This premise, of course, flies directly in the face of the invisible hand concept and would not be likely to be accepted by those practicing sustainable consumption.
The Conclusion
Insofar as I have found some agreement between two such oppositional concepts as allowing the invisible hand to guide the markets and the tenants of sustainable consumption, I am confident in asserting that the premise of consumer burden is faulty! However, I must concede that countries (and corporations) who have worked diligently to institutionalize a cheap workforce in developing countries do have some moral obligation to at least ease the burden of transition away from ingrained practices. Lest the developing countries suffer the fate similar to (though much more abruptly than) the residents of Pittsburgh following the decline of the steel industry.
I am extremely curious about this point of view, which I have stumbled upon. Is this a typical reaction despite the expectation that continued or accelerated consumption will have the greatest impact upon developing nations?
Also if you are looking for the article, search for:
Saudis Seek Payments for Any Drop in Oil Revenues
Sincerely,
Sean Diamond
Monday, October 12, 2009
Production Or Happiness (Wk 3 Assignment)
Hello Reader,
This week we were posed the question: "Gross domestic product or gross national happiness? What should governments be striving for, and how?"
To answer the first question, it seems appropriate to define each of the two terms plus a third term. Then, I want to explore purpose of measuring the two indicators. I believe this will make the choice self-evident. Finally, the how will have to be largely based on conjecture. Particularly due to the fact that most of the scholarly papers that I have run across thus far simply define the problem rather than offer solutions.
-----------
Gross Domestic Product (GDP)
The monetary value of all the goods and services produced by an economy over a specified period. It includes consumption, government purchases, investments, and exports minus imports.
From: Investopedia.com. Retrieved October 12, 2009, from Dictionary.com website: http://dictionary.reference.com/browse/gross%20domestic%20product
The Gross Domestic Product (GDP) is most likely to be familiar to you, and is considered one of the key metrics by which most countries measure economic success. Essentially, the larger the GDP, the more economic activity has occurred (typically over the course of a year or a month) and the more valuable the countries is considered. This particular indicator is critical to the sustainable consumption debate, because it gets to the root of the quote that in the Story of Stuff Annie Leonard attributes to economist Victor Lebow. That is, "Our enormously productive economy...demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction, our ego satisfaction in consumption...we need things consumed, burned up, replaced and discarded at an ever accelerating rate." To translate this into GDP terminology, it means that for an economy to be successful, the GDP must grow continuously!
Gross National Happiness (GNH)
An index that represents the overall well being of a nation's population. It is measured using indicators of well being (i.e. life expectancy and life satisfaction).
Summarized from the Happy Planet Index Report
As far as I can tell, there is no strict definition of Gross National Happiness (GNH) anywhere that is readily accessible. However, the essence of the definition is the average life satisfaction of a nation's population multiplied by the average life expectancy of a nation's population. Basically, it amounts to a measure of how happy people tend to be and how long they can expect to enjoy that happiness. For example: if the average person in Country A was extremely satisfied during their life (10 out of 10) but died at about age 25, and if the average person in Country B was moderately satisfied during their life (5 out of 10) but died at about age 50, both Countries A and B would have the same GNH (=250).
Ecological Footprint
"[A] measure of the amount of land required to provide for all [of a nation's] resource requirements plus the amount of vegetated land required to sequester (absorb) all [its] CO2 emissions and the CO2 emissions embodied in the products [it] consume[s]"
From: the Happy Planet Index Website
For my own (brief) elaboration regarding the shortcomings of the Happy Planet Index (HPI) definition of ecological footprint please refer to the first paragraph of the section entitled My Concern on my post entitled Ecological Debts and Rights. Otherwise, I am going to accept their definition as sufficient for discussing this topic.
-----------
What's the Point?
Both GDP and GNH are simply measures of human activity. GDP is a measure of how much economic activity there is. GNH is a measure of how much activity there is that contributes to well being. Of course, both of these measures are simply a representation of (one statistic describing) the real world. In other words, GDP and GNH are models for the real world. This has a few implications for their meanings. The first (and often overlooked part) is that a model is only as accurate as the components which it takes into account, and is thus limited in its usefulness. Furthermore, thanks to the practical limitations caused by chaotic systems, such as human behavior, it is impossible to create a completely accurate model without recreating the entirety of the system...at which point your model is useless, because it is just as complicated as the thing you were trying to understand in the first place. Therefore, all models must be used with caution. However, the second implication is that if your model measures the appropriate attributes of a system to a reasonable degree of accuracy, you can often get at the gist of the information you desire.
In our case, the gist is "What should governments be striving for, and how?", which I have taken to mean "Which metric, GDP or GNH, will more accurately represent a successful government?" And thus, governments will be able to accurately measure how successful current and prospective policies may be. Of course, success in and of itself can be considered subjective. Fortunately, in this case both mainstream economics (from which GDP springs) and alternative economics (from which GNH arises) seem to agree on success to some degree. Going back to the basics of mainstream economics, Adam Smith's invisible hand of the market economy is based on the ideal that markets will inevitably fall in line with the interests of society so long as each individual consumer attempts to maximize their own welfare. Similarly, alternative economics is looking to improve the overall well being of individuals in society, which (unless I'm completely missing the mark) is an attempt to maximize welfare.
As such, both GDP and GNH are an attempt to measure how successfully a country is promoting the welfare of its people! Great, now that we know where we are trying to go, we just need to determine which is the best way to get there (i.e. which model more accurately portrays how many units of welfare a country has).
