Ethics and Environment

The process of producing goods forces businesses to engage in exchanges and interactions with two main
external environments: the natural environment and the consumer environment. It is from the natural
environment that business ultimately draws the raw materials that it transforms into its finished products.
These finished products are then externally promoted and sold to consumers. Thus, the natural
environment provides the raw material input of business, whereas the consumer environment absorbs its
finished output. This chapter discusses the two basic issues related to the natural environment: pollution
and resource depletion. We will evaluate the main environmental threats; identify ethical issues raised by
pollution from commercial and industrial enterprises; and examine our obligations to conserve Earth’s
resources.

Environmental issues, then, raise large and complicated ethical, economic, and technological questions
for our business society. What is the extent of the environmental damage produced by the processes
through which we manufacture our products, grow our food, and power our cities? How large a threat
does this damage pose to our well-being? What values must we give up to halt or slow such damage?
Whose rights are violated by pollution, and who should be responsible for paying for the costs of pol
luting the environment? How long will our natural resources last? What obligations do firms have to
future generations to preserve the environment and conserve our resources? This chapter explores these
environmental issues. It begins with an overview of various technical aspects of environmental resource
use. This overview is followed by a discussion of the ethical basis of environment protection. The final
sections discuss two controversial issues: our obligations to future generations and the prospects for
continued economic growth.

Pollution and Resource Depletion

Pollution and resource depletion are two critical environmental issues resulting from human
activities, particularly industrialization and urbanization.

1. Pollution:

 Definition: Pollution is the introduction of harmful substances or products into the

environment. It is mostly a byproduct of human activities like manufacturing, waste
disposal, and burning fossil fuels.
 Types of Pollution:
o Air Pollution: Emission of harmful chemicals like carbon monoxide (CO), sulfur
dioxide (SO₂), and nitrogen oxides (NOₓ) from factories and vehicles.
o Water Pollution: Contamination of water bodies due to industrial discharge,
agricultural runoff (pesticides, fertilizers), and improper waste disposal.
o Soil Pollution: Degradation of soil quality caused by chemicals, waste disposal,
and industrial activities.
o Noise Pollution: Excessive noise from traffic, construction, and industrial
processes, leading to health issues like stress and hearing loss.

2. Resource Depletion:
  Definition: It refers to the consumption of natural resources faster than they can be
replenished.
 Examples of Depleting Resources:
o Fossil Fuels: Coal, oil, and natural gas are being extracted and used faster than
they are naturally formed.
o Water Resources: Over-extraction for agriculture and industry, leading to water
scarcity.
o Forests: Deforestation for timber, agriculture, and urban development.
o Minerals: Excessive mining reduces the availability of critical minerals like
copper, aluminum, and iron.

Major Types of Air Pollution

Air pollution is a significant contributor to environmental degradation and health problems. The
slide categorizes air pollutants as follows:

1. Greenhouse Gases:

 These gases trap heat in the Earth's atmosphere, contributing to the greenhouse effect
and global warming.
 Major Greenhouse Gases:
o Carbon Dioxide (CO₂): Produced from burning fossil fuels like coal, oil, and
gas.
o Methane (CH₄): Emitted from livestock, agriculture, and landfills. Methane is
about 25 times more potent than CO₂ in trapping heat.
o Nitrous Oxide (N₂O): Released from agricultural activities and industrial
processes. It is 300 times more effective than CO₂ at trapping heat.

2. Ozone-Depleting Gases:

Chlorofluorocarbons (CFCs) break down the ozone layer in the stratosphere, which protects life
from harmful UV radiation. CFCs, once common in aerosols, refrigerators, and air conditioners,
take 7–10 years to reach the stratosphere and can persist for 75–130 years, continuously
destroying ozone. Ozone layer depletion increases UV exposure, risking skin cancer, damaging
crops, and harming ocean plankton vital to marine food chains. International
agreements(Montreal Protocol on Substances that Deplete the Ozone Layer, adopted in 1987)
reduced CFC emissions by 87% since 1988, but existing emissions will continue to rise for
decades, and not all countries have committed to stopping CFC production.

3. Acid Rain Gases:

Acid rain is caused by the burning of high-sulfur coal, releasing sulfur oxides and nitrogen
oxides. Power plants are the main source, contributing 70% of sulfur oxides and 30% of nitrogen
oxides. These gases combine with water vapor to form acids, which fall as rain, sometimes far
from the emission source. Acid rain harms aquatic life, damages trees and plants, leaches toxic
metals into waterways, and corrodes buildings and monuments. Although regulations have cut
sulfur oxide emissions by half since 1990, acid rain still affects parts of the northeastern United
States. The regulation that significantly reduced sulfur oxide emissions in the United States is the
Clean Air Act Amendments of 1990, specifically its Acid Rain Program.

