Chapter Seven:

The Environment

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 Overview
➢ Chapter Seven examines the following topics:
(1) The meaning and significance of ecology
(2) The traditional business attitudes toward the
environment
(3) The moral problems underlying business’s abuse
of the environment
(4) The costs of environmental protection
(5) The methods for pursuing environmental goals
(6) Some deeper questions of environmental ethics
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 Introduction
➢ The effects of environmental recklessness by
manufacturing, industry, and consumers are now
being seen.
➢ Humankind has scarred the globe, polluted the
air, contaminated the soil, and used up the
resources.
➢ What are the responsibilities of businesses
regarding the environment, plants and animals,
and all other resources?

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“A home that was flooded with toxic sludge following the
coal-ash spill at the Kingston Fossil Plant in Tennessee.
Even if an environmental calamity like this does not directly
affect our lives, should it still be a cause of concern?”
 Business and Ecology
➢ Definition of ecology: The science of the
interrelationships among organisms (especially
humans) and their environments.
➢ Ecosystems: A total ecological community, both
living and nonliving, webs of interdependency
structure ecosystems – a change in one element
can have ripple effects through the system.
➢ Business inevitably intrudes into ecosystems as it
produces the things we want – but not all or all
kinds of intrusions are justifiable.
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 Business’s Traditional Attitudes
Toward the Environment
➢ Traditionally, business has regarded the natural
world as a free and unlimited good – pollution and
the depletion of natural resources is the result.
➢ The “tragedy of the commons”: Damage to the
environment can also be explained as the result of
a situation in which each person’s or business’s
pursuit of self-interest can make everyone worse
off – the reverse of Adam Smith’s invisible hand.

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 Business’s Traditional Attitudes
Toward the Environment
➢ Spillover: Unintended costs to third parties from
transactions; also called “externalities”
➢ In viewing things strictly in terms of private
industrial costs, business overlooks spillover
➢ So business often derives a profit from a product
without considering the overall social cost – the
damage the product or the production process has
caused to the environment and human populations

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 The Ethics of Environmental
Protection
➢ The “free rider” problem: Protecting the
environment is in everyone’s self-interest, but a
company may rationalize (unfairly) that the little
bit it adds to the total pollution problem doesn’t
make any difference.
➢ So, it benefits from the efforts of others to prevent
pollution but “rides for free” by not making the
same effort itself.
➢ Some philosophers maintain that every human
being has a right to a livable environment.
Moral Issues in Business
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The Ethics of Environmental
Protection

Moral Issues in Business

Chapter 7
 The Ethics of Environmental
Protection
➢ Questions about the costs of pollution control:
(1) What kind of environment do we want?
(2) What is required to bring about the kind of
environment we want?
➢ The costs of pollution control: Determining the
cost of pollution control requires cost-benefit
analysis – which is difficult because it involves
controversial factual assessments and value
judgments.
Moral Issues in Business
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 The Ethics of Environmental
Protection
➢ Ecological economics: A new discipline, which
attempts to expand the boundaries of
environmental cost-benefit analysis.
➢ It calculates the value of an ecosystem in terms of
what it would cost to provide the benefits and
services it now furnishes us.
➢ For example, the worth of a wetland in terms of
the cost of constructing structures that provide the
same flood control and storm protection that
natural wetlands do.
Moral Issues in Business
Chapter 7
The Ethics of Environmental
Protection

Moral Issues in Business

Chapter 7
 The Ethics of Environmental
Protection
➢ Who should pay the cost? This is a question of
social justice. Two popular answers are currently
in circulation:
(1) Those responsible for causing the pollution ought
to pay
(2) Those who stand to benefit from protection and
restoration should pick up the tab

Moral Issues in Business

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 The Ethics of Environmental
Protection
➢ Those responsible: Business has profited greatly
from treating the environment as a free good, but
consumers have paid lower costs for products.
➢ Some would blame consumers, not businesses, for
pollution because they create demand for products
whose production impairs the environment.
➢ But, this argument fails to recognize the deep-
rooted causes of pollution – population growth,
increasing urbanization, and rising affluence.
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Moral Issues in Business
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 The Ethics of Environmental
Protection
➢ Those who would benefit: Critics of this argument
point out that every individual, rich or poor, and
every institution, large or small, stands to benefit
from environmental protection and restoration,
albeit not necessarily to the same degree.
➢ The problem: If pollution concerns all of us to a
different degree, how would we determine the
amount individuals and companies should pay,
based on the degree to which they benefit?