A Caveat
The reason I added the third term, ecological footprint, to the two main possibilities offered by the question, GDP and GNH, is to add some context. It is all well and good to take either measure, GDP or GNH, on its own and have a little celebration about the fact that my country's GDP or GNH is higher than your country's, but what does this really mean? To me it makes more sense to look at efficiency.
That is, we consider how many inputs (resources) are being used to get one unit of output (welfare) rather than simply how many units are being output. This will give us a more realistic view of how profitable various countries are with respect to GDP and GNH. Otherwise, to put it into an economic perspective, it is like considering the marginal revenue from selling a product without considering the marginal cost to produce the product! If you do this, it will always seem like a great idea to strive to produce and sell additional products without limitation.
All Things Considered
Assuming that a country's GDP and GNH are considered in comparison its ecological footprint, then it makes significantly more sense, at least in theory, for an individual government to strive to maximize its country's GNH rather than its GDP. Because, as discussed before, GNH is a direct measure of how much well being its citizens possess, and is essentially by quantization of the amount of welfare the country possesses. Whereas, GDP is a direct measure of how much economic activity its citizens have participated in, which is used along with a number of other assumptions to infer how much welfare the country possesses. And the more assumptions the user of a model has to make, the less accurate the model tends to be. However, I suspect that the theory falls apart in practice due to a lack of context and standardization.
By context I am referring to the fact that most people (more importantly most policymakers) have no concept of what a good GNH rating would look like if it fell on their desks. However, it seems as though this could be remedied in a scientific manner by taking data and comparing measurements of the same situation using both GDP and GNH for an extended period of time before phasing out GDP in favor of GNH. This practice would likely be accompanied by an analysis of the discrepancies between the two metrics and their practical implications.
By standardization I mean that a metric such as GNH would probably not be able to withstand outside pressure if only one or two countries used it as their sole measure of success. It seems likely that a large number of countries chasing after GDP goals might trample over (either literally by means of physical war or occupation) or undermined (metaphorically by means of cultural diffusion) an individual country following a path laid by GNH. As a result it seems that this practice would need to be agreed upon and enacted simultaneously by several countries at once to have a decent chance at success.
We must also be cognizant that GNH is based on the averages for a nation. This means while a change would be beneficial to society as a whole, it might not be beneficial for all individuals (i.e. those whose social status based solely on high economic activity). Also, there will may be temporary transitional problems that arise for people who are now wholly dependent upon features of the current system of measure. Therefore, it should be expected that such a social change, just like any other, will meet resistance from those who stand to lose out entirely or initially.
------------
I hope you have enjoyed my conjecture. I look forward to feedback and apologize for how long it took me to post this assignment. It seems that the work is already starting to pile up for the semester, so an ungraded blog tends to fall toward the end of the list of priorities. In any event, please look for another posting soon(er than before).
Sincerely,
Sean Diamond
This week we were posed the question: "Gross domestic product or gross national happiness? What should governments be striving for, and how?"
To answer the first question, it seems appropriate to define each of the two terms plus a third term. Then, I want to explore purpose of measuring the two indicators. I believe this will make the choice self-evident. Finally, the how will have to be largely based on conjecture. Particularly due to the fact that most of the scholarly papers that I have run across thus far simply define the problem rather than offer solutions.
-----------
Gross Domestic Product (GDP)
The monetary value of all the goods and services produced by an economy over a specified period. It includes consumption, government purchases, investments, and exports minus imports.
From: Investopedia.com. Retrieved October 12, 2009, from Dictionary.com website: http://dictionary.reference.com/browse/gross%20domestic%20product
The Gross Domestic Product (GDP) is most likely to be familiar to you, and is considered one of the key metrics by which most countries measure economic success. Essentially, the larger the GDP, the more economic activity has occurred (typically over the course of a year or a month) and the more valuable the countries is considered. This particular indicator is critical to the sustainable consumption debate, because it gets to the root of the quote that in the Story of Stuff Annie Leonard attributes to economist Victor Lebow. That is, "Our enormously productive economy...demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction, our ego satisfaction in consumption...we need things consumed, burned up, replaced and discarded at an ever accelerating rate." To translate this into GDP terminology, it means that for an economy to be successful, the GDP must grow continuously!
Gross National Happiness (GNH)
An index that represents the overall well being of a nation's population. It is measured using indicators of well being (i.e. life expectancy and life satisfaction).
Summarized from the Happy Planet Index Report
As far as I can tell, there is no strict definition of Gross National Happiness (GNH) anywhere that is readily accessible. However, the essence of the definition is the average life satisfaction of a nation's population multiplied by the average life expectancy of a nation's population. Basically, it amounts to a measure of how happy people tend to be and how long they can expect to enjoy that happiness. For example: if the average person in Country A was extremely satisfied during their life (10 out of 10) but died at about age 25, and if the average person in Country B was moderately satisfied during their life (5 out of 10) but died at about age 50, both Countries A and B would have the same GNH (=250).
Ecological Footprint
"[A] measure of the amount of land required to provide for all [of a nation's] resource requirements plus the amount of vegetated land required to sequester (absorb) all [its] CO2 emissions and the CO2 emissions embodied in the products [it] consume[s]"
From: the Happy Planet Index Website
For my own (brief) elaboration regarding the shortcomings of the Happy Planet Index (HPI) definition of ecological footprint please refer to the first paragraph of the section entitled My Concern on my post entitled Ecological Debts and Rights. Otherwise, I am going to accept their definition as sufficient for discussing this topic.
