Ecological Concern in International Business

In this globalization era many industries seek expansion not just limited to their own nation but to go international and seek new market for their products and services. The environmental standards and norms play a significant role in determining the competitiveness of products and goods on the international market. Environmental responsibility is a vital component of a business strategy as it not only helps the environment, but it wins the trust of communities and gains the respect of the governments of the countries in which the business operates.

All businesses impact on the environment: they emit pollution, they produce waste and use resources. Businesses, however, are continually being encouraged to improve their approach to environmental issues. To the casual observer, the greening of mainstream business may appear to be a recent phenomenon, but it is no ephemeral fad, according to writer and green business strategist Joel Makower.

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Rather, he says, it represents a shift in how business is being done, born of a confluence of global challenges: energy and natural resource constraints, global security concerns, growing public health problems, and the specter of disruptive climate change. And opportunities: a wealth of new enabling technologies that allow business efficiency to increase dramatically, dematerializing and detoxifying products and services along the way.

The merging of economic and environmental interests may engender one of the biggest business transformations in decades, spurred on by a societal imperative to harness the unparalleled power of the private sector to address the world’s most pressing environmental problems. Companies of all sizes and sectors have come to recognize that being a greener business can create new forms of business value, whether increased sales and reduced costs, or forms of value that are indirect (increased quality, reduced risk, increased ability to attract and retain talent) or intangible (enhanced reputation or becoming a preferred trading partner).

Not every company derives such benefits, but many have found ways to turn the emerging environmental ethic into a business opportunity. Enormous economic and population growth worldwide in the second half of the twentieth century drove the impacts that threaten the health and the world — ozone depletion, climate change, depletion and fouling of natural resources, and extensive loss of biodiversity and habitat. ? Environmental Impacts of Trade World trade expansion has raised the issue of the relationship between trade and the environment.

The production of goods that are imported and exported, like other production, will often have environmental effects. According to the free trade principles that provided the basis for GATT and for its successor, the World Trade Organization (WTO), countries cannot restrict imports except in very limited cases such as protection of the health and safety of their own citizens. There have been many international environmental issues, such as forest protection, ozone depletion, hazardous wastes, and global climate change. All these issues are linked to international trade.

To address these questions, the theory and practice of international trade need to be examined. Most economists believe that expanded trade is generally beneficial, promoting increased efficiency and greater wealth among trading nations. At the national level, the standard economic policy response to environmental impacts is to implement policies that internalize externalities. At the international level, however, the picture is more confused. The burden of environmental externalities associated with trade may be borne by importers, exporters, or by others not directly involved in the production or consumption of traded goods.

The authority to formulate and enforce environmental policies usually exists only at the national level. This can create significant problems when environmental impacts are transnational, since most international trade agreements do not include any provisions for environmental protection. ? Key Principles Of Contemporary Environmental Policy A degree of consensus has merged around the need to encompass the following underlying principles in environmental policy enacted at local, national, regional and international levels. 1.

The ‘polluter pays’ principle (PPP) stipulates that the polluters should pay the full cost of environmental damage they cause. Environmental costs are often referred to as ‘externalities’ (for example, damage to health, rivers, the air etc. arising from economic activity) that are not incorporated into the costs of a product but are borne by society as a whole. By making the polluter pay the full cost of its activities, including externalities, the PPP provides an incentive to make products less polluting and/ or to reduce the consumption of polluting goods.

The internalization of external costs can be met through the use of market-based, policy instruments. 2. The prevention principle involves changes to products and processes to prevent environmental damage occurring rather than relying on remedial action to repair the damage after it has taken place. This implies the development of ‘clean technologies’; minimal use of natural resources; minimal releases into the atmosphere, water and soil; and maximization of the recyclability and lifespan of products. 3.

The precautionary principle acknowledges that our understanding of the ecology and environmental processes is, at best, incomplete and constantly evolving. Policy is therefore formulated against a background of uncertainty. However, lack of scientific knowledge should not be used to justify failure to introduce environmental policy. Indeed, even without conclusive scientific evidence about outcomes, precautionary action should be taken if the potential consequences of inaction are particularly serious or if the cost of action is not high. 4.

