RIISINESS & PROFESSIONAL ETHICS JOURNAL, YUL. 24, NUS. 1&2 Business, Ethics, and Global Climate Change Denis G. Arnold and Keith Bustos In years past, there was substantial debate over the exintewve uf slubal warming. Today. the debate is largely over. A consensus has emer ed ia the global scientific community that global climate change (GCC) is jaccurring and that it will have a dramatic and adverse impact on ecosys- tems, nonhuman species populations and human populations." na recent review essay in Evhics, Stephen Gardiner notes that despite the fact that GCC is widely regarded by scientists, policy analysts, and politicians as an ethical issue, the philosophical literature on the ethics of GCC 1s surpmis= ingly underdeveloped.’ The primary subjects of ethical analysis identified by Gardiner are states, and the primary ethical issues he identifies are the fair distributions of burdens among states in reducing emissions.’ However, what ethical obligations, if any, the business organizations that produce these emissions—vither directly or indirectly have regarding GCC is not addressed. This is not surprising, forthe pozibilty that busine tions can have ethical obligations concerning GCC isalmost entirely absent ivi the existing literature onthe cthies of GCC.* Tite vigauization of this essay is as follows. First, an overview and brieChiswory of die diseovery of GCC is provided. Second, the influential position that holds that fiee matkets aud responsive democracies relicve business organizations of any special vbtxations to protect the environment is explained, Next. five objections 10 this “fiee nmuket solution” to organiza © tusiness & Professional Ethics Jounal 2005. Correspondence may be sent fo Prof. Denis G. Amotd and Mr, Kelth Bustos, Deparment of Philos ‘phy, XH Met hung tower, University of Tennessee, Knoxville, TN,37996: fof via email: damald lurk edBusiness & Professional Kthics Journal environmental problems are presented with special attention vives to the transportation and electricity generation sectors’ contribution to GCC. Finally, the ethieal obligations of business in the transportation and energy sectors are identified with regard to their contribution to GLC, and preliminary policy recommendations are offered Global ate Change ‘Thcieis a vast amount of conflicting information concerning GCC available lw anyone surfing the web, browsing headline articles in national newspa- pers, or scauinglibrary collections. When trying to determine the scientific ‘ucts concerning GCC, it can be difficult to knew which sources to trust. However, the most widely cited, peer-reviewed sources are the assessment reports produced by the Interyoveimmental Panel on Climate Change (WPCC). In 1988, the IPCC was jointly established by the World Meteoro- logical Organization (WMO) and the United Nations Environment Programme (LINE) with the purpose of assessing the available sciewifi and socioeconomic information an climate change Inorderto provide expert advice to the Conference af the Parties to the United Nations Framework Convention on Climate Change? Since 1990, the IPCC has relied upon hundreds of expert scientists to produce a series of reports and papers that, have become standard works of elerence used hy poliey makers, scientists, tnd other agencies euch as the Energy Information Administration (FIA), {division of the United States Department of Energy? Bofore getting to the IPCC’s position on GC ‘about what factors contribute to this phenomenon. As solar radiation enters the Larth’s atmosphere, atmospheric greenhouse gases (GHGs) (such as ‘water vapor, carbon dioxide, methane, and others) trap some of this tadiation as it travels back out ofthe atmosphere, retaining heat much like lass in a greenhouse.’ Even though water vapor is by far the most abundant zreenhouse gas inthe Carth's atmosphere, human activities have ‘negligible effect un the atmospheric concentrations of water vapor, and for this reason, i is ot figured into national greenhouse gas emission invento. ries Many of the GHQs (catbun dioxide, methane, nitrous oxide) are produced by both natural and aatluopoxenie processes, and there arc natural mechanisms that remove significant amounts of GHGs from the atmosphere.” However, anthropogenic eiissions have increased the total concentration of GHGs beyond the Earth’s natural capacity to rentove these gases trom the atmosphere."” Of these GHGs, CO, (carbon dioxide) is the we shoud he clearBusiness, Ethles, and Global Climate Control 3 ‘most abundant in the Eurth’s atmosphere due to burning fossil fuels." CO; ssalso the most recaeltrant of tie GHGs, since it does nat decompose easily in the atmosphere (taking anywhere from 30-200 years to decompose). ‘This means that a significant decrease n atmospherit CO; levels will wut be realized for many years alter anthropogenic COsemissions drup. Inviden tally, the U.S. has ranked first in the world for CO, emissions for several decades and has been responsible for about twenty-four percent of the total ‘world CO, emissions for the past decade and 1s projected to hover between, twenty-three percent and twenty-four percent until 2079." ‘According to the IPCC, approximately seventy-tive perrent of the aumospheric CO, stemming from human activity (world-wide) over the past ‘oveuly years is due to burning fossil fuel, and the other twenty-five percent is laruely due to changes in land-use, mainly deforettation.'* Due to an increase in atmospheric concentrations of CO;, "the globally averaged surface temperatures lave increased by 0.6 1 0.2°C over the 20th century." Furthermore, the IPCC projects that "the globally averaged surface ai temperature is projected . . . tw warn 14 to 5.8°C by 2100 relative to oyu." This warming trend is projected to continue ata rate of about 0.1 to ? degrees Celsius per decade fur the next few decades."” The IPCC has also tonnd evidence indicating that regional changes in temperature have already affeeted a variety of physical and bivlovival systems world wide, such as shrinking glaciers, lengthening of mid to high-latitude growing seasons, poleward migration of plant and animal ranges, and declines uf some plant and animal populations." Generally speaking, an mereace in average global temperatures is likely (sixty to ninety percent chance) tn lead to altered weather patterns resulting in a gteater risk of draughts (due to extreme drying) and floods (dus to intense rainfall events) in many difterent regions, and the global :mean sea level is projected to rise between 0.09 to 1) XK meters hy 2100." ‘Also, natural systems (such as coral reefs, mangroves, boreal and tropical forests, and prairie wetlands to name a few) are vulnerable to climate changes duc to their inability to adapt to rapid environmental changes Some of the more vulnerable epecies risk extinetion, and the extent of Uainage of loss of biodiversity is sure to inerease with the magnitude and rate of climate change. “The human systems that are highly susceptible to climate change are ‘water resources, autivultue, forestry, fisheries, energy production, industry, insurance and other Finacial services, and human health (particularly a net4 Business & Professional Eshies Journat increase in dhe yeosraphic range of malaria and dengue)" A nation’s ability 0 cope with and adapt to cisnate change depends on such factors as \wealth, available technology. education, access tv information, skills, snrastructure, access toresoutces, and management capabilities.” The most important thing to note is that the impacts of future elimate changes will most likely be dispraportionately hore hy the world’s poor.” ‘As forthe impact on the global financial sector, the extreme weather ‘events anticipated to accompany climate change won merease actuarial Uncertainty in risk assessment, which would result in increased insurance premiums or could possibly lead to the withdrawal of coverage in certain ations altogether.