When auditor Ernst and Young recently surveyed nearly chief financial officers, its findings were disturbing: When presented with a list of possibly questionable actions that may help the business survive, 47 per cent of CFOs felt one or more could be justified in an economic downturn. Worryingly, 15 per cent of CFOs surveyed would be willing to make cash payments to win or retain business and 4 per cent view misstating a company's financial performance as justifiable to help a business survive. While 46 per cent of total respondents agree that company management is likely to cut corners to meet targets, CFOs have an even more pessimistic view 52 per cent.
Competition, economist Andrei Shleifer discusses, can pressure companies to engage in unethical or criminal behavior, if doing so yields the firm a relative competitive advantage. Other firms, given the cost disadvantage, face competitive pressure to follow; such competition collectively leaves the firms and society worse off. But under a shared value worldview, these concepts are reinforcing.
The conflict between collective and individual interests arose in the financial crisis. Banks, the OECD described, are prone to take substantial risks: First, the opacity and the long maturity of banks' assets make it easier to cover any misallocation of resources, at least in the short run. Second, the wide dispersion of bank debt among small, uninformed and often fully insured investors prevents any effective discipline on banks from the side of depositors. Thus, because banks can behave less prudently without being easily detected or being forced to pay additional funding costs, they have stronger incentives to take risk than firms in other industries.
Examples of fraud and excessive risk are numerous in the history of financial systems as the current crisis has also shown. Even for rational-choice theorists like Richard Posner, the government must be a countervailing force to such self-interested rational private behavior by better regulating financial institutions.
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One may ask if competition is the problem, then is monopoly the cure. The remedy is neither monopoly nor overregulation which besides impeding competition, stifles innovation and renders the financial system inefficient or unprofitable.
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The FTC in Ethyl described this divergence: An individual customer may rationally wish to have advance notice of price increases, uniform delivered pricing, or most favored nation clauses available in connection with the purchase of antiknock compounds. However, individual purchasers are often unable to perceive or to measure the overall effect of all sellers pursuing the same practices with many buyers, and do not understand or appreciate the benefit of prohibiting the practices to improve the competitive environment …. In short, marketing practices that are preferred by both sellers and buyers may still have an anticompetitive effect.
What the appellate court failed to grasp is that MFNs—while individually rational—can be collectively irrational. If the buyers fiercely compete, MFNs seemingly provide a relative cost advantage. Why should they uniquely incur the cost, when the benefits accrue to their rivals? Status competition epitomizes competition for relative position among consumers with interdependent preferences. Either people adapt to their fancier lifestyle, and envy those on the higher rung. Status competition not only taxes individuals but society overall. Status competition has confounded consumers and economists for centuries.
John Maynard Keynes, for example, assumed that with greater productivity and higher living standards, people in developed economies would work only fifteen hours per week. Keynes correctly predicted the rise in productivity and real living standards. This analysis would reveal that the failure to live it is due to a kind of unconscious cut-throat competition in fashionable society. Status competition is often, but not always, detrimental.
On the bright side, people voluntarily compete and use Internet peer pressure to change their energy consumption, driving, and exercise habits. One interesting empirical study sought to understand why academics cheated by inflating the number of times their papers were downloaded on the Social Science Research Network SSRN. Why the deception?
Status competition, the study found, was a key contributor. In all five scenarios, competitors seek a relative advantage that ultimately leaves them collectively and society worse off. This suboptimal competition is not a new concept. Many, however, used a pejorative term, instead of competition, to describe it, such as: a collective action problem, Firms—independent of any competitive pressure—at times impose a negative externality to maximize profits. For example, electric power utilities, whether or not a monopoly, will seek to maximize profits by polluting cheaply and having the community bear the environmental and health costs.
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The utility monopoly, for example, may lobby to keep abay pesky environmentalists, but it would not expend resources on lobbying to secure a relative competitive advantage when its market power is otherwise secure. The previous subsection identifies five scenarios where competition for a relative advantage leaves the competitors and society worse off. Underlying democracies is the belief that competition fosters the marketplace of ideas: truth prevails in the widest possible dissemination of information from diverse and antagonistic sources.
For if the problem were attributable primarily to misaligned incentives, then the problem would arise in duopolies, and be unaffected by entry and increased competition. Here, misaligned incentives play an important role, but so do increased entry and competition. This subsection discusses two industries, where, as recent economic studies found, greater competition yielded more unethical conduct among intermediaries.