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Achieving Our Environmental Goals
➢ Regulations: The use of direct public (state and
federal) regulation and control in determining
how the pollution bill is paid. Four drawbacks:
(1) Requiring firms to use the strongest feasible
means of pollution control is problematic.
(2) Although regulations treat all parties equally,
this often comes at the cost of ignoring the special
circumstances of particular industries and
individual firms.
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Achieving Our Environmental Goals
3) Regulation can take away an industry’s incentive
to do more than the minimum required by law.
(No polluter has an incentive to discharge less
muck than regulations allow. No entrepreneur has
an incentive to devise technology that will bring
pollution levels below the registered maximum.)
(4) Regulation can also cause plants to shut down or
relocate.

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Achieving Our Environmental Goals
➢ Incentives: A widely supported approach to the
problem of cost allocation for environmental
improvement through government investment,
subsidy, and general economic incentive (e.g. by
means of tax cuts, grants or awards).
➢ The advantage is that it minimizes regulatory
interference and coercion.
➢ The disadvantage is that it moves slowly, pays
polluters not to pollute, and is not always cost-
effective.
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Achieving Our Environmental Goals
➢ Pricing mechanisms: Also called effluent charges,
they spell out the cost for a specific kind of
pollution in a specific area at a specific time.
Prices are tied to the amount of damage caused so
may vary from place to place and time to time.
➢ Pollution permits: Allow companies to discharge a
limited amount of pollution or trade pollution
“rights” with other companies.
➢ Critics argue that this approach entails an implicit
right to pollute, and reject this as immoral.
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Delving Deeper Into Environmental
Ethics
➢ To satisfy its disproportionate consumption of
nonrenewable resources, America (and China!)
turn to foreign lands.
➢ This raises two critical moral questions:
(1) How is the continued availability of foreign
resources to be secured?
(2) Does any nation have a right to consume the
world’s irreplaceable resources at a rate so
grossly out of proportion to the size of its
population (in the case of America)?
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“The U.S. represents 4.6 percent of the world’s population
and consumes 30 percent of the world’s refined oil. Is the
U.S. obligated to reduce its oil consumption?”
Delving Deeper Into Environmental
Ethics
➢ Obligations to future generations: A broader view
of environmental ethics considers our duties to
other societies and upcoming generations.
➢ Some say we must respect the right of future
generations to inherit an environment that is not
seriously damaged.
➢ Others argue that by putting ourselves in the
“original position,” we can balance our interests
against those of our descendants.
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Delving Deeper Into Environmental
Ethics
➢ The value of nature: A radical approach to
environmental ethics challenges the human-
centered assumption that preserving the
environment is good only because it is good for us.
➢ Adopting a naturalistic, non-anthropocentric ethic
would change our way of looking at nature, but
many philosophers are skeptical of the idea that
nature has any intrinsic value.

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Delving Deeper Into Environmental
Ethics
➢ Our treatment of animals: Business affects the
welfare of animals very substantially.
➢ One way is through experimentation and the
testing of products on animals.
➢ Critics such as Peter Singer contend that most
experiments and tests are unjustified on moral
grounds because animals have moral rights.
➢ Utilitarians stress the moral necessity of taking
into account animal pain and suffering.
Moral Issues in Business
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Delving Deeper Into Environmental
Ethics
➢ Factory farming: Business’s largest and most
devastating impact on animals is the production of
animal-related products—in particular, meat.
➢ The economizing of the meat and animal-products
industries leads to their treating animals in ways
that many reject as cruel and immoral.
➢ Is it wrong to eat meat? The answer depends on
whether animals have moral rights, and whether
and to what extent these rights are on a par with
human rights.
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