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Causes of Globalisation

The impact of globalisation on the environment : - economic - regulatory - information - pluralisation effects. + national and global environmental policies Need for a revitalised governance regime Increased economic integration + conceptual change in environmental thinking Environmental problems = of international concern instead of national interest Consequence : as globalisation continues, few societies are being left untouched by major environmental problems. = the common heritage of mankind (cross-border effects ) Not own national solution, but international (public and private) 4 key questions: - Effect of globalisation on the environment ? - Effect of globalisation on national environmental regulation / economic integration - International cooperation : useful or necessary - Best management : skills, structure, position

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5.1. Effects of Globalisation on the Environment

Economic opportunities but also new problems and tensions. Economic Effects Environmental impacts of expanded economic growth and trade can be understood in terms of : Scale effects : increased pollution and natural resource depletion due to increased economic activity and greater consumption. Income or wealth effects : greater financial capacity - greater investment in environmental protection demands for attention to environmental quality. Technique effects : tendencies towards cleaner production processes and access to new technologies and environmental best practices. Composition effects : less-pollution intensive high-tech and services-based set of activities. The overall environmental impact of economic growth depends on the net impact of these four effects. If the income, technique, and composition effects overwhelm the negative scale effect of expanded economic activity, then the impact of growth will ultimately be positive. But in the early stages of industrialization, it may well be that environmental conditions deteriorate. Regulatory Effects Trade agreements often include disciplines . Increased competitive pressure may manifest in industry or governmental efforts to reduce pollution control compliance costs. This political dynamic could trigger a regulatory race to the bottom . The concern is not about a race to the bottom, but rather about a race toward the bottom that translates into suboptimal environmental standards, at least in some jurisdictions. Divergent standards across jurisdictions may impose market access barriers : More applied to product standards than to standards for production processes or methods (PPMs) .

5.1. Effects of Globalisation on the Environment

* Information Effects
Expansion of communication networks across the globe. Increasing speed and decreasing cost of communication, National inter- dependence is stimulating a greater sense of international community and a foundation of shared values. I Increased access to data and information on economic and environmental performance allows for faster problem identification, better issue analysis, and quicker trend spotting * Pluralisation Effects Intensified interaction in the economic and political spheres + rapidly diminishing costs of communication results in an increase of the number and diversity of participants in global networks. Exponential growth of non-governmental organizations (NGOs) : - heightened levels of activity - increased access to the policy-making process at national and international levels. Globalization by no means implies the end of politics. Level playing field become increasingly necessary.

5.2. Effects of the Environment on Globalisation

Interest : efforts to liberalize trade and investment flows. At one extreme : a rigid harmonisation of policy approaches and regulatory standards = reaction At the other extreme : uncoordinated national environmental policies = obstruction = reaction Similarly, ecological realities may require policy coordination and collective action on the global scale. National Activities with International Effects In an increasingly interconnected and interactive world, environmental harms, such as greenhouse gas emissions, left unattended at the local and national levels may result in global-scale problems, such as : - the global warming sea level rise, - increased intensity of wind storms, and - changed rainfall patterns that may come to pass as a result of climate change Transboundary pollution spillovers Mainly : costs are borne locally and benefits spread across the world, Deeper economic integration makes countries more sensitive to the regulatory choices and social policies of their trade partners.

5.2. Effects of the Environment on Globalisation

Examples : * Chinas trade with the United States (US) : the 1970s totaled less than US$ 1 billion in 2002 US$ 92 billion A key focus of trade policymaking centers on non-tariff barriers to trade and the need for a level playing field in the global marketplace Trade agreements now routinely include market-access rules and disciplines : Public health standards, Food safety requirements Emissions limits Labeling policies Waste management and disposal rules all national measures may shape the flow of international trade

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The EU import ban on genetically modified foods : 55 per cent decrease in US corn exports to Europe over the past five years Venezuela objected to the discriminatory approach of the reformulated gasoline provisions of the US Clean Air Act of 1990 . And won a WTO dispute settlement case restoring its access to the US gasoline market. In 1996, the reformulated gasoline rule did violate GATT as it subjected Venezuelan and Brazilian refiners to potentially more stringent requirements for fuel emissions than domestic refiners The Tuna/Dolphin case of the early 1990s to the recent Shrimp/Turtle dispute. Ban on importation from Mexico . Same principle for mortality of endangered sea turtles, e.g. exported from India, Malaysia, Pakistan, and Thailand . For the first time in GATT history, decision for unilateral trade restrictions to conserve extraterritorial natural resources.

