Business Environmental Management Economics

Transcription

1 Course Syllabus Business Environmental Management Economics Economics 434/534 and ESR 434/534 Spring 2011 Tues. & Thurs. 4:40-6:30 pm Cramer Hall 250 Instructor: Professor David E. Ervin Office: Cramer 241M Office Hours: Wednesdays, 10:30 am-12 noon or otherwise by appointment Phone: Description: Examine the motivations, benefits, costs and risks that affect the decisions of firms to voluntarily adopt environmental management and sustainability programs. Analyze case studies of companies and evidence from surveys and economic analyses. Evaluate public and private policy options that foster business environmental management that also provides public goods. Texts: 1. Forest Reinhardt. Down to Earth: Applying Business Principles to Environmental Management. Harvard Business School Press, 2000 (hereafter Reinhardt). 2. B. Hay, R. Stavins and R. Vietor, eds.. Environmental Protection and the Social Responsibility of Firms Resources for the Future, 2005 (hereafter HSV) D2L: (click on Login to D2L) Prerequisite: Students are responsible for knowing basic concepts and analytical approaches used in microeconomic principles related to firm behavior, such as supply, costs of production, consumer demand, and market and pricing models. The relevant material can be obtained from any standard economic principles textbook or from on-line sources such as to master the required material. Major Objectives -- Students who complete this course will develop: 1. An understanding of the environmental, social, personal and economic factors that drive voluntary business environmental/sustainability management strategies; 2. An understanding of the economic and business management theories of how business firms make environmental management decisions;

2 3. An understanding of the evidence on the adoption and use of voluntary business environmental management practices and performance; 4. An exposure to the environmental management strategies and programs of selected firms; 5. An understanding of the shifting roles of government and non-governmental organizations in business environmental management, and; 6. Skills in analyzing the economics of an organization s environmental management or sustainability program, and writing a professional report or making professional presentation of the analysis and findings. Course Expectations All assignments submitted should be word processed.. Readings - There will be assigned readings to support all aspects of the in-class work. Students are asked to complete all required readings before the class in which they will be discussed. Reading Summary/Analysis - To create incentives to complete and think carefully about the course readings, which will be the basis for most class discussions, students are asked to summarize, analyze and potentially critique the chapters from the texts and from each electronic reading. For a subset of the readings (designated with a * in the outline below), you will be required to prepare a written summary/analysis. Each reading summary/analysis should be submitted at the beginning of class on the day the reading is scheduled for discussion. The paper should only list your student number (not your name), be two pages in double-spaced format with one inch margins all around, 12 point font, and preferably printed front and back. ed submissions will not be accepted. The reading summary/analysis will be graded (0, 1, 1.5, 2, 2.5 and 3) based on the level of effort put forth, the quality of writing, and the degree of insight shown. These analyses should briefly state the problem/issues under investigation, summarize the theory or conceptual model, evaluate any data and empirical methods used, providing critiques of each, and the main policy implications. Students might try to address the following questions: 1. What are the main problems/issues/objectives addressed by the analysis? 2. Are the theory/conceptual model and empirical methods used at a high level given the other literature with which students are familiar? 3. Are any innovative concepts used that seem particularly appropriate? 4. Are the results convincing, but not overstated? 5. If any policy implications are drawn, are they justified? 6. Are the limitations of the analysis identified? Class Outline

3 I. The Environment and Sustainability as a Business Problem and an Economic Opportunity (weeks 1-2) A. Introduction to the Environment as a Business Problem and Social Responsibility Reinhardt, chapter 1 HSV, chapter 1 Makower, The State of Green Business 2011 (D2L electronic reading) B. Potential Motivations for Voluntary Business Environmental Management Ervin, D. An Introduction to the Economics of Voluntary Business Environmental Management (D2L electronic reading; read to stylized model)* Portney, P. Corporate Social Responsibility: An Economic and Public Policy Perspective, HVS, pp D. Environmental Management and Economic Competitiveness Porter, M. and C. van der Linde Toward a New Conception of the Environment-Competitiveness Relationship. Journal of Economic Perspectives, vol. 9 (4), (D2L electronic reading)* Palmer, K., W. Oates, and P. Portney Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm. Journal of Economic Perspectives. vol. 9 (4), (D2L electronic reading)* Aigner, D. Does Corporate Social Responsibility Have to Be Unprofitable, HVS, pp Esty, D. Reconceptualizing Corporate Social Responsibility, HVS, pp Supplementary readings: Alpay, E., S.T. Buccola, and J. Kerkvliet. Productivity Growth and Environmental Regulation in Mexican and U.S. Food Manufacturing. American Journal of Agricultural Economics 84 (November 2002): Esty, D. C. and A. S. Winston, Green to gold: How smart companies use environmental strategy to innovate, create value, and build competitive advantage. New Haven, Yale University Press. (library reserve) Hart, S. and M. Milstein Creating Sustainable Value, Academy of Management Executive 17(2): (D2L electronic reading) Bansal, P. and K. Roth Why Companies Go Green: A Model of Ecological Responsiveness. Academy of Management Journal 43(4): (D2L electronic reading) Ervin, D. and F. Casey 2001 Green Business Rising. Choices Third Quarter: (handout)