But this problem can arise in other markets as well. Home appraisers, pressured by threats of losing business to competitors, inflate their valuations to the benefit of real estate brokers who gain higher commissions and lenders who make bigger loans and earn greater returns when selling them to investors. Ratings agencies provide several complementary functions: i to measure the credit risk of an obligor and help to resolve the fundamental information asymmetry between issuers and investors, ii to provide a means of comparison of embedded credit risk across issuers, instruments, countries and over time; and iii to provide market participants with a common standard or language to use in referring to credit risk.
One cannot fault the DOJ for assuming that entry, in increasing competition, often benefits consumers. The increased competition resulted in significant ratings grade inflation as the agencies competed for market share. Importantly, the ratings inflation was attributable not to the valuation models used by the agencies, but rather to systematic departures from those models, as the agencies made discretionary upward adjustments in ratings in efforts to retain or capture business, a direct consequence of the issuer-pays business model and increased concentration among investment banks.
Issuers could credibly threaten to take their business elsewhere. The formula allowed securities firms to sell more top-rated, subprime mortgage-backed bonds than ever before. The world's two largest bond-analysis providers repeatedly eased their standards as they pursued profits from structured investment pools sold by their clients, according to company documents, e-mails and interviews with more than 50 Wall Street professionals.
Even in the staid world of corporate bonds, increased competition among the ratings agencies led to a worse outcome. One empirical economic study looked at corporate bond and issuer ratings between the mids and mids. The reputational mechanism appears to work best at modest levels of competition. In New York, like other states, automobile owners must have their vehicles periodically tested for pollution control.
In this market, the government fixed the price of emission testing. So the testing centers competed along non-price dimensions such as quick testing and passing vehicles that otherwise should flunk. Antitrust typically treats entrants as superheroes in deterring or defeating the exercise of market power. Here entrants, the study found, were likelier the villains.
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If customers indeed demand illicit dimensions of quality, firms may feel compelled to cross ethical and legal boundaries simply to survive, often in response to the unethical behavior of just a few of their rivals. In markets with such potential, concentration with abnormally high prices and rents may be preferable, given the reduced prevalence of corruption. The Supreme Court recognized that competition could increase vice. This article simply examines the initial issue of whether competition in a market economy is always good. If, as this article explores, the answer is no, a separate institutional issue is whether we should allow private parties to deal with these types of failures or whether legislation is required.
Once antitrust officials recognize that market competition produces at times suboptimal results, the debate shifts to whether the problem of suboptimal competition can be better resolved privately by perhaps relaxing antitrust scrutiny to private restraints or with additional governmental regulations which in turn raises issues over the form of the regulation and who should regulate.
Even if one concludes that private restraints were the solution, the economic literature has not developed sufficiently an analytical framework for courts and agencies to apply, consistent with the rule of law, a suboptimal competition defense. Nor is it necessarily superior that independent agencies or courts rather than elected officials determine which industries receive a suboptimal competition defense, when, and under what circumstances. Society may prefer that the more publicly accountable elected officials, despite the risk of rent-seeking, should decide when competition is suboptimal.
Accordingly, antitrust officials should continue to advocate competition and challenge private and public anti-competitive restraints. But competition in a market economy, while often good, is not always good. The literature should prompt officials to inquire when competition promotes behavioral exploitation, unethical behavior, and misery.
Some may fear this weakens competition advocacy, as rent-seekers will use the exceptions described herein to restrict socially beneficial competition. But to effectively advocate competition, officials must understand when more competition is the problem, not the cure. In better understanding these instances when competition does more harm than good, antitrust officials can more effectively debunk claims of suboptimal competition. By undertaking this inquiry, antitrust officials become smarter and better advocates.
I also thank the University of Tennessee College of Law for the summer research grant. In trying to drape themselves in the mantle of free competition, defendants are disingenuous. Their decision to simulate plaintiffs' trade dress yields society no benefits. Above-board competition directed at factors such as quality and price is in society's interests. Obtaining sales by facilitating passing off is not. No group can afford to drop out of the contest for government handouts; members of a group that did would pay the same taxes but receiver fewer benefits, thus redistributing income to the remaining contestants.
Even if everybody belonged to a special interest group, so that special interest politics did not affect the distribution of wealth, interest groups still would direct resources to socially unproductive programs. First, the confidential witness statements describe a staggering race-to-the-bottom of loan quality and underwriting standards as part of an effort to originate more loans for sale through secondary market transactions.
The witnesses catalogue an explosive increase in risky loan products, including interest-only loans, stated income loans, and adjustable-rate loans, and a serious decline in loan quality and underwriting. Several witnesses portray an underwriting system driven by volume and riddled with exceptions. There are specific instances of loose standards, as when an employee recommended denial of a loan application but higher-level managers repeatedly approved those loans, or when underwriters allowed rejected loans, usually because borrowers' incomes were too low, a second chance and approved the formerly rejected loans.
