Business Practices and Environment
The primary message sent out by climate science has been sending out is the v essence of beginning to disinvest in fossil fuels. In view of this, leaning towards clean energy is now viewed as the most appropriate approach of keeping global warming below 2 degrees Celsius as suggested by Storm (1307). Despite that, some mainstream climate economists contend that the conventionally set climate targets are overly ambitious since they can hurt the economies. In particular, the costs of prompt decarbonization are too high for most enterprises to adopt. Due to the issue, economists recommend lowering the initial carbon prices and raising them afterward. Their ideas are linked with the social welfare function of classical economics, who assert that discounting goods using the rate of social discount that is consistent with the current return rates is the most compelling way of distributing economic resources. Regarding environmental degradation, it is better to prioritize on allocating the scarce resources to ventures with the highest yields and using the generated revenues to finance proven cost-effective technologies of mitigating climate change in the future. In this essay, there is an evaluation of the morality of the recently adopted measures of controlling carbon emissions by businesses.
The Ethics of Environmental Protection
Ecosystems act as a coherent and holistic system. Different elements rely on one another collateralized debt obligations by capturing and placing nature in the care of enterprises to extract value entails untying the environmental services to enable individuals to trade it. Since such disaggregation is impossible without the destruction of ecosystems, it follows that unbundling and separately trading ecosystem elements is a recipe for further disaster. For this reason, environmentalists devise theories and ideas about protecting the globe from degradation after significant harm. The most recent conservationist approach is valuing, pricing and monetizing nature ecosystem with hopes that they can save it from further deterioration. To them, rivers, forests, and hills are an asset since they act as habitats for biodiversity (Monbiot). After the invention of environmental marketization, the environmentalist has devised names such as natural capital to refer to nature and asset classes to refer to biodiversity in the market of ecosystems. The environmentalist approach spells a collapse of the classical system of neoliberalist capitalism.
The ethical principles underlying protection of the environment is justice, duty, and goodness. Goodness entails trying to improve the world while justice encompasses restitution people or groups of people after undertaking unjust actions towards them or violating their rights (Shaw 99). The primary duty of enterprises it to reduce carbon footprints that can harm people and ensure that their operations do not destroy natural habitats. Since emissions lead to environmental harm and destruction of habitats, pricing policies and measures created by governments act as sanctions for causing damage. By protecting ecological integrity, the destruction of the ecosystem is regulated, thereby providing justice for humans and other animals that depend on it for survival. Interestingly, from the onset, the taxes were believed to be a lasting solution to pollution, hence received support from numerous environmental economists. However, according to Fortune Magazine, despite the impeccable economic logic, carbon taxes have become increasingly unpopular.
The Market-like Emission Control Strategies
The modern conservationists propose the use of the market value of ecosystem services as a reminder of the costs of the loss of habitat through floods, freshwater carbon pollution, and species as suggested by The Guardian. To the proponents of capitalistic environmental pricing, buying and selling the services could save the world and generate profit at the same time (Monbiot). However, the system failed to conserve species and prevent habitat dwindling terribly due to loss of benefits. Ideally, the modern emission control approach is similar to creating market efficiency. Precisely, making enterprises pay for the carbon footprints they make seeks to ensure that business practices yield maximum benefits and minimal environmental harm to protect habitats and the entire ecosystem. Notably, markets are efficient when there are no externalities that affect the first welfare theorem adversely such as pollution. Hence, measures are taken to offset the issue lead to justice to the current and future generations since they minimize the occurrence of hunger, war, and poverty.
Conflicting Issues in the Monetization of Enterprise Emissions
Economists promoting environmental agenda contend that failures of the conventional prohibitionist strategies resulted from the unwillingness of policymakers to value environmental assets accordingly. Consequently, they propose that enterprises which are responsible for the destruction and degradation of the environment should lead in devising the new system of weighing the imminent destruction against the money generated within the ecosystem market. According to Monbiot, putting the commodities (water, pollination, and air) for sale can enhance persuasion of the unpersuadable people to protect nature. Also, through such weighing, a considerable amount of money can be generated for conservation projects. Pricing can place the natural world as something of significant worth since it is the foundation of asset classes and green infrastructure. However, the market system idea suffers a myriad of challenges including the following;
While some environmental economists believe that the policies that control emissions by businesses aim at regulating market failure (pollution externality), some contend that putting a price on the environment implies killing neoliberal capitalism, a theory which suggests that the market has a potential of resolving a considerable proportion of economic, social and political issues. In particular, people receive the best services and prosper most when the state’s expenditure is at the minimum. In other words, maximization of social interest is best enhanced through freedom to pursue self-interest, taxes, regulations, bailouts, subsidies and other interventions are the threat to capitalism since they limit economic freedom in markets.