5.3. Global Environmental Policies

Globalization is an ecological fact. A series of environmental challenges : polluted waters, collapsing fisheries, invasive species , climate change Ecological realities : e.g. Water : independence or interdependence

Protection of the shared resources of the global commons : e.g. the oceans, the atmosphere, etc. = rallying point for NGOs aiming to promote worldwide collective action Increased understanding of the interdependence of ecological systems contributes to establish a more robust global environmental regime The primary responsibility for environmental protection : national governments and local communities Some problems are with international cooperation. Difference between the maximalisation of catching fish by a local fisherman and collectively keeping the same principle which leads to overexploitation But still : absence of clear rules and institutions ensuring sustainable resource management.

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5.4. Globalisation and Global Governance

Without effective international-scale governance, globalization may intensify environmental harms wherever national regulatory structures are inadequate. - Some problems are local and can best be addressed on that scale . - But even in these cases, there is a clear advantage of learning from other countries and localities that have managed to address similar issues. - Problems are also so inextricably international that a coordinated multi-country response is required. - There is no Leviathan or overarching authority. The problem, therefore, is one of organizing and maintaining cooperation. Successful intervention requires some mechanism for promoting collective action. But fragmentation, gaps in issue coverage, contradictions among different treaties, organisations, and agencies with competing responsibilities have undermined effective, results-oriented action in the domain. Also a pervasive lack of data, information, and policy transparency adds to the challenge. An institutional structure is necessary that can provide: * the data foundation needed for good environmental decision-making; * the capacity to gauge risks, costs, benefits, and policy options comparatively; * a mechanism at international level to exert leverage on private-sector and governmental resources; * and means to improve results from global-scale environmental spending and programs.

5.4. Globalisation and Global Governance

Environmental and Economic Governance: Whose Reform? * UN Environment Program (UNEP) = the environmental regime, with also multiple organisations in the United Nations (UN) system. UNEP competes with more than a dozen other UN bodies, * Blocked by a difficult mandate, a modest budget, and limited political support,. * Besides fragmentation there are the independent secretariats to numerous conventions, including : the Montreal Protocol (ozone-layer protection), the Basel Convention (hazardous-waste trade), the Convention on International Trade in Endangered Species, the Climate Change Convention, all contending for limited governmental time, attention, and resources.

The existing international environmental system has failed to deal adequately with the priorities of developed and developing countries. = inadequacy and dispersion of the existing financial mechanisms (IMF World Bank) Also the role of the WTO as the principal forum for the discussion and resolution of trade and environment concerns has been contested by the environmental community and developing countries. - Environmentalists perceive it as an organization charged narrowly with the promotion of trade liberalization - Free traders perceive it as an inappropriate forum for environmental issues, which they see as burdening the trade regime - Developing countries see the inclusion of environmental rules among the responsibilities of the WTO as a complication and a threat, potentially creating an excuse for protectionism and the exclusion of Southern goods from Northern markets. Urgent need for the creation of a World Environment Organization to help focus and coordinate worldwide environmental efforts (See the World Summit on Sustainable Development in 2002, French President Jacques Chirac called for the creation of a Global Environmental Organization( not only economy)

5.4. Globalisation and Global Governance

5.5. Governance alternatives

Collective action in response to global environmental challenges continues to fall short of public needs and expectations How to revitalize the global environmental regime ? But institutions tend to be fragmented and poorly coordinated, with limited mandates and impenetrable decision-making processes.

Need for an approach that : - acknowledges the diversity and dynamism of pollution control and natural-resource-management problems - recognizes the need for specialized responses to the multi-faceted nature of the environmental challenge

Functions at Various Levels of Governance . Local problems but can be found around the world ( e.g. local water and air pollution) Regional issues such as international water-bodies pollution or regional fisheries management become global concern Most difficult issues require a strong structure of global collaboration (climate change, ozone layer, ocean pollution). A number of functions need to be performed at the various levels of governance by different institutions.