The subsidiarity : environmental policy is formulated at a number of different levels – local, regional, national and international. The subsidiarity principle requires actions to be taken at the lowest possible level of government at which it can be effectively taken. This poses interesting challenges for environmental policy given the lack of respect of pollution for borders. 5. Common but differentiated responsibility: environmental regimes that deal with environmental problems with international implications often distinguish between countries when formulating policy. . Openness : the representation of all stakeholders in the formulation of environmental policy is important for good environmental management. Many MEAs are noteworthy for their openness and transparency, encouraging participation from business and environmental NGOs and utilizing modern technology to communicate their activities to the public. ? International Environmental Policy Globalization has played an important role in the appearance of environmental policy on the international agenda but, given the lack of respect of ollution for international borders, the incentive to formulate international environmental policy would exist even in the absence of globalization. The development of multilateral trade policy preceded the emergence of environmental issues and policy on the international stage but environmental issues in turn got their first international airing ahead of other globalization-driven issues such as competition policy and labour market regulation. In 1972, the Stockholm conference was held to consider “problems of the human environment….

And also to identify those aspects of it that can only, or best be solved through international cooperation”. This conference resulted in the creation of the UNEP, an organization which, in addition to organizing environmental information and monitoring networks, has been instrumental in providing the support for key MEAs. Many MEAs effectively limit the way businesses carry out their activities and use trade as an instrument in environmental protection- a development that potentially brings them into conflict with the WTO.

The Montreal protocol, banned the production and use of several categories of industrial chemicals known to contribute to the depletion of stratospheric ozone layer and imposes restrictions on others. The UNFCCC and Kyoto Protocol’s attempt to deal with the complex issue of climatic change via a range of strategies, most of which are designed to restructure economic development so that it is less dependent on greenhouse gases. It is left up to signatories to develop strategies to determine how they develop to meet their emissions targets under Kyoto.

As per GATT, countries are allowed to restrict trade in order to “conserve exhaustible natural resources” or to protect “human, animal or plant life or health. ” However, the interpretation of this special exception to free trade rules has led to fiercely contested disputes among countries. For example, European nations have refused to allow imports of U. S. beef produced with hormone supplements. The U. S. has argued that since there is no proven harm to human health from the use of hormones, this is an illegal barrier to trade. Product and Process Issues

An issue has arisen over the use of genetically engineered crops. While unlabeled genetically engineered foods are allowed in the U. S. , they are widely opposed in Europe. Should European countries be able to ban the import of genetically engineered foods? The issue has enormous implications both for agribusinesses who see great profit potential in genetic engineering, and for many consumers who strongly oppose it. The issue is further complicated because much of the opposition to genetic engineering is based not on possible human health effects but on the likely environmental impacts of genetically engineered crops.

Pollen from such crops can easily spread into the environment, disrupting fragile ecosystems and possibly creating “superweeds” resistant to pesticides. But under GATT and WTO rules, the process by which a product is produced is not an acceptable cause for trade restrictions. Only if the product itself is harmful can a country impose controls. For example, if pesticide residues at dangerous levels are detected on fruit or vegetables, import of those products can be banned. But if the overuse of pesticides is causing environmental damage in the producing areas, the importing nation has no right to act.

Similarly, if rainforests are being destroyed by unrestricted logging, it is not permissible for countries to impose a ban on the import of unsustainably produced timber. This process and production methods (PPM) rule removes an important potential weapon for international environmental protection. If a nation fails to act to protect its own environment, other countries have no trade leverage to promote better environmental practices. Only if a specific multinational environmental agreement (MEA), such as the Convention on International Trade in Endangered Species (CITES), is in place are import restrictions permissible.

This principle was at issue in decisions, in which trade authorities ruled that nations had no jurisdiction over extraterritorial environmental issues. But in an increasingly globalized world, such issues are more and more common. Simply waiting for the producing country to “clean up its act” is likely to be insufficient. Trade and Domestic Policy Trade can impact domestic as well as international policy, weakening the autonomy of nations to define their own environmental and social policies. Concerns have arisen of a “race to the bottom”, in which nations reduce environmental and social standards in order to gain competitive advantage.