4 Hart, S. and C. Christensen The Great Leap: Driving Innovation from the Base of the Pyramid, MIT Sloan Management Review: (D2L electronic reading) Videras, J. and A. Alberini The Appeal of Voluntary Environmental Programs: Which Firms Participate and Why? Contemporary Economic Policy 18(4): (electronic library reserve) Esty, D. and M. Porter Industrial Ecology and Competitiveness: Strategic Implications for the Firm. Journal of Industrial Ecology 2(1): (D2L electronic reading) Lyon, T. and J. Maxwell Corporate environmentalism and public policy. Cambridge, UK ; New York : Cambridge University Press (library reserve). April guest speakers to be announced II. Economic Analysis of Business Environmental Management (weeks 3-6) A. Theories and Models of Business Environmental Regulation and Voluntary Environmental Management Ervin, D. An Introduction to the Economics of Voluntary Business Environmental Management (D2L electronic reading; read stylized model). Ervin D., J. Wu, M. Khanna, C. Jones, T. Wirkala, and P. Koss Economic and Institutional Factors Affecting Business Environmental Management PSU Economics and ESM Working paper (D2L electronic reading)* Carpentier, C. and D. Ervin Business Approaches to Agri- Environmental Management: Incentives, Constraints and Policy Issues Organization for Economic Cooperation and Development, Paris. (D2L electronic reading) Lyon, T. and J. Maxwell Corporate Social Responsibility and the Environment: A Theoretical Perspective Review of Environmental Economics and Policy, vol. 2, issue 2, pp (D2L electronic reading)* Portney, P. Corporate Social Responsibility: An Economic and Public Policy Perspective, HVS, pp Reinhardt, F. Environmental Protection and the Social Responsibility of Firms: Perspectives from the Business Literature, HVS, pp Ervin, D. The New Economics of Green Business (D2L electronic reading) Wu, J Environmental Compliance: The Good, Bad and Super Green Journal of Environmental Management (D2L electronic reading)*

5 B. Reviewing the Evidence on Voluntary Business Environmental Management and Performance Alberini, A. and K. Segerson Assessing Voluntary Programs to Improve Environmental Quality. Environmental and Resource Economics 22: (D2L electronic reading).* Delmas, M. and M. W. Toffel Organizational responses to environmental demands: Opening the Black box, Strategic Management Journal., 29: (D2L electronic reading).* Khanna, M Non-Mandatory Approaches to Environmental Protection: A Survey Journal of Economic Surveys July 15(3): (34). (D2L electronic reading). Khanna, M., P. Koss, C. Jones, and D. Ervin, Motivations for voluntary environmental management. Policy Studies Journal 35(4): (D2L electronic reading) C. Environmental Product Differentiation Reinhardt, chapter 2* D. Managing Competitors Reinhardt, chapter 3 E. Reducing Costs in the Firm Reinhardt, chapter 4* F. Redefining Markets Reinhardt, chapter 5 G. Managing Risk and Uncertainty* Reinhardt, chapter 6 Supplementary readings on library reserve: Khanna, M. and L. Damon EPA s 33/50 Program: Impact on Toxic Releases and Economic Performance of Firms Journal of Environmental Economics and Management 37, (D2L electronic reading) Khanna, M. and Anton, W.R.Q Corporate Environmental Management: Regulatory and Market Based Pressures, Land Economics, 78(4): , November (D2L electronic reading). Lyon, T. and J. Maxwell Voluntary Approaches to Environmental Regulation: A Survey, in Economic Institutions and Environmental Policy, M. Franzini and A. Nicita, eds. Ashgate (library reserve). Segerson, K. and N. Li Voluntary approaches to environmental protection. Chapter 7 in The International Yearbook of Environmental and Resource Economics, 1999/2000. H. Folmer and T. Teitenberg, Eds. Cheltenham: Edward Elgar. (library reserve) III. Government and Non-Profit Organization Roles (weeks 7-8) Carpentier, C. and D. Ervin. Business Approaches to Agri-Environmental Management: Incentives, Constraints and Policy Issues Organization for

6 Economic Cooperation and Development, Paris, July (D2L electronic reading) Other readings to be added Supplementary readings Lyon, T. and J. Maxwell Preempting Uncertain Regulatory Threats. JRS: 1-20 (D2L electronic reading) Lyon, T. and J. Maxwell Greenwash: Corporate Environmental Behavior under the Threat of Audit. JRS: 1-20 (D2L electronic reading) Lyon, T. and J. Maxwell Astroturf: Interest Group Lobbying and Corporate Strategy, Journal of Economics and Management Strategy 13(4): (D2L electronic reading). IV. Future Business Environmental Management (week 9) A. Integrating Environment and Business Practice Reinhardt, chapter 7 Lubin and Esty The Sustainability Imperative, Harvard Business Review, May, 2010 (D2L electronic reading). B. Business Environmental Management in the New Millennium Reinhardt, chapter 8 Vogel, Opportunities for and Limitations of Corporate Environmentalism, HVS, pp * Future Business Environmental Management (D2L electronic reading) May guest speakers To be announced V. Business Case Study Presentations (week 10) Presentations of firm case analyses by students or student teams. Grading Date Undergraduates Graduates Reading Summaries 20% 20% Mid-term Exam May 3 rd 20% 20% Presentation/Paper May 31 st and June 2 nd 20% 30% Final Tues., June 7 th ( ) 30% 20% Participation 10% 10% Important Notes 1. A request for an incomplete or withdrawal will be approved only if the student has earned a C or better at the time of the request. 2. Cheating on an examination, class paper or project will result in a failing grade for the examination, paper or project, and may result in a failing grade for the class or expulsion from the university.