-----------
What's the Point?
Both GDP and GNH are simply measures of human activity. GDP is a measure of how much economic activity there is. GNH is a measure of how much activity there is that contributes to well being. Of course, both of these measures are simply a representation of (one statistic describing) the real world. In other words, GDP and GNH are models for the real world. This has a few implications for their meanings. The first (and often overlooked part) is that a model is only as accurate as the components which it takes into account, and is thus limited in its usefulness. Furthermore, thanks to the practical limitations caused by chaotic systems, such as human behavior, it is impossible to create a completely accurate model without recreating the entirety of the system...at which point your model is useless, because it is just as complicated as the thing you were trying to understand in the first place. Therefore, all models must be used with caution. However, the second implication is that if your model measures the appropriate attributes of a system to a reasonable degree of accuracy, you can often get at the gist of the information you desire.
In our case, the gist is "What should governments be striving for, and how?", which I have taken to mean "Which metric, GDP or GNH, will more accurately represent a successful government?" And thus, governments will be able to accurately measure how successful current and prospective policies may be. Of course, success in and of itself can be considered subjective. Fortunately, in this case both mainstream economics (from which GDP springs) and alternative economics (from which GNH arises) seem to agree on success to some degree. Going back to the basics of mainstream economics, Adam Smith's invisible hand of the market economy is based on the ideal that markets will inevitably fall in line with the interests of society so long as each individual consumer attempts to maximize their own welfare. Similarly, alternative economics is looking to improve the overall well being of individuals in society, which (unless I'm completely missing the mark) is an attempt to maximize welfare.
As such, both GDP and GNH are an attempt to measure how successfully a country is promoting the welfare of its people! Great, now that we know where we are trying to go, we just need to determine which is the best way to get there (i.e. which model more accurately portrays how many units of welfare a country has).
A Caveat
The reason I added the third term, ecological footprint, to the two main possibilities offered by the question, GDP and GNH, is to add some context. It is all well and good to take either measure, GDP or GNH, on its own and have a little celebration about the fact that my country's GDP or GNH is higher than your country's, but what does this really mean? To me it makes more sense to look at efficiency.
That is, we consider how many inputs (resources) are being used to get one unit of output (welfare) rather than simply how many units are being output. This will give us a more realistic view of how profitable various countries are with respect to GDP and GNH. Otherwise, to put it into an economic perspective, it is like considering the marginal revenue from selling a product without considering the marginal cost to produce the product! If you do this, it will always seem like a great idea to strive to produce and sell additional products without limitation.
All Things Considered
Assuming that a country's GDP and GNH are considered in comparison its ecological footprint, then it makes significantly more sense, at least in theory, for an individual government to strive to maximize its country's GNH rather than its GDP. Because, as discussed before, GNH is a direct measure of how much well being its citizens possess, and is essentially by quantization of the amount of welfare the country possesses. Whereas, GDP is a direct measure of how much economic activity its citizens have participated in, which is used along with a number of other assumptions to infer how much welfare the country possesses. And the more assumptions the user of a model has to make, the less accurate the model tends to be. However, I suspect that the theory falls apart in practice due to a lack of context and standardization.
By context I am referring to the fact that most people (more importantly most policymakers) have no concept of what a good GNH rating would look like if it fell on their desks. However, it seems as though this could be remedied in a scientific manner by taking data and comparing measurements of the same situation using both GDP and GNH for an extended period of time before phasing out GDP in favor of GNH. This practice would likely be accompanied by an analysis of the discrepancies between the two metrics and their practical implications.
By standardization I mean that a metric such as GNH would probably not be able to withstand outside pressure if only one or two countries used it as their sole measure of success. It seems likely that a large number of countries chasing after GDP goals might trample over (either literally by means of physical war or occupation) or undermined (metaphorically by means of cultural diffusion) an individual country following a path laid by GNH. As a result it seems that this practice would need to be agreed upon and enacted simultaneously by several countries at once to have a decent chance at success.
We must also be cognizant that GNH is based on the averages for a nation. This means while a change would be beneficial to society as a whole, it might not be beneficial for all individuals (i.e. those whose social status based solely on high economic activity). Also, there will may be temporary transitional problems that arise for people who are now wholly dependent upon features of the current system of measure. Therefore, it should be expected that such a social change, just like any other, will meet resistance from those who stand to lose out entirely or initially.
------------
I hope you have enjoyed my conjecture. I look forward to feedback and apologize for how long it took me to post this assignment. It seems that the work is already starting to pile up for the semester, so an ungraded blog tends to fall toward the end of the list of priorities. In any event, please look for another posting soon(er than before).
Sincerely,
Sean Diamond
Wednesday, October 7, 2009
Ecological Debts and Rights
Hello Reader,
Tonight I was reading about the concept of an ecological footprint on the Happy Planet Index (HPI) website. Where I ran across the following statement:
Now I understand the concept of equity, and I generally agree with it, but I would like to take the time to question this particular concept of equity. Please note that this posting will primarily be my own academic musing, so I would appreciate hearing other arguments for or against anything I may say.