In principal, producers located in nations enforcing strict process standards will suffer a competitive disadvantage compared with producers located in member states enforcing less strict standards. All things being equal, this may result in increased sales, market share and profitability for those producers located in low-standard nations. Faced with the prospect of their industries suffering a competitive disadvantage when compared with companies located in low-standard nations, some nations may choose not to elevate environmental standards or may even relax current standards.

The North American Free Trade Agreement (NAFTA) has produced cases in which corporations have challenged environmental regulations as barriers to trade. The Canadian asbestos industry sought to remove U. S. restrictions on the sale of cancer-causing asbestos products, while the U. S. pesticide industry challenged strong Canadian pesticide regulations. In one case, the Ethyl Corporation (based in the U. S. ) successfully overturned a Canadian ban on the importation and sale of the gasoline additive MDMA, a chemical suspected to cause nerve damage.

Canada was required not only to eliminate the ban, but also to pay $10 million compensation to Ethyl Corp. for legal costs and lost sales. Trade expansion may also have direct or indirect beneficial effects on the environment. According to the theory of comparative advantage, trade causes countries to become more efficient in their use of resources, thereby conserving resources and avoiding waste. Trade liberalization may also involve removal of distortionary subsidies and pricing policies, improving the efficiency of resource allocation.

For example, widespread subsidies on chemical fertilizers and pesticides promote environmentally harmful farming methods – but such subsidies to domestic producers are generally prohibited in trade agreements. Eliminating these subsidies would promote both economic efficiency and environmental sustainability. Trade may also encourage the spread of environmentally friendly technology. In energy production, for example, many developing and formerly communist nations are heavily dependent on old, inefficient, high-polluting power plants.

Trade can facilitate the replacement of these plants with modern, highly efficient combined cycle facilities or sometimes seen as offenders in the exploitation of developing country resources, can also introduce efficient technologies into industrial sectors. Multinationals may be responsive to domestic political pressures to develop cleaner industrial processes, which they then disseminate throughout their worldwide operations. On the negative side, globalization of trade can also create “boomerang” effects through the transboundary exchange of xternalities. Poor laborers who apply pesticides without safety precautions suffer harmful effects, as do adults and children who drink water from streams polluted by runoff. In addition, harmful effects return to the United States through fruits containing residues of dangerous chemicals. The relationship between trade and environmental quality is clearly complex. Economic growth based on free trade reduces some negative environmental impacts but exacerbates others. ? Trade Agreements and The Environment The World Trade Organization Approach

This approach retains the overarching policy goal of free or “liberalized” trade, pursued for five decades through “rounds” of trade agreements under the General Agreement on Tariffs and Trade (GATT), which became the World Trade Organization (WTO) in 1994. The GATT and the WTO, whose membership now includes over 120 nations, have worked to lower tariffs and nontariff barriers to trade, as well as to eliminate subsidies for export industries. Although the WTO recognizes a special exception to trade rules under Article XX for resource conservation and environmental protection, its panel rulings have interpreted this narrowly.

WTO authorities tend to be suspicious of “green protectionism” – the use of trade barriers to protect domestic industry from competition under the guise of environmental regulation. They are also unsympathetic to efforts by nations to use trade measures to affect environmental policy outside their borders. From the WTO perspective, the responsibility for environmental policy should remain at the national level. As far as possible, decisions on international trade policy should not be complicated with environmental issues.

This is consistent with an economic principle known as the specificity rule: policy solutions should be targeted directly at the source of the problem. Using trade measures to accomplish environmental policy goals is therefore a second-best solution, which is likely to cause other, undesired effects such as the reduction of gains from trade. This argument, placing the responsibility for environmental policies on national governments, has been criticized on several grounds. It fails to consider the competitive pressures that may encourage trading nations to reduce environmental protections, as well as the inadequate institutional tructures in many developing countries. It is also inadequate for dealing with environmental problems which are truly transboundary or global. The North American Free Trade Agreement (NAFTA) Approach In 1993, the United States, Canada, and Mexico signed the NAFTA agreement, lowering trade barriers across the continent. During the negotiations for this agreement, environmental groups argued strongly that freer trade could lead to negative environmental consequences, pointing to the severe environmental problems already affecting the maquiladoras—tariff-free industrial zones along the Mexican border.