* In either case, the need for government-funded compensation following natural disasters is sure to increase (particularly Since many of the IPCC’s claims have been met by staunch skeptics in industry and politics, a bref history ofthe discovery of GCC may be hhelpful* By he late 1980s many scientists and other well-informed people \were aware that the phenomenon of GCC was nota myth, However, no one really knew how severe this problem actually was or could become, nor did they completely understand what should be dome about it.” The IPCC was formed partially in response to the growing concer that GCC could be worsening. Once formed in the late 1980s. the IPCC quickly waned ctechbulty as supporting a moderate view concerning the reality of GCC, and its potential ecological effects. The IPCC gained credibility by offering cautious conclusions concerning GICC—ones that were extremely well ‘supported by rigorous scienttie studies The third 1PCC climate change report, released in 2001, contirmed that the vast majority ofthe scientific ‘community was certain that GCC was happening and that the release of anthropogenic GHGs exacerbated its further onset GQ" had heen discovered. ‘The main uncertainty that remains concems the appropriate response to GCC, which continues to stand as a major problem that the global community must addrec. ‘The Market "Solution" Iu his classic and widely reprinted essay "Morality, Money, and Motor Cars,” Noman Bowie takes on cnvironmentalists who believe that businesses lave special obligations to protect the environment.” Bowie is skeptical that an adequate defense of the environmentalist postion has been ‘mounted, and so le wssuines the role of "éevil’s advocate” in arguing that‘usiness, Ethics, and Global Climare Comrol = 3 businesses have nv special vbligation to protect the environment above and beyond what is required by lav.” Bowie begins by endorsing the com- ‘monly accepted prnelple that "no one has right vo rent ha nantes ‘unless there 1s competing, overriding mora reason todo sv." He points ‘out that this prima facie duly iceammonly understood.o apply to individual persons, ot ecosystems, species, or even individual animals. Bowie next points out that when it eomes tothe manufacture and marketing of consumer ‘goods, businesses must factor the cost of avoiding harm into the price of the product. Heillustrates thi claim with the example of automobiles. In 2003 there were 33,471 passenger fatalities in the U.S." Death is an obvious hharm. When it comes to passenger safety, all cars are not created equal Inexpensive cars typically have fewer safety features than more expensive tsary. Consumers who cannot afford to pay for safer, more expensive cars, buy inexpensive ones with comparatively few safety features. Other consumers may prefer tv pay more for a car that bas particular engine performance or style qualities, despite the fact that it has a poor safety record, While stil other consumers will emphasize safety as an overriding preference and purchase their vehicles frum companies that emphasize safety such a the Volvo division of Ford. If many wutombite manufactur fers emphasized safety in all thelr models. then on Bowie's satalysiy consumers would not huy as many’ cars from those manufucurers ad those automobile enmpanies would lose money. Given the varied preferences of ‘consumers, Bowie canciides that “an automobile company does not violate its obligation to avoid farm and hence is not in violation of the moral minimum if the trade-olf between potential harm and the utility of the products rests on social consensus and competitive realities "* Bowie then extends this analysis to the question at harm to the environment. He pointe out that consumers often rebut businesses that ‘embrace environmentally friendly practices. For example, The restaurant chain Wendy's tried to replace foam plates and cups with paper, but customers in tho test markets balked Proctor and Gamble offered Downey fabrie softener in a ‘onentrated form that eequites less packaging than ready-to-use tidus, however the concentrate version is lesa conver becuse it las to be mixed with water. Sales have been poor. Procior anid Ganible manufactures Vizar and Lenor brands of detergents in concentrate form, which the customer mixes at tome In reusable bows. Eurupeans will take the trouble;© Business & Professional Ethies Journal not. Kodak tied to eliminate its yellow film Auteticans wil bboxes but met customer resistance . Given this type of consumer hehavior, Bowie concies that legal harm ta the environment caused by businesses is regarded as morally permissible by society As such, he helieves that “current legal activities by business ‘organizations that harm the environment do not violate the avoid-harm In cases of market failure, where citizens recognize that their indi- vidual preference satisfaction is harming the environment in undesirable ‘ways, Bowie points out that citizens in democracies have the ability to impose regulations to correct market failures. For example, shen consum- ers purchase SUVs and conventional automobiles, their use of those vehicles contributes to GCC. Citizens who choose to purchase sult vehicles may nonetheless grant tax telief for puctasers uf hybrid electic ‘chiles, thereby encourazing vet wo purchase fow emission vehicles that contribute much less (9 GCC. Given the importance of thls ability 10 correct for market failures, together with the fact that businesses justify their environmental practices by appealing to consumer preferences, Howie concludes that businesses have an obligation to refrain trom appacing tl preferences of consumers regarding environmental protection ” Bowie does not explicitly take up the ssne af GUC However, iis not difficult to extrapolate the obligations of fusiness with regard to Gi least m demneractes, aecoring to his analysis. ‘These are, frst, to obey the Jaw Second, fo refrain trom opposing the collective will of citizens as expressed through the legislative process and the law regarding GCC. ‘Third to respond to consumer demand regarding GCC. Businesses that do these things will have no ethical obligations regarding GHG emissions and GCC beyond those stipulated by law. ‘Market Failures And Ethical Obligations Bowie's arguments have received surprisingly little evticism in the liter= ature." However, there are serious difficulties with his defense of the market solution to environmental problems. In what follows we raise five of the most substantial objections, focusing in pasticulan un the rules of business organizations in the wansportation aud elecricity veneration sectors rexarding GCC.Business, Ethics, and Global Climate Control 7 Objection One: The Absence of Hemacracy ‘This objection has two parts. Fist, many of the nations in_ which Multinational Corporations (MNCs) conduct business ack important democratic institutions such as equal voting ights, multiple political partes, democratic clections, politically neutral militaries, and an independent judiciary. Thirty-eight percent ofthe world’s sovereign states and colonial uunits—tivine to forty-two percent of the world's population have nondemocratic forms uf government.” Dowie's defense of the ethical ‘obligations of business coneetuing the environment are conceptually incoherent when applied » MNCs that operate in nondemocratic nations. Irisconcepwally incoherent because inorder (o provide nvrinative guidance it must assume the existence of democratic institutions where they do not exist“ Second, the fact that voters accept a particular level of harm dues not make such harm morally legitimate, This might be te case ifthe arta is restricted to those who accept it, hut GLC will not only affect U.S, citizens, but the entire population ofthe planet and future generations of persons who cannot yet register their preferences in the market or in the politcal process."