There is testimony that instructions, according to managers, came from the corporate officers, and that officers had access to information on the effects of these practices, including the rising defaults. There are also indications that the compensation for sales reinforced the disregard for standards and quality as volume was linked to reward. Oxford University Press is a department of the University of Oxford.
It furthers the University's objective of excellence in research, scholarship, and education by publishing worldwide. Sign In or Create an Account. Sign In. Advanced Search. Article Navigation. Close mobile search navigation Article Navigation. Volume 1. Article Contents. The virtues of competition. Competition sacrificed. The dark side of competition. Editor's Choice. Is competition always good? Oxford Academic.
One of the initial attempts to express human impact mathematically was developed in the s and is called the I PAT formula. This formulation attempts to explain human consumption in terms of three components: population numbers, levels of consumption which it terms "affluence", although the usage is different , and impact per unit of resource use which is termed "technology", because this impact depends on the technology used.
The equation is expressed:. In recent years, concepts based on re- cycling resources are increasingly gaining importance. The most prominent among these concepts might be the Circular economy , with its comprehensive support by the Chinese and the European Union. There is also a broad range of similar concepts or schools of thought, including cradle-to-cradle laws of ecology, looped and performance economy, regenerative design, industrial ecology, biomimicry, and the blue economy. These concepts seem intuitively to be more sustainable than the current linear economic system.
The reduction of resource inputs into and waste and emission leakage out of the system reduces resource depletion and environmental pollution. However, these simple assumptions are not sufficient to deal with the involved systemic complexity and disregards potential trade-offs. For example, the social dimension of sustainability seems to be only marginally addressed in many publications on the Circular economy, and there are cases that require different or additional strategies, such as purchasing new, more energy efficient equipment.
A review of a team of researchers from Cambridge and TU Delft identified eight different relationship types between sustainability and the circular economy, namely: . Sustainability measurement is the quantitative basis for the informed management of sustainability. They are applied over a wide range of spatial and temporal scales. Some of the best known and most widely used sustainability measures include corporate sustainability reporting , Triple Bottom Line accounting , World Sustainability Society, Circles of Sustainability , and estimates of the quality of sustainability governance for individual countries using the Environmental Sustainability Index and Environmental Performance Index.
One of the most known ways to measure environmental sustainability is Planetary boundaries. According to the most recent July revision of the official United Nations World Population Prospects, the world population is projected to reach 8. This increase will be distributed among the population aged 15—59 1. In contrast, the population of the more developed regions is expected to undergo only slight increase from 1. Emerging economies like those of China and India aspire to the living standards of the Western world, as does the non-industrialized world in general.
At the global scale, scientific data now indicates that humans are living beyond the carrying capacity of planet Earth and that this cannot continue indefinitely. This scientific evidence comes from many sources but is presented in detail in the Millennium Ecosystem Assessment and the planetary boundaries framework. The ecological footprint measures human consumption in terms of the biologically productive land needed to provide the resources for and absorb the wastes of the average global citizen. In it required 2. The figure right examines sustainability at the scale of individual countries by contrasting their Ecological Footprint with their UN Human Development Index a measure of standard of living.
The graph shows what is necessary for countries to maintain an acceptable standard of living for their citizens while, at the same time, maintaining sustainable resource use. The general trend is for higher standards of living to become less sustainable. As always, population growth has a marked influence on levels of consumption and the efficiency of resource use. Information generated by reports at the national, regional and city scales confirm the global trend towards societies that are becoming less sustainable over time.
Romanian American economist Nicholas Georgescu-Roegen , a progenitor in economics and a paradigm founder of ecological economics , has argued that the carrying capacity of Earth — that is, Earth's capacity to sustain human populations and consumption levels — is bound to decrease sometime in the future as Earth's finite stock of mineral resources is presently being extracted and put to use. At the enterprise scale, carrying capacity now also plays a critical role in making it possible to measure and report the sustainability performance of individual organizations.
This is most clearly demonstrated through use of Context-Based Sustainability CBS tools, methods and metrics, including the MultiCapital Scorecard, which have been in development since Thus, rather than simply measure and report changes in relative terms from one period to another, CBS makes it possible to compare the impacts of organizations to organization-specific norms, standards or thresholds for what they the impacts would have to be in order to be empirically sustainable i. At a fundamental level, energy flow and biogeochemical cycling set an upper limit on the number and mass of organisms in any ecosystem.
The Millennium Ecosystem Assessment is an international synthesis by over of the world's leading biological scientists that analyzes the state of the Earth's ecosystems and provides summaries and guidelines for decision-makers. It concludes that human activity is having a significant and escalating impact on the biodiversity of world ecosystems , reducing both their resilience and biocapacity.