As a result, a side agreement, the North American Agreement on Environmental Cooperation (NAAEC), set up the tripartite Commission for Environmental Cooperation (CEC), while another side agreement, the North American Agreement on Labor Cooperation (NAALC), dealt with labor issues. This specific attention to social and environmental aspects of trade was remarkable and almost unprecedented in trade agreements. While this unusual aspect of NAFTA persuaded some environmental groups in the U. S. to support the agreement, the CEC has few powers.

It may respond to a country’s failure to enforce existing environmental regulations, but its role is generally limited to producing a fact-finding report and recommendations to the government involved. In addition, promises of funding to clean up environmentally damaged areas along the Mexican/U. S. border have generally not been fulfilled, while border conditions have continued to deteriorate. The opening of agricultural sector trade under NAFTA has both social and environmental effects, as small corn farmers in Mexico are able to compete with cheaper grain imported from the U.

S. The migration of displaced farmers from rural to urban areas will intensify urban environmental pressures, as well as creating greater pressure for illegal migration across the U. S. /Mexico border. In addition, the genetic diversity characteristic of small-scale farming may be threatened, which could result in the loss of a “living seed bank” of great importance to world agriculture. In the area of industrial pollution, NAFTA has had both positive and negative impacts.

Mexican environmental enforcement has improved, but increased industrial concentrations have led to worsened local environmental quality in some areas. A recent review of NAFTA’s environmental provisions concludes that they have “fallen well short of the aspirations of the environmental community” and “should be strengthened in the next phase of NAFTA. The European Union Approach The European Union (EU) is unusual in being a free trade area that has its own legislative and administrative institutions.

Unlike the North American CEC, the European Union has the power to set environmental standards which are binding on its member countries. This is known as the harmonization of environmental standards. Note, however, that this policy involves more than free trade; it entails the creation of a supranational authority with the power to set environmental standards. Regional trade area policies also raise the issue of “harmonizing up” versus “harmonizing down”. Some countries may be forced to tighten their environmental policies to meet EU standards. But other countries may find their environmental standards weakened.

A law requiring returnable bottles in Denmark was overturned by the EU as a barrier to trade, and Norway chose not to join the EU in part out of fear that they would be compelled to modify strict domestic environmental regulations. It is relatively rare for trade agreements to include the kind of enforceable supranational environmental regulations that exist in the EU. Although the Standards Code adopted after the Uruguay Round negotiations in 1992 calls for international harmonization of environmental standards, there is no basis for this process to be other than voluntary.

Indeed, critics feel that harmonization undertaken in the closed, business-dominated atmosphere of the WTO standards committees would be likely to harmonize standards down rather than up in many cases. Multilateral Environmental Agreements (MEAs) It has long been recognized that some environmental problems require international solutions. The first international treaty dealing with trade and the environment was the Phylloxera agreement of 1878, which restricted trade in grapevines to prevent the spread of pests that damage vineyards.

In 1906 an international convention was adopted banning the use of phosphorus in matches. Phosphorous was responsible for serious occupational disease among match workers, but it was the cheapest ingredient for matches. An international convention was required to prevent any exporting country from gaining competitive advantage by using phosphorus in match production. Since then, numerous international treaties have been adopted to respond to specific environmental issues. These include conventions protecting fur seals, migratory birds, polar bears, whales, and endangered species.

Transboundary and global environmental issues have been addressed in the Montreal Protocol on Substances that Deplete the Ozone Layer (1987), the Basel Convention on Hazardous Wastes (1989), the Antarctica Treaty (1991), and the Convention on Straddling and Highly Migratory Fish Stocks (1995). In 1997 the Kyoto Protocol on Climate Change established guidelines for reducing greenhouse gas emissions, including important trade-related measures. These international treaties have addressed the environmental impacts of production methods in ways that individual nations cannot.

