Module IV: ECOLOGICAL ENVIRONMENT

Ecology
Ecology means the study of the relations that living organisms have with respect to
each other and their natural environment.
Ecological Environment
Ecological environment refers to environment consists of biotic community (i.e.
living organism includes flora, fauna and fungi) and abiotic components (i.e.non-
living elements) like soil, air, water, climate, light etc. Ecological environment
determines the nature and type of resources available in a region or country. There
must be a proper integration of business and ecology for use of its resources and
affects through its product and process.
Ecology and business
There is a close reciprocal relationship between ecology and business. Business
depends upon ecological environment to meet its input requirements. Ecological
factors can affect many different aspects of business. Ecological factors affecting
business includes

 Climate
 Climatic change
 Availability of non-renewable energy
 Biological species available in a region
 Flora and fauna
 Availability of natural resources
 Geographical location etc.
Climatic condition and natural resources determine the of business activities. For
example, UAE has a very hot, arid climate. As a result, farming may not give more
profit much and air conditioning system may have a larger market. Similarly in
India, Jute Industry is concentrated in and around West Bengal because of the
availability of raw jute there.
INDUSTRIAL POLLUTION
Meaning
Industries Pollution refers to the undesirable outcomes when industrial plants emit
harmful by-products and waste into the environment which is harmful for both
living organism and the environment. Industrial activity is considered as an
important source of environment pollution. It pollutes air, water and soil.
The emission of harmful gases and toxic effluent contaminate water, air, soil
and surrounding environment. Industrial pollution is the leading cause of pollution
worldwide. Industrial activities are the major source of air, water and soil pollution,
leading to illness and loss of life all over the world.

Forms of Industrial pollution

1. Air pollution : Air pollution is the contamination of air due to the presence of
substances in the atmosphere that are harmful to the health of humans and
other living beings, or cause damage to the climate or to materials. Industries,
especially those involving manufacturing of explosives, release thousands of
tons of oxides of nitrogen and sulphur into the atmosphere.
Air pollution causes problems like acid rain, greenhouse effect, global warming,
and depletion of ozone layer and formation of smog. For example, Bhopal Gas
Tragedy in 1984. A harmful gas was stored in tank, leaked and the clouds of gas
spread over a large area of the city killing about 4000 people and affecting
thousands of others.
2. Water pollution:Water is the most essential element of life. Human survival
requires continuous supply of pure and safe water for consumption. Water pollution
is the degradation of the quality of water that makes it unsafe or harmful to human
being, animals, plant and aquatic life. Water pollution reduces the normal use of
water for irrigation, agriculture, industries and human consumption. Water pollution
is more dangerous than air pollution because the source water contamination is
divers and slower rate of self-purification.
Water is the only natural resource available in plenty and essential for the survival
of all living organism. It is contaminated by various sources of pollution. Such as
Sewage and domestic waste, Industrial effluents, Agriculture discharge, Soaps and
detergents Toxic or heavy metals, Thermal pollution and petroleum oil spills.
One of the main sources of water pollution is effluents from industries. All
manufacturing industries release industrial waste water. These waste waters are
contaminated with toxic elements used in the plant. For example, excessive release
of mercury in sea water caused Minamata disease in Japan in 1953-60.More than
100 people died and thousands were permanently paralysed by consuming fish
contaminated with mercury.
3. Soil pollution
Soil plays extremely important role in the production of food for all living
organism. Nowadays, soil is a dumping ground for most of the waste materials.
Industrial wastes are the major cause of soil pollution. Textiles, paper and pulps
industries, leather tanning industry, petrochemical industry, food processing
industry, soap and detergent industry, dairy industry etc. discharge large quantity of
solid waste to its surrounding..
The soil pollution differs from air and water pollution in the sense that the
pollutants in the soil remain there in direct contact with the soil for relatively longer
periods. The main sources of soil pollution are: Industrial waste, urban and
domestic waste, radioactive pollutants, agrochemicals, chemical and metallic
pollutant, biological agents, and acid rain.