The report refers to natural systems as humanity's "life-support system", providing essential " ecosystem services ". The assessment measures 24 ecosystem services and concludes that only four have shown improvement over the last 50 years, 15 are in serious decline, and five are in a precarious condition. In , a summary for policymakers of the largest, most comprehensive study to date of biodiversity and ecosystem services was published by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. The report was finalised in Paris.
The main conclusions:. Over the last 50 years, the state of nature has deteriorated at an unprecedented and accelerating rate. The main drivers of this deterioration have been changes in land and sea use, exploitation of living beings, climate change, pollution and invasive species. These five drivers, in turn, are caused by societal behaviors, from consumption to governance. Damage to ecosystems undermines 35 of 44 selected UN targets, including the UN General Assembly's Sustainable Development Goals for poverty, hunger, health, water, cities' climate, oceans and land.
It can cause problems with food, water and humanity's air supply. To fix the problem, humanity will need a transformative change, including sustainable agriculture , reductions in consumption and waste, fishing quotas and collaborative water management. In , research was published showing that insects are destroyed by human activities like habitat destruction , pesticide poisoning , invasive species and climate change at a rate that will cause the collapse of ecological systems in the next 50 years if it cannot be stopped.
The Official Agenda for Sustainable Development adopted on 25 September has 92 paragraphs, with the main paragraph 51 outlining the 17 Sustainable Development Goals and its associated targets. This included the following seventeen goals: . As of August , there were proposed targets for these goals and proposed indicators to show compliance. Adopted by the United Nations member states at the time and more than twenty international organizations , these goals were advanced to help achieve the following sustainable development standards by According to the data that member countries represented to the United Nations , Cuba was the only country in the world in that met the World Wide Fund for Nature 's definition of sustainable development , with an ecological footprint of less than 1.
Education for sustainable development ESD is commonly understood as education that encourages changes in knowledge, skills, values and attitudes to enable a more sustainable and just society for all. ESD aims to empower and equip current and future generations to meet their needs using a balanced and integrated approach to the economic, social and environmental dimensions of sustainable development.
The concept of ESD was born from the need for education to address the growing environmental challenges facing the planet. Education should change to provide the knowledge, skills, values and attitudes that empower learners to contribute to sustainable development. At the same time, it has been argued that education must be strengthened in all agendas, programmes and activities that promote sustainable development. It has been suggested Sustainable development is integrated into education and education is integrated into sustainable development.
Healthy ecosystems provide vital goods and services to humans and other organisms. There are two major ways of reducing negative human impact and enhancing ecosystem services and the first of these is environmental management. This direct approach is based largely on information gained from earth science , environmental science and conservation biology. However, this is management at the end of a long series of indirect causal factors that are initiated by human consumption , so a second approach is through demand management of human resource use. Management of human consumption of resources is an indirect approach based largely on information gained from economics.
Herman Daly has suggested three broad criteria for ecological sustainability: renewable resources should provide a sustainable yield the rate of harvest should not exceed the rate of regeneration ; for non-renewable resources there should be equivalent development of renewable substitutes; waste generation should not exceed the assimilative capacity of the environment. At the global scale and in the broadest sense environmental management involves the oceans , freshwater systems, land and atmosphere , but following the sustainability principle of scale it can be equally applied to any ecosystem from a tropical rainforest to a home garden.
At a March meeting of the Copenhagen Climate Council , 2, climate experts from 80 countries issued a keynote statement that there is now "no excuse" for failing to act on global warming and that without strong carbon reduction "abrupt or irreversible" shifts in climate may occur that "will be very difficult for contemporary societies to cope with". Other human impacts on the atmosphere include the air pollution in cities, the pollutants including toxic chemicals like nitrogen oxides , sulfur oxides , volatile organic compounds and airborne particulate matter that produce photochemical smog and acid rain , and the chlorofluorocarbons that degrade the ozone layer.
Anthropogenic particulates such as sulfate aerosols in the atmosphere reduce the direct irradiance and reflectance albedo of the Earth 's surface. Global dimming may have disturbed the global water cycle by reducing evaporation and rainfall in some areas. It also creates a cooling effect and this may have partially masked the effect of greenhouse gases on global warming. Reforestation is one of the ways to stop desertification fueled by anthropogenic climate change and non sustainable land use.