Serious questions remain, however, about the compatibility of MEAs with WTO rules. Which set of international agreements should take precedence in the case of a conflict? For example, the Kyoto Protocol encourages the subsidized transfer of energy efficient technology to developing nations – but this provision could be in violation of the WTO’s prohibition of export subsidies. Whereas national laws such as the U. S. Marine Mammal Protection Act have been found incompatible with WTO rules, there has so far been no major test case involving conflict between an MEA and a trade agreement. Kyoto Protocol Climate Conference 997, at the Conference of Parties III (COP3), Kyoto, Japan, the Kyoto conference on climate change took place. There, developed countries agreed to specific targets for cutting their emissions of greenhouse gases. A general framework was defined for this, with specifics to be detailed over the next few years. This became known as the Kyoto Protocol. The US proposed to just stabilize emissions and not cut them at all, while the European Union called for a 15% cut. In the end, there was a trade off, and industrialized countries were committed to an overall reduction of emissions of greenhouse gases to 5. % below 1990 levels for the period 2008 – 2012. (The Intergovernmental Panel on Climate Change said in its 1990 report that a 60% reduction in emissions was needed… ) As with the following COP meetings, there was enormous media propaganda by affected big businesses and by countries such as the U. S. who were openly hostile to the treaty. In fact one of the first things George Bush did when he came to power was to oppose the Kyoto Protocol. By 2050 when certain emission reductions are needed by, their reduced emissions will still add up to be go over their fair share:

Rather than continue down the path of unequal development, industrialized nations can help pay off their carbon debt by truly helping emerging countries develop along a cleaner path, such as through the promised-but-barely-delivered technology transfer, finance, and capacity building. So far however, rich nations have done very little within the Kyoto protocol to reduce emissions by any meaningful amount, while they are all for negotiating a follow on treaty that brings more pressure to developing countries to agree to emissions targets.

There have been many conferences and meets to discuss the increasing ecological concern: Climate Change Flexibility Mechanisms Flexibility mechanisms were defined in the Kyoto Protocol as different ways to achieve emissions reduction as part of the effort to address climate change issues. These fall into the following categories: Emissions Trading, Joint Implementation and Clean Development Mechanism. However, these have been highly controversial as they were mainly included on strong US insistence and to keep the US in the treaty (even though the US eventually pulled out).

Some of the mechanisms face criticism for not actually leading to a reduction in emissions. Carbon Sinks, Forests and Climate Change A mechanism suggested for tackling climate change and warming has been the idea of using Carbon Sinks to soak up carbon dioxide. To aid in this, reforestation, or planting of new forests, have been suggested. This is a popular strategy for the logging industry and nations with large forests interests. While there may be some potential in this solution, it cannot be effective on its own.

This is because it legitimizes continued destruction of old-growth and pristine forests which are rich ecosystems and have an established biodiversity base (albeit shrinking now) that naturally maintain the environment (at no cost! ). Creating new forest areas would require the creation of entire ecosystems. It is also criticized for being a quick fix that does not tackle the root causes effectively and does not lead to, or promote actual emissions reduction. Climate Conferences after Kyoto Protocol The Hague Climate Conference

November 13 to November 24, 2000 saw the sixth session of the United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (or, COP6 for short). Each COP meeting is where nations meet to evaluate the accords and compliance with meeting emissions reduction targets. This one was intended to wrap up three years of negotiations on the implementation of the Kyoto Protocol. Instead though, the talks pretty much collapsed. Marrakesh Climate Conference October 29 to November 9, 2001 saw the seventh session of the United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (or, COP7 for short).

The purpose of the meeting was to agree legal text covering outstanding technical aspects of the political agreement reached in Bonn in July 2001 on how to implement the Kyoto Protocol. While an agreement resulted, there are still concerns there will be little impact on emissions as a result. Montreal Climate Conference December 2005 saw the eleventh session of the United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (or, COP11 for short). At the same time, the first Meeting of the Parties of the Protocol (MOP 1) took place.

These meetings attempted to advance discussions on the future emission reductions and ways to help developing countries. The US walked out at one point of the meeting, but were eventually convinced to come back to the conference. The result, some felt, was a slightly weakened text, but something to build upon for the future. Developing countries were also discussed, but issues of climate justice and equity seemed to be missing once again. Bali Climate Conference The UN conference on climate change held in Bali, Indonesia in December 2007 led to a final agreement known as the “Bali Roadmap”.