Institutions need to possess several capacities, including the ability : - to identify and define problems, - to raise awareness about them in various forums, - to draft rules and create norms for behavior leading to the solution of these problems, - to formulate policy options, - to facilitate cooperative actions among governments and other actors, - to finance and support activities, and - to develop management systems

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The exchange of data, best practices, policies, and approaches could be an important tool in problem solving at the national level. National institutions and national governments remain the primary actors charged with regulatory and enforcement powers to solve environmental problems

5.5. Governance alternatives

Probable solution : a global environmental mechanism (GEM) that needs to focus on promoting collective action on the international scale

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It is the chance to build a coherent and integrated environmental policymaking and management framework for a shared global ecosystem. Three core capacities are as essential : - provision of adequate data and information that can help to characterize the problems - creation of a policy space for environmental negotiation and bargaining - sustained support for national efforts to address issues of concern and significance This global environmental mechanism (GEM) would provide a new model for collaboration, overcoming the shortcomings of existing bodies. The GEMs core elements would be : - a global information clearinghouse - a global technology clearinghouse - a global environmental bargaining forum

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5.5. Governance alternatives

Global Environmental Information Clearing-House Better environmental data and information to identify problems and trends, evaluate risks, set priorities, establish policy options, test solutions, and encourage technology development. = better timely, relevant, and reliable data on environmental issues and trends = shift from assumptions to highlight preferences and sharpened policies = data can make the invisible visible, the intangible tangible, and the complex manageable Good information on how others are doing tends to stimulate competition and innovation. Comparative performance analysis and benchmarking across countries could provide much greater transparency, reward policy leaders, and expose laggards.

Global Environmental Technology Clearing-House Technological advances are often the key to environmental gains. Industrialised countries dominate the technology market and the generation of innovations. Most multilateral environmental agreements contain provisions related to technology transfer as part of the incentive packages for developing countries to meet their obligations under the conventions and cite technology transfer as a critical method for achieving concrete environmental improvements. Most technologies are owned by private companies not governments. This CH could : - guide nations towards the use of appropriate technologies, - support North-South partnerships, and - provide a forum for coordinating financial assistance to developing countries

Global Bargaining Forum Need for effective international agreements. Developing countries will often need support, subsidies, and other incentives to encourage their efforts A great value would be in a forum for the facilitation of international deals on the environment that improve quality and result in positive cash flow to custodians of environmental assets. A global bargaining forum could act as a catalyst for action, facilitating financial discussion among countries or private entities. The forum might also provide mechanisms for verification, financial transfers, and dispute settlement.

5.5. Governance alternatives


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Economic and ecological interdependence require rigorous national policies and effective international collective action. The increasingly globalised world makes new thinking about international environmental cooperation essential An extraordinary mix of political idealism and pragmatism will be required to coordinate pollution control and natural-resource management policies on a worldwide basis across diverse countries and peoples,political perspectives and traditions, levels of wealth and development, beliefs and priorities But the gains to be achieved go beyond the environmental domain. It is time for re-engineering the environmental regime. The logic of a GEM is straightforward: - a globalizing world requires thoughtful and modern ways to manage interdependence - the world community would benefit from a systematic mechanism to promote environmental cooperation in

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2011: 6.98 Billion inhabitants America (13.5%) Africa (15%) Oceania (0.5%) Europe (10.6 %) Asia (60.4 %) 2050: 9.58 Billion inhabitants America (12.7%) Africa (24%) Oceania (0.6%) Europe (7.5 %) Asia (55.2 %) TOP 3 Ranking : 2011 : China (1.35), India (1.24), USA (0.31) 2050 : India (1.69), China (1.31), Nigeria (0.43)

- population growth adds overwhelming

numbers global warming ozone depletion deforestation air pollution and acid rain water pollution disappearance of plants and animals world food supply poverty - bad economic policy control of fertility war and revolution

Environmental Analysis : Scrutinizing of the external forces which have the bearing on the functioning of the BUSINESS. = Part of an organisations management system used to develop and implement its environmental policy and manage its environmental aspects. Why Environmental Analysis ? Analysis of the Environment makes the Business aware of the Threats & Opportunities in the environment (**)

(**) Why Environmental Analysis ?