One of the most important projects is the Great Green Wall that should stop the expansion of Sahara desert to the south. Of this, The remaining freshwater is found in glaciers, lakes, rivers, wetlands, the soil, aquifers and atmosphere. Due to the water cycle, fresh water supply is continually replenished by precipitation, however there is still a limited amount necessitating management of this resource. Awareness of the global importance of preserving water for ecosystem services has only recently emerged as, during the 20th century, more than half the world's wetlands have been lost along with their valuable environmental services.
Increasing urbanization pollutes clean water supplies and much of the world still does not have access to clean, safe water. Ocean circulation patterns have a strong influence on climate and weather and, in turn, the food supply of both humans and other organisms. Scientists have warned of the possibility, under the influence of climate change, of a sudden alteration in circulation patterns of ocean currents that could drastically alter the climate in some regions of the globe. Loss of biodiversity stems largely from the habitat loss and fragmentation produced by the human appropriation of land for development, forestry and agriculture as natural capital is progressively converted to man-made capital.
Land use change is fundamental to the operations of the biosphere because alterations in the relative proportions of land dedicated to urbanisation , agriculture , forest , woodland , grassland and pasture have a marked effect on the global water, carbon and nitrogen biogeochemical cycles and this can impact negatively on both natural and human systems. Present-day forests occupy about a quarter of the world's ice-free land with about half of these occurring in the tropics.
Food is essential to life. Feeding more than seven billion human bodies takes a heavy toll on the Earth's resources. Environmental problems associated with industrial agriculture and agribusiness are now being addressed through such movements as sustainable agriculture, organic farming and more sustainable business practices. The underlying driver of direct human impacts on the environment is human consumption.
Consumption of goods and services can be analysed and managed at all scales through the chain of consumption, starting with the effects of individual lifestyle choices and spending patterns, through to the resource demands of specific goods and services, the impacts of economic sectors, through national economies to the global economy.
The ideas of embodied resource use the total resources needed to produce a product or service , resource intensity , and resource productivity are important tools for understanding the impacts of consumption. Key resource categories relating to human needs are food , energy , materials and water. In , the International Resource Panel , hosted by the United Nations Environment Programme UNEP , published the first global scientific assessment on the impacts of consumption and production  and identified priority actions for developed and developing countries.
The study found that the most critical impacts are related to ecosystem health, human health and resource depletion. From a production perspective, it found that fossil-fuel combustion processes, agriculture and fisheries have the most important impacts. Meanwhile, from a final consumption perspective, it found that household consumption related to mobility, shelter, food and energy-using products cause the majority of life-cycle impacts of consumption. The Sun's energy, stored by plants primary producers during photosynthesis , passes through the food chain to other organisms to ultimately power all living processes.
Since the industrial revolution the concentrated energy of the Sun stored in fossilized plants as fossil fuels has been a major driver of technology which, in turn, has been the source of both economic and political power. Reducing greenhouse emissions, is being tackled at all scales, ranging from tracking the passage of carbon through the carbon cycle  to the commercialization of renewable energy , developing less carbon-hungry technology and transport systems and attempts by individuals to lead carbon-neutral lifestyles by monitoring the fossil fuel use embodied in all the goods and services they use.
Water security and food security are inextricably linked. In the decade —60 human water withdrawals were four times greater than the previous decade. This rapid increase resulted from scientific and technological developments impacting through the economy —especially the increase in irrigated land, growth in industrial and power sectors, and intensive dam construction on all continents.
This altered the water cycle of rivers and lakes , affected their water quality and had a significant impact on the global water cycle. Water efficiency is being improved on a global scale by increased demand management , improved infrastructure, improved water productivity of agriculture, minimising the water intensity embodied water of goods and services, addressing shortages in the non-industrialized world, concentrating food production in areas of high productivity, and planning for climate change, such as through flexible system design.
A promising direction towards sustainable development is to design systems that are flexible and reversible. The American Public Health Association APHA defines a "sustainable food system"   as "one that provides healthy food to meet current food needs while maintaining healthy ecosystems that can also provide food for generations to come with minimal negative impact to the environment.
A sustainable food system also encourages local production and distribution infrastructures and makes nutritious food available, accessible, and affordable to all. Further, it is humane and just, protecting farmers and other workers, consumers, and communities. Industrial agriculture cause environmental impacts, health problem associated with obesity in the rich world and hunger in the poor world.
This has generated a strong movement towards healthy, sustainable eating as a major component of overall ethical consumerism. The environmental effects of different dietary patterns depend on many factors, including the proportion of animal and plant foods consumed and the method of food production. It recommends the Mediterranean diet which is associated with health and longevity and is low in meat , rich in fruits and vegetables , low in added sugar and limited salt, and low in saturated fatty acids; the traditional source of fat in the Mediterranean is olive oil , rich in monounsaturated fat.