Definitions
Ecological Footprint:"a measure of the amount of land required to provide for all [of an individual's or a nation population's or the world population's] resource requirements plus the amount of vegetated land required to sequester (absorb) all their CO2 emissions and the CO2 emissions embodied in the products they consume." from HPI website
Ecological Debt: "The sum of annual ecological deficits." from Global Footprint Network website
Ecological Debt Day: Assuming that a nation or the world begins using an ecological footprint the size of its geographic footprint on January 1st, it will have used its entire ecological footprint by this day of the year, and it will start accumulating an ecological debt for the remainder of the year. from class notes of my Sustainable Consumption course.
My Concern
First, I must point out that I generally agree with HPI's definition of an ecological footprint; however, I would be inclined to consider all pollution emissions in the portion about land required for sequestration rather than simply minding CO2 emissions. Furthermore, to be particularly rigorous, I think it would also be appropriate to add other effects, such as the water that is embedded in the production of goods and the growth of food (or in the case of bottled water the water in the bottle) since this can significantly deplete aquifers and/or exacerbate drought situations. Of course, their particular definition of ecological footprint is not my primary concern.
My primary concern is the assumption at the end of the quote at the top of this post:
While I completely believe that such vilification is warranted in many cases, I have to ask why is so much emphasis placed on per capita figures? Clearly per capita figures are important, but why does this seem to be the pre-eminent concern? Now, at this point, you may expect me to go on about how China has (or will soon) overtake the US on an overall basis of carbon emissions. However, this is not my concern.
Instead, my interest is in how ecological footprints are calculated. That is, as the term footprint implies, they are based on a measure of geographic region. More specifically, they are based on the "total amount of productive hectares". This focus raises some interesting considerations.
Alternative Accounting
If the ecological footprint is based upon geographic area, shouldn't countries be judged primarily upon their utilization of their geographic footprint (i.e. compare ecological footprint to geographic footprint)? Trained as a physicist, I might even desire to keep my units accurate and choose to only compare the ecological footprint to the "productive" geographic footprint. In either of these cases, the US is still not keeping its ecological footprint within its on borders; however, it is doing a significantly better job than many other countries including Germany, Japan, and the United Kingdom.
One way to measure this sort of comparison is through considering ecological debt days. According to my class notes some examples (I assume from 2008) are:
I am particularly amused by this particular measurement, because the day that this was discussed in class was perhaps one of the first times I saw non-Americans become defensive regarding consumption issues. In particular, the several British MBA students were initially confused by how it would be possible for the UK to have its ecological debt day earlier in the year than the US.
While this does not eliminate the need for the US to take immediate action to address the plethora of environmental issues it is creating, it does raise some questions regarding the brunt of the criticism. Also, it is important to note every country that has an ecological debt date is overconsuming its resources and should not be let off the hook!
Rather than get defensive (or offensive), I would like to think through some of the merits of this alternative method of ecological accounting.
National Stewardship
The main merit that is immediately obvious to me is most evident in a current practice, which I will term national stewardship. That is, given the current political structure of the world (i.e. being primarily divided into sovereign nation-states), it seems reasonable to expect a functioning national government to responsibly care for (be a steward of) the human resources (i.e. population) and the natural resources (i.e. environment) within its own borders. (I am considering current frameworks in an attempt to be pragmatic and avoid dealing with potential global ideological shifts in this post.) Unfortunately, this expectation is not being met by a large number of governments, and the matter is further confounded by oceanic issues and multinational corporations. Thus, the extent to which governments succeed or fail to put national stewardship into practice can be considered a measure of how successful the government is.
Also, it seems reasonable for a nation to fairly trade its resources with another nation without impeding the other nation's sovereignty and for a nation could consume beyond its means for a period of time by going into ecological debt, similar to the way that they do by going into financial debt. Additionally, it should be perceived as hostile to encroach upon another nation's footprint (geographic or ecological) without mutually agreed upon compensation. Finally, it is important to note that nations are currently defined by their geographic boundaries and not by the size of their population.
Since in the national stewardship model the government of one nation, for example the United Kingdom, is not expected to utilize its resources to maintain the resources of another nation, for example the United States, why should the first nation expect to reap the benefits of the resources of the second nation? Thus, if a nation can keep its ecological footprint within the confines of its own geographic footprint (i.e. it's not being 'hostile') by managing its human resources (labor, economy, social structures, etc.), it should be considered sustainable regardless of population size and should thereby be entitled to reap the benefits of its management skills. Of course, in the case where a nation cannot keep its ecological footprint under control, it should be expected to compensate other nations inflicted by the damaged caused by its poor management skills.
Therefore, without radically altering the global political structure, current national stewardship expectations dictate that nations should be judged (primarily, if not solely) upon a comparison of their ecological and geographic footprints. Although I do see that this could almost be as much of an argument against the current global political structure as an argument for national stewardship, I have a feeling that embracing national stewardship would be much less violent process (or at least no more violent than typical global affairs).
Reproductive Responsibility
I understand that people are not able to choose the nation into which they are born any more than they are able to pick the family into which they are born. However, conversely people do have some measure of choice of where they decide to live and how many children they have. (Please note that I am aware of a large number of socio-economic, political, cultural, and feminist reasons why this is choice is limited and/or considered invalid, but just bare with me here for argument's sake, and assume that these issues do not apply to everyone and/or could be overcome/avoided in many cases.) So I must question the assumption that "everyone is entitled to the same amount of the planet’s natural resources".