The Problem of Accurate Valuation
One of the issues raised by the challengers is the non-commensurability of the values of nature. In particular, the approach involves making a comparison of things that are not comparable (Park 192). Ideally, to the conservationists, when thinking in economic terms, the intrinsic values of the natural environment can be lowly weighted compared to the alternatives. Besides, the anti-PES faction contends that marketplace solutions encompass shrinking of the democracy, public participation in decision-making, as well as transparency and accountability (Conniff). While the arguments can be viewed as respectable and plausible, they are also logically unsound. The opponents claim that they can be an avenue of further environmental damage rather than mitigation. .
In an attempt to identify the welfare, the British Department of Transport pointed to the protection are solace, social value, personal goals, inclusive communities, and personal connections as the ideal measures of value that can be monetized. However, despite the attempts to break down the idea of the monetary value of natural assets, it is hard to understand the ideal cost of nature. Hence, it is impossible to arrive at exact figures when calculating the price of benefits since they cannot be sensibly measured in monetary terms(Monbiot). That is to say, while pricing solutions are the best ones for solving environmental issues according to economists, they suffer a myriad of constraints. The most popular one is the failure to take environmental and social costs into account when calculating prices. The phenomenon is responsible for the recent escalation of greenhouse gases to detrimental levels. It is therefore evident that the agenda of pricing the environment pushes nature into further destruction.
The Problem of Agency (Adverse Selection)
The carbon tax agenda implies that political power can be applied to issues to make them resolve magically. Some economists contend that pricing nature is threatened by the risk of putting nature in the hands of persons who do not believe that the environment more for economic value (Monbiot). In particular, handing the conservation strategies entail handing them over to wealthy people and corporations, which is characterized by plutocratic decision aiming.
In the whole, the environment is currently perceived to be a critical part of economies, and emission control strategies aim at ensuring protecting its integrity. Financialisation of emission seeks to instill the ethical principle of justice in the highly capitalistic world. Since pollution is a form of a market externalities, the pollution control policies that are enacted by governments act as injunctions seeking to facilitate justice. Despite that, the market-based environmental protection measures are associated with numerous challenges. First, it is hard to comprehend the values of the environment that are priced. Secondly, the institutions held accountable for the protection of nature cannot be trusted to do it owing to the failure of carbon taxes in areas such as Great Britain. Lastly, putting it in the hands of free market pushes natural habitats towards monetization in the hands of persons that have been responsible for its damages.
Conniff, Richard. “What’s wrong with putting Price on Nature”. Yale Environment 360. Oct 18, 2012.Accessed: Dec 10, 2018. https://e360.yale.edu/features/ecosystem_services_whats_wrong_with_putting_a_price_on_natureFortune Magazine. “How a Capitalist should Tackle Climate Change.”Feb24, 2017. Accessed: Dec 10, 2018. http://fortune.com/2017/02/24/climate-change-carbon-tax/
Monbiot, George. “Put a Price on Natur?We must stop this neoliberal Road to Ruin” The Guardian.July 24, 2014. Accessed: Dec 11, 2018. https://www.theguardian.com/environment/georgemonbiot/2014/jul/24/price-nature-neoliberal-capital-road-ruinPark, Jonathan T. “Climate Change and Capitalism.” Consilience 14 (2015): 189-206.
Shaw, William H. Business ethics: A textbook with cases. Nelson Education, 2016.
Storm, Servaas. “How the invisible hand is supposed to adjust the natural thermostat: A guide for the perplexed.” Science and engineering ethics 23.5 (2017): 1307-1331.
The Guardian. “ What’s wrong with putting Price on Nature”Oct 18, 2012. Accessed: Dec 10, 2018. https://www.theguardian.com/environment/2012/oct/18/what-wrong-price-on-nature
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