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Chapter 9

BUS 223 Chapter 9: CHAPTER 9

Course Code
BUS 223
Haskovon Kriegstein

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Environmental regulation can add costs to some businesses or it can be a business
opportunity for others
Economic winner will be firms and industries that do the most environmental good
Sustainable business and sustainable economic development seek to create new ways of
doing business in which business success is measured in terms of economic, ethical, and
environmental sustainability, often called the triple bottom line approach
The sustainability paradigm sees environmental responsibilities as a fundamental part of
basic business practice
Backcasting examines what the future will be when we emerge through the funnel snf
looking at the steps needed to get there
Natural Step’s Funnel diagram (pg. 479)
Business Ethics and Environmental Values
It is important to be cautious of the environment because it will affect us and future
upcoming generations
Everything in the ecosystem in interrelated
Prudent approach to the conservation movement of modern environmentalism
The natural world, like capital, had the productive capacity to produce long-term income
but only if managed and used prudently
The natural environment is essential and valuable for many other reasons; the natural
world provides great aesthetic, spiritual, and inspirational value
some argue that many animals, presumably all animals with a central nervous system,
have the capacity to feel pain
some animals have the cognitive capacity to possess a conscious life of their own
Business’ Environmental Responsibility: The Market Approach
one approach to best business practices is: leaving it to the business manager where they
simply ought to seek profits and allow the market to allocate resources efficiently
another approach could be to have government regulations, where business would have to
develop a compliance structure to conform to the regulatory requirements
The optimal level of pollution that would best serve society’s interests is best attained,
according to Baxter, by leaving it to a competitive market
Society could strive for pure air and water, but the costs (lost opportunities) that this
would entail would be too high. So it is better to determine what a safe level is ad try to
reach that “optimal level of pollution”
A variety of market failures, many of the best known of which involve environmental
issues, point to the inadequacy of market solutions.
o A second type of market failure occurs when no markets exist to create a price for
important social goods.
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