Improve management of environmental impacts Set targets to reduce energy use, water use & waste to landfill Initiate and maintain procedures to improve efficiencies including :
Environmentally friendly purchasing procedures Preferred business travel option

Define key responsibilities for achieving targets Monitor and measure environmental performance against key indicators Regularly assess progress towards achieving set objectives Ensure due diligence and ongoing consideration of legal and other environmental requirements

Stages of Environmental Analysis

Scanning : the process of identifying early signals of environmental changes and trends Successful environmental scanning : attention to possible changes and events before their occurrence, allowing time for suitable action. Monitoring : detecting meaning through ongoing observations of environmental changes and trends (assemble sufficient data to make out whether certain patterns are emerging) The outputs of monitoring : - a specific description of environmental patterns to be forecast; - identification of trends for further monitoring; - identification of patterns requiring further scanning. Forecasting : developing projections of anticipated outcomes based on monitored changes and trends Assessment : determining the timing and importance of environmental changes and trends for firms strategies and their management

Techniques of Environmental Analysis

TYPES OF FORECASTING : Economic Forecast : general and complete economic conditions, . Social Forecast : population growth/decline ethnic composition, life styles, etc. Political Forecasts : All political related matters and fiscal policy, Technological Forecast : technological developments

POPULATION : - Article 25 of the Universal Declaration of Human Rights : everyone has the right to a standard of living adequate for their health and well-being - Policy commitments from several World Summits

The gap between rich and poor people continues to grow all around the world. Ecologically : massive environmental degradation and climate change threaten the stability of ecological systems Socially : an increasing gap between rich and poor an increasing gap between the global North and South = no many access to basic human needs, rights, and education, and consequently leading to further environmental destruction.

Environmental problems worsen and violent conflict continues. 1,25 billion (= 1/5 of the global population) - still cannot fullfil their basic needs for food, water, sanitation, health care, housing or education - must try to subsist on less than US$1 a day (1/2 the world live on less than two dollars a day) - decline of real income per capita in more than 30 of the poorest national economies - one child in seven in Africa dies before their 5th birthday - about 1,1 billion worldwide lack adequate drinking water

But : the modern organisation has the potential to apply environmental resource management with sustainability principals to achieve highly affective outcomes.


Some companies : experiment with various new tools and concepts Other companies : more traditional and stick to hierarchal decision making having difficulty dealing with the demand for lateral decision making that supports affective participation Is it a matter of ethics or just strategic advantage that organizations are internalizing sustainability principles? Examples of corporations who are shifting to sustainable environmental resource management : Ford, Toyota, BMW, Honda, Shell, Du Pont, Swiss Re, Hewlett-Packard, and Unilever. Sustainability of environmental resource management has improved, but corporate sustainability has yet to reach the majority of global companies operating in the markets.

3 major barriers to shift towards sustainable practice with environmental resource management are : - not understanding what sustainability is; - having difficulty modeling an economically viable case for the switch; - having a flawed execution plan, or a lack there of; = critical gap : Need for creation of a shared vision and understanding of what sustainability is and Need for clarification of the business case. Examples : - rich population = a higher energy consumption. South Korea, in 1965 a developing country = level of consumption as Germany and Japan - USA + Japan + Germany + other developed countries = 1.5 Billion people = 4 x oil consumption China + India + Brasil and other non-developed countries = 4.5 Billion people

Sustainability and environmental resource management involves - managing economic, social, and ecological systems - within and external to an organisational entity - in order for it to sustain itself and the system it exists within Sustainability = development will improve quality of life without necessarily having to consume more resources. Sustainability principals : - social and environmental accountability, - long-term planning; - a strong, shared vision; - a holistic focus; - devolved and consensus decision making; - broad stakeholder Transforming sustainable thinking into measureable and achievable results Since the late 1990s From the periphery of the business world to the top of many stakeholders agendas Right balance between economic, social and environmental goals

Businesses in the 21st century

Many significant challenges, including: Profitability Competitiveness Globalisation Speed of change Adaptability Risk Growth Technology. Need to unlock the potential in the company/ organisation by : - Identifying and minimising risks - Managing the social, environmental and financial risks - Improving operational effectiveness - Reducing costs - Increasing customer and stakeholder satisfaction - Protecting the brand and the reputation - Achieving continual improvement - Promoting innovation - Removing barriers to trade - Bringing clarity to the marketplace.

Always focus on financial performance and operational excellence. Today higher standard and it is all around sustainability. Driven by a number of ethical, environmental, health, and safety concerns, now development of sustainability strategies to remain competitive in the market : uphold Corporate Social Responsibilities (CSR), and abide by regulations. A more complex structure in each organisation and a shift toward a more holistic strategy in terms of people, processes, and technology: Enterprise Sustainability Management (ESM). 6 areas of sustainability : - Environment, Health, and Safety (EHS) - Energy Management - Carbon Management - Operational Risk Management (ORM) - Product Stewardship - Sustainability Reporting From departmental level to company level.

Corporate Sustainability is the set of leadership, business process, culture, and technology capabilities that an organisation establishes to maintain its social license for conducting business in a particular community.