The Bali Roadmap outlined a new negotiating process to be concluded by 2009 to feed into a post-Kyoto (i. e. a post-2012) international agreement on climate change. The Roadmap included a decision to launch an Adaptation Fund as well as further decisions on technology transfer and on reducing emissions from deforestation. However, as with past climate conferences, this was not without its controversies, especially Europe and developing countries’ criticisms of the US position and negotiation tactics. Copenhagen Climate Conference

An overview of the Climate Change Conference (also known as COP 15) was held in Copenhagen, Denmark, in the middle of December, 2009. There was a lot of hope and optimism before this conference that a meaningful climate negotiation could be agreed to, as climate change concerns are increasing rapidly. Instead, a mixture of posturing from nations such as China and the US, and the inability for nations to agree on numerous issues led to a meeting failure. But amongst the various reasons for failure are concerns that repeatedly show themselves every year at these climate conferences. Approaches to Environmental Issues The standard approaches in the past to the environmental problems generated by industry and business have been regulatory driven “end-of-the-pipe” remediation efforts. However, since the 1990’s businesses have followed some new approaches Business Sustainability Sustainable development (SD) is a pattern of resource use that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come.

The term was used by the Brundtland Commission which coined what has become the most often-quoted definition of sustainable development as development that “meets the needs of the present without compromising the ability of future generations to meet their own needs. ” Sustainable development ties together concern for the carrying capacity of natural systems with the social challenges facing humanity. As early as the 1970s “sustainability” was employed to describe an economy “in equilibrium with basic ecological support systems. The field of sustainable development can be conceptually broken into three constituent parts: environmental sustainability, economic sustainability and sociopolitical sustainability. The most broadly accepted criterion for corporate sustainability constitutes a firm’s efficient use of natural capital. This eco-efficiency is usually calculated as the economic value added by a firm in relation to its aggregated ecological impact. Similar to the eco-efficiency concept but so far less explored is the second criterion for corporate sustainability.

Socio-efficiency describes the relation between a firm’s value added and its social impact. Both eco-efficiency and socio-efficiency are concerned primarily with increasing economic sustainability. In this process they instrumentalize both natural and social capital aiming to benefit from win-win situations. Corporate Social Responsibility Corporate social responsibility (CSR), also known as corporate responsibility, corporate conscience, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance, is a form of corporate self-regulation integrated into a business model.

Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure its support to law, ethical standards, and international norms. Consequently, business would embrace responsibility for the impact of its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, CSR-focused businesses would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality.

Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: people, planet, profit. Triple Bottom Line The triple bottom line (abbreviated as “TBL” or “3BL”, and also known as “people, planet, profit” or “the three pillars”) captures an expanded spectrum of values and criteria for measuring organizational (and societal) success: economic, ecological and social. With the ratification of the United Nations and ICLEI TBL standard for urban and community accounting in early 2007, this became the dominant approach to public sector full cost accounting.

Similar UN standards apply to natural capital and human capital measurement to assist in measurements required by TBL, e. g. the ecoBudget standard for reporting ecological footprint. In practical terms, triple bottom line accounting means expanding the traditional reporting framework to take into account ecological and social performance in addition to financial performance. The concept of TBL demands that a company’s responsibility lies with stakeholders rather than shareholders.

In this case, “stakeholders” refers to anyone who is influenced, either directly or indirectly, by the actions of the firm. According to the stakeholder theory, the business entity should be used as a vehicle for coordinating stakeholder interests, instead of maximizing shareholder (owner) profit. ISO 14000 Standards One critical milestone was establishment of the ISO 14000 standards whose development came as a result of the Rio Summit on the Environment held in 1992. ISO 14001 is a corner stone standard of the ISO 14000 series.