The healthy rice-based Japanese diet is also high in carbohydrates and low in fat. Both diets are low in meat and saturated fats and high in legumes and other vegetables; they are associated with a low incidence of ailments and low environmental impact. At the global level the environmental impact of agribusiness is being addressed through sustainable agriculture and organic farming. At the local level there are various movements working towards local food production, more productive use of urban wastelands and domestic gardens including permaculture , urban horticulture , local food , slow food , sustainable gardening , and organic gardening.
Sustainable seafood is seafood from either fished or farmed sources that can maintain or increase production in the future without jeopardizing the ecosystems from which it was acquired. The sustainable seafood movement has gained momentum as more people become aware about both overfishing and environmentally destructive fishing methods. As global population and affluence has increased, so has the use of various materials increased in volume, diversity and distance transported.
Included here are raw materials, minerals, synthetic chemicals including hazardous substances , manufactured products, food, living organisms and waste. Developed countries' citizens consume an average of 16 tons of those four key resources per capita, ranging up to 40 or more tons per person in some developed countries with resource consumption levels far beyond what is likely sustainable. Sustainable use of materials has targeted the idea of dematerialization , converting the linear path of materials extraction, use, disposal in landfill to a circular material flow that reuses materials as much as possible, much like the cycling and reuse of waste in nature.
Synthetic chemical production has escalated following the stimulus it received during the second World War. Chemical production includes everything from herbicides, pesticides and fertilizers to domestic chemicals and hazardous substances. Although most synthetic chemicals are harmless there needs to be rigorous testing of new chemicals, in all countries, for adverse environmental and health effects. International legislation has been established to deal with the global distribution and management of dangerous goods. The classification of the toxic carcinogenic agents is handled by the International Agency for Research on Cancer.
Every economic activity produces material that can be classified as waste. To reduce waste, industry, business and government are now mimicking nature by turning the waste produced by industrial metabolism into resource. Dematerialization is being encouraged through the ideas of industrial ecology , ecodesign  and ecolabelling. In addition to the well-established "reduce, reuse and recycle", shoppers are using their purchasing power for ethical consumerism. The European Union is expected to table by the end of an ambitious Circular Economy package which is expected to include concrete legislative proposals on waste management, ecodesign and limits on land fills.
In a new report "Plastic and Climate" was published. According to the report plastic will contribute greenhouse gases in the equivalent of million tons of carbon dioxide CO 2 to the atmosphere in In current trend, annual emissions will grow to 1. By plastic could emit 56 billion tons of greenhouse gas emissions, as much as 14 percent of the earth's remaining carbon budget. On one account, sustainability "concerns the specification of a set of actions to be taken by present persons that will not diminish the prospects of future persons to enjoy levels of consumption, wealth, utility, or welfare comparable to those enjoyed by present persons".
The developed world population is only increasing slightly but consumption levels are unsustainable. The challenge for sustainability is to curb and manage Western consumption while raising the standard of living of the developing world without increasing its resource use and environmental impact. This must be done by using strategies and technology that break the link between, on the one hand, economic growth and on the other, environmental damage and resource depletion.
A recent UNEP report proposes a green economy defined as one that "improves human well-being and social equity, while significantly reducing environmental risks and ecological scarcities": it "does not favor one political perspective over another but works to minimize excessive depletion of natural capital ". The report makes three key findings: "that greening not only generates increases in wealth, in particular a gain in ecological commons or natural capital, but also over a period of six years produces a higher rate of GDP growth"; that there is "an inextricable link between poverty eradication and better maintenance and conservation of the ecological commons, arising from the benefit flows from natural capital that are received directly by the poor"; "in the transition to a green economy, new jobs are created, which in time exceed the losses in "brown economy" jobs.
However, there is a period of job losses in transition, which requires investment in re-skilling and re-educating the workforce". Several key areas have been targeted for economic analysis and reform: the environmental effects of unconstrained economic growth; the consequences of nature being treated as an economic externality ; and the possibility of an economics that takes greater account of the social and environmental consequences of market behavior.
Historically there has been a close correlation between economic growth and environmental degradation : as communities grow, so the environment declines. This trend is clearly demonstrated on graphs of human population numbers, economic growth, and environmental indicators. There is concern that, unless resource use is checked, modern global civilization will follow the path of ancient civilizations that collapsed through overexploitation of their resource base.
In economic and environmental fields, the term decoupling is becoming increasingly used in the context of economic production and environmental quality. When used in this way, it refers to the ability of an economy to grow without incurring corresponding increases in environmental pressure. Ecological economics includes the study of societal metabolism, the throughput of resources that enter and exit the economic system in relation to environmental quality.