Causes of Industrial Pollution

1. Lack of policies to control pollution: Lack of effective policies and proper
implementation is considered as an important cause of industrial pollution in
India. Improper implementation, bureaucratic formalities and corruptions
resulted mass scale pollution and affected the life of people, animals and
plants.
2. Unplanned industrial growth: Unplanned industrial growth resulted
concentration of industries in certain regions in the country. Concentration of
industries in some places compounds the problems of environment pollution.
 3. Use of outdated technology: To avoid high cost and expenditure many firms
make use of traditional technologies to produce products. The outdated
technology, instead of clean production technology, generate large amount of
waste that pollute air, water and land.

4. Presence of large number of small scale industries: Many small scale

industries and factories that don't have enough capital and rely on government
grant to run their day-to- day business often escape environment regulations
and release a large quantity of waste into the environment.

5. Inefficient waste disposal: Most of the firms have no effective waste disposal
system. They use the toxic waste released from their plants for land filling and
similar other purposes. They don't care about the waste after disposal. The
inefficient disposal of waste creates chronic health problems and makes the
industrial pollution a severe one.

6. Leaching resources from natural world: Industries do not require a large

amount of raw materials to make them into finished products. Nearly 50% of
raw materials are turned into waste materials after the completion of a
production process. Minerals spilled over during the time of mining and oil
leakage cause unimaginable damage to our eco- system.

Effects of pollution
1.Green House Effect:It is a phenomenon in which the earth atmosphere traps the
heat from the sun and prevents it from escaping into outer surface, The heating up
of earth surface due to trapping of infra-red radiation reflected from the earth by the
greenhouse gases especially Carbon Dioxide (CO2) layer in the atmosphere is
called greenhouse effect. The heat trapping gases are called greenhouse gases,
Greenhouse gases include Carbon Dioxide, Methane, Chlorofluorocarbon and
Nitrous oxide. This brings climate change and global warming. Industrial activities
are the main source of greenhouse gases
2.Global Warming: A gradual increase in the overall temperature of the earth
atmosphere, generally attributed to greenhouse effect caused by increased level of
Carbon Dioxide, Chlorofluorocarbon and other particles is called global warming.
Global warming leads to climate change and consequently affect key life supporting
system on the planet. Global climate change, rainfalls, storms, wind pattern, ocean
current and sea level, are closely connected to global heat flows and temperature.
Industrial and non-industrial activities like burning of fossil fuels,coal mine, natural
gas leak, rice paddies, refrigeration and air conditioning, industrial solvents, bio-
mass burning, changing land use etc. increases green gases in the atmosphere.
3.Acid Rain: Any form of precipitation with acidic components such as Sulphuric
or Nitric acid that fallsto ground from the atmosphere in wet or dry form is called
acid rain. This can include rain, snow, fog hail or even dust that is acidic. Acid rain
results when Sulphur dioxide and Nitrogen oxide are emitted into the atmosphere
and transported by wind and air current. The major sources for this are
i) burning of fossil fuel for generation of electricity, ii) emission from vehicles and
heavy equipment iii) manufacturing,oil refinery and other industries.
Acid rain makes the soil acidic. This adversely affects plant and animal life. It
also damages the leaves of plants and trees. Acid rain renders the river or even
ocean water acidic, thereby, adversely affects the marine life. Acid rain causes
excessive damage to buildings and monuments made from marbles, limestone, slate
and mortar. Acid rain is responsible for wiping out many bacteria and blue green
algae, thereby, disrupting the all ecological balances.
4. Depletion of Ozone:The gradual thinning of Earth's ozone layer in the upper
atmosphere caused by release of chemical compounds containing gaseous Chlorine
or Bromine from industries and other human activities is called Depletion of ozone
layer. Ozone layer protect life on earth by absorbing the high energy Ultra Violet
radiation from the sun reaching the earth. Thinning of ozone layer is known as
ozone hole. It is a major environmental problem because it increases the amount of
harmful Ultra Violet radiation that reaches Earth's surface which increases the rate
of skin cancer, eye cataracts, and genetic and immune system damage.
5. Smog: Smog is a mixture of smoke and fog. The gases like Sulphur Dioxide and
Nitrogen Dioxide released when burning fossil fuels in industries, home and auto-
mobiles, are mixed with moister in the tiny droplet of fog produce Sulphuric acid
and Nitric acid respectively. They get condensed on the solid particulate matters of
smoke or dust present in the air give smog. Smog decreases visibility, respiratory
problems, Asthma, Bronchitis in human being.
6. Global Climate Change: Climate is the average weather condition in a place
over 30 years or more. On the other hand weather is a specific event like rainstorm
or hot day that happens over a few hours, days or weeks. Climate change means a
change in the average conditions such as temperature and rainfalls in a region over
a long period of time. Global climate change refers to the average long term change
over the entire earth. These include warming temperature and change in
precipitation, as well as the effects of earth's warming. Global warming leads rising
sea level, shrinking mountain glaciers, ice melting, changes in flowering and plant
blooming time. Climate change would intensify the amount of rainfalls, drought and
heat waves.