It specifies a framework of control for the Environmental Management System against which an organization can be certified by the third party. Other ISO 14000 Series Standards are actually the guidelines, many to help you achieve registration to ISO 14001. They include the following: •ISO 14004 provides guidance on the development and implementation of environmental management systems •ISO 14010 provides general principles of environmental auditing (now superseded by ISO 19011) •ISO 14011 provides specific guidance on audit an environmental management system (now superseded by ISO 19011) •ISO 4012 provides guidance on qualification criteria for environmental auditors and lead auditors (now superseded by ISO 19011) •ISO 14013/5 provides audit program review and assessment material. •ISO 14020+ labeling issues •ISO 14030+ provides guidance on performance targets and monitoring within an Environmental Management System •ISO 14040+ covers life cycle issues Green Economics Green economics is an approach to economics in which the economy is considered to be a component of, and dependent upon, the natural world within which it resides and of which is it considered a part.

It takes the widest possible view of stakeholders of a transaction to include impacts to nature, non-human species, the planet, earth sciences, and the biosphere. A holistic approach to the subject is typical, so that economic ideas incorporate learning from other disciplines in a true Trans disciplinary fashion, and important theories from feminist economics, post modernism, critical theory, ecology, international relations and peace, deep ecology, animal rights, social and environmental justice, anti-globalization, eco efficiency, participation and localization theories.

Green Economics includes and builds on environmental economics and ecological economics, but is careful to include principles of social equity at the core of its concerns. India’s Green Economy Initiative: India’s National Rural Employment Guarantee Act 2005 (NREGA) is a guaranteed wage employment programme that enhances the livelihood security of marginalized households in rural areas. Implemented by the Ministry of Rural Development, NREGA directly touches the lives of the poor, promotes inclusive growth, and also contributes to the restoration and maintenance of ecological infrastructure.

In its first two-and-a-half years of operation, from 2006 to 2008, NREGA generated more than 3. 5 billion days of work reaching on average 30 million families per year. The programme is implemented in all 615 rural districts of the country, with women representing roughly half the employed workforce. The emphasis is placed on labour-intensive work, prohibiting the use of contractors and machinery.

While traditional trade barriers such as customs duties and tariffs, import quotas and other non -tariff barriers have radically declined in significance in contemporary international trade, other factors such as the role of norms and standards concerning quality, technology, and the environment as well as consumer protection mechanisms have significantly increased in importance and today greatly influence both the size and structure of foreign trade among particular countries and regions.

As regards environmental norms and standards the traditional approach found in the scientific literature is that they reduce the competitiveness of firms in the lesser developed countries, who are not in a position to implement compliance practices and thus lose export opportunities. The new contemporary approach, however, emphasizes the advantages to enterprises of introducing long-term policies leading to compliance with appropriate environmental norms and standards, which will in turn lead to sustained long-term competitiveness for the firm. International Environmental Protection Norms and Standards

The concept of an environmental management system according to ISO 14001 is based on the fundamental elements of the TQM idea. ISO norm 14001 defines a system of environmental management as follows: “part of an overall management system which encompasses the organizational structure, planning, responsibility, procedural principles, procedures, processes and the means necessary to elaborate, implement, realize, review and maintain an environmental policy” EEC Council Regulation No 1836/93 of June 29, 1993 allowed for the voluntary participation by companies in the industrial sector in a Community ECO MANAGEMENT and AUDIT SCHEME.

Despite the fact that the EMAS system is not a collection of environmental norms in the strict sense of the word, the requirements it imposes in the field of environmental management set standards very close to the ISO 14001 norms. While in its essence the EMAS requirements are in accord with the ISO 14001 norms, the fact that it provides for control mechanisms give companies with EMAS certification greater environmental credibility. There are two types of goods and products: 1) Goods and products deemed environmentally harmful; and ) Goods and products designed to aid in environmental protection. The definition of goods and products designed to aid in environmental protection is given by the OECD/Eurostat Informal Group as follows: “Goods, products and services protecting the environment, including activities which create such goods and products or offer services concerning the measurement, prevention, limitation, minimalization, or correction of air, water, or sunshine pollution, or address problems of waste management, noise pollution, and eco-system management. The above definition encompasses waste treatment and prevention technologies and goods, products, and services aimed at reducing risks to the natural environment or minimalizing pollution and the depletion of natural resources. OECD/EUROSTAT lists three groups of goods and products designed to aid in environmental protection A. Goods and products designed to aid in environmental management: includes goods and services created exclusively with the aim of environmental protection and having a significant impact on pollution reduction and the identification and collection of statistical data; B.