I can only assume that I am only responsible for protecting the environment in which I live and/or has been included in my ecological footprint, a responsibility which would be delegated to the government in the case of national stewardship. I can also only assume that along with all of the other responsibilities of parenthood, parents are also responsible for their child's ecological footprint at least until the child is legally independent. To be plain, would I be considered irresponsible if I, as a potential parent, decide to have a number of children that can be accommodated by the natural resources available in the country or region in which I choose to live (or removing that choice, the country in which I already live)? This would mean that my family would have no ecological debt day! I would argue that this would mean that I am being responsible and sustainable. Conversely, given all of the same assumptions, if I decided to have more children than my nation's ecological footprint allows, am I not acting unsustainably?
Again, while I am not dismissing the issues with over-consumption, I am asking why irresponsible over-populating is being given a free pass by assuming that every person is entitled to the same amount of natural resources when in all practicality, no rational parent should have that expectation. This is especially true for areas or countries that have high population density and/or intense resource scarcity. For example, if I decide to live in the middle of the Sahara Dessert, should I be entitled to the same amount of resources as someone who decides to live close to a river surrounded by land that is suitable for cultivating crops? All of this being considered, it makes me wonder: to what extent is reproduction considered a right? (A tricky subject with a lot of possible implications which I will not go into.)
Well, I have left you with a bit of a bomb shell to consider. I hope you enjoyed my musings, and I look forward to any debate points on this subject. I feel that an entire research paper could be written on this topic (in fact I'm fairly certain several have been already).
Sincerely,
Sean Diamond
Tonight I was reading about the concept of an ecological footprint on the Happy Planet Index (HPI) website. Where I ran across the following statement:
Dividing this [the total amount of productive hectares available on the planet] by the world’s total population, we can calculate a global [ecological footprint] per capita figure on the basis that everyone is entitled to the same amount of the planet’s natural resources.
Now I understand the concept of equity, and I generally agree with it, but I would like to take the time to question this particular concept of equity. Please note that this posting will primarily be my own academic musing, so I would appreciate hearing other arguments for or against anything I may say.
Definitions
Ecological Footprint:"a measure of the amount of land required to provide for all [of an individual's or a nation population's or the world population's] resource requirements plus the amount of vegetated land required to sequester (absorb) all their CO2 emissions and the CO2 emissions embodied in the products they consume." from HPI website
Ecological Debt: "The sum of annual ecological deficits." from Global Footprint Network website
Ecological Debt Day: Assuming that a nation or the world begins using an ecological footprint the size of its geographic footprint on January 1st, it will have used its entire ecological footprint by this day of the year, and it will start accumulating an ecological debt for the remainder of the year. from class notes of my Sustainable Consumption course.
My Concern
First, I must point out that I generally agree with HPI's definition of an ecological footprint; however, I would be inclined to consider all pollution emissions in the portion about land required for sequestration rather than simply minding CO2 emissions. Furthermore, to be particularly rigorous, I think it would also be appropriate to add other effects, such as the water that is embedded in the production of goods and the growth of food (or in the case of bottled water the water in the bottle) since this can significantly deplete aquifers and/or exacerbate drought situations. Of course, their particular definition of ecological footprint is not my primary concern.
My primary concern is the assumption at the end of the quote at the top of this post:
"...everyone is entitled to the same amount of the planet’s natural resources."In basic principle this seems to read essentially as a definition of social equity. But is it? If you are an environmentalist or have picked up the international section of a news paper any time in the last decade or so, there is a decent chance that you may have stumbled upon an article about international climate change policy. If so, there is also a decent chance that you have seen a comment or factoid or tidbit aimed at vilifying the USA for taking more than their fair share of oil or polluting more than they ought to. You have probably also seen a statistic along the lines of the US population only being 5% of the world population but consuming 20-30% (up to 50% really) of this, that or the other thing.
While I completely believe that such vilification is warranted in many cases, I have to ask why is so much emphasis placed on per capita figures? Clearly per capita figures are important, but why does this seem to be the pre-eminent concern? Now, at this point, you may expect me to go on about how China has (or will soon) overtake the US on an overall basis of carbon emissions. However, this is not my concern.
Instead, my interest is in how ecological footprints are calculated. That is, as the term footprint implies, they are based on a measure of geographic region. More specifically, they are based on the "total amount of productive hectares". This focus raises some interesting considerations.
Alternative Accounting
If the ecological footprint is based upon geographic area, shouldn't countries be judged primarily upon their utilization of their geographic footprint (i.e. compare ecological footprint to geographic footprint)? Trained as a physicist, I might even desire to keep my units accurate and choose to only compare the ecological footprint to the "productive" geographic footprint. In either of these cases, the US is still not keeping its ecological footprint within its on borders; however, it is doing a significantly better job than many other countries including Germany, Japan, and the United Kingdom.
One way to measure this sort of comparison is through considering ecological debt days. According to my class notes some examples (I assume from 2008) are:
Japan: March 3rdFor a slightly different explanation and current world figures, check out the Global Footprint Network website, but note that it uses the terminology overshoot day rather than ecological debt day.
United Kingdom: April 16th
Germany: May 29th
United States: June 24th
France: July 27th
World: October 23rd
I am particularly amused by this particular measurement, because the day that this was discussed in class was perhaps one of the first times I saw non-Americans become defensive regarding consumption issues. In particular, the several British MBA students were initially confused by how it would be possible for the UK to have its ecological debt day earlier in the year than the US.