4. Airborne Toxics:

Around 4 billion pounds of toxic substances are released into the atmosphere annually, including
harmful chemicals like phosgene and methyl isocyanate. This includes over 230 million pounds
of carcinogens (e.g., benzene, formaldehyde) and 500 million pounds of neurotoxins (e.g.,
toluene, trichloroethylene). Although overall levels have declined, some states report increases in
carcinogens. The EPA estimates that 20 of these airborne toxics cause over 2,000 cancer cases
each year, with higher cancer rates found near chemical plants, particularly in West Virginia and
Louisiana.

5. Common Air Pollutants:

 These are substances commonly found in urban air:

o Carbon Monoxide (CO): Released from vehicle exhaust; reduces oxygen
delivery to organs.
o Sulfur Oxides (SOₓ): Contribute to smog and acid rain.
o Nitrogen Oxides (NOₓ): Major contributors to smog and respiratory problems.
o Airborne Lead: Historically from gasoline, now mostly from industrial
emissions.
o Ozone (O₃): Forms at ground level when pollutants react in sunlight; causes
respiratory issues.
o Particulates: Tiny particles that can penetrate deep into the lungs, causing health
issues.

Major Types of Water Pollution"

Categorizes water pollutants into two main groups:

1. Organic Wastes
These are pollutants derived from living organisms and biological processes. Examples
include: Human sewage, Animal wastes, Bacteria, Oil
2. Inorganic Pollutants
These are non-living chemical substances that can contaminate water. Examples include:
Salt brines, Acids, Phosphates, Heavy metals, Asbestos, PCBs (Polychlorinated
Biphenyls), Radioactive chemicals

Major Types of Land Pollution

Land pollution refers to the degradation of the Earth’s surface caused by the improper disposal of
waste and chemicals. It can be categorized into three main types:

1. Toxic Substances

These are hazardous chemicals that contaminate the soil and harm ecosystems and human health.

 Examples:
o Acids (e.g., sulfuric acid from industrial runoff)
o Heavy metals (e.g., lead, mercury)

2. Solid Wastes

Non-liquid waste materials that are discarded and accumulate on land.

 Sources:
o Residential garbage (household waste)
o Industrial waste (by-products of manufacturing)
o Agricultural waste (crop residue, animal manure)
o Mining waste (rock and debris from mining activities)

3. Nuclear Wastes

Radioactive materials that remain hazardous for long periods.

 Types:
o High-level waste: extremely radioactive, often from nuclear reactors
o Transuranic waste: contains elements heavier than uranium
o Low-level waste: less radioactive but still dangerous (e.g., contaminated clothing)

Depletion of Non-Renewable Resources

This refers to the rapid consumption of resources that cannot be replenished on a human time
scale, such as fossil fuels and certain minerals. This slide explains the environmental and ethical
concerns related to this depletion.

1. Extinction of Species

 Natural habitats are destroyed due to mining, drilling, and industrial expansion, leading to
species extinction. Companies must balance resource use with environmental
preservation.
2. Depletion Rates

 Resources are being consumed at their peak production rate, not slowly or gradually.
 Businesses must shift from short-term profit to long-term sustainability planning.Fossil

Fuel Depletion

Resource Estimated Depletion Time CSR Implication

Coal ~150 years Shift to renewable energy; reduce carbon footprint.
Natural Gas ~30–40 years Invest in clean alternatives (solar, wind, etc.).
Likely by 2040 (some Improve energy efficiency and reduce transport
Oil
regions) emissions.

 Real Example: Tesla promotes the use of electric vehicles to reduce oil dependence.

Mineral Depletion

Mineral Depletion Estimate CSR Relevance

Copper, Mercury Around 2100 Use recycled metals; reduce e-waste.
Aluminum During the 21st century Optimize packaging; promote reusability.
Indium, Antimony In 10 years Use substitutes in electronics.
Tantalum In 20–116 years Ethical sourcing, especially from conflict-free zones.

 Example: Apple launched a robot named Daisy to recover rare earth metals from old
iPhones.
 Ethical Concern: Many minerals are sourced from conflict zones (e.g., tantalum from
Congo), raising human rights issues.

Ethical and CSR Takeaways for Businesses

 Transparency in resource sourcing and environmental impact reporting.