! Yet he preferences regarding the potential harm to non- US. citizens and future generations remain unaccounted for on Rowe's analysis. Objection Two: The Roles of Consumers With regard to complex environmental problems such as GCC, it is ‘easonable to conchide that most consumers lack an understanding of the ‘causes of climate change, the impact of their own consumer choices on climate change, ot the likely harm of GCC to their welfare and the welfare Of future wetierations. However, the large businesses that dominate the ‘transportation and elevuivity sectors of the global economy typically have a sophisticated understanding buth uf GCC, and the extent to which their ‘own production, products. and services contibute to GCC. This sophisti- cated knowledge allows them wo make changes rexaiding their practices, and todevelop environmentally friendly products wiser vices, which consumer preference satisfaction by itself could never achieve, Bowie cites examples ft failed environmentally friendly Initlatives on the part of businesses, However, as with any new product offering, marketing the initiative 10 consumers must be regarded as an important priority. And Just as the marketing of anew toothpaste ar soda flavor can be a failure, so too can the8 Business & Professional Ethics Jounal ‘marketing ofan environmentally friendly product Not all environmentally friendly products willbe sccesstil. However, we shold not hecame too cynical a a result of filed product launches. ‘There are many examples of businesses that have brought environmentally friendly products to market successfully. And it is worth noting that despite modest intial resistance from consumers, Wendy's and nearly all fest food restaurants have successfully switched from foam plates and eups to paper. Objection Three, Consumer Choice Bowie's analysis resus that i businesses are to protect the environment above and beyond the la, it must be asa esul eonsuner preferences However, there are two dificulies with this Clim. Fist, womsuuet preferences are nor always satisfied by businesses. Forexample, eonsuttets ‘who are concemed about GCC and wishto purchase hybrid elect vehicles (HV) currently have few options.® There are waiting lists for many HEV ‘vehicles. Hut as atomobile manufacturers are well aware. consumers pur- chase vehicles based on the ity ofthe vehicle to meet a variety of needs Fuel efficiency and emissions may be impartant to a consimer, but so are things like passenger eapacity, acceleration, and luxury qualities. At present, for example, there are no HEV minivans, so consumers who would prefer mate environmentally friendly minivans are lft without options. Second, consumers often have litle or no influence with regard tothe environmental pratices of busine recognizes that coal fired powerplants emitharmfal levels of GHGs into the mosphere, may strongly prefer to purchase electricity fom an enetzy provider that relies more on wind, solar, or hydroclctie energy zources. However, eneray provides typically have a monopoly over consumes, 0 the uansuer cannot take her business elsewhere. Furthermore, the con suter qua citizen typically has no dicect way to regulate energy providers For example, a consumer who Objection Pour: Harm io Others ‘As noted above, he impact of GCC will alfect every peisun on Eutth, aud rot merely the consumers of specific products ur services. The atinaplieie is a common resource. one that U.S. consumers stare with the slobal community. As Will Kymlicka and Henry Shue have argued. preferences typically ental a claim on resources.” The preference satisfaction of U.S, consumers, forexample, makes use ofa per-capita disproportionate level of atmospheric resources.” At the same fime, The arm caused 10 presentusiness, Ethucs, and Global Climate Comrol 9 generations of non-US. consumers will be disprouportiviate to their use of atmospheric resources. So too, presumably, will be the harm w future ‘generations. hese funure persons will have preferences that require due consideration.” ‘The mere preterence satistaction of present-day U.S. consumers cannot by itsell justly this harm to others, Objection Five: Responsibility for the Past [A basie prineipleof justice holds that it is unfair to require others to pay for the costs of benefits one has secured for oneself without their uncoereed consent:® Those who enjoy the benefits resulting from burning fossil fuels, and thereby contribute to GCC, ought to pay more for such benefits than those wh do nut enjoy such benefits. In the U.S. the transportation sector and the clecricity yenetation sector are the two most carbon intensive Sectors, and thus the wo setors that contribute the most tothe total US. CO, emissions. The reason for these iwo sectors being so carbon intensive is de to theit heavy dependence upon fassil fuel vanbustion. The transportation sector is more carbon intensive than the electricity werteration sector because the former is almost completely dependent upon petro- fuel. Between 1990 and22005, he transportation end-use sector contributed an average of about thitty-one percent of total CO, emissions from fossil fuel combustion inthe U.S" In 2008 the U.S. emitted approximately 5,781.4 million metric tones (mnt) of C1, de to hnening fossil hes, with ‘vansportation accounting for approximately one thir of those emissions.” The energy consumed by the tansportaton sector is predominantly petta- Joum-ba cone percent of the CO, emissions resulting rom burning gasoline, about twenty-one percent from diesel and approximately thirteen percent from jt fuels.” In 2002, the transportation eanéuse sector consumed almost ninty-seven percent of the total US. cotsuinpion uf petoleum.® The amount of energy consumed by automo: biles within this sector aecounted for more than thity-three percent white light tucks (pick-ups, minivans, spor-utility vehicles, and vans) accounted ‘or almost twenty-five peuvent." Even though automobiles consume more energy than light rucks (because there ae fewer trucks on the rosd), the later nave accounted fora ureter intzease in energy consumption over the past decade due to their erowiny popula.” In the US., fossil fuels are the primary fuel used tv power many sectors ot ou economy. especially the electie power industry. In 2003, he with slightly more than six10 Business & Professianal Ethics Journal US. generated and sold 3.488 Pillion kilowatt hours (kW) of elecric- ity approximately 1,773allion kWh (thirty-six percent was consumed hy the residential end-use sector, roughly 1,181 bilion kWh (hirty-tour percent) consumed by the commercial sector, about 1,008 billion kWh (twenty-nine percent) wont tthe industrial sector, and 7 billion kWh (less than one percent) was used by traneportation.™ In thisame year, more than half the elewicity produced in the U:S. was from coal (fifty-one percent), tsventy pereont from nuclear, and seventeen percent from natural gas. In corer to produce 3488 billion kWh, the cleetrie generating facilities burned slightly more than one billion tons of coal, about 207 million barrels of peiruleun, aid a fle more than 5.5 billion neue cubic fet of natural ss.” The generation of eletiity in die U.S. telewed 2279.3 illo metric tons (mmt) of CO, into the atmosphere, whic is dhe hes level since 2000." ‘Table 1: Carbon Intensity from all Energy Consumption hy Seetor (Ig CO, Eq/QBtu)” Seer ‘one [voor [soem [roo [somo [ soon | 2007 | 2008 “Tepe moa [oe [or [ws [oo [oon [or Loo ‘Other GasUrescaarss] sve] sre [sro | e73 | seo [ez [ors | seo ctisiy Gencaiow | sss [359 [sou | 302 ga [289 [90 ul Seee wut [ou [ors | oo s |e | ou “artes 6 om fos fl, mer, and eneale sources) nd et enewabe ners consumo "ter bse Sets ices te ester commer, ndings ers “Ipcues elect genera rom nuclear ad enable sources “totes nuclear and enable nee consist ‘Nowe Esces anenea fel use emision and contin When compared toll endae sectors within the LIS. we ean se thatthe transportation sector andthe electricity generation sectors are not only the ‘most carbon intensive but also emit the most carbon overall. Table 2 indi cates the amount of CO, emitted from burning fossil fuels in the U.S. in 2003. Electric power emissions are distributed among each ofthe four end- tse sectors. The carbon emissions from eletrcity production are