Cleaning products and technologies: includes goods and services which reduce or eliminate environmental harm. These are sometime used for other purposes as Ill, and their identification and classification in relevant statistical data is difficult, expensive, and open to controversy. C. Management and avoidance: this group includes goods, products, and services which may have significant positive environmental effects but which are designed and implemented for other purposes (such as energy saving technologies, creation of alternative energy sources, etc. ).

This category may be considered optionally and its classification and analysis depends to a great extent on existing environmental policies as well as access to statistical data. Goods and products harmful to the environment include mainly those produced by the following industries: mining, metallurgy, chemical, paper and cellulose, energy, construction materials, and means of transportation. Vedanta in India In the Indian context, the recent case of Vedanta group’s efforts to set up a bauxite mining establishment in Niyamgiri, Orissa exemplifies the Indian governments growing concern to environmental issues over business development.

In 2005, a memorandum of understanding was signed between Orissa and Vedanta to set up the complex, including the alumina refinery and a captive power plant. It also included the supply of 150 million tonnes (mt) of bauxite for Vedanta’s alumina refinery at Lanjigarh, for which the state had identified the Niyamgiri mine as the initial source of the material’s supply to the extent of 78 mt. The 8,000-strong Dongria Kondh tribes people in Orissa state believe the remote Niyamgiri Hill range — where the bauxite mine is mooted — is the home of their God Niyam Raja, and rely on the land for their crops and livelihood. After five long years of court hearings, violent public protests, Centre-state wrangling and media coverage, the government denied permission for bauxite mining at Niyamgiri in Orissa, settling the dispute in favour of the tribe that’s indigenous to the area. Vedanta’s project is valued at about Rs45,000 crore ($9. 6 billion). Plans by Vedanta Resources to begin bauxite mining in Orissa suffered a setback after a government team said the company was violating environmental guidelines, officials said on Monday. Displacement, loss of livelihood, pollution, non-payment of compensation of land and objections to the project and its effects are some of the causes for discontent and protest,” a report submitted to the Ministry of Environment and Forests. “These are aspects that are integral to the lives of the Dongria Kondh (local tribespeople) and do not appear to have been considered while deciding to open up the mountain top for mining,” the report says.

The Supreme Court approved the project in August 2008 after years of legal wrangling and Vedanta were waiting for an environmental clearance, the final hurdle of the project. Vedanta has regularly denied allegations that its planned bauxite mine would violate the rights of thousands of poor indigenous tribes people, saying that all its projects are conducted within the law and using international best practices. The company says it plans to mine less than one percent of the mountain range to produce one million tonnes of alumina annually and has already invested $22 million in development work. There have been serious violations of the Forest Rights Act (FRA), the Environment Protection Act (EPA) and the Forest Conservation Act (FCA),” Minister for Environment said. “We have also issued show-cause notices to the company.

This is not an emotional decision. There is no prejudice and no politics. This is not because Niyamgiri is sacred. This is purely a legal approach. ” The ministry’s note on the factors that have dictated its decision said that the Saxena panel went into great detail highlighting various instances of violations under FCA. All these violations, coupled with the resultant impact on the ecology and biodiversity of the surrounding area, further condemn the actions of the project proponent. Not only are these violations of a repeating nature, but they are instances of wilful concealment of information by the project proponent,” it said. The environment ministry is in the process of examining what penal action should be initiated against the project proponents for the violations. Moreover, the Jharkhand mines from where the refiner is sourcing the bauxite do not appear to have the necessary clearances, the ministry said.

Conclusion In this globalization era many industries seek expansion not just limited to their own nation but to go international and seek new market for their products and services. The environmental standards and norms play a significant role in determining the competitiveness of products and goods on the international market. There are a number of different standards and norms concerning environmental management and the implementation of systems of environmental management.

Among them, the most significant is the EMAS system and the concept of an integrated environmental management system according to ISO 14001 that is based upon the fundamental elements of the Total Quality Management (TQM) idea. A firm’s proper environmental policies may have a positive effect on international competitiveness of its products and services, yielding an advantage to the producers and exporters who first initiate and implement them, in light of the explosive expansion of the international trade in environmental services that promote “clean”

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