While this does not eliminate the need for the US to take immediate action to address the plethora of environmental issues it is creating, it does raise some questions regarding the brunt of the criticism. Also, it is important to note every country that has an ecological debt date is overconsuming its resources and should not be let off the hook!
Rather than get defensive (or offensive), I would like to think through some of the merits of this alternative method of ecological accounting.
National Stewardship
The main merit that is immediately obvious to me is most evident in a current practice, which I will term national stewardship. That is, given the current political structure of the world (i.e. being primarily divided into sovereign nation-states), it seems reasonable to expect a functioning national government to responsibly care for (be a steward of) the human resources (i.e. population) and the natural resources (i.e. environment) within its own borders. (I am considering current frameworks in an attempt to be pragmatic and avoid dealing with potential global ideological shifts in this post.) Unfortunately, this expectation is not being met by a large number of governments, and the matter is further confounded by oceanic issues and multinational corporations. Thus, the extent to which governments succeed or fail to put national stewardship into practice can be considered a measure of how successful the government is.
Also, it seems reasonable for a nation to fairly trade its resources with another nation without impeding the other nation's sovereignty and for a nation could consume beyond its means for a period of time by going into ecological debt, similar to the way that they do by going into financial debt. Additionally, it should be perceived as hostile to encroach upon another nation's footprint (geographic or ecological) without mutually agreed upon compensation. Finally, it is important to note that nations are currently defined by their geographic boundaries and not by the size of their population.
Since in the national stewardship model the government of one nation, for example the United Kingdom, is not expected to utilize its resources to maintain the resources of another nation, for example the United States, why should the first nation expect to reap the benefits of the resources of the second nation? Thus, if a nation can keep its ecological footprint within the confines of its own geographic footprint (i.e. it's not being 'hostile') by managing its human resources (labor, economy, social structures, etc.), it should be considered sustainable regardless of population size and should thereby be entitled to reap the benefits of its management skills. Of course, in the case where a nation cannot keep its ecological footprint under control, it should be expected to compensate other nations inflicted by the damaged caused by its poor management skills.
Therefore, without radically altering the global political structure, current national stewardship expectations dictate that nations should be judged (primarily, if not solely) upon a comparison of their ecological and geographic footprints. Although I do see that this could almost be as much of an argument against the current global political structure as an argument for national stewardship, I have a feeling that embracing national stewardship would be much less violent process (or at least no more violent than typical global affairs).
Reproductive Responsibility
I understand that people are not able to choose the nation into which they are born any more than they are able to pick the family into which they are born. However, conversely people do have some measure of choice of where they decide to live and how many children they have. (Please note that I am aware of a large number of socio-economic, political, cultural, and feminist reasons why this is choice is limited and/or considered invalid, but just bare with me here for argument's sake, and assume that these issues do not apply to everyone and/or could be overcome/avoided in many cases.) So I must question the assumption that "everyone is entitled to the same amount of the planet’s natural resources".
I can only assume that I am only responsible for protecting the environment in which I live and/or has been included in my ecological footprint, a responsibility which would be delegated to the government in the case of national stewardship. I can also only assume that along with all of the other responsibilities of parenthood, parents are also responsible for their child's ecological footprint at least until the child is legally independent. To be plain, would I be considered irresponsible if I, as a potential parent, decide to have a number of children that can be accommodated by the natural resources available in the country or region in which I choose to live (or removing that choice, the country in which I already live)? This would mean that my family would have no ecological debt day! I would argue that this would mean that I am being responsible and sustainable. Conversely, given all of the same assumptions, if I decided to have more children than my nation's ecological footprint allows, am I not acting unsustainably?
Again, while I am not dismissing the issues with over-consumption, I am asking why irresponsible over-populating is being given a free pass by assuming that every person is entitled to the same amount of natural resources when in all practicality, no rational parent should have that expectation. This is especially true for areas or countries that have high population density and/or intense resource scarcity. For example, if I decide to live in the middle of the Sahara Dessert, should I be entitled to the same amount of resources as someone who decides to live close to a river surrounded by land that is suitable for cultivating crops? All of this being considered, it makes me wonder: to what extent is reproduction considered a right? (A tricky subject with a lot of possible implications which I will not go into.)
Well, I have left you with a bit of a bomb shell to consider. I hope you enjoyed my musings, and I look forward to any debate points on this subject. I feel that an entire research paper could be written on this topic (in fact I'm fairly certain several have been already).
Sincerely,
Sean Diamond
Sunday, October 4, 2009
Serious Business (Wk2 Assignment)
Hello Reader,
This week we were asked the question: "Do you think business has a duty to promote sustainable consumption? If no, why not? If yes, what should they do and how far should the go?"
---
Now, if you are an environmentalist, your answer to this question is almost certainly yes, but before I continue on to the second part of the question I want take some time to think about why and why-not. Before I do any of this, please note that it is my belief that people (and companies) should take responsibilities for their own actions to the extent that their actions are under their own control. Also, I am working under the assumption that it is someone’s duty to promote sustainable consumption. Thus, it is a matter of “who” and not “if”.
Perhaps Not
One important point that I picked up from reading The Role of Business in Sustainable Consumption by Michaelis is that individual businesses are not in control of the business culture as a whole.