shown‘Business, Ethtes, and Global Climate Comirol 11 separately to demonstrate the actual contsibution this sector makes to the entire carbon dioxide emissions from burning fossil fucs in the U.S. able 2: (10, missions trom Fossil Fuel Combustion by End-Use Sector for 2008 ed Ui Sector Milin Metric | Percentage af Total CO, Emisions ‘Tans of Carbon from Pree Concamptinn ‘Teaspoon nary ma Resdentit raids 2% ‘comma Loos 0% ‘Teal srt 100% aectrieny Generaton | 22793) ame Given the transportation and electricity generation sectors’ large con- tribution to GCC, it is reasonable to hold them acconntahle for the proportional harm to the atmosphere that they have caused historically. In particular, there are good reasons for holding them accountable tor the impact of at least some of their GHG emissions on GCC to date. While purely theoretical discussions of historical accountability are of interes, we ‘wish to focus on an account of historical accountability that is useful for policy making, Our concem is to provide tools for policy makers who may iced to use the coercive poster of the law to encourage business organiza ions fulfil their moral obligations regarding GCC. Erie Newniayer off a compelling moral position that may be helpful in establishing the level of culpability a business organization deserves regarding GHG emissions.” Neuayet’s arguments pertain tonation states, ‘whereas the present essay deuls with vorpurateenvizomntental responsibility Although hese wvo groups play drastically different ules within soviety, the ‘actual responsibilities regarding GHG abatement are quite simile [Nonmayer gives three reasons in defense of historicat accountability as it12, Business & Professional Ethies Journal pertains to global GHG emissions. First, indisputable science has demon- strated that an increase mn GH emissions exacerbates the anset af (Ck and human activities (namely the burning of fossil fuels) have greatly contributed to the atmospheric concentrations of GHGs over the past century. And for this reason, to reject historical accountability would be to reject the phenomenon of GCC." (This tact assumption has been embraced bby business organizations such as ExxonMobil.) Second, Neumayer contends that the polluter-pays principle (PPP) helps to justify the historical accountability approach. The PPP supports the claim that GCC is predomi rrantly waused Uy the GHG emissions of developed countries and these ‘countries sould pay for tzating GCC. By rejecting historic wwevuntabil ity, we would reward rich industrial nations by not making them pay forthe GHGs they have emired white disadvantaging poor, les industrialized nations." “Third, he argues that by adopting historical accountability we ‘would enue that all present and fire indivichals wonld have the equality ‘of opportimity ta use the global atmaspherie commons, no matter where they lve or wll hive ® So, eording ta Neumayer, hisorieal accountability ‘shouldbe adopted as morally preferable approach inassigning responsibility forthe current and future harm resulting from GCC. Although we are sympathetic to Neumayer's position, we do not _accopt full historical accountability, which assigns responsibility to GHG- emitting nations possibly as far back as the late 1800's when Svante Arthenius first detected a warming trend in the Earth’s atmosphere." In stead, we support a truncated version of historie accountability that is ‘effective only back to 2001. Granted, many corporate leaders knew about their respective organizations’ potential contribution to GCC as early as 1995 (and possibly as early asthe mid 19803); however, at that time the scientific evidence remained relatively uncertain, Business organizations ‘eanuot reasonably be held responsible for responding to every potentially alarming situation concerning heir busines practices. Even alter GCC was ‘determined tobe likely inthe late 1990s, ere wastill a sxnificar stout ‘of controversy concerning the science behind those findings. But by 2001 the IPCC was able to claim with a very high level of cersamty that CO; «emissions constituted a significant contribution tthe further onset of GCC. {tas not until 200% that GCC: was an undeniable fact. It is reasonable 10 hold husiness organizations morally responsible for their negligent contr bution to GCC once i hecame abundantly clear that thetr respective CHG: emissions contributed greatly to GCBusiness, Ethies, and Global Climate Control 13 [Neumayer might object to our negligence standard by claiming that "ignorance doos not exempt one from liability for damages caused." and that historical accountability is not about blame or collective moral guilt... but about assigning an equal share ofthe beneficent existence of the absorptive capacity of nature to every individual, independent of his or her place in either space or tme."™ Nedmayer's stret liability standard is ‘redicated on the idea that individuals ought tobe held responsible for their proportionate use of atmospheric resources. We, however, are concerned with dhe impact on GCC of the businesses organizations that emit GHGS and manufacture products that emit GHGs. Orsauizatious have subst ally different origins and histories than individual persons. Of particuat cconcem isthe fact that organizations grow, merge with or are subsumed by ‘other organizations, in addition to being eliminated. Given the vagaries of ‘he ontalagial statis of organizations, itis not reasonable to hold them accountable inthe same way that we hold individuals accanntahle Frther= ore, requiring business organizations to compensate for all past emissions dating back decades, or even centuries, would be dificult because firms are bought and sold by other firms and they come into and go out of existence on regular basis. Establishing which corporate entity i responsible for retrospective GHG emissions sharos some ofthe same difficulties that the US. Superfund initiativehas experienced. Although the Superfund program has been successful in cleaning up hazardous sites throughout the USS, it bas experieneed difficulty in charging the polluting organization with the expenses for cleanup, That is, by the time a hazardous site becomes a Superfund site, the polluting business organization may have been long sine dissolve leaving:no one to sue forthe environmental damage. These concerns lead us Io conclude that a negligence standard is the most appropriate standard of histovial axvounability ‘The Way Forward ‘As we have seen, here Is clear scientific evidence documenting the contri- bution of anthropogenic GHGs to climate change. Changes in the global climate are expected to produce chaotic and extreme weather events throughout the world While we have a moral abligation to mitigate avoidable large-scale harm, 1s mportant ta note that there is no need tbe immediately alarmed by the potential negative effects ot GCC, tor eatae ‘trophic effects will not begin to manifest for several decades and possibly rot for a hundred years or so. However, we ought to still be concemed14 Business & Professional Ethies Journal out GCC, as GHG emissions have been proven to exacerbate the onset of GCC To draw an analogy for the sort of concern that we ought to have. consider the example ot steering, an acean liner If the captain spats an ‘iceberg in the path of the liner a fair distance off, he would want to begin altering the course of his ship to avoid the obstacle. He would not order the ship to be turned sharply; instead he would order a gradual char course, Similarly, we need not radically alter our current business practices 50 as to immediately stop emitting GHGs (specifically CO:); instead we need to begin altering business practices soas to gradually, and deliberately, teduce GHG emissions, Such a course of action calls for individual firms lu stat taking proactive measures to abate their CO; emissions. sein the Discounting, Many Industry economists have concluded that aking strong actions 10 smmediately reduce CU, emission will be mote costly than the potential future benefit Asa result, these economists suppor a business as usual approach while tang less dramatic action to mitigate fnure increases in CO, emission such as investing mm green technologies» Although such a conservative plan i «step inthe right direction, it appears ta have some serious moral difficulties. One of the main problems with relying on an economie framework t analyze normative questions is that it tends to be inherently uilitacian, favoring utility or efficiency over justice.” One way to determine the value of future utility isto apply’the concept of discounting toenvironmental problems. The concept of discountingofersto the principle that people preferto enjoy abenefit sooner than late, which means that poople would typically substitute present benefit fora future benefit only if the latter were more valuable than the former.” This principle highlights people's general tendency to value fature consumption less than reseut cousunption.” A positive discount rate embodies this general teadeuey, and a negative discount rate implies that future consumption is more valuable dha present cousunption.