The Economics and Business of Sustainability

373 Pages·2021·11.369 MB·English

by  Peter N. Nemetz

The Economics and Business
of Sustainability
Given the emergence of sustainability as the defning issue of our time, it is essential for
university graduates, and especially business and economics students, to have a fundamental
grasp of the key issues in this emerging multidisciplinary feld of study.
Nemetz provides a comprehensive, detailed overview of the interlinked economic and
ecological concepts central to this new discipline. Accompanying the introduction of the
underlying theory is a broad array of real-world supporting data from Asia, Europe and
North America. This volume also features a chapter on the threat of emerging pandemics
and their signifcance for the achievement of a truly sustainable world.
This book accentuates the value and importance of a strong sustainability approach in
an age of climate change emergency. It is an ideal companion for instructors and students
of sustainability in business, economics and related disciplines such as geography and
political science.
Peter N. Nemetz is Professor of Strategy and Business Economics at the University of
British Colombia, Canada.

The Economics and Business
of Sustainability
Peter N. Nemetz
First published 2022
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
605 Third Avenue, New York, NY 10158
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2022 Peter N. Nemetz
The right of Peter N. Nemetz to be identifed as author of this work has been
asserted by him in accordance with sections 77 and 78 of the Copyright, Designs
and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilised
in any form or by any electronic, mechanical, or other means, now known or
hereafter invented, including photocopying and recording, or in any information
storage or retrieval system, without permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks or registered
trademarks, and are used only for identifcation and explanation without intent to
infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Nemetz, Peter N., 1944- author.
Title: The economics and business of sustainability / Peter N. Nemetz.
Description: Milton Park, Abingdon, Oxon ; New York, NY : Routledge, 2021. |
Includes bibliographical references and index.
Subjects: LCSH: Sustainable development. | Business--Environmental aspects. |
Climatic changes—Economic aspects.
Classifcation: LCC HC79.E5 N446 2021 | DDC 338.9/27—dc23
LC record available at https://lccn.loc.gov/2021013614
ISBN: 978-0-367-77311-3 (hbk)
ISBN: 978-0-367-77309-0 (pbk)
ISBN: 978-1-003-17073-0 (ebk)
DOI: 10.4324/9781003170730
Typeset in Bembo
by Apex CoVantage, LLC
To my dearest wife, Roma, and daughter, Fiona, the grandest stars
in my universe – may they continue to burn bright for many years
to come.

Contents
List of fgures ix
List of tables xii
Other books by the author xiv
Preface xv
1 Book outline, rationale and introduction 1
Appendix 1.1: A simple example of systems theory 9
Appendix 1.2: Business and ecosystems as complex adaptive systems 11
2 A brief historical overview of economic development and the
environment: Pre- and post-agricultural revolution 16
3 A brief historical overview of economic development and the
environment: The Industrial Revolution and sequel 36
Appendix 3.1: A short primer on input-output analysis 65
4 What are we trying to achieve? Measuring wealth and well-being 74
Appendix 4.1: The World Bank’s calculation of total wealth
(World Bank 2011, pp. 142–143, reproduced with permission) 107
Appendix 4.2: Well-being indicator variables used by the OECD (2011b) 109
5 An overview of environmental economics 113
Appendix 5.1: Sulfur dioxide trading in the US 130
Appendix 5.2: Greenhouse gases and economic incentives 132
Appendix 5.3: The Toxic Release Inventory and its effects 141
6 Cost-beneft analysis and measuring environmental benefts 152
Appendix 6.1: Applying evaluation methodology – case study of
the US Clean Air Act 177
Appendix 6.2: Placing a value on ecosystem services – case study of New York City’s
water supply 181
Appendix 6.3: A brief overview of multi-attribute decision-making (MADM) 183
viii Contents
7 Placing a value on human life 191
Appendix 7.1: Philip Morris’ report to the government of Czechoslovakia 197
8 Some relevant ecological principles 199
9 A brief outline of ecological economics 239
Appendix 9.1: Valuing ecosystem services of North America’s boreal forest 259
Appendix 9.2: Case study of Thai shrimp farming 262
10 Risk analysis and the precautionary principle 267
Appendix 10.1: Two classic examples of risk framing 298
Appendix 10.2: The precautionary principle and global warming 300
11 Pandemics and sustainability 309
12 The path forward 317
Index 340
Figures
1.1 IPCC-predicted effects of temperature increases 5
1.2 System effects of loss of forest cover 10
2.1 Easter Island 17
2.2 Ecosphere 18
2.3 Typical predator-prey interaction 19
2.4 Typical population collapse 20
2.5 Global population estimates 20
2.6 Some exponential growth examples 22
2.7 Estimated gross world product 24
2.8 Percentage of undernourished population in the developing world 25
2.9 Population growth vs. GDP/capita in 2000 26
2.10 Selected national population pyramids 27
2.11 US national population pyramids 28
2.12 Landmarks in global economic development 30
2.13 Salinity problems in the US West 32
2.14 Colorado River fows 33
3.1 Global materials extraction 37
3.2a UK historical energy consumption 38
3.2b US energy consumption 38
3.3 UK CO emissions 39
2
3.4 US CO emissions 40
2
3.5a Traditional environmental Kuznets curves (I) 40
3.5b Traditional environmental Kuznets curves (II) 41
3.6 Revised environmental Kuznets curve 41
3.7 Ratio of male to female births as function of PCB concentration in
maternal serum in the Arctic 42
3.8 The risk transition 43
3.9 The full environmental risk transition 44
3.10 CO emissions in the developed and developing world 45
2
3.11 Change in GHG and GDP by HDI groupings 46
3.12a CO emissions – China and India 47
2
3.12b CO emissions – Japan, France and Germany 48
2
3.13 UK consumption-based vs. production-based CO footprint 49
2
3.14 US consumption-based vs. production-based CO footprint 50
2
3.15 China consumption-based vs. production-based CO footprint 51
2
3.16 Total global GHG emissions 52