Global Environment

Global environment consists of all those factors that operate at the transnational,
cross cultural and across the border level, having an impact on the business of an
organization. Global environment includes globalization, global economic forces,
organizations trade blocks and forums, global trade and commerce, global financial
system, geo- political situations, political equations, global demographic pattern and
shift, global human resources, institutions, availability of natural resources, quality
of skill and expertise, mobility of labour etc.
The World Trade Organisation
The WTO is the only international organisation dealing with the rules of trade
between nations. It is established in January, 1995, located at Geneva in
Switzerland. It has many rules, it operates a system of trade rules, it acts as forum
for negotiating trade agreements, it settles trade dispute between member nations
and support the need of developing countries
The primary purpose of WTO is to open trade for the benefit of all. The WTO top
decision making body is the Ministerial Conference. Below there is a General
Council and various other councils and committees. The WTO has over 160
members representing 98% of the world trade.
Functions
1. Administering WTO trade agreements
2. Forum for trade negotiations
3. Settlement of trade dispute
4. Technical assistance and training for developing countries
5. Cooperation with other international organisations IMF, IBRD etc.

The WTO agreements

1.Agreement on Agriculture
2. Agreement on Trade in Textiles and Clothing
3. Agreement on manufactured goods
4. Agreement on TRIMS
5. Agreement on Anti-dumping practices
6. GATTS
7. Dispute Settlement Bodies.

Agreement on Agriculture
The Agreement on Agriculture is an international treaty of the WTO. It was
negotiated during the Uruguay Round of General Agreement on Tariff and Trade
and entered into force with the establishment of the WTO.
The main purpose of this treaty is to encourage gradual reduction of trade distorting
subsidies. The Agreement on Agriculture specifically deals with three aspects;
i. Market Access:It refers to the reduction of tariff and non-tariff barriers to
trade by the WTO members. It was different for developed, developing and
underdeveloped countries.
ii. Export subsidies
iii. Domestic support

Agreement on Sanitary and Phytosanitary

This agreement deals with standards necessary to protect human, animals and plants
from certain hazards associated with the movements of plants, animals and
foodstuffs in international trade. These risks are arising from the entry,
establishment or spread of pests, diseases and disease causing or carrying
mechanism.
Agreements on Textiles and Clothing
This Agreement provides for elimination of Multi-fibre arrangements after a ten
year transition period. The main objective of this arrangement is protection of
textile industries in developed countries from the threat posed by low cost import
from developing countries.The agreement on textiles and clothing provided for the
gradual dismantling of quota that existed under MFA. The agreement established a
10 year period to eliminate the quota in all textiles and clothing trade between WTO
member countries

TRADE RELATED INTELLECTUAL PROPERTY RIGHTS (TRIPS)

The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS) is the most comprehensive multilateral agreement on intellectual property
(IP). It plays a central role in facilitating trade in knowledge and creativity, in
resolving trade disputes over IP, and in assuring WTO members the latitude to
achieve their domestic policy objectives. It frames the IP system in terms of
innovation, technology transfer and public welfare. The Agreement is a legal
recognition of the significance of links between IP and trade and the need for a
balanced IP system.
It aims to provide fair and stable conditions for the conduct of international trade
with a view to encouraging trade and investment that raises living standards
worldwide. It is the successor to the former General Agreement on Tariffs and
Trade (GATT), a multilateral trade agreement that was concluded in 1947 .