™ Bjorn Lowborx has organized a group of economists to foun the CCopenagen Consensus, whic has taken ut Ue arduous tak of raving de ‘worst problems facing the global commons. Surprisingly, the group ranked GCC as the very least demanding problem from an economic perspective.” (One of the main reasons for GCC being placed atthe bottom of this list 15-to putt plinly-—hecanse t went cost too much tad anything about itt present These economists have applied the concept of discounting 0Business, Ethues, and Cilobal (imate Control 1S the GCC scenario and decided dat GHG mitigation would be t00 costly in the present, while the benefits of averting possible economic disruptions ‘would be enjoyed in the distant future, Froman economic perspective, then, spending money on GCC now is tational; and the maney should instead be allocated to more pressing, problems that, sf solved, could raise the ‘quality of lite for millions of people. Economists use a cost-benefit analysis (CBA) to determine the merit of each proposed policy or plan of action. The option that has the highest benefiticost (BIC) ratio is preferred. There are at least two kinds of difficulty with such an analysis: epistemological and moral. The epistemic problem with CBA is that future costs and benefits are mere estimates or extrapolations, and true costs and true benefits arc currently unknown, The further into the future one is expected to predict costs and benefits, the more challenging itis todo so accurately. Additionally, thete are muterous moral problems that arise from the notion of substitutability that is implicit in such analyses. Eeouuinists assume that persons are willing to substitute future hhealth (or avoidance of harm) with economic gain. Although same individuals might agree to such a trade, i is morally ilegitimate to assume that all individuals will do so." Also, the economists ascme that such a substitution will result in the greatest net glohal henetite, Here again, this Js a morally problematic assumption, for it marginalizes the unequal distribution of harm bome by unfortunate individuals.” While satistying the short-term demands ot an impatient publie may bbe important to the stahuity and future growth of a particular nation's fecanamy, 1 oes not morally justify deferring the costs of GCC. The idea of discounting the future at 2 positive rate is difficult to justify morally We should not use a positive discount rate when valuing future benefits and costs produced by GCC. ‘The main ethical justification for this view is that future people are not able to participate in the decision making process and are therefore unable to register their preferenecs. So, even if the majutity of living people acespt the current and future harm created by GHG ‘emissions, this docs not make it morally acceptable, since an individual's generation is morally arbitrary (in the same mannet that sex andl rave are arbitrary), Policy Implications How should we determine the appropriate level of GHG abatement? What ‘would an appropriate abatement plan look like? What time frame should 116 Business Professtonal Ethics Journal hhave? ‘The two extremes that set vur boundaries ave (1) do too litte, and ‘cause substantial farm ro future generations: or (2) uke drastiewetion (oo soon thus incurring unnecessary costs. It seems reasonable o suggest that we atopt a moderate approach, which means that if we are 10 avotd the predicted catastrophes rented tn GUC, then we need to reduce CO, emis sions below 1990 levefs within few decades, aut then cantinne to decrease CO, steadily thereafter.” The long-term goal isto reduce CO, emissions ta 4 emall fraction of what they are today. The need to engage in aggressive, ‘but not fantio, CO, abatement is due to the fact that this GHG has an atmosphere lifetime of $0-200 years.” This means that even an aggressive plan of ation will not reverse GCC, it wll only stabilize it since the CO, we produce today ean continue to eonteibute to GCC for up to 200 years into the future. We contend that business organizations that are responsible for substantial CO, emissions have a moral obligation to be engaged in aaweressive proactive measures to abate their CO, emissions, and that this Ublixatiow has been effective since 2001, Any business organization that has not taken proactive measures tw abate CO, emissions is deserving of isapprodation, ‘Before discussing what sort of punishments and incentives might be invoked to help business organizations comply with such a moral dur. i rust he noted that we do not believe that merely complying withthe current US. regulations satisies the duties of business organizations regarding GHG abatement and GCC migation tn order to avoid censnre, a usiness organization must go beyond mere compliance, for current LS. legislation does not bode wel for mitigating GCC." ‘Tho problem with determining the actual degree and type of proactive measures that a business organization must engage in, so as to meet this moral demand, i that there are numerous ways to go beyond compliance and still miss the mark. ‘That is, just because a firm engages in beyond- compliance praetiees docs not necessarily mean that itis doing all that it is orally obligated to do regarding GCC. Conversely, just because a busi ‘ness organization is guilty ofa few environmental transgressions docs not ‘ean that iti filing to take appropriate action regarding GCC. Just as there are "shades of geen" within the corporate world, there are also shades of brown.” ‘The ambiguity in abatement actions illuminates the nee for diasaostic tools that can help to make a distinction between green and brown organ- izations, It is challenging to gather neutral information from the businessBusiness, Ethics, and Global Climate Comrot 17 organizations dhempelves, a> they tend to put theit best environmental projects forward.” Nonetheless, distinctions between the environmental practices of companies can be made. Take for example the difference hetween Loyota and General Motors (GM). Toyota is currently at the toretront of HEV vehicle production. Itcurrently offers consumersa variety ‘of high fuel economy vehicles, while GM currently manufactures no sich vehicles." GM speciatizes mostly in producing farger vehicles that con= sume more fuel such as the Hummer brand, whereas Toyota primarily produces midsize cars and smaller. Another important reason for this disparity is that Toyota has invested heavily in hybrid technology, whereas GM chose to invest in hydrogen technology research, Toyota's investment js currently paying off allowing them to be a leader inthe race to decrease the fuel demand ofthe transportation industry.” GM's activites reflect a lack of eoncem with the eurent state of GHG emissions. Writing in Foreign Affairs, Lord Drowne, Group Chief Executive of British Petroleum, points out that "BP found that it was able to reach its initia target of reducing eiissions by ten petvent Below its 1990 levels without cost. Indeed, the company added aroural $650 million of share- holder value, because the bulk of the reductions came from the elimination of leaks and waste."