Without much extra thought, I might be inclined to let businesses off the hook, but by that logic everyone could make similar claims. Relying on the idea that one person (or in this case one company) cannot make a difference is an acceptable excuse. If you are inclined towards this line of reasoning I encourage you to go watch a large number of after-school specials that were broadcast in the 80's and 90's. Go ahead. This blog will most likely still be here when you get back. Of course, there is more to it than after-school specials, to let's take a look at some of the reasons why.
Perhaps
The business culture consists of many businesses, but as pointed out by Annie Leonard in the Story of Stuff, "people live and work all along this system [of consumption]". That is to say that people are integrally involved in the processes of production and consumption and that companies are not intangible, nebulous entities. On the contrary, successful companies tend to have well defined structures of hierarchical decision-making, which constitute the business culture referred to by Michaelis. Thus, by the transitive property, people make up the business culture.
I take this to imply that the business culture does not exist in a vacuum and is influenced in much the same way that other groups and communities are influenced: by popularity. Similar to school-yard popularity, peer pressure can be a motivator for change in the business culture. Of course this means that the most popular members of the business culture will wield the most influence (and therefore control) over the business culture. However, unlike school-yard popularity, the titans of the business culture are determined primarily by financial success as suggested by Michaelis. This speaks to common sense, as it is the successful companies that are studied by those in business school and used as benchmarks by competitors.
Therefore, it seems the onus falls almost solely upon successful companies to champion sustainable consumption in order that others may follow. However, I would like to push a little further and extend the onus to encompass all companies.
As explained by Leonard Mlodinow in The Drunkard’s Walk (for a particularly good example of how successful business leaders and companies are susceptible to randomness in the market place, I recommend pages 11-16), while the odds of a company’s success are improved by the skill of its staff, the chaotic nature of the market place means it is not beyond the realm of possibility for a poor or mediocre company to suddenly be thrust into the midst of success. In fact it is equally likely that a currently successful business will fall from grace and/or need a good government bail out to stay afloat. Or even that either situation has been occurring for an extended period of time, which means that a fluke may not seem like one at all.
Of course, regardless of whether a company has arrived at success due to premier business practices or a hiccup of randomness, it will more likely than not be held in the same high regard as any other successful company (see pages 177-182 of Mlodinow’s book). The only practical way to avoid success and its associated responsibilities (e.g. championing sustainable consumption) is to not participate in the market place. Thus, I reassert that all companies should assume responsibility for championing sustainable consumption. Also, returning to Annie Leonard’s statement about people working within these companies, the onus of sustainable consumption is necessarily extended to people in charge of companies (and by the same logic as before, all of those attempting to become the people in charge of companies).
Who’s In Charge Around Here?
In a small business, it is very clear who is in charge, typically the owner and/or manager. However, in publicly traded companies, it becomes a bit more nebulous. At first glance, employees (and disgruntled customers) will point to management, but active shareholders may disagree, because they are in fact the owners. This point is further confused by the inclusion of the now common place existence of mutual funds, which exacerbates the disconnection between owners and the decision making process.
While I can see the merits of placing the responsibility upon both the shareholders and the managers, I am going to lean toward the managers. This is primarily based on my understanding that a shareholder is legally removed from liability with regard to a company’s actions. (Please correct me if I do not correctly understand this concept.) That is not to say that extremely active shareholders do not have the ability to monitor and influence the actions of their companies (I hope to address practice in a later post), but rather that as a general practice the shareholders pay the managers to do exactly this.
Thus, assuming that publicly traded companies do not wish to revert back to being private companies, it is the responsibility of the upper-level managers (and all who strive to be them) to promote sustainable consumption in their companies’ decisions and actions. In actuality the most senior business executives of companies have a lot of other concerns in addition to sustainable consumption, so it is reasonable for a responsible company to hire a surrogate (a sustainability officer or consultant or both depending on the size of the company) to act as a sustainability champion to keep itself on track as long as the surrogate has the de facto backing of the other managers in the company.
How Far Is Too Far?
To answer the question of how far managers should go to address issues of sustainable consumption, the scope of their impact must be taken into account, and by almost all accounts their impact is huge. To point to another tidbit of information that is supplied by Annie Leonard: 51 of the world's 100 richest economies are companies. While I have not seen it written explicitly, I can only assume that these companies are primarily based in and/or are being lead by people that went to school in the industrialized world and have operations than span the populated continents of the globe. I can also say with a fair degree of certainty that these companies are directly and indirectly impacting (extracting resources, utilizing labor, dumping waste, transporting goods, etc.) large parts of the globe as well.
Standing by my original belief, managers should go as far as their companies' reach allows. Not astoundingly, it becomes a matter of self-control and self-discipline for managers to ensure they are not reaching beyond their means. A lesson all of society could stand to learn… if only there were some success stories upon which to look.
---
I hope you enjoyed this latest post. As usual, I look forward to any comments. In particular any clarifications regarding shareholder liability, pitfalls in my logic, or suggestions for related materials are appreciated. Later this week please look for my third assignment regarding Gross Domestic Product vs. Gross National Happiness.
Sincerely,
Sean Diamond
This week we were asked the question: "Do you think business has a duty to promote sustainable consumption? If no, why not? If yes, what should they do and how far should the go?"
---
Now, if you are an environmentalist, your answer to this question is almost certainly yes, but before I continue on to the second part of the question I want take some time to think about why and why-not. Before I do any of this, please note that it is my belief that people (and companies) should take responsibilities for their own actions to the extent that their actions are under their own control. Also, I am working under the assumption that it is someone’s duty to promote sustainable consumption. Thus, it is a matter of “who” and not “if”.
