BA 447: Environment

Note to students: scan links provided. Consider this lecture a survey to get you started.

Exercise: Step 1

• Is there a relationship between changes in the price of crude oil and deaths in a large city like San Francisco?

Selected Topics

• Global warming • Sustainable energy use • Ecological issues – Conserving natural resources – Protection of plant and animal life • Role of NGOs (sometimes referred to as activists) • Impact on global business

Global Warming

• Increase in earth’s temperature • Greenhouse effect - increase in carbon dioxide and other emissions and effect on atmosphere • Most of the warming seems to have occurred in last 50 years, therefore due to human activity

Global Warming - sources

• • • • International Panel for Climate Change EPA - info on climate change http://en.wikipedia.org/wiki/Global_warmin g http://www.realclimate.org/index.php?p=12 1

Efforts to Reduce Emissions

• Alternatives to reducing emissions – Government mandates – Free market • Existing systems – US: Clean Air Act places a cap on emissions – EU Greenhouse Gas Emission Trading Schemes – UN Framework Convention on Climate Change

Kyoto Protocol

• Kyoto Protocol • Agreement to reduce emissions 5% below 1990 levels by 2008-2012. • If they can not do so, country can buy Green House Gas (GHG) emission reductions.

– Certified Emissions Reductions • Exemptions – developing countries, including China • US objections

Emissions Trading

• World Bank facility: – http://carbonfinance.org/ • European Bank for Reconstruction and Development – http://www.ebrd.com/country/sector/energyef/c arbon/

A note on sites on global warming

• Most sites are supportive, a few raise doubts – – – http://www.lickglobalwarming.org/ http://www.globalwarming.org/about.htm

http://www.globalclimate.org/ • Pay attention to who is behind the site – A good number of sites raising doubts are industry funded, primarily “fossil fuel sources” – Key issue is fear of regulation – Politics tend to cloud the issue also

Sustainable Energy Use

• Nominal prices of crude oil over time – http://www.eia.doe.gov/cabs/chron.html

• Real price comparison – http://www.forbes.com/static_html/oil/2004/oil.shtml

• US Gas prices (components and history) – – http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis _publications/primer_on_gasoline_prices/html/petbro.h

tml http://www.randomuseless.info/gasprice/gasprice.html

Some myths about energy

• Are gas prices really that expensive?

• Some myths about energy – http://dieoff.com/page132.htm

Long term prospects

• Hubbert's peak • Example of debate/discussion – BBC article on long term oil prospects

Addressing alternative sources

• Amount of crude oil currently consumed • Infrastructure dependent on crude oil • Capacity to produce key raw material • Net change in conversion to alternative – Amount of crude oil consumed in production of alternative, e.g. as energy, as raw material – Amount of energy gained – Compare apples to apples?

Addressing alternative sources

• • Net change in conversion to alternative – Amount of crude oil consumed in production of alternative, e.g. as energy, as raw material – Amount of energy gained – Compare apples to apples?

OSU study on Biofuels

Ecological Issues - examples

• Forest cover • Spotted owl • Dolphins • Sea Turtles • Chilean sea bass

Resource Issues

• Natural resources such as trees and minerals • Water – For consumption: human and production – For transport • Food production

Genetically Modified Crops and the Environment

• Examples: – Seeds genetically modified to be pesticide resistant – Seeds modified to produce organisms that kill other organisms • Issues: – How to increase food production?

– What are impacts on environment?

– Is it a shortage issue or a distribution issue?

Understanding Dissent

• Appreciate that issues are complex • Different sides will use information technology to disseminate their message • Look into science if possible • Ask questions, investigate • Check background of sources of information

Role of Activists

• In general call attention to an environmental issue.

• Methods (for example, against GM): – In Brazil, filed or caused law suit to be filed to ban the introduction of modified seeds – In Europe, lobbied parliament – In other countries, lobby congress or executive branch – Target key players as a way of attacking industry – Good use of the press – public relations – Need “good publicity” to survive

Examples of Political Strategy

• • Procurement and Tax Reform Anti-Global Warming Campaign / • Components: – Objective is an enabling legislation – Proponent – draft legislation, negotiates/lobbies legislators, e.g. door to door, press – Coalition of supportive individuals and organizations – Craft clear set of messages to be disseminated – press – Use events to create impact, e.g. face to corruption

Exercise

• Other relevant environmental concerns • Name an opportunity and/or threat to a global company given the discussions on global warming, energy, etc.?

Conclusions – implications on global businesses

• Reality of world-wide movements – Climate change is supported by both public and private entities globally – Response to genetically modified seeds – Other environment-related movements • These have spawned “targetting”/legislation • Direct costs to global firms including legal costs, energy costs, etc.

• Indirect costs in terms of negative publicity, etc.