** Morally Imaginative companies, such as BP and Royal Dutch Shell, have already begun to assume responsibility for their ‘impact on the globat environment. However, i is reasonable to conclude that husinesses that decline ta fli! their minimal ethical duties regarding GCC, such as ExxonMobile, should he provided with meentives for daing so by governments.*” One such incentive in meeting the duty to mitigate GCC would be imposing a tax on earbon emissions. The actual cost of the tax has been hotly contested and has et to be settled, Setting a specific tax rate is beyond the scope of this paper; however, we suggest that this rate should reflect the fact thatthe future global climate is just as valuable as it istoday. In other words, the method used to set the specific carbon tax rate should not involve a positive discount rate forthe reasons discussed above. Instead, the method should usca discount rate of zero or possibly a negative discount rate. Again, the reason for doing so isto emphasize that the fur ture health ofthe global climate is as valuable or possibly more valuable Ahan iis today (hecause of the euieut neyative effets vf GCC). ‘Those firms that filed (take proactive measures frum 2001 on should bee penalized for their negligence. Such a penalty might involve a com Pounding interest rate, meaning that each year past 2001 that firm fails to18 Business & Professtonal Ethics Journal take appropriate proactive measures, it will not only incur an interest ‘expense, bur for each yeu at the fine is unpaid, the accrued interest itself hheeames part ofthe principle an also accrues interest. Here, for illustrative purposes, 16 an example, If the carbon tax wete set at $450/t0€ (ton of carbon) for 7005, business organizations that only bexan abating their ‘carbon emissions this year would be requlted to pay $450 per yea that has pasced ($450 x 4). ‘This penalty would also include an interest rate of ten percent.” Ac a result, a firm that has only begun to engage in proactive ‘measures to abate their CO, emissions in 200 would have to pay $495/t0¢ for 2001, $541.50ltoc for 2002, $598.95itoc tor 75, and S6S8.85/t0c for 2004." ‘The position that we have argued fori that individual business organi ations are morally responsible for their contribution to GCC and the resulting harm. And, in order for firms to reduce their contribution to the rharm that will inevitably befall persons inthe future due to the extreme and ‘chaotic weather events caused by GCC, they must take aggressive proactive measure to abate their respective CO, emissions. Ideally, this is a moral ohligation that should be vuluutaily cubraced by individual firms. However, we realize that placing such a moral responsibility on firms may be too mich to ask of them on thelr own so We also all fr the help of the government in ahating industrial CO, emissions. Such governmental assistance would came in the form of imposing a tax on carbon euuissions, and this expense can then he internalized by individual firms and incorpo rated in the price oftheir goods, therehy requiring consumers to beara fair price forthe pollution produced when manufacturing the goods that they Consume, Also, the revenue generated trom the carbon tax can be used 10 fund or subsidize further abatement measures so as to help the U.S. reduce its contribution to GCC. Notes 1. Within popular discourse, global warming and global climate change ace used interchangeably. However, these two terms refer to different but related issues, Specifically, asthe average global temperatures, rise due to an increase in eieculiouse gas emissions, the elevated tempera: tures contribute t0 distinctive cluauyes in the global climate patterns. ‘The latter hing been the focus of this paper. See. Intergovernmental Panel on. Climate Change, Climate Change 2001: Impacts, Adaptation, and Vullnera- bility (New York: Cambridge University Press, 2001), 3-17nsiness, Ethtes. and Global Climate Control 19 2, Stephen M. Gardiner, "Ethics and Global Climate Change,” Ethics, 114 (April 2004), 555-600. This overview of the literature is highly recommended 3. Henry Shue, “tnvironmental Change and the Varketles of Justice, in Earthly Goods: Environmental hange and Social Justice, eds, Fen Osler Hampson and Judith Reppy (Ithaca, NY Cornell liniversity Press, 1996), 9-20; Matthew Paterson, "Principles of lustice in the Context of Global Climate Change," in Intemational Relations and Gilohal Climate Change, cds, Urs Luterbacher and Detlef Sprinz (Cambridge, MA: Cambridge Unt ‘ersity Press, 2001); and Peter Singer, "One Atmosphere,” in ne Worl The Ethics of Globalization (New Haven, CT: Vale University Press, 2002). 4. For example, while a special issue of Business Ethics Quarterly was Ucveted to "Environmental Challenges to Business," none of the eighteen essays published therein focuses on global climate change. See Business uhics Quarterly, The Ruffin Series No. 2: "Environmental Challenges to Business,” 2000.” The must important exception to this rule is R. Edvard Freeman, Jessica Pierce, and Richard H. Dodd, Environmentalism asd che New Logic of Business: How Firms Can be Profitable und Leuve Our Chile ‘iron a Loving Planet (Oxiord: Oxford University Press, 2000). 5. Intergovernmental Panel on Climate Change, Climate Change 2001: Impacts, Adaptation. and Vulnerability (New York: Cambridue Uni- versity Press, 2001), foreword, 6. thid 7. The GHGs that are most effective in retaining solar radiation are ‘water vapor (H,0), carbon dioxide (CO,), methane (CH,), nitrous oxide (0), hydrofluorccarbons (HFCs), perfluorocartons (PECs), and sulfir hexafluoride (SF,). Energy Information Administration, Fimissions of Greenkouse Gases in the United States 2002 (Washington D.C.: 2003), 1 8. Ibid 9. According to the EIA, The most important natural sources of carbon dionide are releases from the oceans (330 billion motrie tons of ‘carbon dioxide per year) and land (440 billion metric tons of carbon dioxide ‘nny, including 220 billion metric tons of carbon dioxide from plant respiration, 202 billion metric tons of carbon dioxide from non-plant respiration (bacteria fungi, aud kes bivores), and 15 billion metric tons of carbon dioxide from combustion of natural and human-made fires. Known anthropogenic sourees (including deforestation) were estimated w avcount tor ahont twenty-nine billion metric tons of carbon dioxide per year Juin20 Business & Professional Ethies Journal the 1989 to 199R time period. Energy Information Administration, Emissions of Greenhouse Gases inthe United States 2002, 5. 10, Ibid, 3. LL Ibid, 8 12, US. Environmental Protection Ageney, hnentory of US. Green. house Gas Emissions and Sinks: 1990 - 2002, (Washington, DC: GPO 2004), 5. 13. Energy Information Administration, “Carbon Dioxide Emissions from Energy Consumption: Total World" International Enorgy Related Environmental Information, Energy Information Administration, 27 July 2004, liy.jiwww:ciadoe govlenvintenv-hum, (S-July 2005); Energy Information Aumiuistation, Emissions of Greenhouse Gases inthe United States 2003 (Washington, DC, 2004), 3. 14, Inergovernmental Panel un Climate Change, Climate Change 2001: The Sewenge Basis (New York: Cambridge University Press. 2001). 1 15. Intergovernmental Panel on Climate Change, Climate Change 2001: Impacts, Adaptation, and Vulnerability, § 16. Ibid, 3 17. Intergovernmental Panel on Climate Change, Climate Change 2001: The Sciontific Basis, 13. 18, Intergovemmental Panel on Climate Change, Climate Change 2001: Impacts, Adaptation, and Vulnerability, 3. 19. Intergovernmental Panel on Climate Change, Climate Change 2001; The Seientific Bass, 16 20. tid, 4 21. Ibid, 4,12, 22, Ibid, 8 23, Ibid, 4,8. 24, Ibid, 13, 25, It. 13, 26, One of the most well known skeplics is the selF proclaimed skeptical environmentalist, Blom Lomborg. Bjom Lombory, The Skeptical Pmvironmentalist (Cambridge: Cambridge University Press, 2001). 