Perhaps Not
One important point that I picked up from reading The Role of Business in Sustainable Consumption by Michaelis is that individual businesses are not in control of the business culture as a whole.
Without much extra thought, I might be inclined to let businesses off the hook, but by that logic everyone could make similar claims. Relying on the idea that one person (or in this case one company) cannot make a difference is an acceptable excuse. If you are inclined towards this line of reasoning I encourage you to go watch a large number of after-school specials that were broadcast in the 80's and 90's. Go ahead. This blog will most likely still be here when you get back. Of course, there is more to it than after-school specials, to let's take a look at some of the reasons why.
Perhaps
The business culture consists of many businesses, but as pointed out by Annie Leonard in the Story of Stuff, "people live and work all along this system [of consumption]". That is to say that people are integrally involved in the processes of production and consumption and that companies are not intangible, nebulous entities. On the contrary, successful companies tend to have well defined structures of hierarchical decision-making, which constitute the business culture referred to by Michaelis. Thus, by the transitive property, people make up the business culture.
I take this to imply that the business culture does not exist in a vacuum and is influenced in much the same way that other groups and communities are influenced: by popularity. Similar to school-yard popularity, peer pressure can be a motivator for change in the business culture. Of course this means that the most popular members of the business culture will wield the most influence (and therefore control) over the business culture. However, unlike school-yard popularity, the titans of the business culture are determined primarily by financial success as suggested by Michaelis. This speaks to common sense, as it is the successful companies that are studied by those in business school and used as benchmarks by competitors.
Therefore, it seems the onus falls almost solely upon successful companies to champion sustainable consumption in order that others may follow. However, I would like to push a little further and extend the onus to encompass all companies.
As explained by Leonard Mlodinow in The Drunkard’s Walk (for a particularly good example of how successful business leaders and companies are susceptible to randomness in the market place, I recommend pages 11-16), while the odds of a company’s success are improved by the skill of its staff, the chaotic nature of the market place means it is not beyond the realm of possibility for a poor or mediocre company to suddenly be thrust into the midst of success. In fact it is equally likely that a currently successful business will fall from grace and/or need a good government bail out to stay afloat. Or even that either situation has been occurring for an extended period of time, which means that a fluke may not seem like one at all.
Of course, regardless of whether a company has arrived at success due to premier business practices or a hiccup of randomness, it will more likely than not be held in the same high regard as any other successful company (see pages 177-182 of Mlodinow’s book). The only practical way to avoid success and its associated responsibilities (e.g. championing sustainable consumption) is to not participate in the market place. Thus, I reassert that all companies should assume responsibility for championing sustainable consumption. Also, returning to Annie Leonard’s statement about people working within these companies, the onus of sustainable consumption is necessarily extended to people in charge of companies (and by the same logic as before, all of those attempting to become the people in charge of companies).
Who’s In Charge Around Here?
In a small business, it is very clear who is in charge, typically the owner and/or manager. However, in publicly traded companies, it becomes a bit more nebulous. At first glance, employees (and disgruntled customers) will point to management, but active shareholders may disagree, because they are in fact the owners. This point is further confused by the inclusion of the now common place existence of mutual funds, which exacerbates the disconnection between owners and the decision making process.
While I can see the merits of placing the responsibility upon both the shareholders and the managers, I am going to lean toward the managers. This is primarily based on my understanding that a shareholder is legally removed from liability with regard to a company’s actions. (Please correct me if I do not correctly understand this concept.) That is not to say that extremely active shareholders do not have the ability to monitor and influence the actions of their companies (I hope to address practice in a later post), but rather that as a general practice the shareholders pay the managers to do exactly this.
Thus, assuming that publicly traded companies do not wish to revert back to being private companies, it is the responsibility of the upper-level managers (and all who strive to be them) to promote sustainable consumption in their companies’ decisions and actions. In actuality the most senior business executives of companies have a lot of other concerns in addition to sustainable consumption, so it is reasonable for a responsible company to hire a surrogate (a sustainability officer or consultant or both depending on the size of the company) to act as a sustainability champion to keep itself on track as long as the surrogate has the de facto backing of the other managers in the company.
How Far Is Too Far?
To answer the question of how far managers should go to address issues of sustainable consumption, the scope of their impact must be taken into account, and by almost all accounts their impact is huge. To point to another tidbit of information that is supplied by Annie Leonard: 51 of the world's 100 richest economies are companies. While I have not seen it written explicitly, I can only assume that these companies are primarily based in and/or are being lead by people that went to school in the industrialized world and have operations than span the populated continents of the globe. I can also say with a fair degree of certainty that these companies are directly and indirectly impacting (extracting resources, utilizing labor, dumping waste, transporting goods, etc.) large parts of the globe as well.
Standing by my original belief, managers should go as far as their companies' reach allows. Not astoundingly, it becomes a matter of self-control and self-discipline for managers to ensure they are not reaching beyond their means. A lesson all of society could stand to learn… if only there were some success stories upon which to look.
---
I hope you enjoyed this latest post. As usual, I look forward to any comments. In particular any clarifications regarding shareholder liability, pitfalls in my logic, or suggestions for related materials are appreciated. Later this week please look for my third assignment regarding Gross Domestic Product vs. Gross National Happiness.
Sincerely,
Sean Diamond
Subscribe to:
Posts (Atom)