 Innovation in using renewable inputs and waste reduction.
 Collaboration with governments and NGOs to promote sustainability.
 Education for consumers about the environmental cost of products.

The Ethics of Pollution Control – A Detailed Overview

1. Introduction
Pollution control is not just a scientific, technical, or economic issue—it’s deeply ethical. It involves
questions about what we owe to other humans, future generations, and even nonhuman entities like
animals, plants, and ecosystems. Ethics provides the moral reasoning behind why we should reduce
pollution, even when it may not offer immediate benefits to us.

2. What is Ecological Ethics?

Ecological ethics (also called environmental ethics) is a branch of ethics that extends moral
consideration to the natural world.

 Core Idea: Nature—including animals, forests, rivers, and even entire ecosystems—has intrinsic
value. That means they are valuable in and of themselves, not just because they are useful to
humans.
 This contrasts with the traditional anthropocentric (human-centered) view, where only humans
are considered morally important.

Ecological ethics leads us to ask:

 Is it wrong to cut down a forest even if no one is harmed?

 Do animals and plants have rights?
 Should we protect species from extinction even if they don’t benefit us?

3. The “Last Man” Argument

This is a philosophical thought experiment that supports ecological ethics.

Proposed by Richard Routley, the “Last Man” argument works like this:

 Imagine a scenario where one man is the last human alive on Earth.
 He decides to destroy all the forests, kill the remaining animals, and pollute the air and water—
just before he dies.
 Even though no humans remain to be harmed, we feel that this act is morally wrong.

Why is it wrong?
Because we intuitively recognize that nonhuman life and nature have value independent of human
existence.

This challenges the idea that moral concern should only apply to humans and supports the argument
that nature deserves respect and protection in its own right.
4. Implications for Pollution Control

Understanding pollution control through ecological ethics changes how we make environmental
decisions:

✅ Traditional View:

 Reduce pollution because it harms human health (e.g., asthma from air pollution).
 Clean rivers because people need drinking water.
 Prevent climate change to protect future generations.

✅ Ecological Ethics View:

 Reduce pollution because it harms animals, plants, and ecosystems—even if no humans are
affected.
 Stop releasing toxic waste into oceans not just for fisheries, but to protect marine biodiversity.
 Prevent habitat destruction out of respect for the intrinsic worth of nature.

5. Real-World Applications

Ecological ethics supports strong environmental laws and practices such as:

 Banning harmful chemicals that affect bees or birds.

 Protecting endangered species regardless of their usefulness.
 Preserving natural forests instead of replacing them with plantations.

It also informs ethical stances like climate justice, deep ecology, and animal rights.

6. Conclusion

The Ethics of Pollution Control calls for a shift in our moral thinking. It's not enough to protect the
environment because we depend on it—we must also recognize its inherent value. The “Last Man”
argument reminds us that nature deserves moral respect, even when humans are not directly involved.

Private and Social Costs – Detailed Explanation

1. Private Cost

 Definition: This is the cost that a business or individual directly incurs when engaging in an
economic activity.
  Who pays it? The person or company doing the activity.
 Examples:
o A factory pays for raw materials, labor, and machinery.
o A car owner pays for fuel, maintenance, and insurance.

These are internalized costs — they are accounted for in the company’s profit-and-loss statement.

2. Social Cost

 Definition: Social cost includes both the private cost and any external cost that society must
bear due to the activity.
 External Costs (also called negative externalities) are costs not paid by the producer but by
others — often unknowingly or unwillingly.
 Examples:
o A factory emits smoke → Air pollution affects local residents' health (they bear the
cost).
o A company dumps waste in a river → The community pays for cleanup or suffers from
polluted water.
o Traffic from delivery trucks → causes congestion and noise, affecting local residents.

So, Social Cost = Private Cost + External Cost

3. Why It Matters Ethically

 Companies focused only on private costs may ignore the harm their actions cause to others.
 Ethical business practices demand that companies recognize and take responsibility for the
social costs they generate.
 Governments often intervene with taxes, regulations, or fines to force companies to internalize
these social costs (e.g., carbon tax).

4. Real-World Example

Plastic production:

 Private cost: Manufacturer pays for oil, labor, and equipment.

 External (social) cost: Oceans filled with plastic waste, harming marine life and ecosystems.

✅ Conclusion
Understanding the difference between private and social costs helps explain why some businesses
cause harm even while earning profits. Ethical businesses aim to internalize externalities—meaning
they take full responsibility for the total cost of their actions, not just what they pay directly.