77 Spencer Weant, Phe Duscavery ofGlobal Warming (Cambridge: Cambridge University Press, 7003), 160 28. Thi, 162Business, Ethics, and Global Climare Comrot 21 29, Norman E. Dowie, "Morality, Money, and Motor Cars," in Business, Eihics, and the Global Environment, eds. W.M. Loffinan, R. Fredric, and E. Peuy (New York, Quorum Books, 1990), 89-97 30. Bowe fs well Known fur defending de Kuntint view that white itis true thar MNC managers have an ethical obligation to make a profit for the owners ofthe enterprise, this obligation does not automatically trump other ethical obligations. Indeed, Bowie argues that one of the primary tasks ofan ethical manager isto halance the competing ethical obligations of stakeholders. See Norman E. Rowte, Kusiness Ahics’ A Kantian Per~ spective (Malden, MA: Blackwell, 1999), esp. K-18; Dens Amold land Norman E, Bowie, "Sweatshaps and Respect tor Persons,” Business Ethics Quarterly, 13:2 (April 2003), 221-242; and Norman E. Bowie and Patricia Werhane, Management Ethics (Malden, MA: Blackwell, 2005), esp chp. 2 31. Bowie, "Morality, Money, and Motor Cars," 90. 32. While there may be good arguments for extending the do-no-harm principle beyond persons, let us grant this interpretation ofthe principle. 33. ULS, Department of Transportation, National Highway Traffic Administration, 2003 National Statistics, available at htp:/vwnre.nhtsa dot zovipdf!d-30/NCSA/TSPAnn/20031ITMLTSIcov2.him, 34. Bowie, "Morality, Money, and Motor Cars," 92. Ibid, 93. 36. Ibid. 93. 37. Ibid. 95. 538. thas, however, received some critical attention, See W. Michal Hoffinan, "Business and Environmental Ethics,” Business Eihics Quarterty (Apnl 1991), 169-184 30 Freedom Honse, Hemocracy’'s Century: A Survey of Global Pot- itica! Change in she 20 Century (New York: Freedom House, 2000), 2-4 40. This isa problem with any libertarian account of the obligations of multinational business organizations. Kar a sustainet argument in dee fenge of this laim see Denis G. Amold, "I ertarian Thearies ot the Cor- poration and Global Capitalism," Journ af Husiness Brice, 48 (December 2003), 185-173. ‘M1. Stephen Gardiner makes an important point regarding this issue. He addresses the asymmetric independence of interests between genera- tions: the interests of earlier groups are independent ofthe interest of groups ‘which succeed them. In particular, earlier groups have nothing to gain from22 Business & Professional Ethics Journal the activities or attitudes of later groups (though, of course, later groups hhave a substantial mount 0 gain from carlier groups). This Feature of the intergenerational probletn is important because it rules out any possibility ‘ot intertemporal exchange for iutual advantage, Stephen M. Gardiner, "The Pure tntergenerational Problem.” The Monist 86, no. 3 (2003), 486-487. 42. The HEVs that are currently available are the Honda Accord, Hybrid (with a tuel economy rating of about 33 mpg), the Ford Escape (about 33 mpg), the Honda Civie Hybrid (about 48 mpg). the Toyota Prius {about 5S mpg), and the Honda Insight (about 69 mpg). U.S. Departinent of Energy and U.S. Environmental Protection Agency, Fuel Economy Guido: Model Year 2005(2004) Available athatp:/www fueleconomy.zov /fog/FEG2005.paf. Honda, New and Certified Used Cars, hip auto ‘mobiles lnonda.com! (14 December 20104) 43. Will Kymlicka, Liberaliem, Community, and Culture (New York: ‘Oxford University Press, 1989), 37-38 Henry Shue, "nvironmental Change and the Varieties of Justice," 9-29. “44, The importance of the preferences of future generations is some- siines said to require "discounting," We discuss this objection below 45, See, for example, Singer, One World, 27 34. 446. Granted petrv-fuels have less earbon per unit of energy than coal, |which may lead one to assume that the electricity generation sector would have the highest carbum intensity since it is heavily dependant upon coal. Even though the electricity wenevation sector depends heavily on coal, it also relies on other sources of energy such as natural gas, hydroclectrie power, rmiclear power, and renewables w generate clevtivty, which keeps this sector from being the leading source of anthruyoxenic COs. U.S. Environ mental Protection Agency, fnventory of U.S. Greenhouse Guy Emissions ‘and Sinks: 1990-2003, (Washington, DC: GPO 2005), 62, Available at http:/yosemite epa gow'oar/globalwarming.nsficontenvResoureeCenter PublieationsGHGErmscionct /SEmissionsinventory2005.huml, 47, Energy Information Administration, Emissions of Greenhouse Gases in the US 2003 (Washington, 1: 2004), Appendix A. Available at hitp:/sew w.eia doe govloiat/160/gerpt/index him 48. Energy Information Administration, kmisszons of Greenhouse Gases in the US 2003, 28 49. US. Environmental Protection Agency, Inventory of iN Cireene house Gas Emissions and Sinks: 1990-2003, 33-56.Business, Eties, and Global Climate Control 23 50. US. Environmental Protection Ageney, Inentory of US, Green- house Gas Emissions and Sinks: 1990 2002,2-1 SI. Ibid 22, Ibid, 28. 33. Coeray Information Administration, Electric Power Anmual 2003 (Washington, DC: Office of Coal, Nuclear, Electric and Altemative Fuels, 2008), 3,39. 34. Ibid. 2 55. Ibid. 24. ‘The reason for only listing dese fuels because they are responsible for almost all of the elecicity veneraiun sector's CO, emissions 6. Fnergy Information Administration, Emissions of Greenhouse Casee im the US 2003, 28. Energy Information Administration, Eiectric Power Anmuol 7005, 2 57. US. Environmental Protection Agency, Inventory af 11S Greonkouse Gas Emissions and Sinks: 1900.2003, 62 58, Enorgy Information Administration, Emitsions of Greenhouse Gases in tho US 2003, 28 59, Transportation End-Use Sector: Consists of private and public ‘chicles that move people and commodities. Included are automobiles, trucks, buses, motorcycles, railroads and railways (ineluding steetears and subway), sitera ships, barges, and natural gas pipelines. U.S, Environ ‘mental Protection Agency, Inventory of US. Greenhouse Gas Emissions and Sinks: 1990-2002, 283, 0. Industrial Cnd-Uise Sector: Comprises manufacturing industries, which make up the largest part ofthe sector, along with mining, eonsteuc- tion, agricul, fiseies, and foresty. Establisnnents in thi sector range from ste! mill to small fam to companies esse ing elects compo nents, Nonuility power producers are ws included in de industrial end-use sector. U'S. Environmental Protection Agency. inventory of U.S. Green- ‘house Gas Emissions and Sinks: 1990-2002, 276, ‘SL. Residential End-Use Sector: Consists of all private residences whether occupied or vacant, owned of rented, including single family homes, multifamily Housing units, and mobile homes. Secondary homes, such ac immer homes, age also included. Institutional housing, such as school dormitories, hospitals, and mibtary harracks, generally are not inluded in the residential endase sector, fut are instead inclvdd inthe74 ——-Rustmess & Professional Ethtes Journal commercial end-use sector. U.S. Environmental Protcetion Agency, fnvent ‘ory of US. Greenhouse Gus Emissions arid Sinks: 1990-2002, 281 162. Commercial End-Use Sector, Defined economically, consists of business establishments that are not emgage in agpontativn ti ma inacturing or ether types of industrial activities e.g. arivultse, ning, 0 consinietion). Commercial establishments include hotels. motels, restau- rants, wholesale hunsinesces, retail stores, laundries, and other service enter- prises; religious and nonprofit organizations; health, social, and educational institutions; and Federal, State, and local governments Stret lights, pumps, bridges. and publie services ae also included ithe estahirshment operating, them ie considered commercial. U.S. Environmental Protec-tion Agency, Inventory of US. Greenhouse Gas Emissions and Sinks: 1900-2002, 771 63. Erie Neumayer, "In Defense of Historical Accountability for Greenhouse Gas Emissions," Ecological Economics 33 (2000), 185-192 64. Ibid, 187, 65. Ibid, 187-188. 