Realisation of sustainable environmental management - environmental conservation and - business operations - under a united decision-making scheme - various systems applicable A solid and efficient sustainable environmental management = use of an environmental management system (EMS)

Plan: - Establish an environmental policy, - Define environmental impacts - Define legal requirements and - Set objectives and targets Do : - Implement action plans, - Implement training and - Implement awareness Check: - Conduct audits to check the system according to the standards - Monitor, measure, record Act : - Management review and - Management recommendations for improvement

Sustainable Environmental Management Information System. PLANNING - IMPLEMENTATION - CONTINUED IMPROVEMENT To implement the environmental management activities, man can use the international environmental management standard ISO14001 A consolidated EMS enables the company to : - reduce environmental impacts such as energy, waste and water and - raise awareness across the organisation Environmental management is concerned with controlling human impact on the environment.

Sustainable Environmental Management Information System. PLANNING - IMPLEMENTATION - CONTINUED IMPROVEMENT





Reduction of environmental impacts

Managers' strategies reflect the mindset of the times Industrial environmentalism (19601970) Industries were able to resist pressures and make their own definitions and regulations Regulatory environmentalism (19701982) Only important in terms of compliance with law. Environmentalism as social responsibility (19821988) More cooperative with government and New managerial structures are implemented Strategic environmentalism (19881993) Progress into a proactive stance on environmental protection Environmental management as an opportunity (1993present) Competitive advantage in the marketplace Sustainable management is the new norm of the future

Carbon Management Carbon footprint must decrease : Example : Slow logistics versus Just-in-Time : less CO From push to pull market Trucks or sea-vessels Economy of scale : bigger transport units Sea-vessels (Triple E) : 18.000 TEU + Efficiency, Economy of scale and Environmentally improved Eco-combi (Scandinavia) : 60 tons 25 m. Modal shift : rail or barge or coastal vessel But also less CO emissions for trucks

Reverse Logistics Management Example : Return of packaging logistic carriers (pallets, etc.)

Carbon Management The ship will set a new industry benchmark for size and fuel efficiency. Fourhundred metres long, 59 metres wide and 73 metres high, the Triple-E is the largest vessel of any type on the water today. Its 18,000 TEU (twenty-foot container) capacity is large enough to hold 111 million pairs of sneakers.

Waste Management Example : Interdependence : dependent on the others Kodak : The disposable or single-use camera Shipping lines : no disposal of cargo residues or waste in the oceans Developing Green Products Consumers want green products. Example : Sustainability in the value chain : Trash--porter. Freitag : production of handbags from truck tarpaulin Fendi : production of upcycled handbags and accessories from recycled materials Sustainable management Example : Paperless document flows Antwerp Mainport = Shorepower Windmill park

Specific functions Eco-Municipalities An eco-municipality is one that has adopted a particular set of sustainability principles as guiding municipal policy and is committed to using a democratic, higly participative approach to implementing those principles and developing an ecologically, economically and socially healthy community for the long term. The International Tourism Partnership (ITP) Worlds leading international hotel companies to provide a voice for environmental and social responsibility in the industry : e.g. laundry, catering.

Gibraltar water catchment

A water harvesting system collects rainwater from the Rock of Gibraltar into pipes which lead to tanks excavated inside the rock

12.1 Environment Every day focus on : - a cleaner world - using renewable sources - enabling world trade - encouraging development 12.2 (New) Ideas for sustainability - development of sustainable cleaning products - renewable energy projects - responsible management of raw materials - renewable ingredients - biodegradable ingredients 12.3 People - Profit - Planet It describes the triple bottom lines and the goal of sustainability

The three P mantra People Profit Planet What you measure is what you get, First strategy : cost cutting is number-one business priority Second phase : growing awareness of corporate malpractice Third phase : growth of Fairtrade movement but still limited (tea, coffee, bananas, cotton, cocoa

People - Profit - Planet Only when companies also measure their social and environmental impact, there will be socially and environmentally responsible organisations. Only companies that produce a TBL are taking account of the full cost involved in doing business. - corporate social responsibility, - climate change and - fair trade The TBL (triple bottom line) is an accounting framework that incorporates three dimensions of performance: social, environmental and financial.

There is no universal standard method for calculating the TBL Variables for the TBL scorecard : - Economic - Social - Environmental /Safety Leads to target goals : - Environmental Quality - Economic Prosperity - Social Capital and Equity

Problem posing


Marc De Witte