TRADE RELATED INVESTMENT MEASURES (TRIMS)

under the Agreement on Trade-Related Investment Measures of the World Trade
Organization (WTO), commonly known as the TRIMs Agreement, WTO members
have agreed not to apply certain investment measures related to trade in goods that
restrict or distort trade.
TRIMs aims to eliminate trade-distorting measures that countries may use to focus
on their domestic industries, such as requiring foreign investors to use locally
produced goods or to export a certain percentage of their products.
The main two features are to Abolition of restrictions imposed on foreign goods.
Permission grant to import raw material without restrictions.

GATS
The General Agreement on Trade in Services of the World Trade
Organization (WTO), commonly known as the GATS, established a multilateral
framework of rules and principles for trade in services, a large and fast-growing
segment of world trade.
Agreement on anti-dumping
These are the measures to a domestic industry in the territory of the contracting
parties. It allows member nations to apply anti-dumping measures on a unilateral
basis after elaborate investigation.
Anti-dumping investigation determines whether
i. An imported product has been dumped
ii. It has caused material injury to the domestic industry of a like product and
iii. There is a casual link between dumped import and the injury.
If the investigation established these three factors, the government is allowed to
levy anti-dumping duty on such import.
Agreement on Technical access to trade
T he objective of this agreement is to ensure that the technical regulations,
standards, testing and certification procedures do not create any unnecessary
obstacle to trade. The mandatory product standards do not create such barriers if
based on internationally agreed standards.
It also recognizes that countries have a right to establish protection level they
considered appropriate. The countries should not be prevented from taking such
measures that are necessary ensure that these levels of protections are met.

GATT (GENERAL AGREEMENT ON TARRIF AND TRADE)

The General Agreement on Tariffs and Trade (GATT) was set up to eliminate
protectionism, get countries trading freely among themselves, and help restore
economic prosperity. The General Agreement on Tariffs and Trade is a legal
agreement between many countries, whose overall purpose was to promote
international trade by reducing or eliminating trade barriers such as tariffs or quotas.
The objectives are:
(a) to help raise standards of living;
(b) to achieve full employment;
(c) to develop the world's resources;
(d) to expand production and exchange of goods;
(e) to promote economic development.
Globalization
The term globalization means integration of nation economy with global economy.
Globalisation may be defined as the process of interaction and integration among
people, company and government across the world.
It is the growing economic interdependence of countries worldwide through
increasing volume and variety of cross border transactions in goods and service, and
of international capital flows and also through the more rapid and widespread
diffusion of technology.
Globalization is a multi-dimensional process characterized by the acceptance of a
set of economic rules for the entire world designed to maximize profit and
productivity by universalizing markets and production, and to obtain the support of
the states with a view to making national economy more productive and
competitive.

Features of globalization
1. Free trade: Globalisation implies free movement of goods and services
across the world. It also involves movement of capital and other input
resources without any restriction throughout the world. It stands for keeping
away the business from excessive and rigid regulatory and protective rules
and regulations.
2. World market:Globalisation is characterized by growing and accessible
global market for goods and services. There is no between domestic and
international market. Manufactures market their product in any country.
Products are developed keeping in mind the consumers of the entire world.
difference can planned and developed according to the consumers all over the
world.
3. Global product standard: Modern production is focused on the
requirements of consumers across the world. Global brands are available in all
markets. Only those products and services which confirm global standard
accepted by the global customers. For examples, Coca- Cola, Nike etc.
4. Emergence of new actors: Globalization requires new actors for it successful
implementation world over. The WTO is considered as the global authority to
implement the trade and service rules at global level It is the trade depute
settlement forum and regulates world trade for the benefit of its member
countries. Other agencies at the global level are MNCs, international network
of NGOs, Regional Trade Blocks etc.
 5. Transfer of capital: Another important feature of globalization is free
movement of capital across the world. There is a huge increase in FDI and FIl
world over. It is also accompanied by rising influence of sovereign wealth fund.
6. New rules and Norms: Globalization is characterized by formulation and
implementation of new rules and norms. They relate to market economy, greater
privatization, liberalization, multilateral agreement in trade, TRIMS, conventions
and agreement on global environment etc.