Exactly how, if, or to what extent this can be achieved is a subject of much debate. In the International Resource Panel , hosted by the United Nations Environment Programme UNEP , warned that by the human race could be devouring billion tons of minerals, ores, fossil fuels and biomass per year—three times its current rate of consumption—unless nations can make serious attempts at decoupling. By comparison, the average person in India today consumes four tons per year. Sustainability studies analyse ways to reduce resource intensity the amount of resource e. There are conflicting views whether improvements in technological efficiency and innovation will enable a complete decoupling of economic growth from environmental degradation.
On the one hand, it has been claimed repeatedly by efficiency experts that resource use intensity i. For example, there are certain minimum unavoidable material requirements for growing food, and there are limits to making automobiles, houses, furniture, and other products lighter and thinner without the risk of losing their necessary functions.
Consequently, long-term sustainability requires the transition to a steady state economy in which total GDP remains more or less constant, as has been advocated for decades by Herman Daly and others in the ecological economics community. A different proposed solution to partially decouple economic growth from environmental degradation is the restore approach.
Economic Development and Environmental Protection: Economic Pursuit of Quality
Participants in such efforts are encouraged to voluntarily donate towards nature conservation a small fraction of the financial savings they experience through a more frugal use of resources. These financial savings would normally lead to rebound effects, but a theoretical analysis suggests that donating even a small fraction of the experienced savings can potentially more than eliminate rebound effects.
The economic importance of nature is indicated by the use of the expression ecosystem services to highlight the market relevance of an increasingly scarce natural world that can no longer be regarded as both unlimited and free. However, this only applies when the product or service falls within the market system. One approach to this dilemma has been the attempt to "internalize" these "externalities" by using market strategies like ecotaxes and incentives, tradeable permits for carbon, and the encouragement of payment for ecosystem services.
Community currencies associated with Local Exchange Trading Systems LETS , a gift economy and Time Banking have also been promoted as a way of supporting local economies and the environment. Treating the environment as an externality may generate short-term profit at the expense of sustainability. For example, industrial waste can be treated as an "economic resource in the wrong place".
The benefits of waste reduction include savings from disposal costs, fewer environmental penalties, and reduced liability insurance. This may lead to increased market share due to an improved public image. The idea of sustainability as a business opportunity has led to the formation of organizations such as the Sustainability Consortium of the Society for Organizational Learning , the Sustainable Business Institute, and the World Council for Sustainable Development. One school of thought, often labeled ecosocialism or ecological Marxism, asserts that the capitalist economic system is fundamentally incompatible with the ecological and social requirements of sustainability.
By this logic, market-based solutions to ecological crises ecological economics , environmental economics , green economy are rejected as technical tweaks that do not confront capitalism's structural failures. Sustainability issues are generally expressed in scientific and environmental terms, as well as in ethical terms of stewardship , but implementing change is a social challenge that entails, among other things, international and national law , urban planning and transport, local and individual lifestyles and ethical consumerism.
Social disruptions like war , crime and corruption divert resources from areas of greatest human need, damage the capacity of societies to plan for the future, and generally threaten human well-being and the environment. To achieve sustainability, global peace will probably be needed, because economic growth is one of the main factors that determines the military capability. Without peace and international cooperation, a country that will limit its economic growth, will achieve lower military capability.
If there are countries that continues to grow economically, the result may be the conquest of the first country by the ones that continues to grow. Economic growth will continue what can pose problems to sustainability. A major hurdle to achieve sustainability is the alleviation of poverty.
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It has been widely acknowledged that poverty is one source of environmental degradation. It is therefore futile to attempt to deal with environmental problems without a broader perspective that encompasses the factors underlying world poverty and international inequality. According to the UN Population Fund, high fertility and poverty have been strongly correlated, and the world's poorest countries also have the highest fertility and population growth rates.
For example, teaching water treatment to the poor by boiling their water with charcoal , would not generally be considered a sustainable strategy, whereas using PET solar water disinfection would be. Also, sustainable best practices can involve the recycling of materials, such as the use of recycled plastics for lumber where deforestation has devastated a country's timber base. Another example of sustainable practices in poverty alleviation is the use of exported recycled materials from developed to developing countries, such as Bridges to Prosperity 's use of wire rope from shipping container gantry cranes to act as the structural wire rope for footbridges that cross rivers in poor rural areas in Asia and Africa.
According to Murray Bookchin , the idea that humans must dominate nature is common in hierarchical societies. Bookchin contends that capitalism and market relationships, if unchecked, have the capacity to reduce the planet to a mere resource to be exploited. Nature is thus treated as a commodity : "The plundering of the human spirit by the market place is paralleled by the plundering of the earth by capital. Whereas most authors proceed as if our ecological problems can be fixed by implementing recommendations which stem from physical, biological, economic etc.