Environmental Rights – Detailed Explanation

1. The Philosophical Basis

 At its core, this view is based on the idea that humans are free and rational beings who require
certain basic conditions to live fulfilling lives.
 One of those conditions is access to a livable environment—clean air, safe water, fertile soil,
and stable ecosystems.

2. Right to a Livable Environment

 Just like humans have a right to food, shelter, and education, they also have a moral (and in
some places, legal) right to an environment that does not harm their health or well-being.
 When pollution, deforestation, or climate change damages the environment, these rights are
being violated—especially for vulnerable populations like children, the elderly, and low-income
communities.

3. Violation of Environmental Rights

 Practices such as toxic waste dumping, industrial emissions, or unregulated mining can strip
people of their ability to live healthy lives.
 This means that pollution is not just an environmental issue—it is also an ethical and human
rights issue.

4. Ethical Implications

 The concept of environmental rights gives strong moral weight to environmental protection.
 It can justify strict or even absolute restrictions on harmful activities.
 According to this perspective, no economic benefit can justify violating people’s environmental
rights, even if the financial cost of stopping pollution is high.

5. Real-World Examples
  In India, the Supreme Court has ruled that the right to a clean environment is part of the right
to life.
 International treaties like the Aarhus Convention promote public rights to environmental
information and justice.
 Climate justice movements argue that climate change violates the rights of future generations.

✅ Conclusion

Environmental rights emphasize that protecting the environment is not just a choice—it’s a moral duty.
By framing environmental protection as a human right, it becomes a non-negotiable ethical obligation,
not just an economic or policy preference.

Private and Social Costs – Detailed Explanation

1. Private Cost

 Definition: This is the cost that a business or individual directly incurs when engaging in an
economic activity.
 Who pays it? The person or company doing the activity.
 Examples:
o A factory pays for raw materials, labor, and machinery.
o A car owner pays for fuel, maintenance, and insurance.

These are internalized costs — they are accounted for in the company’s profit-and-loss statement.

2. Social Cost

 Definition: Social cost includes both the private cost and any external cost that society must
bear due to the activity.
 External Costs (also called negative externalities) are costs not paid by the producer but by
others — often unknowingly or unwillingly.
 Examples:
o A factory emits smoke → Air pollution affects local residents' health (they bear the
cost).
o A company dumps waste in a river → The community pays for cleanup or suffers from
polluted water.
 o Traffic from delivery trucks → causes congestion and noise, affecting local residents.

So, Social Cost = Private Cost + External Cost

3. Why It Matters Ethically

 Companies focused only on private costs may ignore the harm their actions cause to others.
 Ethical business practices demand that companies recognize and take responsibility for the
social costs they generate.
 Governments often intervene with taxes, regulations, or fines to force companies to internalize
these social costs (e.g., carbon tax).

4. Real-World Example

Plastic production:

 Private cost: Manufacturer pays for oil, labor, and equipment.

 External (social) cost: Oceans filled with plastic waste, harming marine life and ecosystems.

✅ Conclusion

Understanding the difference between private and social costs helps explain why some businesses
cause harm even while earning profits. Ethical businesses aim to internalize externalities—meaning
they take full responsibility for the total cost of their actions, not just what they pay directly.

Markets and Pollution

The topic "Markets and Pollution" explores how traditional market systems often fail to
account for the full social costs of producing goods, particularly when it comes to environmental
damage. When a company manufactures a product, it incurs certain costs directly—such as labor,
materials, and energy—which are known as internal or private costs. However, the production
process may also lead to external costs, such as pollution of the air, water, or soil, which are not
paid for by the company but by society at large. These external costs are called negative
externalities.

In economics, supply curves are used to show the relationship between the price of a good and
the quantity producers are willing to supply. A supply curve that only reflects private costs tends
to be lower, meaning the good appears cheaper and more is produced. But if the supply curve
were adjusted to include both private and external costs—essentially, the full social cost—the
curve would shift upwards. This would result in a higher market price and a lower quantity of the
good being produced and consumed. In effect, fewer resources would be wasted, and
environmental harm would be reduced.

When external costs are not considered, it leads to overproduction and underpricing of goods.
This can have serious consequences, such as excessive pollution, health hazards, and the unfair
burden placed on communities and future generations. It also reduces overall utility—the
satisfaction or benefit that individuals receive—and raises ethical concerns, as people suffer
consequences for which they are not responsible. Therefore, failing to incorporate external costs
into production decisions not only creates inefficiency in markets but also violates principles of
fairness, rights, and justice.

The discussion underlines the importance of mechanisms like environmental regulation, carbon
pricing, or pollution taxes that can help internalize these external costs and make markets work
more fairly and sustainably.