66. Ibid, 188, G7. Ibid. Although Neumayer does not explicitly state when historie a-countability should take effect, he docs scem to imply that it should be effective sive 1896, 68. Ibid. 69. [an Moffatt, “Global Waning, Scientific Modeling and Its Rel= ationship to the Economic Dimensions of Pol Clumate Change, eds. Anthony D. Owen and Nick Hanley (New Yurk, NY. Koutledge, 2004), 29; Bjom Lomborg, The Skepuical Envirunmenaiss Robert Mendelsohn, "Perspective Paper 1.1." in Global Crises. Global Solutions, ed. Bjorn Lomborg (Cambridge University Press, 2004), 44-48. 70. William R_Chine, "Climate Change,” in Global Crises, Global Solutions, ed. Bjam Lomborg, 13-43; William Nordhaus and Joseph Boyer, Warming the World: Economie Models of (ilohat Warming (Cambridge. MA: MIT Press, 2000) 71, Welleknown critieisms of utilitarianism mcinde H.1 McCloskey, "A Non-Utilitarian Approach to Punishment,” Inquiry, (), 789-795; WD Ross, The Right and the Good (Oxford: Oxford University Press, 2003); Samuel Scheffler, The Rejection of Consequentialism (Oxford: Clarendon Press.1982); and Berard Williams, "A Critique of Utilitarianism,” in Utilitarianism: For and Against, ods 14.C, Smart and Bernard Williams, (Canbridge: Cambridge University Press, 77-150).Business, Ethics, and Global Climate Control 25 72, Ahmed M, Husson, Principles of Environmental Keannmirs: Kra- nomics, Ecology ard Public Policy (New York, NY: Routledge, 2000), 184 73. Ibid. 185. 174, Ibid., 324. The discount rate for individualz ie typically higher than that for society since society is less short sighted than individuals, ‘meaning that individuals arc typically more selfish and concerned with theit present welfare, Society, onthe other hand, typically focuses on the welfare ‘oF groups of individuals and thereby focuses on longer-term benefits forthe whole, 75, To review die current vesult of the Copenhagen Consensus visit p/w. my dk Default asp?1D-158, 76. John Broome holds a similar view. he argues that dhe market price ‘method, which is commonly used by economists, iy ill-suited for properly evaluating the well-being of flrure generations. John Brovmne, “Discourting, the Kunure,* Philosophy and Public Affatrs 23, no. 2 (1994), 128-156, 77. Kor example, Rohert Mendelsohn argues that liberal economic analyses that call for dramatic mereases in (0, abatement filo account for adaptation and climate benefits. He cites shudies that demonstrate a varied distribution of benefits and costs throughout the world. He maintains that ‘countries in the polar regions would enjoy large benefits from global ‘warming, countries in the mid-tatitudes will at first benefit and begin to be Iharmed only if temperatures rise above 2.5 C, and countries in the tropical tnd subtropical regions are likely to be harmed immediately by warming tnd be subject to the magnitudes of impacts first thought likely. He then claims that these benefits and costs will offset each other resulting in a lower net global impact. Robert Mendelsohn, "Perspective Paper 1.1," 45. 78, Tor a utilitarian eritique of discounting ses Mary B. Williams, “Discounting Versus Maximum Sustainable Yield," in Environmental Enhics,ed, Robes Ellitt, (New York: Oxford University Press, 1995), 21- 28, Fora critical discussion of discounting as applied to GCC see Partha Dasgupta, Human Well-Being und the Natural Environment (New York: (Oxford University Press, 2001), 183-187. Seealsu, Derek Parfit, Reusuns and Persons (New York: Oxford University Press, 1984), 480-486, 79, Intergovernmental Panel on Climate Change, Climate Change JINN The Sewentfie Basis. 12. XO. US. Environmental Protection Agency, favemtary of US. Greenhouse Ciae missions and Sinks: 1990-2002, 526 Business & Professional Ethics Journal 81. For discussion of the failures of current U.S. policy concerning alobal climate change, see James Gustave Speth, Red Sky at Morning, ‘America and the Cris ofthe Global Envir nment (New Ulaven, CT: Yale University Fre88, 2004) x7 See Freeman, Pierce. and Dodd, Environmerstaliss an the New Logic of Rusiness, Chp. 3, "Four Shades of Green,” pp. 37-62. 83. In their hook Shades of Green: Business, Regulation, and Environment, Gunningham, Kagan, and Thorton found it particulatly ‘challenging to find quantitative cata fo evaluate corporate environmental performance (8), They claim that the eificuty stems from the fact that ‘00d environmental performance requires progress on so many dimensions that measuring relative success, even within an mdustry with comparable processes, io far from simple. The frst difficulty 1s ahaining useful measures of progress on all relevant dimensions. It was possible ta obtain nly certain kinds of environmental performance data for some firms mene sample, parily because of differences across jurisdictions in reporting requirements, Secondly, it was diffieult to rank facilities on degree of cenvironrental sucvess since, for example, mill A that has made unusual progress on une dimcnsion (e.g, reducing use of chlorine) may be only average inavoidiny inadvertent leaks and spills that contaminate ts effluent, ‘while mill B, demonstrably a leader in reliability and better than average in reducing chiorine use, way have done a weaker than average job in controlling odorous fugitive emissions (6-7). Neil Gunningham, Robert A. Kagan, and Dorothy Thomton, Shades ofGreen, Business, Regulation, and ‘Environmont (Stanford, CA: Stanford University Press, 2003) $4. Toyota currently offers hybrid technology in it Pius, Highlander (SUV), and Lexus RX400h (midsize SUV). and will soon offer the Cas y and Lexus GS 450 (midsize secan). Jeremy W. Peters, “Toyota Is Suid Plan a Gas-Electrie Camry," The New York Tames, 17 May 2003, sec. C. {GM currently offers only miceo-hyheuts (the hevraet Silverado and GMC Sierra pickup trucks), which only reduce fel consumption by about ten percent. "Green Car Congress, A Short Field (inte to Hybrids,” Green Car Congress, § August 2004; hp: /hww greencarcangress.ccm 12004/08/a_short field_g.html (29 June 2008) 85. GM hao a history of making bad decisions concerning market trends and has been losing market shares to its competitors far more than tice decades. Maryann N. Keller, "Dull at Any Speed; GM Never Learnest {tu Shift Geats," The Washington Post, 12 June 2005, see. BOI.Business, Ethics, und Global Climate Control 27 86, John Browne, "Deyond Kyoto,” Foreign Affairs, 83,4 (July/ Auge ust 2004), 26. 87, “The Unrepentant Oilman," The Economist, 366, 8315 (March 18, 2005), 04. ‘XR. A zero discount rate would 1eflect an equal value and a negati txeonint rate would reflect the future climate being more valuable than its today ‘89, ‘Thus i the carbon tax suggested by Willian R. Cline, which, ae- cording to his ealeutations, is an appropriately risk~aveise tax aimed at quickly reducing CO, emissions. Ideally, this tax would stat wt $4500t0m in 2005 and raise as high as 81,400ton by 2205, William R. Cline, “Climate Change,” 13-43. A suminary of Cine’s article long with responses @ his views can be accessed onthe webat hifp-/wrww.conenhagenconsensws.com MDefaultasp?1D=415, ‘90. The ten percent interest rate reflects the weology behind choosing 1 private discount rte instead ofa social discount rate. Uhat is, a private discount rate reflects a greater degree of impatience than daes a social Uiscount rate because individuals tond to be more myopic than societies wwheu dealing with consumption individuals place more value on imme- fe vutsumption than on future consumption, Private intrest rates are generally nye: than socal interest rates and can be as high as ten percent. ‘Weave deliberately set the interest rate at such ahigh percentage to reflect high degree of impatcuce, in order to entice firms to quickly come into compliance. Ahmed M. Hussen, Principles of Environmental Economics Fconomics, Ecology and Public Policy, 32. 91. 2001: $450 x 10% ~ $45 + $450 ~ $495; 2002: $495 x 109% = 49.50 + $495 = $544.50: 2003: $544.50 x 10% = $54.45 1 $544.50 — SSK U5; UMM: $598.95 x 10% = $59.90 + $598.95 ~ $658.85.