A pure capitalist approach has also been criticized in Stern Review on the Economics of Climate Change by referring to climate change as "the greatest example of market failure we have ever seen. In regard to the United States of America, The Government and the Economy has had a long lasting impact on the environment, but in a problematic way.
Policy issues regarding the environment has shown that the country regards the protection of the environment as a "second hand issue". One causation from this is a certain dilemma called "collective action problem" or collective action dilemmas. For the government, one cost might be the loss of public confidence and trust, while a firm might lose market share and profitability . Deep ecology is a movement founded by Arne Naess that establishes principles for the well-being of all life on Earth and the richness and diversity of life forms.
The movement advocates, among other things, a substantial decrease in human population and consumption along with the reduction of human interference with the nonhuman world. To achieve this, deep ecologists advocate policies for basic economic, technological, and ideological structures that will improve the quality of life rather than the standard of living.
Those who subscribe to these principles are obliged to make the necessary change happen. Reduce dependence upon fossil fuels, underground metals, and minerals 2. Reduce dependence upon synthetic chemicals and other unnatural substances 3. Reduce encroachment upon nature. One approach to sustainable living , exemplified by small-scale urban transition towns and rural ecovillages , seeks to create self-reliant communities based on principles of simple living , which maximize self-sufficiency particularly in food production. These principles, on a broader scale, underpin the concept of a bioregional economy.
Other approaches, loosely based around New Urbanism , are successfully reducing environmental impacts by altering the built environment to create and preserve sustainable cities which support sustainable transport and zero emission housing. Residents in compact urban neighborhoods drive fewer miles, and have significantly lower environmental impacts across a range of measures, compared with those living in sprawling suburbs.
With more diversification between people, this increases people's happiness and leads to a better standard of living. The concept of circular flow land use management has also been introduced in Europe to promote sustainable land use patterns that strive for compact cities and a reduction of greenfield land take by urban sprawl. Large scale social movements can influence both community choices and the built environment. Eco-municipalities may be one such movement. The eco-municipality movement is participatory, involving community members in a bottom-up approach.
In Sweden, more than 70 cities and towns—25 per cent of all municipalities in the country—have adopted a common set of "Sustainability Principles" and implemented these systematically throughout their municipal operations. There are now twelve eco-municipalities in the United States and the American Planning Association has adopted sustainability objectives based on the same principles. There is a wealth of advice available to individuals wishing to reduce their personal and social impact on the environment through small, inexpensive and easily achievable steps.
Application of social sustainability requires stakeholders to look at human and labor rights, prevention of human trafficking, and other human rights risks. The international community has identified many industries whose practices have been known to violate social sustainability, and many of these industries have organizations in place that aid in verifying the social sustainability of products and services. Resources are also available for verifying the life-cycle of products and the producer or vendor level, such as Green Seal for cleaning products, NSF for carpet production, and even labeling of organic food in the United States.
The World Health Organization recognized that achieving sustainability is impossible without addressing health issues. Sustainable world is needed for sustainable health and some ways to reach more GDP part of the Sustainable Development Goals can harm health. In , science and medical academies published a report, saying that the global food system is failing us: it produces to much food what create huge environmental destruction from one side and a huge health damage from Overweight and Obesity from the other while creating big numbers of malnourished people in the same time.
The Experts write: " What we're doing now is unsustainable," "The only thing we can hope is that a sense of urgency will permeate. We're running out of time. Its innovative management seeks to resolve the challenges with respect to the shortage of water resources. The company maintains a presence in all the stages that make up the end-to-end water life cycle , from the construction of water treatment plants purification of drinking water, desalination and sewage treatment to the operation and maintenance of distribution and sewage networks and other services related to the sustainable management of this resource.
Learn more about what we do to provide water. Based on this trend, renewable installed capacity will be at least 10, MW. Learn more about what we do in renewable energy. Through its different business lines, ACCIONA offers innovative solutions that satisfy the growing demand for infrastructure , access to water and energy, etc. The company participates in the full infrastructure-building value chain , from identifying opportunities, design and execution, to operation and maintenance of built works. The company employs the most advanced and innovative techniques in carrying out projects, as well as the right technologies for each job.
When developing its projects, it measures and manages its social and environmental impact on the communities in which it works. Learn more about what we do in infrastructure. The rapid growth in urban centers requires new services. As well as facilitating access to essential services for life - such as energy and water - ACCIONA contributes to making cities productive living spaces of wellbeing, promoting socioeconomic development of people.